Supplychain Digital - July 2015 by Supply Chain Digital

w w w. sup p l ych ain dig i t al.c om â&#x20AC;˘ J ul y 2 015

MOTORS

Exclusive Interview: YODEL Chairman Discusses The Cutthroat UK Parcel Industry

T O P 1 INDU 0

STRY

CEOs

share happiness

EDITOR’S COMMENT

Editor’s Letter the July issue of Supply Chain Digital……..we have the perfect read for when you’re catching the sun this month. Alongside some substantial business reports featuring the likes of the diversified South African transport company Larimar Group and global supply chain services provider APL Logistics, we also have some pleasing features. Our front cover feature article is all about my recent trip to the mountains of Zilina in Slovakia, to see where the magic happens at the Kia Motors factory. The plant is the organisation’s main European facility; its parent company Hyundai Motors Group has annual revenues of $53 billion, so it was an honour to meet with such an important CEO as Han-Woo Park during the visit. There was even opportunity to help Kia staff build cars on the assembly line by attaching spoilers, steering wheels and grab handles- great fun was had by all! Look inside to read more about the company, and keep eyes peeled for a follow-up story on the SCD website. Secondly, we have a very interesting piece on the cutthroat UK parcel industry from our exclusive interview with Yodel Chief Executive Chairman, Dick Stead. He spoke with us at length at how his company has risen through the ranks after a rocky start to a point where it is now building a solid reputation within the sector. Don’t forget our trusty Top 10 article on the foremost CEOs either! HELLO AND WELCOME TO

Enjoy the read, Sam Jermy

Editor

sam.jermy@wdmgroup.com 3

Features

CONTENTS

SUPPLY CHAIN MANAGEMENT

Behind the scenes at Kia Motors

LOGISTICS

Yodel Chairman discusses the cutthroat UK parcel industry

July 2015

TOP 10

We rank the Supply Chain Industryâ&#x20AC;&#x2122;s Top CEOs

Company Profiles AFRICA 32 Larimar Group

MIDDLE EAST 42 APL Logistics

CANADA 54 Kobay Enstel Limited

AUSTRALIA

Larimar Group

APL Logistics

62 Bombardier Transportation New Generation Rollingstock Project

BRAZIL 70 Localfrio

LATIN AMERICA

Kobay Enstel Limited

82 IDEALEASE

Localfrio

AUSTRALASIA 94 DAMCO

IDEALEASE

Bombadier Transportation New Generation Rollingstock Project

62 5

S U P P LY C H A I N M A N A G E M E N T

Behind the scenes at

MOTORS

WEDGED IN between three impressive mountain ranges which form the Western Carpathians, Zilina is a picturesque town in Slovakia with a proud industrial history. But there is something else that punctuates the landscape, and I got my first clue as the cool light of the moon shone upon some railway tracks outside the hotel. There was 6

July 2015

the biggest freight train I have ever seen passing through, all double stacked with cars from the nearby Kia factory and heading to Western Europe. I later discovered if they are heading for the UK, the cargo makes its way to the Port of Hamburg in Germany, before arriving at the Port of Grimsby and Immingham in England. The Kia Motors Slovakia plant has

We went to see how one of the world’s leading automotive companies effectively produces and distributes finished cars from its main European plant Writ ten by: SAM JERMY

recently celebrated the one millionth Kia cee’d rolling off the production line. As well as this cee’d milestone, the plant also produces the Sportage and Venga models, and overall the company manufactured and distributed 323,700 cars out of Zilina in 2014. At an investment of €1.6 billion, the plant acts as the fulcrum to the firm’s operations, particularly in Europe

where around 60 percent of EU sales originate from Kia Motors Slovakia. The main export countries are situated in Western Europe unsurprisingly; France, Germany, the United Kingdom, Italy and all feature prominently in that regard but Poland and Russia also provide a home for a sizeable amount of finished products. At the recent media conference 7

SUPPLY CHAIN MANAGEMENT at Zilina plant, Han-Woo Park who is the Chief Executive Officer and President of the entire Kia Motors group, was present. He said: “In April we celebrated two million cars produced here in Slovakia and more recently we exceeded the one million mark in regards to cee’d production. So we have made a very successful contribution to the entire Kia Motors group from this plant. “We have continuously improved

to the point where we are producing 60 cars an hour now. Along the way we have picked up numerous awards, including being in the top ten of sustainable companies in Europe, so we have certainly satisfied customer expectations. “Our vision is to become the world’s best plant, here in Zilina, Europe. To do this, we have our own strategy to create optimum efficiency with 400 quality control members who,

The Kia Motors Slovakia management team proudly celebrate the production of the 1 millionth Kia cee’d at the Zilina plant

July 2015

B E H I N D T H E S C E N E S AT K I A M O T O R S

along with all the employees, are passionate about producing high quality cars most efficiently. Although it’s a nice vision and philosophy, without these special employees we cannot achieve our goals.” Operations Kia has its own unique innovation systems, and everybody participates in daily innovations that contribute to the overall successful operations. This success is illustrated in the amount of awards the plant has picked up; National Champion in The 2014 European Business Awards sponsored by RSM International, the Merkur Award 2014 from Vienna Business School and a National Productivity award from the Slovakian government to name just three. Kia Motors was also rated excellent as change and innovation leaders, and were highly commended on a recent safety audit as well as picking up awards for Leading HR organisation and Best IT Operations along the way. It is through these rigorous procedures it is able to improve product quality rate by 10 to 20 percent every year. Because of this improvement the company is now

“In April we celebrated two million cars produced here in Slovakia and more recently we exceeded the one million mark in regards to cee’d production” – Han-Woo Park, CEO and President of Kia Motors. offering seven year warranty which competitors simply do not offer. But Kia Motors doesn’t simply talk about how staff contribute to the company’s success; it also actively encourages career development and brings new talent through the group each year. Kia and parent company HMG (Hyundai Motors Group) is committed to creating opportunities for young people entering the job market and every operation wherever it is located seeks to meet those needs. Tomáš Potoček, HR Director for Kia Motors Slovakia, said: “There are several training programs we offer; 9

SUPPLY CHAIN MANAGEMENT

Automation plays a key role some for the operators, managers, experts and leaders. This consists of both internal onsite training and external training with some even going to South Korea headquarters. “We have leadership programs. If you are a leader, you can rise higher. If you are an expert, there is limited scope because your field is niche and you specialise early on. The vast majority of our supervisors on production lines progress and go up the ladder. In total, our training facilities across the globe pass around 4,000 people each year” “Those who show effort and particular skills, we will reward them. We are a very flexible employer and there is a very big connection between 10

July 2015

“We are a very flexible employer and there is a very big connection between the local Zilina region, employees and the plant. We provide extensive bus transportation for 2,500 of our 3,800 staff to get to and from work with 10,000 kilometres covered by the buses on a daily basis –T omáš Potoček, HR Director at Kia Motors Slovakia

B E H I N D T H E S C E N E S AT K I A M O T O R S

the local Zilina region, employees and the plant. We provide extensive bus transportation for 2,500 of our 3,800 staff to get to and from work with 10,000 kilometres covered by the buses on a daily basis. The Zilina plant is currently accommodating around 70 students on scholarship programs for secondary and university level students with many welcomed back to full-time employment with Kia Motors Slovakia after studies.â&#x20AC;? Logistics Running such a large operation doesnâ&#x20AC;&#x2122;t come without logistical challenges for Kia. For example, the recent economic sanctions placed on Russia, although not including automotive, saw an economic impact which led to a significant downturn in the Russian new car market. Luckily for the company, whilst Russia has been a major market for Zilina the production processes are sufficiently flexible to permit a reduction in Russian market vehicles and an increase in other market vehicles. Energy consumption is another aspect that needs constant monitoring, especially with fluctuating fuel prices. Also, the Slovakian business

Beginning of production

The fast-paced assembly line

60 cars are completed each hour

SUPPLY CHAIN MANAGEMENT environment means energy prices can be around 25 percent more expensive than nearby Czech Republic, but Kia continues to be focused on reducing carbon emissions regardless. But the benefits of being located in Slovakia outweighs the challenges, and Potoček noted there were a number of skilled workers in the region due to its rich industrial history. He said: “We also knew there were a number of local suppliers who could assist us in Zilina, plus it is strategically located in Central Europe. Obviously Hyundai Glovis is our biggest supplier for modules, and we work New models being loaded

“We aim to make supplier synergies with Korea and use common parts, so we will always act on supplier recommendations from HQ. 70 percent of materials are coming from within the EU... Also, 25 percent of the EU materials come from within Slovakia.” – Martin Lokaj, Supply Chain Manager at Kia Motors Slovakia

July 2015

B E H I N D T H E S C E N E S AT K I A M O T O R S

The finished products sit ready for distribution to wider Europe and beyond closely with Johnson Controls.” Martin Lokaj, Supply Chain Manager at Kia Motors Slovakia, added: “We aim to make these supplier synergies with Korea and are using common parts, so we will always act on supplier recommendations from HQ. 70 percent of materials are coming from within the EU, the other 30 percent is mainly from USA. Also, 25 percent of the EU materials come from within Slovakia which we feel is important, as it adds to the national economy and overall GDP.” It is clear Kia Motors has a friendly, motivated and successful team at the Zilina plant and this is helping it go from strength to strength. So is

there potential for even more growth in the coming years, and will this lead to the building of more facilities? Kia Motors CEO, Han-Woo Park, concluded: “In the future we have eventualities on productivity and our size can be increased if need be. When we need to we will consider investment if demand exceeds the amount of cars we can possibly supply.” “We want to increase our production capacity without the need to build other plants, so with this plant in Slovakia we will just increase production. Next year we will increase production without physically increasing the size of the plant.” 13

LOGISTICS

Chairm The Cutthroat UK

We spoke to Yodelâ&#x20AC;&#x2122;s Chief Executive Chairman, Di an important industry sea change, and how his co

man Discusses K Parcel Industry

ick Stead, for his take on what he describes as ompany is now sailing in the right direction 15

LOGISTICS If you were in charge of running a parcel courier in the United Kingdom right now, you would be forgiven for batting down the hatches and shying away from public glare. Such is the volatility of the market, whole companies struggle to keep their heads above the water; CityLink going out of business at Christmas and the TNT Express incarnation Whilst stopping part of its service just illustrates how cutthroat the industry is. Those are just two examples over the last six months, so imagine how troublesome it may be to plan long-term strategies.

“We are growing our volumes with probably the fastest growth rate in the UK parcel industry. People are coming to use Yodel because our performance is dramatically improving” - Dick Stead, Yodel CEO

July 2015

Things are refreshingly different aboard Yodel at the moment despite early struggles; the parcel courier firm started out as a bottom-end player but after learning valuable lessons things are looking up as its remarkable financial turnaround of the past two years continues. The company was formed in 2011 following the acquisition of the UK domestic business of DHL by Home Delivery Network, and is currently privately owned by the Barclay brothers. Miraculous turnaround Dick Stead is the Executive Chairman of Yodel and has overseen the renaissance, he said: “We have moved from a position at the bottom of the market where we were losing £11m a year, to a position where we are now going to be in the black for the first time. That is a huge financial turnaround all things considered, but importantly we are growing our volumes with probably the fastest growth rate in the UK parcel industry. People are coming to use Yodel because our performance is dramatically improving. “We were probably one of the worst parcel companies in the UK

T H E C U T T H R O AT U K PA R C E L I N D U S T R Y

four years ago, and now we are certainly amongst the best in the industry. So all the financials are heading in the right direction, it’s an incredibly positive turnaround. “Our shareholders have a view that the only thing that matters is getting customer service better in the industry. Admittedly, it was a big challenge they had given us considering our previous position, and I don’t think we have achieved exactly where we want to go but the skilled improvement we have made so far has been miraculous.

Traditionally you were thinking, well X Company or X Retailer are using our service so we want to keep them happy. A lot of it is driven by the decision to absolutely focus on the end consumer and not the client; because we have much less of a problem if the customer is happy.” Major investment Yodel has also spent a tremendous amount of time developing and researching real-time analytics and evaluation tools, so now as every parcel 17

LOGISTICS goes out people are offered the chance to provide their honest feedback on everything about the service. In little more than a year over one million people have contributed to the feedback survey, enabling the firm to constantly evaluate and refine its service. All of this information is readily available to other Yodel on its live dashboard too. Stead said: “Because we get a parcel number we get feedback in a live time and get verbatim comments, we can then trace this right down to the individual van and particular driver involved. So on a daily basis, there are conversations going on in service

July 2015

“I anticipate retailers are seeing the real damage to their reputation if they can’t supply the goods they have promised to supply over peak periods; by offering free next day delivery they are in danger of exacerbating the problem” - Dick Stead, Yodel CEO

T H E C U T T H R O AT U K PA R C E L I N D U S T R Y

centres to congratulate people on the brilliant work they are doing. “Drivers who have produced a negative comment, we can discuss with them what went wrong. So as well as finding a way to satisfy the end customer and get the parcel delivered, we are also able to identify training needs and driver attitudes and correct the performance of some drivers. It’s got to the point now where about 15 percent of their pay depends on whether they have satisfied their customer or not.” The virtuous circle Yodel deal with a whopping 85 percent of all UK retailers, ranging from ecommerce operators right through to multinationals and British High Street stores. Stead recognises that his company’s business relationship with retailers is not always a bed of roses but both create value by collaborating. Firstly, the retailer has clearly got to please its customers and research shows that about 50 percent want deliveries free. So for a parcel courier, it has to find a cost-effective solution. At Yodel, it partly measures its value on increased sales for the retailer driven by the customer being entirely satisfied 19

LOGISTICS

throughout the whole delivery process. Stead said: “It is an incredibly competitive and volatile marketplace. I anticipate retailers are seeing the real damage to their reputation if they can’t supply the goods they have promised to supply over peak periods; by offering free next day delivery they are in danger of exacerbating the problem. “So therefore I think we’re seeing a bit of a sea change where retailers are looking for people who will provide the volume they’ve promised and 20

July 2015

if they provide over that volume it is not possible to take it. So for the first time we are aligning ourselves together where the retailers should only offer to sell and provide to customers that can only be physically delivered in a promised timescale. “I don’t think we’re quite where we need to be yet. There is still many retailers who are driven by the marketers who are all going for that single order. If you are entirely honest and only promise what you can deliver,

T H E C U T T H R O AT U K PA R C E L I N D U S T R Y

“I think we’re seeing a bit of a sea change where retailers are looking for people who will provide the volume they’ve promised and if they provide over that volume it is not possible to take it. So for the first time we are aligning ourselves together ” - Dick Stead on collaboration

your customers will be loyal and you will build up your business by reputation. If you just go for the single order and say it is dead important just to get that single order today and promise next day delivery so they don’t go anywhere else; it is high risk because if you fail that delivery you’ve lost that customerand they have gone forever.” Yodel is creating an environment where people can believe in the longterm benefits of attaining and growing loyalty from individual customers. There is a transition underway but it is a gradual transition, and Stead hopes as a result next day deliveries won’t be completely outsold again. The company certainly looks set for a healthier future, backed up by major shareholders with a vision instead of looking for a short-term investment. So far it has built five major service centres which are very large infrastructures capable of holding 30-40,000 parcels a day all with the most up to date IT systems which incidentally, has also been completely updated. This multi-million pound commitment to infrastructure and quality of service has put Yodel in a much healthier position, and now the group looks set to sail into more prosperous waters. 21

TOP 10

Supply Chain

CEOs The latest rundown of the top men at the worldâ&#x20AC;&#x2122;s biggest logistics companies

Written by: : Sam Jermy

TOP 10

10. Jens Bjørn Andersen DSV Andersen became CEO of DSV Road Holding in 2007 and Group CEO in 2008. He began with the former Samson Transport Co in 1988, holding various positions. Following DSV’s 1997 acquisition 24

July 2015

of Samson, he became CEO of DSV Samson Transport. From 2001, he was CEO of Tollpost Globe AS in Oslo and was headhunted for the CEO job at DFDS Transport/DSV Road in England in 2003.

TOP 10 CEOS

08. Kenji Watanabe Nippon Express Watanabe serves as the Chief Executive Officer and President of Tokyo-based Nippon Express. He has been in this position since June 2011, having joined the company back in April 1972 and has held a wide number of positions. He obtained his Bachelor of Law degree from Chuo University in March 1972.

09. Xavier Urbain CEVA Logistics One of the newest CEOâ&#x20AC;&#x2122;s in our list, Urbain was named CEO of CEVA in January 2014 and is also the President of the Americas region. He held several senior positions as Kuehne + Nagel and was CEO of ACR Logistics and Hays Logistics. He started his career with Deloitte & Touche as an external auditor. He holds a PhD in economics.

TOP 10

07. John Wiehoff CH Robinson Worldwide An employee at CH Robinson since 1992, he has been CEO since 2002. He won a role in public accounting with Arthur Anderson LLP as a graduate, with CH Robinson being one of his clients. He joined the company eight years later as a controller in the finance department. He became Chief Financial Officer in 1998.

06. Dr Detlef Trefzger Kuehne + Nagel Prior to joining Kuehne + Nagel in 2013, Trefzger was on the Executive Board of Schenker from 2004 to October 2012. In 1994 he was Principal at Roland Berger and Chief Financial Officer of Schenker in 1999. He was Executive Vice President Contract Logistics of Kuehne + Nagel Group from March 2013 to August 2013, when he became Group CEO and responsible for Contract Logistics.

July 2015

TOP 10 CEOS

05. David P. Abney UPS The man who replaced Scott Davis on September 1, 2014, as part of an orderly transition in which Davis retired as CEO but retained the role of non-executive chairman. David Abney, who began his career as a part-time package loader while in college, is the 11th CEO in the 107-year-history of UPS and is tasked with keeping the group heading in the right direction.

TOP 10

04. Dr RĂźdiger Grube Deutsche Bahn AG Grube is also reported to be the Vice President of the Hyundai Motor Company, a director at Mitsubishi and at McLaren Group and also non-executive director for The Airbus Group. Since 2009, he has been Chairman of the Management Board and CEO of the Federal Republic of Germanyowned railway company, the parent of DB Schenker. It was struggling and Grube had to begin by making tough decisions regarding cuts.

03. Frederick W. Smith FedEx Modern-day legend and proof of the American dream, Smith is the founder of one of the biggest companies in the world. Now a $45 billion interest, the idea for it began during Smithâ&#x20AC;&#x2122;s three-year stint, 1966-69, as a US Marine, where he observed closely the logistics and procurement of the armed forces and was inspired to start up an overnight delivery service for civilians. He founded Federal Express with his $4 million inheritance (modern equivalent $23 million) and raised $91 million ($525 million) in venture capital in 1970.

July 2015

TOP 10 CEOS

02. Dr Frank Appel Deutsche Post DHL Appel has been CEO 2008 and will be until 2017. He has a PhD in Neurobiology from ETH (Swiss Federal Institute of Technology. He was a Consultant and Project Manager at McKinsey & Co in Germany since 1993 and was then elected to Partner of Member of German Business Management in 1999. In 2000 he joined Deutsche Post as Managing Director Corporate Development.

TOP 10

01. Nils S Andersen Maersk From Denmark, Andersen trained as an economist and joined AP Moller Maersk in 2007 as CEO after a career as a controller with Nordic Sugar and the Carlsberg brewery group through the 1980s and 90s. At Carlsberg he became Executive Vice President and then CEO of breweries in Spain and Germany. He spent two years on the executive board of HERO consumer foods in Switzerland, before returning to Carlsberg in 1999 to lead a number of acquisitions, market entries and group-wide initiatives. His work is said to have turned around the financial performance of the Carlsberg group and strengthened its global position. At Maersk, he fronted a transformation process which led to a more focused portfolio, a 30

July 2015

leaner organisation and increased competitiveness. The groupâ&#x20AC;&#x2122;s transparency and communication with stakeholders also increased. From 2011 Andersen has been heading a new long-term strategy with focus on the four core growth businesses of Maersk Line, Maersk Oil, APM Terminals and Maersk Drilling. Maersk also has more market value, assets and has posted $800 million more profits than Appelâ&#x20AC;&#x2122;s DHL in second place.

Larimar Group:

Investing In The Future Written by: Nye Longman Produced by: Daniel Pritchard

LARIMAR GROUP

Through its strategic diversification and consolidation plan, Larimar is undergoing a ‘quantum leap’ in order to retain its position as one of South Africa’s transport groups

arimar has been a part of South Africa’s transport history for the past 65 years and is set to play a strong part in its future. Indeed, the family-run business could once boast the largest operations in the Southern Hemisphere with a fleet of close to 4,000 buses; while this number has waned somewhat, the company’s willingness to simultaneously embrace and deliver lasting, meaningful change has only strengthened. In order to maintain its much envied position in South Africa (the group boasts some very lucrative partnership and government contracts) it is simultaneously diversifying its revenue base and working towards making the business comply with global environmental standards. Operations Larimar’s group structure enables it to provide a diverse range of solutions to its clients and it is perhaps for this reason that the group is looking to diversify further. It is comprised of six companies which provide transportation (Putco), freight and logistics (Bell Trucking), engineering and manufacturing (Dubigeon Body and Coach, and VOMS Industrial) motor retail (KZN Iveco) and insurance (Larimar Financing and Leasing Services). Across these divisions, the group employs in excess of 5,000 people, all of whom have access to the company’s dedicated talent development initiatives. Perhaps the most notable of Larimar’s

July 2015

AFRICA

associations is its contract with the South African government; a deal that saw over 900 brand new buses rolled out between 2005 and 2009; one that will see a further 800 buses deployed in coming years. The successful implementation of “one of the largest fleet expansions in South Africa and the world” according to Group Managing Director Franco Pisapia, that has won the group international renown; it has been very recently awarded a contract by the Kampala Transport Authority to deploy and manage 100 of its buses, a number that will grow eventually grow by a further 600.

Key Personnel

Franco Pisapia Group Managing Director Franco Pisapia is part of the Larimar family, and was brought in for his unique technical experience which has proven instrumental to the group’s diversification efforts. He has successfully managed his own business ventures and holds diplomas in mechanical engineering and business administration, amongst many other technical and managerial courses.

Larimar will deploy 800 extra buses

w w w. l a r i m a r. c o . z a

LARIMAR GROUP

The firm has many strategc partnerships

July 2015

Tactical Expansion Pisapia noted that the company needed to remain dynamic in order to retain its dominant position, he said: “To remain the top transport operator and remain competitive we will have to adjust to the new dispensation of transport in South Africa: diversification will give us the flexibility and will give us the technology and efficiency to stay ahead.” Explaining how it would be done practically, he said: “Across group we are trying to diversify our revenue base; to convert into an industrial group instead of just focusing on the transport side of things.” The main focus of this diversification project

AFRICA

is Putco’s partnership with the global chassis manufacturer Iveco; they share stakes of 40 and 60 percent in an extensive automotive facility respectively. Pisapia noted: “Although set up barely 18 months ago, our facility can produce up to 5,000 trucks and 1,000 buses annually; this makes us by far the biggest producer of buses and trucks in South Africa.” He also highlighted that Putco would be consolidating its stake in the facility with a hefty follow up investment of over 1 billion Rand; the factory alone provides jobs for upwards of 1,000 people. The larger picture has obviously attracted increased focus and capital: Pisapia tentatively noted that the group was considering expanding its capacity even further by offering freight tankers in the next few years. Larimar is making sure its expansion and consolidation efforts are properly supported with the correct software infrastructure. Aside

“Although set up barely 18 months ago, our facility can produce up to 5,000 trucks and 1,000 buses annually; this makes us by far the biggest producer of buses and trucks in South Africa.” – Franco Pisapia, Group Managing Director

w w w. l a r i m a r. c o . z a

LARIMAR GROUP

TOGETHER WE KEEP SOUTH AFRICA MOVING Sasol and Putco continue to work together to create a better South Africa

The perfect choice FOR SCANDINAVIA

As a proud partner

we wish PUTCO continued success

for their future plans BASILDON - +44 (0) 1268 285620 BRISTOL - +44 (0) 117 982 8080 IMMINGHAM - +44 (0) 1469 571440

WWW.NTEX.CO.UK

July 2015

Continuous quality from start to finish

Tel & Fax +271 1783 5655

LARIMAR GROUP

AFRICA

from building strong links with Microsoft, the group has also rolled out the latest CAT6 Local Area Networking (LAN) systems and has also implemented a dedicated hot disaster recovery site. Responsible Business Larimar’s competitive strategy also seeks to ensure that the company extends the efficient practices it has demonstrated though its ISO 9001 accreditation towards becoming environmentally sustainable in compliance with the globally recognised ISO 14001 certification. No small part of this strategy focuses on fighting the case for buses as a sustainable mode of transport. Pisapia noted that Larimar was already taking a major step towards this goal, he said: “We are looking into using low sulphur diesel, switching to 50 parts per million down from 500, which will give our buses lower emissions.” The group is supplementing this initiative by upgrading to Euro 4 and 5 buses. Pisapia was proud of his company’s track record when it came to supporting its staff, he said: “I strongly believe that we look after our

Larimar has rolled out LAN systems

It is also making strides in sustainability

“Perhaps the most notable of Larimar’s associations is its contract with the South African government; a deal that saw over 900 brand new buses rolled out between 2005 and 2009” – Franco Pisapia w w w. l a r i m a r. c o . z a

LARIMAR GROUP

July 2015

AFRICA

employees very well, so much so that some have been with us for over 40 years.” Loyalty of this magnitude is not bought but nurtured through encouraging workers to take genuine and conscientious ownership of their and the company’s success. Pisapia explained: “We delisted Putco in 2005, buying out any minority shareholders; we then allocated shares to our own staff. We structured this scheme to comply with South Africa’s Broad-Based Black Economic Empowerment legislation, which has gained us level 3 status.” A share of roughly 23 percent of the company has been divided up between employees in this way. Furthermore, employees have a clear idea of how they can progress within the company and have access to the group’s dedicated training academy which provides learners with everything from technical instruction and driving refresher courses, to dedicated management training. Aside from excelling at the delivery of government legislation, Larimar provides a wide variety of programmes to economically disadvantaged people. Each year the Putco foundation invests over 10 million Rand, sponsoring housing projects, mentoring schemes and even paying for the lengthy education of medical students. Based on its past achievements alone, it would almost be enough to predict that the Larimar Group will retain its dominant position in South Africa; looking at its current strategies, this is looking more like a certainty.

Company Information INDUSTRY

Automotive; Buses HEADQUARTERS

Gauteng FOUNDED

1945 PRODUCTS/ SERVICES

The Larimar Group is South Africa’s largest bus company, with a range of divisions involved in everything from manufacture and management, to finance and retail.

w w w. l a r i m a r. c o . z a

APL Logistics

The Future Of 3PL Supply Chain Management

Written by: Nye Longman Produced by: Dennis Morales

APL LOGISTICS

Through its unfaltering dedication and innovative approach to its customers, APL Logistics has secured a dominant position in the Middle East for many years to come

PL Logistics, heading up its US$1.659 billion revenues for 2014, is proving that investment and tactical expansion are possible even for an asset-light third party logistics (3PL) company. Focusing its core philosophy around every aspect of customer needs has provided the company with much fertile ground for innovation in the Middle East and Africa; it has become a source of well-deserved self-confidence. It is this success that enticed Kintetsu World Express to acquire APL Logistics from its owner Neptune Orient Lines (NOL): while the 3PL will be able to retain its trusted brand, the acquisition will give the company more room for investment and expansion in the future. Operations General Manager Muhammad Azfar Khan explained the remit of the Middle Eastern Division through an apt example, he said: “You are at the Dubai Mall and want to buy a shirt; you look at the tag and it says ‘Made in Vietnam.’ Most of us do not understand the complexity of the operations on getting the shirt to that shelf in the store. We manage the movement of that product from one end to another.” He added: “Customers want to know where their products are in the supply chain at any given time and exactly how many.” These end-to-end solutions cover APL Logistics’ four key verticals: Automotive; Retail; Consumer, and Industrials. The company

July 2015

EUROPE & MIDDLE EAST

provides clients from these sectors with customised, technological services, as well as supply chain engineering and associated services. As Khan put it: “Our goal is to be an established player in each sector. We want customers from each vertical to think of APL Logistics before anyone else.” APL Logistics’ Middle East and Africa division covers a total of 14 strategically important countries across the region, which has been achieved either through operating directly or through long term partnerships. The 3PL has direct operations through its company offices in United Arab Emirates (UAE), Bahrain, Saudi Arabia and Egypt. Through its partnerships, APL Logistics extends its reach across the

‘APL Logistics’ Middle East and Africa division covers a total of 14 strategically important countries across the region, which has been achieved either through operating directly or through long term partnerships’

APL Logistics Warehouse

w w w. a p l l o g i s t i c s . c o m

APL LOGISTICS

July 2015

APL LOGISTICS

EUROPE & MIDDLE EAST

two continents, with offices in Kuwait, Iraq, Jordan, Oman, Kenya, Tanzania, South Africa, Mauritius, Madagascar, and Ethiopia. Its Middle Eastern operations consist of seven warehouses and tens of thousands of pallet positions alone, which come to well over 65,000 pallet positions in UAE alone. As one might expect from working with a globally effective supply chain solutions provider, APL Logistics’ customers and partners find themselves very well connected in Africa and the Middle East; prior experience in other markets has been crucial to succeeding, in Africa especially. Khan did note that this experience was usually supplemented with fresh, innovative thinking from his team, he said: “No solution is the same, no geography is the same, no market, no customer;

SUPPLIER PROFILE

APL Logistics Transport Truck

PRIME LINK

Land transport plays a vital role in regional economies. For more than 35 years Prime Link has enabled both multinational and local companies to focus on their core businesses whilst entrusting their logistics to a proven expert. As specialists in inland transport solutions throughout the UAE and GCC we handle everything from container reefers to project logistics, oversized shipments, chemical and hazardous goods as well as general cargo. Our specialists understand your business and its unique logistics demands, positioning us as your preferred supply chain partner and allowing us to offer you tailor-made logistics solutions.

w w w. a p l l o g i s t i c s . c o m

APL LOGISTICS there often has to be a lot of tailoring before we can begin to replicate processes for different regions. This is something that we regularly achieve because we evolve with our customers.â&#x20AC;?

AutoLinx-Innovative rail-based solution in India

APL Logistics SuperSuite 48

July 2015

Technology For APL Logistics, consistent dedication to its customers does not mean that the company simply follows the lead of its clients; it is proactively seeking technological solutions to meet current and future needs. Its recent implementation of a multi-million Logistics Super Suite (LSS) supply chain management system reflects its customer-centered focus; Khan

S U P P LY C H A I N

commented: “Customers have a more detailed, user friendly interface; they can see what we see.” APL also provides its customers with a Visual Technology Suite; a platform that builds on the company’s customer focus through offering a bespoke, transparent approach to supply chain monitoring. The Suite provides users with three levels of functionality: business intelligence; analytics; and operational tools. Khan explained: “Visual Operations allows customers to view their supply chain in real time and Visual Analytics provides them with a dynamic graphical interface to access historical data. Visual Intelligence offers an in-depth review of the entire supply chain to identify gaps that may not be readily apparent with less robust tools. For example, APL Logistics can conduct a deep dive review of ERP (Enterprise Resource Planning) data to unearth inefficiencies origin or destination DC processing times that would allow for greater sales.” The company is also planning to launch a new global, supply chain, event monitoring tool that will again demonstrate its leadership in technology and innovation. For example, “A head of supply chain for a global retailer finds out that there is a development in South East Asia; before they go into the morning meeting with the CEO and they will want to know how many shipments are impacted. “They can log into the system and see their activity in that port and see what the alternate solutions are: when the cargo is due to leave and

““No solution is the same, no geography is the same, no market, no customer” –M uhammad Azfar Khan, General Manager

5,600 Number of employees working fro APL Logistics

w w w. a p l l o g i s t i c s . c o m

APL LOGISTICS

July 2015

APL LOGISTICS

EUROPE & MIDDLE EAST

APL Logistics Warehouse

what could impact cost: all these things are in real time and can be changed within minutes. It gives customers a big picture of their supply chains, but also allows them to drill down to the small details.” He also noted that the company was keen to embrace mobile technology as clients begin to demand instantly accessible information: “Customers can download an app on Google Play or App Store and track the shipping progress of their products at any given time.” This feature therefore gives customers APL Logistics unprecedented access to supply chain mobile application information and enables managers to keep their finger on the pulse of their operations.

w w w. a p l l o g i s t i c s . c o m

APL LOGISTICS

July 2015

EUROPE & MIDDLE EAST

Talent Management Feeding back into its customer focused operations, APL Logistics’ approach to managing its talent pool seeks to instil and develop this aspect, Khan said: “We sincerely believe that if we take care of our staff, they in turn will be better placed take care of our customers.” It is this understanding of the symbiotic relationship between customers and staff that enables Khan and his management team to get the very best from its workforce. The company has its own online ‘Global Campus’ which makes available thousands of courses which cover everything from management to technical training. Khan noted that much of the resources supported the global trend of reducing environmental impact, he said: “We train our employees to eliminate waste through lean principles, as well as 6 Sigma; it all comes back to being an environmentally friendly organisation.” APL Logistics’ almost stubborn focus on catering for every aspect of its customers’ needs has enabled the company to construct a business plan that ensures each aspect of its operations is strongly geared to meeting this goal and maintaining the standards needed for success. Khan summed up the work of his company when he said: “We help customers in a way better than they themselves understand.”

Company Information INDUSTRY

Logistics & Supply Chain Management HEADQUARTERS

Dubai FOUNDED

2001 EMPLOYEES

5,600+ REVENUE

US$1.659 billion PRODUCTS/ SERVICES

A global provider of supply chain management solutions and services to the Automotive, Consumer, Industrials and Retail verticals

w w w. a p l l o g i s t i c s . c o m

Kobay Enstel Limited

Kobay Enstel Limited: Creating value through excellence in innovation

Based in Ontario, the automotive manufacturing company is expanding its footprint into North America by supporting the growth of its Japanese Tier 1 customers Written by: Stephanie C. Ocano Produced by: Sean Bakke

K O B AY E N S T E L L I M I T E D

Management pic

â&#x20AC;&#x153;Our Canadian roots will always be our foundation.â&#x20AC;? â&#x20AC;&#x201D; Gavin Galansky, President Located in Scarborough, Ontario lies a quality manufacturer of automotive stampings and sub assemblies that has come to be known for its specialization in the manufacturing of intricate, progressive die stampings, mig welded sub-assemblies, seating 56

July 2015

assemblies and tube bending. Founded in July 2006 after the merger between Kobay Tool & Stampings and Enstel Manufacturing, Kobay Enstel Limited has since risen to constantly challenge the standard operating procedures of the industry. The company prides itself on operating under lean manufacturing practices, building a strong team and

S U P P LY C H A I N

Plant

finding innovative, cost-efficient manufacturing techniques. “Our company is all about the strength of our people,” said President Gavin Galansky in a recent interview. “We want to show that we are adding value to our customers by developing innovative processes that reduce cost and enhance the quality of the product,” said Galansky. A world-class team Kobay Enstel’s design team is a group of dedicated professionals with over 40 years of combined

experience. Constantly striving to exceed customer expectations, each associate at the company is in constant communication with one another. With customer satisfaction being a top priority, Kobay Enstel follows the Japanese model of Q.C.D.D.M. (Quality, Cost, Delivery, Development, and Management) in its production processes. “Each function of the organization has specific action plans that all go into the Q.C.D.D.M. model,” said Galansky. “Everything from developing our processes further, to becoming more efficient, to driving w w w. k o b a y e n s t e l . c o m

K O B AY E N S T E L L I M I T E D out costs from the system—the whole way the company is run— follows the Q.C.D.D.M. model, and everyone on the floor understands it.” In terms of management, Kobay Enstel prides itself on developing its people. In doing so, it allows the company to take on projects that most others would shy away from due to their challenging engineering aspects. Kobay Enstel recently secured contracts to complete seating assemblies on the next model of the Honda Civic in 2016, and 17-model Honda CR-V, which is just one example of a project the company has been able to confidently accept because of its strong workforce.

S U P P LY C H A I N

This means two things for Kobay Enstel. “For one, it secures our future,” said Galansky. “And the second half of the equation is that we’re being recognized and rewarded, allowing us to venture into greater things.” Due to the scope of these projects, Kobay Enstel expanded its current facility by adding roughly 21,000 sq. ft. Brand new state-ofthe-art robotic welding cells are being installed alongside state-ofthe-art hydraulic tube benders. According to Galansky, a second plant will also be opened in Alabama, U.S. around February 2016 to begin Kobay Enstel’s expansion efforts into the U.S. This plant will be around 35,000 sq. ft.

Stamping plant w w w. k o b a y e n s t e l . c o m

K O B AY E N S T E L L I M I T E D

Team Kobay

and will start production in 2016. The main focus at this facility will be to support the work being done on the Honda Odyssey and Honda Ridgeline platforms. “The primary reason we’re expanding is to support our customers,” said Galansky. “There is a lot of automotive activity in the southeast U.S. and our goal is to grow the plant in Alabama with our Japanese and North American customers.” Further expansion efforts Upon the initial entrance into the U.S. with a plant in Alabama, Kobay Enstel wishes to grow its North 60

July 2015

American footprint by opening a plant in Mexico and Indiana as well. In five to 10 years, the company’s plans are to enter Mexico and establish a plant there, as well. “Honda has a big plant in Celaya, Mexico and for the next model of Honda Civic we’d like to be able to support that,” said Galansky. “[In the next five years] we’d like to grow our footprint, secure more business and grow with our Japanese customers, particularly on vehicles like, the Honda Ridgeline and the Honda Odyssey—which are all made in Alabama,” added Galansky. Kobay Enstel would also like to

S U P P LY C H A I N

develop its process technology specifically with laser welding and tube bending. “Kobay Enstel, in the last few years, has shifted away from just being a stamping company as stamping is becoming more and more of a commodity,” Galansky said. “We’re moving more into welding and sub assembly—more complex sub assembly and tube bending.” Looking ahead “It’s a very exciting time for Kobay Enstel,” exclaimed Galansky. With the North American automotive market growing, Galansky sees a lot of potential in the growth of the company, as well. “We’d like to grow our business to become the go-to as the number one Tier I and a half,” said Galansky. “We’re somewhere in between Tier I and Tier II—we have a little bit of a Tier I aspect to us in the assemblies that we’re doing, but we like operating in the Tier II space.” “By not going full Tier I, we are able to keep our costs and overhead very competitive,” he continued. Despite the growth that Kobay Enstel is looking forward to in the US and Mexico, it will always remain true to its Canadian roots. “We will always be a Canadian company,” Galansky concluded. “We want to always support our Canadian customers and so there will always be a plant here.”

Company Information INDUSTRY

Manufacturing HEADQUARTERS

125 Nashdene Rd., Unit 5 Toronto, Ontario, Canada FOUNDED

2006 EMPLOYEES

180 REVENUE

$50 M

w w w. k o b a y e n s t e l . c o m

Bombardier Transportat

Bombardier plays central role the revitalization of Australiaâ&#x20AC;&#x2122;s

While the task before them is daunting, Bombardier and th Australian Government are planning to provide cutting-edg mobility solutions for the next phase of increasing populat growth and congestion across the nation. Written by: Ian Hanner Produced by: Daniel Kadar

tion:

e in s rail

he ge tion

B O M B A R D I E R T R A N S P O R TAT I O N

Mock Up of QNGR vehicle at Eagle Farm

Response to population growth The worldâ&#x20AC;&#x2122;s population has increased dramatically since the beginning of the last century, increasing from fewer than 2 billion in 1900 to 7.2 billion in 2014. Aside from the increased resource drain that more people ensure, thereâ&#x20AC;&#x2122;s the other factor of population growth that is inescapable, though solvable congestion. Bombardier Transportation wants to answer the calling by providing the next generation of mobility solutions. In tandem with multiple private sector entities and with the backing of the Australian government, the more 64

July 2015

than-century old company is poised to ensure reliable transport for the years to come. All around the world, goods need to be transported to and fro in not only safe, but ultimately reliable, ways. While automobiles and paved roads have allowed for greater geographical connectivity than ever before, theyâ&#x20AC;&#x2122;re limited a great deal by the number of people on the roads and driving habits. For traveling over long distances, airplanes remain the unrivalled solution. But the large swaths of land needed to put an airplane down, and the heavy fuel

AUSTRALIA

Inside mock up of QNGR vehicle - restroom facilities

consumption that this mode of travel demands make it obviously impractical for commuter traffic. Interestingly, it’s a return to a technology older than both of those that shows the greatest promise: rail. Long neglected as the usefulstill, but not as glamorous transport of yesteryear, the commuter rail industry is poised to make real growth over the next decade or two in nearly every country in the world. One such endeavor that could serve as a beacon for future projects to look to for guidance is being carried out in Australia. In May 2015, the Australasian

Railway Association (ARA) published the results of the Infrastructure Australia Audit Report, which found the ocean-lined nation woefully unprepared for the challenges of growing populations. ARA Interim Chairman Bob Herbert said, “Rail infrastructure underpinning passenger transport must be in place to meet population growth which, according to the audit, will swell demand for public transport by 55 percent in Sydney, 121 percent in Melbourne and around 89 percent in other capital cities.” While the results of the audit w w w. b o m b a r d i e r. c o m /

For perfect clear vision.

Besides outstanding quality and reliability, product innovation plays a significant role for our company. Thanks to our company-owned developmental team, motivated staff and state-of-the-art manufacturing facilities, Glas Trösch AG Rail counts as one of the most competent suppliers worldwide in the field of high-end su windscreens and cabin glazing for the most important train manufacturers.

Glas Trösch AG Rail

Unterdorf 45, CH-4937 Ursenbach Phone: +41 62 957 91 00 Fax: +41 62 957 50 80 Email: rail@glastroesch.com Web: www.glastroesch.com/rail

Glas Trösch AG Rail is proud to be supplier in cabin glazing for Bombardier Transportation.

77 years of experience... provide evidence that offering the engineering, manufacturing, delivery as well as tailor made aftermarket services for reliable state-of-science glazing solutions are a key to long-term success. With that in mind, it is no surprise that our light-weight window systems meeting the highest international standards have been chosen for the fantastic all-new QNGR fleet. Maximum protection vs. minimum weight: opposing attributes which are both met at the same time by the excellent products of Flachglas Wernberg.

“I think all of the parties involved in this project are very keen to demonstrate that our PPP model can be successful for such a large-scale new train procurement process.” – Paul Brown

FLACHGLAS Wernberg GmbH - Germany Phone +49 9604 48-0 - www.flachglas.de

B O M B A R D I E R T R A N S P O R TAT I O N present an image of a worrisome future, the Australian government, in partnership with the private sector, is already developing the transport infrastructure to keep pace. The Queensland New Generation Rollingstock (QNGR) project. “This project is a game-changer for Bombardier in Australia in terms of both size of the project and complexity,” said QNGR Project Director Paul Brown. “It’s a $3 billion project which is seeing us deliver 75 new trains for Queensland and involves the construction of a new depot as part of that contractual obligation. Equally, we have the 30 year maintenance deal as part of a PPP contract.” Bombardier is largely leading the development of the QNGR project through Qtectic, the trading identity of a consortium of companies including Bombardier Transportation, John Laing, Itochu and Uberior. With this venture, Australia is investing in its transportation future, specifically in Queensland. But since this project is to serve as a beacon, it has to be done

AUSTRALIA

right, especially as a public-private partnership (PPP) model. This model presents a range of longterm challenges that are often completely absent in projects of this nature, such as a three decadeslong obligation for Bombardier to maintain the health and functionality of the systems. “Managing the complexity of a PPP contract is a key ability that we believe we have here at Bombardier, particularly in terms of our systems division,” Brown said. “Australia seems to be much more in favor of the PPP model and it would appear to be much more successful here than in other parts of the world— certainly in rail.” He added, “I think all of the parties involved in this project are very keen to demonstrate that our PPP model can be successful for such a large-scale new train procurement process.” Benefits for Australia These 450 carriages, which are designed by Bombardier with input from universities in Queensland, will be manufactured at Bombardier’s facility in Savli, India. The trains will w w w. b o m b a r d i e r. c o m /

B O M B A R D I E R T R A N S P O R TAT I O N

Inside mock up of QNGR vehicle

carry passengers at a top suburban speed of 100 kilometers per hour and a top interurban speed of 140 kilometers per hour. Bombardier’s trains will service every line in South East Queensland. There’s also the matter of job creation. Given that many 68

July 2015

components of this project as possible are being sourced locally in Australia, it’s difficult to accurately measure the number of jobs an undertaking like this will create. However, many of these jobs would be, in theory, temporary. That’s not such a bad thing, with

AUSTRALIA

countless examples of temporary labor markets lifting people out of chronic unemployment. However, what really matter are the long-terms jobs that this project will create. Bombardier estimates that once all is said and done, the operation of the trains and the new facility will easily create permanent jobs for more than 150 individuals. Brown also points to the tertiary roles that this development would create. “In the wider arena, the supporting jobs that this project will bring, such as business at the local coffee shop or maintenance contracts that we’ll need to place for cleaning and maintenance of the depot, can easily create upwards of another 500 jobs,” he said. This is extremely good news for a region that has seen job growth slow to a trickle. So with economic opportunities abounding, and prudent early planning promising to mitigate challenges for Australia down the line, it’s hard for Brown and the rest of Bombardier not to be optimistic. “The railroad sector itself is a very exciting sector to be in right now,” he said. “It ticks all the boxes if you look at what’s happening in the wider economic sphere in terms of population growth, increased urbanization, environmental pressures for municipalities and more. Rail, as a solution, ticks all those boxes, so you know there’s continued forecasted growth in that market. Bombardier and Australia want to remain in a central position to maximize opportunities.”

Company Information INDUSTRY

Supply chain HEADQUARTERS

Melbourne, Victoria, Australia FOUNDED

1942 EMPLOYEES

40,000 REVENUE

$20.1 billion PRODUCTS/ SERVICES With 63 production and engineering sites in 26 countries and 18 service centers across the world, Bombardier Transportation is the global leader in the rail industry. They cover the full spectrum of rail solutions, ranging from complete trains to sub-systems, maintenance services, system integration, and signaling. Their installed base of rolling stock exceeds 100,000 rail cars and locomotives worldwide. Bombardier’s 39,700 employees continue a proud tradition of delivering ingenious rail transportation solutions.

w w w. b o m b a r d i e r. c o m /

Localfrio:

Customized solutions in port logistics Operating in three main Brazilian ports, the company works with an integrated and customized system for all kinds of freight

Written by: Flรกvia Brancato | Produced by: Serio Ambrozino 71

LOCALFRIO

orking seamlessly in an intelligent and customized fashion for more than 60 years, Localfrio operates in the main ports at the Northern and Southern regions of Brazil, offering integrated services for all kinds of freights adapted to different segments. Through seven business units, the company serves bonded and general warehouses, transportation and refrigerated storage. With the assistance of more than 1,300 highly specialized professionals and advanced technology in all units, the company is a national benchmark for the sector and is proud of its know-how and pioneering in creating integrated solutions to serve clients and partners’ needs. “Localfrio is one of the best companies in integrated port logistics in Brazil, operating in the country’s main ports—Suape, Santos and Itajaí—and has ample experience in freight transportation,” recognizes Eduardo Razuck, commercial director of Localfrio.

Localfrio Itajaí Terminal REDEX

July 2015

BRAZIL

“Localfrio is one of the best companies in integrated port logistics in Brazil, operating in the country’s main ports and has a wide experience in freight transportation.”

Localfrio Guarujá Bonded Terminal I

– Eduardo Razuck, commercial director of Localfrio

BUSINESS UNITS Guarujá Bonded Terminal I- Strategically located at Santos’ Port left margin, it is licensed to move and store all kinds of freight for import and export. Additionally, it can move loose, containerized, dry and refrigerated products. Guarujá Terminal II - Also at Santos’ Port left margin, this unit has a total area of 78,176 square meters allocated to nationalized freight logistics— general logistics—in addition to export and cabotage, providing support for all clients’ logistics chain. Itajaí Terminal REDEX - With 10,280 square meters of integrated area and 24/7 service, Localfrio’s Terminal REDEX is located in Itajaí— Santa Catarina state—only 4.3 miles from Port of Itajaí, and 8.6 miles from Port of Navegantes. SP Refrigerated Warehouse - São Paulo terminal has a total area of w w w. l o c a l f r i o . c o m . b r

BRAZIL

42,150 square meters and seven refrigerated chambers available for storage and transport of cold and frozen products. Suape Bonded Terminal I - A benchmark in port operations and licensed to move any type of freight for import or export, Terminal I has a total area of 91,000 square meters and it is located in the primary zone of Port of Suape, in Pernambuco state. Suape Terminal II - Located only 4.9 miles from the berth at the secondary zone of Port of Suape Complex, Terminal II can receive up to 50 vehicles per day with loading and unloading conveyance mechanisms. The total area is 53, 437 square meters. With an exemplary commercial flow, Localfrio has experienced a growth of 500 percent over

SUPPLIERPROFILE

Localfrio Suape Bonded Terminal I

MERCEDES-BENZ

Mercedes-Benz do Brasil is the greatest manufacturer of trucks and buses in Latin America. It is present in the country since 1956, when the production started in the plant of São Bernardo do Campo. Since then, over 2,000,000 commercial vehicles left its production lines going to the roads of Brazil and other 50 countries to which the company exports its products.  The company itself is responsible for the production of the engines, gearboxes and axles that eqquip its products. With commercial vehicles production units in São Bernardo do Campo (São Paulo state), and from 2011 also in Juiz de Fora (Minas Gerais state), further to the Parts Center and Training Center located in Campinas (countryside of São Paulo state). Website: www.mercedes-benz.com.br

w w w. l o c a l f r i o . c o m . b r

LOCALFRIO the last 10 years. Based on data from 2013, USD $108 million-worth of goods circulated between the food, chemical, textile, pharmaceutical and automotive segments. FOCUSING ON INVESTMENTS The company’s performance is owed in part to investments made in equipment and fleet expansion. “Recently, we invested USD $450,000 in transportation equipment for special freight - wind power sector - renewing our fleet with the acquisition of 11 trucks, special semi-trailers and certified convoys for Suape’s unit,” explains Razuck. The strategy is to further consolidate Localfrio’s presence in the breakbuilt market, particularly “in indivisible loads, which are very challenging due to length, width and height, and weight that can surpass lawful restriction,” reiterates the director.

Localfrio Transports - Supply chain integration

July 2015

BRAZIL

Additionally, projected for the current year, the Logistic and Industrial Customs Center is already underway at the Itajaí unit. According to Razuck, “Itajaí/Navegantes is currently Brazil’s second largest port complex when it comes to import freight. The geographical location is privileged for the agro and forest markets. Besides, there has been a considerable increase in exports due to the favorable currency exchange. With investments estimated at USD $1.6 million, the construction phase should end in September and the forecast for customs operations is December. Once it starts, the company hopes to increase its revenue by 35 percent in the first year.” Investments in IT are also a constant practice. In addition to actions in the business and technology fields, such as CRM system update, the company released a freight tracking mobile app which clients can use for agility and convenience. Localfrio Cargo Tracking was developed to facilitate a comprehensive operational scheduling system, allowing the client’s plans to flow efficiently.

Complete structure and specialized logistics operation of special projects (break-bulk)

Know-how and logistics certifications for chemical loads

“Recently, we invested USD $450,000 in transportation equipment for special freight - wind power - renewing our fleet” – Eduardo Razuck, commercial director of Localfrio

w w w. l o c a l f r i o . c o m . b r

LOCALFRIO SOCIO-ENVIROMENTAL RESPONSIBILITY The company is greatly focused in social projects aimed at children. “Localfrio has the future in mind and knows that the country’s development relies on future generations,” points out Razuck. When it comes to healthcare, the company supports the Little Prince Hospital Participant Family Program which strives to ensure that children and adolescents are accompanied the entire period he or she is admitted at the hospital. It also gives incentives to research and studies of institutions such as The Handicap Children Association and Support Group for Children and Adolescents with Cancer. Currently, the company also contributes to projects such as Ajudô, of Pernambuco’s Scholar Sports Federation and SKD Judô, in Itajaí, which

Children from Little Prince Hospital next to car racing driver, Eduardo Rocha Filho

July 2015

BRAZIL

Highly skilled professionals to meet customer needs

together assist approximately 500 needy children. And they sponsor students at G.E. TIPSP, a traditional Futsal—an indoor version of soccer—team. Finally, Localfrio embraces the challenge of caring for those who already contributed to the country. They provide support to senior citizens at the Barretos Cancer Hospital. The Elder Project benefits the department dedicated to assist mature patients of the PIO XII Foundation, which diagnoses and treats cancer. TRENDS AND THE FUTURE The director recognizes that the sector’s biggest challenge is undoubtedly “the constant market search to purchase products for the cheapest prices, which goes against our macroeconomic indexes.” To solve it, among other w w w. l o c a l f r i o . c o m . b r

LOCALFRIO

Eduardo Razuck, commercial dire

“Work in business growth projects, increase logistics range, develop even more our transportation field, aimed at becoming the Brazil’s largest logistic operator, that is our focus.” – Eduardo Razuck, commercial director of Localfrio 80

July 2015

internal initiatives, Localfrio has been increasing operational efficacies, systems integration and process reengineering. In the commercial area, the company has been focusing on niches and economic sectors that are believed to be important, specializing in sales and seeking to offer integrated solutions that generate progressive earnings at the logistic chain. In order to maintain and develop excellence in professional training, the company invests in human development programs. It also invests in the “Participation and Result-Based Program,” which is linked to an internal policy of pre-established

BRAZIL

Company Information INDUSTRY

Logistics HEADQUARTERS

São Paulo, SP - Brazil E S TA B L I S H E D

1953 EMPLOYEES

1,367 ANNUAL REVENUE

USD $100 million

ector of Localfrio

goals. “We are a company with a good mix of young talent and experience. This creates a special dynamic, making the work environment attractive and cooperative,” he says. Through a solid link with road partners and several other collaborators, Localfrio continues its search for strategic partnerships, such as cabotage companies, to extend field operations. In the future, Razuck hopes, “to work in business growth projects, increase logistics range and to develop even more our transportation field, aimed at becoming Brazil’s largest logistic operator. That is our focus.”

PRODUCTS/ SERVICES

Customized solutions for all kinds of freight with integrated services in bonded terminal, general warehouse, transportation and refrigerated storage MANAGEMENT

CEO: Helio Vasone Jr.

w w w. l o c a l f r i o . c o m . b r

IDEAL partner to transport your load The 82

July 2015

Written by: Rebecca Castrejon, Editor Produced by: Taybele Piven, Director of Operations at WDM Group - LATAM Interviewee: Mr. Fernando Noriega, General Director at IDEALEASE MĂŠxico and Rafael Carranza King, Director at Ready to Rent / IDEALEASE in Mexico

IDEALEASE Mexico has taken the lead in the commercial truck leasing and rental sector offering full maintenance under the Ready to Rent/Idealease and Full Service Leasing services, consolidating its presence in Mexico and setting its sights on Central and Southern America. w w w. e e g s a . c o m

IDEALEASE DE MEXICO 20 years of IDEALEASE in Mexico

Members of IDEALEASE Mexico’s executive board

dealease is a private, integrating company with offices in the United States, Canada and Mexico. It consists of 186 partners operating the business in 432 locations. It started originally in 1983 in Illinois (U.S.) It opened for business in Mexico on July 17, 1996 in the city of Monterrey, Nueve Leon. Currently, it is present in 45 of the main cities in Mexico, and is the only company with a national presence focused on offering solutions to consumers of large trucking services in Mexico. “I had the good fortune of founding the company as general director and starting IDEALEASE operations in Mexico 20 years ago,” recalled Fernando Noriega, General Director of IDEALEASE Mexico and mechanical engineer with more than 25 years of experience in the transportation industry. Idealease Mexico offers: Short-term truck rental (Ready to Rent / Idealease), operational lease with all services included (Full Service Leasing) and Guaranteed Maintenance Services for new vehicles. Committed to these services, IDEALEASE Mexico has stood out from the competition as a result of offering an array of solutions in transportation service. Such is the case with their full maintenance package and around the clock roadside assistance.

July 2015

L AT I N A M E R I C A

Key People Its rental and leasing fleet is upward of 2,000 trucks of different sizes and load capacity (heavy, light heavy, light, ultra-light.) They are the only company with national coverage and with a network available to small, medium and large businesses. Furthermore, all of its units are new because their Ready to Rent / Idealease vehicles have a three year service limit and the average Full Service Leasing truck is three years old. This ensures quality, good appearance and functionality during the service life of the vehicle. Within its truck portfolio 25 percent of the fleet is equipped with a refrigerator. These trucks are intended to serve the food industry. Among its array of products the following stand out: dry box, cool box and platforms.

Ing. Fernando Noriega General Director of IDEALEASE Mexico Noriega is the current General Director at IDEALEASE Mexico. He’s a mechanical engineer who graduated from the Universidad Autónoma de San Luis Potosí in 1988. He began his business career in manufacturing. His first job was as production engineer for Cummins Inc., where he went on to fill various managerial posts. He joined IDEALEASE in June 1996 where he’s been since.

Team Mexico IDEALEASE w w w. i d e a l e a s e . c o m . m x

C O M PA N Y N A M E

IDEALEASE Mexico General Director Fernando Noriega, inside of the company installations

Leading Actors

IDEALEASE has doubled its efforts to keep its personnel up-to-date

Despite local competition in the light load segment, IDEALEASE Mexico is the only load truck leasing and rental company with national coverage, saving customers time in finding service. The services they offer and the national coverage reflect an unrivaled supply chain.

with technology

â&#x20AC;&#x153;At Ready to Rent, one of our most important differentiators is our new fleet because the oldest vehicle is three years old. That gives the person who purchases our services assurance that the vehicle will spend more time on the road than in the auto shop. This allows our clients to be more productive for a lower price,â&#x20AC;? stated Noriega. When replacing their fleet, the vehicles are like 86

July 2015

SECTOR

Their fleet varies in size: heavy, medium, light and ultralight

new and are sold into the used car market every three years, propelling the modernization of the Mexican parking lot, where cars are an average of 18 years old according to the National Association of Private Haulers (ANTP) and the National Chamber of Hauling Transport (CANACAR). Another feature IDEALEASE customers love is the diversity of their fleet. Rafael Carranza King, Director of Ready to Rent / IDEALEASE México, stated: We have trucks available starting at 1-ton to full size, which covers Mexico’s three major industrial sectors: production, marketing and services.” Carranza King added that 24 percent of his current fleet is equipped with refrigeration and logistic rails inside the boxes, providing more stability for the loads.

“That gives the person who purchases our services assurance that the vehicle will spend more time on the road than in the auto shop. . This allows our clients to be more productive for a lower price” – Fernando Noriega, General Director at IDEALEASE Mexico

w w w. i d e a l e a s e . c o m . m x

IDEALEASE DE MEXICO

Ready to Rent: Short-term truck rental service

â&#x20AC;&#x153;These units give our clients flexibility in choosing the truck best suited to their needs,â&#x20AC;? he said. Next Investments Their fleet includes trucks with refrigeration for the food industry

July 2015

1. In 2015, Ready to Rent / Idealease is investing 35 million USD to replace and increase its fleet by 40. By 2016, their fleet will number between 900 and 1,300 trucks. 2. For 2016, according to its strategic growth plan, Full Service Leasing wants to reach 2,500 units in its fleet. 3. With the aim of consolidating its

L AT I N A M E R I C A

permanence as leaders in the Mexican load truck leasing and rental sector, IDEALEASE will open new service centers at strategic locations.

Key People

Consolidation during imminent internationalization Based on their success in Mexico, IDEALEASE is setting its sights on neighboring economies. “We’re weighing the possibility of expanding into South and Central America. Nothing’s set in stone yet, but what is certain is continuing to grow in Mexico and the United States,” said the General Director. IDEALEASE Mexico is growing with the industry, increasing its portfolio of services and size of its fleet thanks to the investments Mexico is receiving in the tourism and automotive sectors. An example of that is the more than $7 billion allocated for the construction of seven manufacturing plants in the Bajio region by Nissan-Renault, Honda, Mazda, Audi, Mercedes Benz and BMW, and in Pesqueria, Nuevo Leon, Kia.

Rafael Carranza King Ready to Rent Director at IDEALEASE Mexico Executive leader with national and international experience in business strategy, commerce, marketing, finances, operations and logistics. He has a B.S. and an M.S. in Business Administration from Universidad Iberoamericana de la Ciudad de México. He joined IDEALEASE in 2011.

“These investments will benefit the regional markets and all of the stakeholders in these industries,” said Noriega.

w w w. i d e a l e a s e . c o m . m x

IDEALEASE DE MEXICO

Full Service Leasing:

Another important factor is the recently promulgated Energy Reform which is attracting regional industrial giants and whose clients are capitalizing on different international policies like NAFTA to globalize the transportation of commodities.

operating leasing, all services included

We are betting that in the next few years the demand for our services will increase,â&#x20AC;? added Noriega. Green initiatives Itâ&#x20AC;&#x2122;s constant updating of cars benefits the

L AT I N A M E R I C A

environment and makes their operation more sustainable. Furthermore, its trucks are regulated by the current EPA (Pollutant Emmission Standards) benchmarks. Finally, IDEALEASES shops comply with all environmental regulations stipulated by Mexican authorities. Human Capital As industrial operations go digital and business communications are revolutionized, IDEALEASE doubles its efforts to keep their personnel up to speed on all technological matters. Through an aggressive training program, they bring up to date their technicians, operators, mechanics and collaborators. By the same token, they offer training programs to their clients’ chauffeurs to ensure that their vehicles are being driven appropriately.

“We have trucks available starting at 1-ton to full size, which covers Mexico’s three major industrial sectors: production, marketing and services” – Rafael Carranza, Ready to Rent Director at IDEALEASE Mexico

Logistical technology Always wanting to be on the cutting edge, IDEALEASE is implementing a system that exceeds GPS capabilities. It’s a telemetry program named Ready to Track to evaluate the well-being of the vehicle, the driver’s practices, and the amount of fuel left, in real-time. Win-win partnerships The Mexican subsidiary has a win-win w w w. i d e a l e a s e . c o m . m x

IDEALEASE DE MEXICO

They offer truck

relationship with the IDEALEASE corporate office in Chicago. It creates national and regional strategies that backed by headquarters. An example of this is Ready to Rent/Idealease, a brand created by IDEALEASE Mexico (in the U.S. this service is known as Truck Leasing & Rental.)

maintenance and roadside assistance 365 days per year.

â&#x20AC;&#x153;We are well supported by our suppliers. Such is the case with Navistar International, our main supplier of load trucks, and who offer us specific vehicles tailor made to our needs. We have other suppliers that back us with technical support, tools, technical training and auto parts needed in the shops,â&#x20AC;? concluded Noriega.

L AT I N A M E R I C A

“At Ready to Rent, one of our most important differentiators is our new fleet because the oldest vehicle is three years old. That gives the person who purchases our services assurance that the vehicle will spend more time on the road than in the auto shop”