Procurement efficiency through digital transformation
www.supplychaindigital.com
M AY 2 0 1 9
DRIVING PR O C U R E M E NT N TR AN SFORMATIO
SAP on lessons learned from
TOP 10
Supply chain events
Driving sustainability and growth VP Matthew Frost on enriching lives along the supply chain
FOREWORD
W
elcome to the May edition of
facing the organisers of Fyre Festival
Supply Chain Digital!
and the lessons to be learned
For our cover issue this month, we
from its failure. “We plan in the
spoke with Matthew Frost, Global VP Raw Materials Procurement and Sustainability at Anheuser-Busch
perfect world but we execute in the real world, and in the real world, everything doesn’t go according
InBev to discuss the company’s
to plan,” he says.
Sustainability 2025 goals, the four
Also featured inside are interviews
pillars that define its aims, and the
with Applus, WERC Association and
positive impact they have had on
Fresh Hope, as well as a chat with
its supply chain and sales.
co-founder and CEO of Previse,
Elsewhere, we interviewed leading
Paul Christensen, as he explores
companies such as Paddy Power Betfair, Birchstreet, Vantage Drilling,
how Previse looks to fix one of the biggest problems in the global
UnitingCare Queensland and
B2B ecommerce market.
Barclays Bank Mauritius Limited
Finally, our Top 10 this month counts
to find out more about their digital
down the most exciting supply chain
transformation journeys and supply
events of the year.
chain strategies.
Enjoy the issue!
Our Leadership feature this month
Sean Galea-Pace
showcases Richard Howells, Vice President of Solution Management
sean.galea-pace@bizclikmedia.com
of SAP Digital Supply Chain, as he discusses the logistical challenges
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03
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EDITOR-IN-CHIEF
SEAN GALEA–PACE MANAGING EDITOR
OLIVIA MINNOCK
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CONTENTS
12
AB InBev Driving sustainability and growth together
34
44
LESSONS LEARNED FROM
F E S T I VA L
IMMEDIATE SUPPLIER PAYMENT THROUGH AI TECHNOLOGY
52
62
WILL 2019 BE THE WATERSHED MOMENT FOR THE E-INVOICING MOVEMENT IN EUROPE?
72 TOP 10
Supply chain events Lloyds Bank: Better supply chain management
86
Events & Associations
CONTENTS
90
Paddy Power
104 BirchStreet
142 WERC Association
124 Vantage Drilling
150 UnitingCare Queensland
172 Fresh Hope
Covering every angle in the digital age The Business Chief platforms offer insight on the trends influencing C and V-level executives, telling the stories that matter
CLICK TO SUBSCRIBE FOR FREE
w w w.bu si nessch ief.com
Driving sustainability and growth together WRITTEN BY
MARCUS LAWRENCE PRODUCED BY
JUSTIN BRAND
12
MONTH 2019
13
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ANHEUSER-BUSCH INBEV
Matthew Frost, Global VP for Raw Materials Procurement and Sustainability at Anheuser-Busch InBev, discusses the company’s Sustainability 2025 goals, the four pillars that define its aims, and the positive impact they have had on its supply chain and sales
14
C
ompanies worldwide are finding that manoeuvring towards sustainability driven operations is not only boosting profits but
is also enriching the lives of communities along their supply chains and mitigating their impact on the environment. One such firm to experience this is Anheuser-Busch InBev (AB InBev), the largest beer manufacturer in the world, which has accelerated its historic commitment to sustainability with its ambitious 2025 Sustainability Goals. Broken down into four pillars – Smart Agriculture, Water Stewardship, Circular Packaging and Climate Action – the sustainability drive is seeing a revolution of AB InBev’s supply chain operations. Matthew Frost, Global VP Raw Materials Procurement and Sustainability, is passionate about the multifarious, intersectional benefits of this transformative initiative, and firmly believes that strong sustainability practices are intrinsically linked with improved M AY 2 0 1 9
15
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CREATING BUSINESS VALUE THROUGH SUSTAINABLE ENERGY Ensuring you have the best partner at your side.
Follow us
enelgreenpower.com
ENEL GREEN POWER GLOBAL PARTNERSHIP AB InBev joined the RE100 initiative in early 2017, committing to procure 100% renewable energy by 2025. This is a progressive commitment and companies, like AB InBev, can meet their renewable energy needs in several ways, including purchasing Energy Attribute Certificates (EAC), entering into a long-term Power Purchase Agreement (PPA) or signing up for a Green Tariff. The ways an organization can purchase renewable energy is constantly changing and the contract structures are becoming more complex and innovative each day, including financial hedges and weather derivatives. At Enel Green Power, we work with our partners to help
USA
them understand these different structures and what options are available in each country where they operate. We spend time understanding the goals and challenges of each organization and walk through the different options available, providing the right solution that meets their goals, delivers cost certainty and minimizes risk. We have worked with AB InBev to find customized solutions in the United States and in Chile. In the US, the contract is a Virtual PPA, which is a long term commitment also known as a Contract for Differences (CfD). In Chile, a Green Tariff provided by Enel Distribution Chile is supplied by an Enel Green Power Solar PV plant.
VIRTUAL (OR FINANCIAL) PPA FOR A RE100 CLIENT
PROJECT
OFF-TAKER
THE BUDWEISER WIND FARM AT THUNDER RANCH OKLAHOMA 298 MW $ 435 MILLION INVESTMENT 1,100 GWH ANNUAL GENERATION
CHILE
AB INBEV NEEDED TO PROCURE RENEWABLE ENERGY TO SUPPLY THEIR BUDWEISER BREWERIES IN THE US
SOLUTION VIRTUAL POWER PURCHASE AGREEMENT (VPPA) ENEL GREEN POWER IS SELLING THE ELECTRICITY GENERATED BY A 152.5 MW PORTION OF THE WIND PROJECT TO AB INBEV THE RENEWABLE ENERGY PURCHASED IS ENOUGH TO BREW MORE THAN 20 BILLION 12 OZ SERVINGS OF BEER EACH YEAR 30% CO2 FOOTPRINT REDUCTION
GREEN TARIFF WITH VOLUNTARY RENEWABLE CERTIFICATION
NEED
SOLUTION
BENEFITS
AB INBEV NEEDED TO IMPROVE SUSTAINABILITY WITH RENEWABLE ENERGY THAT COULD CERTIFY THEIR PRODUCTION PLANT IN THE CAPITAL CITY, SANTIAGO
IMPLEMENTATION OF ENEL CHILE CLEAN ENERGY SUPPLY PROVIDED BY THE ENEL GREEN POWER SOLAR PV PLANT DIEGO DE ALMAGRO, LOCATED IN THE ATACAMA DESERT
19 GWH/Y OF CLEAN ENERGY SUPPLY WITH CONSIDERABLE REDUCTION OF THEIR CARBON FOOTPRINT FIRST BREWERY IN CHILE WITH RENEWABLE SUPPLY CERTIFICATION
ANHEUSER-BUSCH INBEV
CO M PAN Y FACT S business operations and innovation. “I think the organisation as a whole is learning more and more that sustainability really is our business now,” he says. Frost notes that, from a commercial perspective, the gradual shift in consumer interests means that this initiative is not only driven by a sense of responsibility, but is also simply good business sense. “Consumers are very much aligned to the message of sustainability, so we find that consumers are seeking out products from com18
panies which are doing something to positively influence the planet through their supply chains. More and more, that’s actually helping us to sell beer,” he adds. “The past two sets of sustainability goals were certainly achieved, but they weren’t as far reaching as our new 2025 ones. They’re helping us to drive growth in the business, innovation, supply security and cost reduction. The more we get into it, the more we realise how beneficial it is for the business overall.”
SMART AGRICULTURE AB InBev aims to ensure that 100% of its direct farmers, from which the firm M AY 2 0 1 9
• AB InBev directly sources 3mn tonnes of barley each year • AB InBev’s electricity will be 100% renewably sourced by 2025
19
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ANHEUSER-BUSCH INBEV
directly sources 3mn tonnes of barley
they benefit much more from having
each year, are skill connected and
training and direct access to agronomi-
financially empowered by 2025. Frost
cal advice on how to grow crops more
notes that this means different things
effectively.”
in different territories across the supply
22
As one of the largest users of
chain, highlighting the fact that the
malting barley worldwide, AB InBev
skills of its farmers in the US are largely
has established its own Barley
well-established, efficient, and less
Research Centre in Fort Collins,
likely to benefit from AB InBev’s direct
Colorado, to ensure that barley
input. The biggest impact to be made is
remains a competitive crop for their
with its smallholder farmers in less
farmers to grow. “We are constantly
affluent countries and regions. “When
working on breeding new varieties of
it comes to farmers growing cassava in
barley that are more disease-resistant,
Mozambique, for example, these are
capable of surviving droughts and
smallholders, family operations, so
flooding, and able to produce more in
“ Consumers are very much aligned to the message of sustainability” — Matthew Frost, Global VP Raw Materials Procurement and Sustainability
M AY 2 0 1 9
CLICK TO WATCH : ‘HOW AB INBEV IS EMPOWERING BARLEY FARMERS IN UGANDA’ 23
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the field depending on the climatic and
in developing countries such as
soil conditions. Therefore, they are
Uganda and Zambia. “Blockchain gives
able to yield more,” explains Frost. “All
smallholders a digital identity, making
of this makes barley less risky for our
them credit-worthy and bankable,”
farmers to plant, whether they’re in the
says Frost. “They can then take out
Ugandan highlands or in Argentina with
loans, grow their business and become
a fully automated farm.” The unifying
more successful. With farmers in more
element between its farmers, whether
developed countries, like the US or
they are smallholders or large agricul-
Argentina, AB InBev’s focus is on
tural cooperatives, is the digital
providing cost effective crop insurance
platforms that AB InBev provides.
and facilitating access to credit.”
These platforms enable the company’s goal of financially empowering its
WATER STEWARDSHIP
farmers, with one example being a
In addition to ensuring that clean water
blockchain-enabled platform deployed
is available to communities surround-
E X E CU T I VE PRO FI LE
Matthew Frost A British National and trained Chemical Engineer, Frost has 30 years of End2End Blue Chip FMCG Supply Chain experience acquired through roles in Research and Development, Engineering, Manufacturing, Logistics and Procurement. Having worked in the UK, Germany, Russia, Switzerland and Africa, Frost has developed a holistic knowledge of procurement across a range of markets. Having served as Chief Procurement Officer at SABMiller, Frost was appointed as AB InBev’s VP Global Raw Materials Procurement and Sustainability when it acquired the firm in 2016.
w w w.suppl yc ha i ndi gi ta l. com
25
ANHEUSER-BUSCH INBEV
ing its breweries, AB InBev is working
“Saving a few gallons of water in our
to create long-standing change in
breweries isn’t going to change the
water consumption across its supply
world,” he says. “We have to get stuck
chain. “A lot of manufacturers look at
into managing the watersheds in those
their water consumption in their
areas in a literal sense.” In different
manufacturing processes and attempt
countries, water rights vary not only
to drive it down. We’ve got ours down
in entitlement but delivery, limiting the
to a low level already, but that’s kind of
efficiency with which farmers can
the wrong focus,” Frost says, adding
make use of their water.
that 37 of AB InBev’s breweries around
26
In the Bajío region of Mexico,
the world are located in high water
farmers have the right to a certain
stress areas and, with the increasing
volume of water for irrigation. When
impact of climate change, it is expect-
the opportunity to have it arises, they
ed that this will rise to 50 by 2030.
must take all of it at once or risk having
“ I think the organisation as a whole is learning more and more that sustainability really is our business now”
— Matthew Frost, Global VP Raw Materials Procurement and Sustainability
M AY 2 0 1 9
CLICK TO WATCH : ‘HOP SUMMIT 2018’ 27 their entitlement cut. “Because of this, they use what we call flood irrigation, which is very costly and inefficient. You saturate the place with water and only so much of it is used by crops while the rest is -wasted,” explains Frost. The challenge here is that, while AB InBev can advise on the best time and volume with which to irrigate crops, the water regulations throw up a barrier to optimising the process. “This is an area where we’re getting involved by emphasising the issue, demonstrating what can be done to resolve it, and trying to use our corporate affairs w w w.suppl yc ha i ndi gi ta l. com
ANHEUSER-BUSCH INBEV
$54.6bn+ Approximate revenue (2018)
2008
Year founded
28
182,915+
Approximate number of employees
M AY 2 0 1 9
CLICK TO WATCH : ‘100+ 2025 SUSTAINABILITY GOALS’ 29 muscle to get things to change for the
returnable bottle fleet, as we call it,”
common good.”
says Frost. “This is by far the most sustainable packaging; you just send
CIRCULAR PACKAGING
the bottle back to us. In some countries,
As part of its Circular Packaging pillar,
we can get 40 turns out of that return-
AB InBev has set the target of ensur-
able bottle. There are some costs
ing that by 2025 100% of its packaging
associated with transporting the
will be either returnable or made from
empty bottles back and cleaning them
majority recycled materials. Drinks
so they can be reused but, ultimately,
bottles have traditionally had the
that’s massively outweighed by the
propensity for being single use, and AB
fact you’re not remanufacturing those
InBev has been working tirelessly to
bottles 40 times over.”
both enable and incentivise recycling
In markets where there is less of
of its bottles. “We use returnable
a social impetus to recycle, AB InBev
bottles in a lot of our geographies – our
deploys ‘one-way glass’ that it anticiw w w.suppl yc ha i ndi gi ta l. com
ANHEUSER-BUSCH INBEV
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Click here to learn more about Novozyme’s Brewing Enzymes
M AY 2 0 1 9
CLICK TO WATCH : ‘BREWERS ON TAP | EXPLORING THREE BREWERY FOUNDERS’ UNABASHED PASSION FOR BEER’ 31 pates will be smashed or otherwise damaged, aiming to reclaim as much of this glass as possible for remanufacturing. These efforts are mirrored by its commitment to recycling aluminium and PET, with AB InBev setting targets for its third-party suppliers to increase their use of recycled materials alongside the optimisation of recycling at its own vertical plants. Its endeavours in this area are given a boost by shifting moods on a generational level. “We are finding that young, legal drinking age
“ We gave those startups some additional seed capital and inserted them along our supply chain” — Matthew Frost, Global VP Raw Materials Procurement and Sustainability
adults are becoming ever more aware of the environmental impact of manuw w w.suppl yc ha i ndi gi ta l. com
ANHEUSER-BUSCH INBEV
“ It’s really a win-win-win: a win for us, a win for the environment and a win for the local grid” — Matthew Frost, Global VP Raw Materials Procurement and Sustainability
32
facturing and the products they
by another significant commitment:
consume,” notes Frost. “People are
ensuring that the company’s energy
more attuned to it, and we’re definitely
consumption is 100% renewable by
trying to push that agenda and
2025. This aim goes deeper than
continuously explain why returnable
simply purchasing green energy
bottles are the better option.”
contracts, however, as AB InBev has invested in purchase power agree-
CLIMATE ACTION
ments (PPAs) that generate additional
All of these factors tie into the overall
renewable electricity for the local grid.
mitigation of AB InBev’s environmental
“Because the unit cost of wind and
impact. They are joined, however,
solar power has been coming down
M AY 2 0 1 9
InBev worked with a carbon disclosure project in 2017 to set a baseline for its supply bases’ CO2 emissions and subsequently set goals for those suppliers to cut their emissions. Frost adds that realisation of its ambitious goals across each of AB InBev’s pillars has been driven in part by its sustainability accelerator, set up to define the challenges the supply chain transformation poses in relation to those goals and inviting startups to solve them. “We gave those startups some additional seed capital and inserted them along our supply chain, enabling them to grow faster by working directly with the people in it,” says Frost, citing its blockchain platform as an example of the success the accelerator substantially in the past few years, we
has produced. “That’s been extremely
have found that every deal we do leads
successful, so we have a number of
to a guaranteed lower cost of power
startups which are growing very quickly
versus grid-available in each of our
as a result of having that involvement in
locations,” Frost explains. “It’s really
our supply chain.”
a win-win-win: a win for us, a win for the environment, and a win for the local grid.” In addition, the company’s Climate Action pledge includes a commitment to reduce carbon emissions across its value chain by 25%. To tackle this, AB w w w.suppl yc ha i ndi gi ta l. com
33
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WRITTEN BY
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HARRY MENEAR
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P R O C U R M E N T T R A N S F O R M AT I O N
Richard Howells, Vice President of Solution Management at Digital Supply Chain, SAP, discusses the logistical challenges facing the organisers of Fyre Festival, and the lessons to be learned from its failure
I
n April 2017, the attention of the world turned to the island of Great Exuma in the Bahamas, where a logistical tragedy of spectacular proportions
was unfolding. Billed as a luxury, immersive music
36
festival, held over two “transformative” weekends on the “boundaries of the impossible,” Fyre Festival promised to be the ultimate getaway experience on a private island once owned by Pablo Escobar. Intended as a promotional event for co-founder Billy McFarland’s celebrity booking company, Fyre Festival boasted an A-List lineup including: Pusha T, Tyga, Desiigner, Blink-182, Major Lazer, Disclosure, Migos, Kaytranada and Lil Yachty. A promotional video filled with Instagram influencers, speedboats and (a true masterstroke) adorable baby pigs. Tickets sold for between US$500 and $1,500, with VIP packages costing as much as $12,000 for private airfare, luxury accommodation and gourmet meals prepared by celebrity chefs, including Bahamian sushi and roast pig. M AY 2 0 1 9
“ The fact that they chose a remote island, which was meant to be the attraction, was a major issue” — Richard Howells,Vice President of Solution Management at Digital Supply Chain, SAP
Fyre Festival promotors, Ja Rule (left) and Billy MacFarland
37
To the horror of the several thousand Instagram influencers, paying guests and local Bahamians, the festival weekend unfolded into one of the most dramatic and highly-publicised calamities in recent memory. Pablo Escobar’s private island turned out to be a strip of land on Great Exuma, in spitting distance of a Sandals resort; the luxury accommodation turned out to be a waterlogged shanty town of repurposed hurricane tents; and the gourmet food distributed to guests took the form of a cheese w w w.suppl yc ha i ndi gi ta l. com
P R O C U R M E N T T R A N S F O R M AT I O N
38
sandwich, which became the most
fined $26mn and sentenced to six years
iconic social media post of the scandal.
in prison, and that, it seemed, was that.
Social media exploded, Instagram
Following the release of two docu-
influencers were scrutinised for failing
mentaries about the event – Fyre by
to disclose their role as paid advertisers
Netflix and Fyre Fraud by Hulu – in
for the festival, co-founder and music
January, 2019, attention has returned
producer Ja Rule tweeted that Fyre
to Fyre Festival, which has become
Festival “was NOT A SCAM” and “NOT
synonymous with disaster and unmet
MY FAULT”, McFarland, Fyre’s CEO, was
expectations. Nevertheless, in
M AY 2 0 1 9
CLICK TO WATCH : ‘FYRE: THE GREATEST PARTY THAT NEVER HAPPENED – NETFLIX OFFICIAL TRAILER
“ The reality is that they didn’t realise how big a job it was to plan this type of event. They announced it five months in advance and to execute an event like this on the mainland is a 12-month exercise” — Richard Howells, VP of Solution Management at Digital Supply Chain, SAP
February, Ja Rule revealed to TMZ
In order to better understand the
that he is working on the launch of
logistical complexities faced by the
a new app-driven booking service
organisers of Fyre Festival, and how an
(which has been noted for its similari-
organisation looking to replicate the
ties to McFarland’s Fyre service)
experience (without brand-destroying
Iconn, and is planning a festival to
backlash) could proceed, we spoke
launch the service. The mogul told
with Richard Howells, Vice President of
TMZ that “in the middle of chaos,
Solution Management at Digital Supply
there’s opportunity.”
Chain, SAP. “I’ve been working for SAP w w w.suppl yc ha i ndi gi ta l. com
39
P R O C U R M E N T T R A N S F O R M AT I O N
for 15 years. I work in the digital supply chain, which includes the entire vertical; the full life cycle of a product or asset from design to deployment, including the sustainability element,” Howells says. He has worked in the supply chain and manufacturing space for over 25 years and is currently
“ We plan in the perfect world but we execute in the real world, and in the real world, everything doesn’t go according to plan”
focused on driving the market direction and positioning of SAP’s Supply Chain Management and IOT solutions. Howells’ philosophy at SAP is that customer experience is growing in 40
importance as multiple verticals move away from one-time sales towards a
service model. “It’s not just the automotive industry where you’re leasing cars. Everything can be leased. If you don’t go to that point, you’re still trying to design smarter products to provide a
better customer service,” Howells says. “It’s just a different way of engaging with customers, providing a better customer experience and differentiating yourself from the competition. It’s what millennials and Gen Z have come to expect.” Turning to Fyre Festival, an event which, according to Howells, failed to meet the expectations of its millennial M AY 2 0 1 9
— Richard Howells, VP of Solution Management at Digital Supply Chain, SAP
Putting out fires: Founder Billy MacFarland attempts to calm a crowd of irate attendees
41 target audience, he explains that the
and it happened to be the same week
event was by no means doomed to
as the biggest event of the year on that
failure, and could have been salvaged
island, their regatta.” Poor planning
by better organisation and understand-
and understanding of the task
ing of its supply chain. “Many of the
undertaken are the first major issues
problems could have been overcome,”
that Howells identifies. “The reality
he insists. “The fact that they chose
is that they didn’t realise how big a job
a remote island, which was meant to
it was to plan this type of event. They
be the attraction, was a major issue.
announced it five months in advance
They didn’t think of the logistics of
and to execute an event like this on the
actually executing an event on that
mainland is a 12-month exercise. They
island where there was zero infrastruc-
had no experience. You’ve got to have
ture. The plan was to import absolutely
accommodation for guests, staff and
everything, from portable toilets to
entertainment, but you’ve got to plan
water, which was a logistical nightmare.
for the right amount of accommodation.
Then they moved it to a bigger island,
You’ve got to plan for the right amount w w w.suppl yc ha i ndi gi ta l. com
P R O C U R M E N T T R A N S F O R M AT I O N
“ It’s having the ability to see that something has affected the plan, and having the ability to adjust, as well as the visibility across your supply chain and business to detect or predict obstacles”
42
— Richard Howells,VP of Solution Management at Digital Supply Chain, SAP
of food, water and facilities, such as
the space, Howells acknowledges
toilets, that need to be imported. You
that the best laid plans often go awry.
can then work out a schedule of when
“We plan in the perfect world but we
these things need to be ordered and
execute in the real world, and in the real
what they’re going to cost,” Howells
world, everything doesn’t go according
explains. “It’s really a budgeting exercise
to plan. My father always used to tell me
based on demand, to work out the
that if you fail to plan, plan to fail,” he says.
supplies required, in order to plan where
In order to counteract the unpredict-
that supply comes from, and when it
ability, Howells counsels both intensive
needs to be at the specific venue.”
planning and adaptability. For both of
With his decades of experience in M AY 2 0 1 9
those strategies to be executed, he
necessary visibility.” SAP’s integrated business tools, Howells is certain, could have alleviated a great deal of the logistical problems with the festival. “They’d need an integrated business planning tool, to be able to plan and project what is required, when it’s required, and be able to replan as things change.” Looking to the future, Howells cautions “social media gives companies the ability to create a perception of being much bigger, organized or capable than they are in some cases. You have to have processes that deliver on your promises. That’s the key. You will get found out if you cannot deliver what the customer is expecting.” Whether in the event planning space, digital marketing, or any other vertical, Howells is hopeful cautions, visibility along the supply chain
that all event organisers and logistics
is essential. “It’s having the ability to see
coordinators, at every point on the
that something has affected the plan,
supply chain, have learned the lessons
and having the ability to adjust, as well
of Fyre Festival: plan effectively, leverage
as the visibility across your supply
technology, budget transparently and
chain and business to detect or predict
– perhaps most importantly – don’t
obstacles.” He also notes that, through-
promise the world and deliver a cheese
out the planning of Fyre Festival “there
sandwich in a hurricane tent.
was very little leveraging of technology. Everything seemed to be conducted via email. There was none of the w w w.suppl yc ha i ndi gi ta l. com
43
D I G I TA L I S AT I O N
44
IMMEDIATE SUPPLIER PAYMENT THROUGH AI TECHNOLOGY Paul Christensen, Co-founder and CEO of Previse, explores how Previse looks to fix one of the biggest problems in the global B2B ecommerce market WRITTEN BY
M AY 2 0 1 9
DALE BENTON
45
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D I G I TA L I S AT I O N
IN
the modern connected world, consumers demand speed. Cashless payments are hardly a new phenomenon, but as technol-
ogy continues to redefine the global landscape businesses are having to embrace this change or
fall behind. The question then becomes one of: if a consumer can receive instant payments or cash exchanges, why should it be any different for suppliers? This is where Previse comes into play. Powered by Artificial Intelligence (AI), Previse enables corporate buyers to safely ensure they pay all their suppliers instantly – eliminating the 46
need to rely on expensive short-term credit, lowering costs for buyers and giving SMEs the confidence to reinvest in growing their businesses. For Paul Christensen, Co-founder and CEO of Previse, providing an innovative platform that could enable immediate payments for suppliers was something of an opportunity. Having worked in the fintech space for more than 20 years, he has seen first-hand the biggest challenges the market faces as technological innovation continues to accelerate. “It’s such a huge problem and therefore an opportunity,” he says. “No one has cracked it yet. So, Previse was built on the idea of being able to tap into that opportunity.” Previse works with large corporates – which receive millions of invoices on a daily basis due to their vast supplier networks – and uses AI to predict M AY 2 0 1 9
“IT’S SUCH A HUGE PROBLEM AND THEREFORE AN OPPORTUNITY” — Paul Christensen, Co-founder and CEO, Previse
47
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D I G I TA L I S AT I O N
“HOW YOU PAY YOUR SUPPLIERS, YOUR RELATIONSHIPS WITH YOUR SUPPLIERS, YOUR SUPPLY CHAIN AND PROCUREMENT FUNCTIONS ARE ALL REALLY MISSION CRITICAL FOR MOST COMPANIES” — Paul Christensen, Co-founder and CEO, Previse
48
the small number of invoices that are
the world brings with it a level of
unlikely to get paid. It then pays them
bureaucracy that can complicate the
immediately, charging a small fee.
process. Christensen strips it back
Historically, paying invoices to a large
further and looks at the current AI or
supplier base is a complex and labori-
digital conversation that large-scale
ous process. “Previse does something
companies are currently having and
that no one has ever done before: It
highlights that these are mostly
forgets that process,” says Christens-
focused on the front office, such
en. “Every large corporate has a huge
as advertising and customer
amount of data sitting in their ERP
experience. “They aren’t thinking
systems. This goldmine isn’t being
enough about the back office, like
touched by anybody, so we go through
procurement or accounts payable
that data and make predictions.
– the whole supply chain ecosystem,”
Previse allows companies to use
he says. “The back office is kind
data, rather than process.”
of low-hanging fruit, that’s
The premise is simple, but the
where you can make
execution is not without its challenges.
the biggest difference.
Working with some of the largest
We are showing that
corporate organisations from around
we can make the
M AY 2 0 1 9
biggest difference with Previse and companies are starting to realise this.” While Christensen can point to success on this front, he admits that it is still a gradual process of “changing the way companies think”. The latest innovation or implementation of game-changing technology is one thing, but convincing people that their business should invest and join the conversation is often met with a little scepticism, even in the midst of the Fourth Industrial Revolution. The importance of being able to demon-
procurement functions are all really
strate the value of what Previse can
mission critical for most companies,”
offer is vital, be it through return
says Christensen. “It cuts across a lot
on investments (ROI) or displaying
of different functions and so that
a strong portfolio of leading
means change is hard. We are working
businesses that the compa-
with big organisations and delivering
ny works with. For Previse,
value to them and we are overcoming
it’s about working with
the barrier to succeed. We haven’t
companies to recognise
cracked it yet, but we are getting there.
how mission critical supplier
This is such a big issue and we are the
payments are to a business.
only one with a solution. We’re getting
“How you pay your suppliers, your
over those hurdles in a big way.” Previse is powered by AI and machine
relationships with
learning. Through binary classification
your suppliers,
and deep neural networks, the company
your supply chain and
will measure the 20-30 features of information that make up an invoice. w w w.suppl yc ha i ndi gi ta l. com
49
D I G I TA L I S AT I O N
“THE BACK OFFICE IS KIND OF LOW-HANGING FRUIT, THAT’S WHERE YOU CAN MAKE THE BIGGEST DIFFERENCE” — Paul Christensen, Co-founder and CEO, Previse
can look at an invoice from somewhere like London and compare it to an invoice from elsewhere across Europe and it analyses the risks involved and where delays could happen. With technology, there is no silver bullet solution that fits all contexts, and many businesses in many sectors struggle to determine the clear advantages and values of specific innovations. Christensen acknowledges this and, as a result, places great importance on transparency in Previse’s business model. Transparency allows Previse to
50 This includes the category of spend,
further highlight the value it can bring
identity of the supplier, location of the
to its customers. “Everybody wants
supplier or even the currency in which
transparency, but do they really?” asks
the transaction is conducted. Previse
Christensen.
will then examine past behaviour in
“It’s easier for smaller businesses to
response to that feature to predict the
have greater transparency, but even for
appropriate response. “The concept is
the larger ones transparency is good.
a simple one really,” says Christensen.
Revealing how long it takes to pay small
“We can use this information and look
suppliers is a corporate social respon-
at the next invoice that comes in and
sibility issue and so we work to improve
say ‘well, the probability of this supplier
the transparency conversation.”
being paid on time is X’ and then work
How Previse achieves this is by being
to pay them immediately.” Not only does
very transparent in its own operations.
Previse allow the immediate payment,
The company charges a fee for its
it also identifies risk. By looking at the
service. SMEs that use Previse will
features of an invoice, the AI solution
receive instant payments and will pay
M AY 2 0 1 9
CLICK TO WATCH : ‘INSTANTPAY’ 51 a 1% fee per month for using the
rise and so fixing the “core problem”
service. “Previse is very open about
will prove crucial in the years to come.
this, it’s a simple price that we outline
Christensen hopes that Previse’s
very early in the process,” says
success will invite new entrants to the
Christensen. “If a company has 30
market. “I’d be disappointed if we didn’t
days of payment terms on a £100 bill,
see any,” he says. “This is a ginormous
they can be paid instantly for a £1 fee.
market, it’s not winner-takes-all. There
It’s as simple as that.”
absolutely should be others as it will
Previse is growing fast. In just over
only further the conversation, allow us
three years it has amassed a strong
to offer improved services and ultimately
network of large organisations that
fix that problem.”
utilise its services. But what does the future hold? There is close to US$125bn in B2B commerce in the world right now, a figure that will only continue to w w w.suppl yc ha i ndi gi ta l. com
TECHNOLOGY
52
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WILL 2019 BE THE WATERSHED MOMENT FOR THE E-INVOICING MOVEMENT IN EUROPE? Ruud Van-Hilten, SVP Commercial Operations EMEA at Tungsten Network, explores how e-invoicing is on the rise WRITTEN BY
RUUD VAN-HILTEN
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53
TECHNOLOGY
W
e are living in exciting times when it comes
to the digitisation agenda and financial supply chains. From January 2019, elec-
tronic invoicing, or e-invoicing, will be compulsory for all companies in Italy and in April 2019, the UK Government’s Making Tax Digital programme will come into force. These could be defining moments for the paper-free, e-invoicing movement across Europe as other countries take note and follow suit. While automating finance departments and moving suppliers to online payment networks has 54
been gathering pace, for those watching closely, it has been a painstakingly slow journey. Our friends in Latin America are much further ahead in the adoption of e-invoicing, primarily because authorities there have made e-invoicing mandatory across all business-to-government and businessto-business transactions. Although Chile was one of the first to introduce e-invoicing, others such as Brazil and Mexico have overtaken Chile due to strict mandates for usage. Despite the journey to invoicing digitisation kicking off at a seemingly slower rate in the UK, the wheels are definitely in motion and we are only at the beginning of a sweeping European trend. So, what will this all mean for technology as we currently know it?
M AY 2 0 1 9
“WE ARE LIVING IN EXCITING TIMES WHEN IT COMES TO THE DIGITISATION AGENDA AND FINANCIAL SUPPLY CHAINS” — Ruud Van-Hilten, SVP Commercial Operations EMEA Tungsten Network
55
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TECHNOLOGY
“ I T’S NOT SURPRISING THEREFORE THAT GOVERNMENTS HAVE DECIDED TO TAKE ACTION” — Ruud Van-Hilten, SVP Commercial Operations EMEA Tungsten Network 56
M AY 2 0 1 9
CLICK TO WATCH : ‘E-INVOICING IN A GLOBAL ORGANIZATION; TUNGSTEN NETWORK INTERVIEW WITH MEG MCGRATH AT SIEMENS’ 57
MIND THE GAP
amounted to €147bn. Italy had the
The main motivation for governments in
largest VAT gap among the EU
Latin America (and Italy) has been
Member States. In 2015, the difference
stopping VAT leakages due to fraud
between the expected VAT revenue
and the existence of inadequate tax
and the amount actually collected in
collection systems. Establishing
Italy was an incredible €35bn. It’s not
real-time or near real-time invoicing
surprising therefore that governments
controls as opposed to the post-audit
have decided to take action.
model which currently dominates Europe means the tax administration
A WATERSHED MOMENT?
can get involved at a much earlier
As well as Latin America, real-time
stage and reduce tax fraud, evasion
clearance models have already been
and avoidance.
implemented in Russia and parts of
In Europe in 2016, the VAT gap was 12% of what should be collected and
Asia and Italy’s decision to join the movement will no doubt lead others in w w w.suppl yc ha i ndi gi ta l. com
TECHNOLOGY
58 Europe to follow suit, particularly
France are already working on their
when they see a tangible reduction
own models suggesting that 2019
in Italy’s VAT gap.
could be a key year for the industry.
According to Trustweaver, by 2025 most of the world will be using some
THE DEATH OF THE PAN-EUROPEAN MODEL?
sort of clearance model to regulate
A big concern is that these countries
invoicing and achieve a tighter control
are setting up their own market-specif-
over VAT. The next six years are clearly
ic and country-specific systems rather
going to be extremely significant for
than developing a pan-European
the e-invoicing industry - the big
model. The vision of a unified Europe-
question is whether 2019 is going to be
an standard is fading and once
the catalyst for the revolution? Will
countries do their own thing it will be
Italy’s change in approach trigger a
very difficult to harmonise afterwards.
domino effect across Europe? Spain,
The existence of dozens of slightly
Portugal, Hungary, Poland, Austria and
different systems could become quite
M AY 2 0 1 9
a headache for global companies as
stand their requirements. We are now
they try to ensure compliancy.
a conduit to the Italian governmental
This of course is where a business-
e-invoicing platform Sistema di
like Tungsten Network can be a lifeline
Interscambio and our Italian customers
for companies trading across multiple
are able to route all their invoices, both
borders. We make it our mission to work
inbound and outbound, via Tungsten
alongside governments as they develop
Network and don’t need to worry about
their systems and work tirelessly to
whether they are compliant or not. This
guarantee all invoices going through
is just one example of how we have
our electronic network are compliant
worked with global tax authorities to
worldwide. To date, we are tax compli-
stay ahead of statutory changes. If other
ant in 48 countries, more than any other
European countries mandate e-invoic-
trading network in the world.
ing this year, we will adapt our system
Most recently, we have been working with the Italian government to under-
accordingly so that organisations are always on the right side of the law.
E XE CU T I VE PRO FI LE
Ruud van Hilten, SVP Commercial Operations EMEA Tungsten Network A process automation expert, Ruud van Hilten has supported global organisations such as HP, GSK, and Siemens re-invent their procure-to-pay function for over 12 years. As Tungsten Network’s SVP Strategic Business Development, he is responsible for high profile partner engagements and accelerating the benefits of the network for Tungsten Network customers. Prior to Tungsten Network, Ruud worked with early e-commerce adopters all over the world at BroadVision.
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59
TECHNOLOGY
60
GOING PAPER-FREE
the right direction. Its Making Tax
Governmental pressure to adopt
Digital programme is aimed to help
e-invoicing is good as it usually results in
individuals and businesses handle their
other efficiencies such as more accurate
tax more effectively and efficiently.
and timely payment of suppliers and a
HMRC wants to become “one of the
reduction in fraud, duplication and error.
most digitally advanced tax administra-
In fact, according to Billentis, e-invoicing
tions in the world� and to transform tax
reduces the costs of handling invoices
administration so that it is easier for
by more than 50%.
taxpayers to get their tax right.
While the UK Government is not mandating e-invoicing, it is moving in M AY 2 0 1 9
By April 2019, it will expect VAT-registered businesses with a taxable
“GETTING EUROPEAN COUNTRIES TO ADOPT E-INVOICING HAS BEEN A BIT LIKE PUSHING A ROCK UP A HILL” — Ruud Van-Hilten, SVP Commercial Operations EMEA Tungsten Network
turnover above the VAT threshold to
Spain, Greece and Portugal predicted
use the Making Tax Digital service to
to follow Italy’s lead. The next year
keep records digitally and use software
should herald some key developments
to submit their VAT returns. This should
in the digital revolution and we believe
help UK businesses begin the move
businesses and governments will never
from paper to digital records.
look back. As always, we are on hand.
Getting European countries to adopt e-invoicing has been a bit like pushing a rock up a hill. But as we look ahead, it feels like we are now at the summit and momentum is on our side with w w w.suppl yc ha i ndi gi ta l. com
61
CONTRACT MANAGEMENT
Lloyds Bank: Better supply chain management
62
Matthew Hurst, supply chain expert, Global Transaction Banking at Lloyds Bank, looks at five simple steps for greater supply chain management WRITTEN BY
M AY 2 0 1 9
M AT THE W HURS T
63
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CONTRACT MANAGEMENT
T
here’s a real push for businesses to expand their global footprint and explore new markets overseas. After
all, furthering exports is good for companies and boosts the economy. But as businesses broaden their trading horizons, their supply chains get longer and more complex, making it crucial for them to ensure that the new partners they are working
with are resilient. This is particularly important during times of political uncertainty. 64
There is no disputing that managing and future-proofing an increasingly complex supply chain isn’t easy – fortunately there are five simple steps businesses can follow to help streamline the process.
DEVELOP A BESPOKE SUPPLY CHAIN MANAGEMENT STRATEGY Every supply chain is unique, which means firms need a dedicated and bespoke strategy that is defined by their specific business objectives. The strategy should be able to adapt to support both immediate and future priorities, whether that’s risk management, margin improvement or responding to a new opportunity quickly.
M AY 2 0 1 9
“ Every supply chain is unique, which means firms need a dedicated and bespoke strategy that is defined by their specific business objectives” — Matthew Hurst, Supply Chain Expert, Global Transaction Banking at Lloyds Bank
65
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CONTRACT MANAGEMENT
The first step is for businesses to
Our latest Working Capital Index
spend time comprehensively map-
discovered UK businesses have
ping out their supply chain to find any
£680bn tied up in excess working
weaknesses that could compromise
capital. By unlocking capital within the
their organisation’s drivers for success.
supply chain, businesses could be
After this, they should take a holistic
better placed to invest in growth or
approach to address any inefficiencies,
weather turbulent economic conditions
working alongside partners and with
at short notice.
financial provisions and operational improvements considered together.
Supply chain finance can allow suppliers to leverage the buyer’s credit rating and access an agreed percent-
66
USE SPECIALIST TOOLS TO MANAGE WORKING CAPITAL
This means the buyer can benefit from
Once a supply chain’s priorities and
early settlement discounts, or a more
risks have been mapped, there are
substantial payment gap, without
a range of tools available to help them
affecting the supplier’s cash flow.
optimise it. Supply chain finance is one
age of their due payment up-front.
It can also be used in the reverse,
such tool. It can help firms and their
helping corporate sellers by giving
partners improve their working capital
them the opportunity to retrieve
management.
payment quickly by selling off receivables from a portfolio of approved
“ The reason these are so important is that supply chains are, of course, built on relationships” — Matthew Hurst, Supply Chain Expert, Global Transaction Banking at Lloyds Bank
M AY 2 0 1 9
debtors to their lender, enhancing cash flow, strengthening the businesses balance sheet and adding security to the supply chain as a whole.
CREATE WIN-WIN RELATIONSHIPS Outside funding, there are propensity modelling tools that can give corporates an overview of which suppliers
CLICK TO WATCH : ‘A REVOLUTION IN HOLISTIC SUPPLY CHAIN MANAGEMENT’ 67
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CONTRACT MANAGEMENT
will respond well to management techniques and help them anticipate how successful a supplier finance programme is likely to be. The reason these are so important is that supply chains are, of course, built on relationships. Ideally, any solution should be arrived at and implemented in collaboration with suppliers. For example, many businesses first decide to use supply chain finance to provide preferential payment terms for key suppliers, while also allowing them 68
to boost working capital. Its uses can be far more nuanced than this, but the way it is traditionally introduced demonstrates how any tactic aimed at optimising a supply chain –
from geopolitical uncertainty to the
and indeed the whole supply chain
level of working capital available to
strategy – should be about creating
local suppliers. Then there are risks
a win-win arrangement for both parties.
caused by dealing with small and medium-sized suppliers, which might
MANAGE RISK EXPOSURE
be particularly vulnerable to liquidity
When working with international supply
pressures.
chains, larger scale can potentially
What is important is not that firms
generate cost savings but operating
try to eradicate these risks in all
across borders can also increase risks
circumstances, but that these hurdles
around using new suppliers based in
are considered and planned for.
unfamiliar geographies. This could be caused by anything M AY 2 0 1 9
By allowing key suppliers to secure an earlier injection of cash flow on
“ There’s a lot of uncertainty in the UK at the moment and businesses are wise to make sure their supply chains are as resilient as possible” — Matthew Hurst, Supply Chain Expert, Global Transaction Banking at Lloyds Bank
At Lloyds Bank, we think this holistic approach is best and we work closely with all our clients, their suppliers and other non-financial bodies, such as the Department for International Trade, to inform our recommendations and support. Experience is also key. We were the first bank in the UK to syndicate a supplier finance programme and our expert teams have access to equipment that can give businesses full visibility and control over all their supply chain interactions. For 2019, we have also committed to lending £18bn to businesses across the UK. There’s a lot of uncertainty in the UK
better-than-normal credit terms, supply
at the moment and businesses are
chain finance can help reduce a buyer’s
wise to make sure their supply chains
exposure to the risk of suppliers
are as resilient as possible.
becoming insolvent, for example, while
Vigilant firms that take a proactive
also encouraging loyalty between buyer
approach to managing their supply
and trading partners.
chain will find themselves well placed to respond to whatever opportunities
SPEAK TO A TRUSTED ADVISER
or challenges the future may hold.
Taking advice is critical. The right lender will work hard to understand the whole business before delivering tailored solutions geared to meeting its specific needs. w w w.suppl yc ha i ndi gi ta l. com
69
Premier Partner
Associate Partners
Award Sponsors
Corporate Table Partner
Business Intelligence Partner
JAPANESE DESIGN & BUILD CONTRACTOR www.kajima.pl
Auditor
Fashion Partner
Media Partners
Supporting Partners
PR & SM Partners
Vodka Partner
Wine Partner
Digital Marketing
Venue Partner
For further information please contact: Craig Smith / +48 604 144 769 / craig@EuropaProperty.com Anna Kaliszewska / +48 601 382 667 / anna@EuropaProperty.com
Beer Partner
Jury Members 2019
Marek Foryński
Kris Bledowski
Karel Zeman
Wolfram Braun
Panattoni Head of BTS Group
MAPI Council Director and Senior Economist
CBRE Global Investors Poland Head of Investment Operations Poland
AVON Operations Poland Vice President Global Manufacturing
Katarzyna Pyś-Fabiańczyk
Phil Goss
Courtney Fingar
Adam Zawadzki
Exeter Property Group Director Leasing and Development CEE
Perła Browary Lubelskie Vice-president of the Management Board
fDi Magazine Editor-in-Chief
Toyota Motor Europe Senior Project Leader
Philippe Beurtheret
Michał Nowicki
Łukasz Niesłuchowski
Bruno Lambrecht
CEETRUS General Manager Hungary
RECARO Director Quality and Deputy General Manager
Rockwell Automation Country Sales Director
CFE Poland General Manager
Dorota Raben
Preston Smith
Marek Potoczny
Adam Janus
CLIP Group Member of The Board
CDDI Founder & Executive
Valeo Group Industrial Projects Director
DHL Head of Real Estate Solutions CEE
T O P 10
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M AY 2 0 1 9
TOP 10
supply chain events Supply Chain Digital takes a look at the biggest procurement and supply chain management events of 2019. Check out these annual gatherings of the top minds in the industry WRITTEN BY
HARRY MENEAR
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T O P 10
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10
Chief Procurement Officer Summit
Held each year at the end of April, the Chief Procurement Officer Summit took place this year in Atlanta, Georgia, at the Ritz Carlton. The annual event is an invitation-only forum for key players in the procurement industry, bringing together elite buyers and sellers in an environment designed to promote the focused discussion of key new drivers shaping the industry. The 2019 Summit featured key topics such as Artificial Intelligence, IoT, Blockchain and the importance of accurate data within procurement systems.
M AY 2 0 1 9
09
Women in Procurement & Supply Chain Summit
The fifth annual Women in Procurement & Supply Chain Summit took place in Sydney, Australia between April 30 and May 2, 2019. The annual event is a unique gathering centred around advancing the careers of female procurement and supply chain professionals. The 2019 summit focused on the challenges, opportunities and pain points facing procurement and supply chain stakeholders. Some of this year’s keynote speakers included Ann Sherry, Executive Chairman of Carnival Australia; April Palmerlee, Chief Executive Officer at the American Chamber of Commerce in Australia; and Thomai Veginis, Chief Procurement Officer at Telstra.
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T O P 10
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08
Procurecon Travel
Designed as an interactive, peer-led event for senior level procurement executives to learn, discuss and innovate regarding their companies’ corporate travel initiatives, Procurecon Travel is scheduled to take place on May 14-15 in Henderson, Nevada. Aimed at companies ranging in size and maturity from startups to Fortune 500 firms, Procurecon Travel offers intimate networking sessions and innovative workshops centred around taking travel procurement beyond cost-cutting and into a future of value creation.
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77
07
World Procurement Awards
Hosted at the Intercontinental Hotel in the heart of London, the World Procurement Awards 2019 are a shining highlight of the talent, passion and expertise leading the procurement industry. The event, taking place on Thursday, May 16, will be hosted in partnership with SAP Ariba and, in addition to honouring the best and brightest trailblazers in the procurement sector, will be a unique opportunity for procurement professionals from around the globe to gather and celebrate the progress made over the previous year by the industry as a whole.
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06
Supply Chain Innovation Summit 2019
The eighth annual Supply Chain Innovation Summit will be held in Shanghai on the 16th and 17th of May, 2019. This year’s event is billed as a must-attend for supply chain and procurement professionals looking to do business in China. Organised around the theme of “Moving to the ‘Thinking’ Supply Chain & Logistics Era”, the event will focus on the need for agility, visibility and adaptability in the modern supply chain landscape.
M AY 2 0 1 9
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05
Global Manufacturing Supply Chain Innovation Summit
As the world’s manufacturing industry continues to evolve alongside Industry 4.0, manufacturing and industrial companies must also innovate in their procurement and supply chain departments. Held on May 30, 2019 in Singapore, the ninth Global Manufacturing Supply Chain Innovation Summit will bring together industry professionals to discuss the theme of “New Manufacturing, New Supply Chain�. The event will be centred around eight sessions, including presentations on the new manufacturing, iconic brand case studies, supply chain visibility and customer collaboration.
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T O P 10
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04
Procurecon Asia
Procurecon Asia will take place between the 9th and 11th of July at the Amara Sanctuary Resort Sentosa. With the goal of “Transforming Procurement. Together”, it will feature inspirational stories from the industry and offer the chance to take part in small, interactive working groups to accelerate and support their procurement transformation projects, grow knowledge and learn how to become ever more agile. According to Jorge Juan Munoz Fernandez, Head of Strategic Sourcing & Transformation at Maxis, the event delivers “actionable solutions to address the biggest procurement challenges currently facing us.
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03
CIPS Australasia Conference & Supply Management Award
The region’s most prestigious conference and procurement and supply chain awards event, the CIPS Australasia Conference & Supply Management Awards are an annual event, this year taking place once again at the Park Hyatt Hotel in Melbourne, Australia. The conference will feature keynote presentations and networking opportunities concerning leading industry trends, such as optimising costs and adding value through procurement and supply chain innovation. The awards ceremony will celebrate thought leaders, offering attendees the opportunity to network with the region’s leading supply chain professionals.
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T O P 10
02
Procurecon IT Sourcing Helping to round out a jam-packed 2019 is Procurecon IT Sourcing, which will be held in Germany on the 19-20 of
82
November. The event is one of the longest-running in the procurement sector and is aimed at helping attendees benchmark themselves, their procurement departments and processes against other leading players in the industry. This year’s event is expected to focus on new software solutions available to the space, as well as hardware licensing and contracting, data spend, mobility spend, telecoms spend, IT outsourcing and digital transformation.
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01
Asia Pacific Procurement Congress 2019 Finally, the Asia Pacific Procurement Congress, held in November in Singapore, promises to be the ultimate in
84
education, development and networking for supply chain professionals in the APAC region. “To build an agile function that contributes to the top-line, your function’s processes, tools and behaviours need to be re-evaluated,” say the event’s organisers. The Congress is dedicated to discussion and development of the latest global trends in technology, talent and business models that are intended to allow procurement professionals and departments to contribute to their companies’ growth and value.
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EVENTS & A S S O C I AT I O N S
The biggest industry events and conferences WRITTEN BY DALE BENTON from around the world
30 APRIL–02 MAY
Women in Procurement & Supply Chain 2019 [ PULLMAN SYDNEY HYDE PARK, AUSTRALIA ] 86
The annual Women in Procurement
16 MAY
World Procurement Awards 2019
and Supply Chain conference is dedi-
[ INTERCONTINENTAL LONDON - THE O2 ]
cated to advancing the opportunities
Redefining procurement excellence -
for female executives across supply
the pinnacle of professional
chain and procurement. Looking to
achievement, each year the greatest
address specific industry challenges
procurement organisations and
facing procurement stakeholders,
thought leaders from around the world
together with timely, candid and
gather for an evening of anticipation,
thought-provoking insights into the
entertainment, and inspiration at the
future opportunities (and pain points)
World Procurement Awards. Compet-
addressing procurement, the event is
ing for a spot on the prestigious list of
a platform for procurement stakehold-
finalists and winners, organisations are
ers to share experiences, insights,
recognised for being innovative and
stories and best-practice innovations.
transformative players in the industry.
M AY 2 0 1 9
30–31 MAY
[ OXFORDSHIRE, UK ]
9th Global Manufacturing Supply Chain Innovation Summit 2019
A highly focused event that brings
[ SINGAPORE ]
together logistics professionals and key
The Global Manufacturing Supply Chain
industry solution providers, the summit
Innovation Summit returns with a new
consists of one-to-one business meet-
area of focus, New Manufacturing,
ings, interactive seminars and valuable
New Supply Chain. Eight sessions
networking opportunities; in less than
across two days will see leading prac-
two days. The Total Supply Chain Sum-
titioners from manufacturers in the
mit is specifically organised for senior
automotive, pharmaceutical, consumer
professionals who are directly responsi-
goods and logistics and supply chain
ble for supply chain within their
space discuss supply chain strategy
organisation, and those who provide the
and innovation, visibility, agility and
latest and greatest products and ser-
efficiency as well as the digitisation
vices within the sector.
of supply chain and logistics.
20–21 MAY
Supply Chain Summit (UK)
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87
EVENTS & A S S O C I AT I O N S
10–12 JUNE
88
09–11 JULY
Supply Chain Summit 2019: Atlanta
ProcureCon Asia
[ THE WESTIN PEACHTREE PLAZA, ATLANTA ]
Asia’s premier gathering for global
The Supply Chain Summit 2019 is the
and regional CPOs and Asian heads
meeting place for the forces of innova-
of procurement. Procurecon Asia
tion, transformation and connectivity
2019 brings over 200 attendees and
that will fundamentally reshape the
more than 100 CPO’s and Heads of
supply chain industry over the coming
Procurement to access and explore
years. Over 800 supply chain and pro-
interactive case studies, broad discus-
curement representatives will meet to
sion on industry challenges and
discuss digital transformation strategy
trends and network with some of the
and look at the supply chain of the
biggest names in the procurement
future. Supply Chain Summit: Atlanta
space. Procurecon asks profession-
will look to enable companies from all
als in both direct and indirect
over the world to discover a truly global
procurement to ‘maximise learning
perspective on the current supply
and optimise your organisation’s
chain landscape.
supply chain strategy.’
MARCH 2019
[ SINGAPORE ]
11–12 JULY
Ovation: The World’s Most Exclusive and Renowned CPO Think Tank [ CHANTILLY, FRANCE ] Created to look “far beyond the traditions of procurement”, Ovation looks to the future of supply chain and the key trends that will directly impact the
89
24–26 SEPTEMBER
Supply Chain & Logistics Summit and Expo 2019
group-level CPO. Over the course of
[ HILTON ANTWERP, BELGIUM ]
two days, 50 exclusively invited CPOs
The EMEA Supply Chain & Logistics
from around the world will attend work-
Summit & Expo is one of the most estab-
shops designed to drive divergent
lished events of its kind in Europe. Now
thinking, challenge and enlighten fellow
in its 21st year, it is a highlight in the cal-
thought leaders and learn how to bet-
endar where world-class organisations
ter harness the complexity of global
meet to maximise efficiency and mini-
supply networks and ecosystems in
mise costs through supply chain
the digital world.
strategies of the future.
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90
PADDY POWER BETFAIR TARGETS PROCUREMENT EFFICIENCY WITH DIGITAL TRANSFORMATION WRITTEN BY
SOPHIE CHAPMAN PRODUCED BY
JUSTIN BRAND
M AY 2 0 1 9
91
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PA D D Y P O W E R B E T F A I R
As the company invests more in technology, Paddy Power Betfair is ensuring efficient procurement processes with spend analytics, as Colum Colbert explains
W
ith the gambling industry continuing to evolve with changing legislation and new technologies, Ireland’s
Paddy Power Betfair (PPB) has operations across Europe, America and Australia. The firm manages several brands which have 92
evolved along with the industry. When Paddy Power was founded in 1988, it followed a traditional gambling model with shops on high streets. As well as growth within its business model, the company has expanded its global presence through mergers and acquisitions. In 2010, Paddy Power acquired Sportsbet, one of Australia’s leading bookmakers. In 2015, Paddy Power and UK-based Betfair agreed to merge. Since the merger, the company has sought to increase its global operations further. Director of Procurement, Jack McMahon, joined Paddy Power – prior to its merger with Betfair – in April 2015. McMahon has over 20 years’ experience in procurement, operations M AY 2 0 1 9
93
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PA D D Y P O W E R B E T F A I R
“ My advice here is clear and simple: choose your suppliers carefully. Look for those who truly can be your partners.They can be critical to your success” 94
— Colum Colbert, Head of Procurement Services at Paddy Power Betfair
M AY 2 0 1 9
and supply chain. With this he sought to implement standard processes and procedures to support stakeholders within PPB. “Our focus has always been to support the business proactively in engaging with our supply base. Our job is to maximise value and minimise risk,” Jack says. “Our long term plan is to operate on a common platform for systems, process and procedures. Hence, our Global team can have a standard language and get to best practice. This also helps offer opportunities
CLICK TO WATCH : ‘PADDY POWER – STANDING OUT’ 95 to staff to transfer between Regions
arranging supply, making sure that the
and develop within PPB.”
supply chain is uninterrupted and
Colum Colbert joined Paddy Power
monitoring quality throughout. The
five years ago. He has been working
second is achieving good value for
with the procurement team for the past
money within that supply chain. Now
two years. “Within procurement, my
that I’ve worked in the industry in PPB
own area of Procurement Services is
for two years, I think these two activities
not about sourcing. Procurement
are part of a bigger picture. I think they
Services manage the procedures,
both fit into a greater overall context of
policies and the systems – what I would
managing supply chain risk. Besides
call the ‘infrastructure’ – that enables
risks around security of quality supply
and supports procurement.” He argues
and value for money, there are also
that procurement has traditionally
legal, tax and IT security risks.”
centered around two things: “The first is security of quality supply, such as
The Procurement Services Head suggests that since joining the w w w.suppl yc ha i ndi gi ta l. com
PA D D Y P O W E R B E T F A I R
96
M AY 2 0 1 9
company, he has witnessed greater
“With a clearer systems strategy in
embedding of its PO system. Provided
place, we have been introducing various
by Oracle, Colbert notes that the role
tools that enable us to achieve procure-
of this system in the P2P process has
ment excellence, what we call ‘Procure-
become clearer to the wider business
ment 2.0’. A good example has been our
overall. The key message of “No PO –
implementation of spend analytics
No Pay” is gaining traction for an increas-
provided by Efficio. We have achieved
ing share of the company’s spend. The
global spend analytics with spend
PO system has created a greater sense
categorised according to procurement-
of spend governance in the company’s
relevant taxonomy. This facilitates
overall P2P systems strategy.
global category management and
Colbert also observes that over the past two years, operations within his
savings planning,” comments Colbert. The partnership with Oracle is enabling
team have become more concerned
the firm to transform its process for
with achieving and delivering best
contract preapproval, or Deal Sheet.
practice, policies and procedures.
This process helps manage legal, tax,
E XE CU T I VE PRO FI LE
Colum Colbert A Chartered Accountant, Colum formerly worked for 12 years as a manager in Baxter Healthcare’s Finance Shared Services Centre. Here, he managed areas including Finance Training, AP, Procurement Services and GL. He joined Paddy Power Betfair (PPB) plc in late 2013 as Senior Manager for Disbursements, covering AP and Payroll. Since 2017, Colum has led PPB’s Procurement Services team, responsible for driving Systems strategy.
w w w.suppl yc ha i ndi gi ta l. com
97
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STRONG
COUNTRIES
“ Efficiency is critical.We don’t want to invest in anything that — Name of Person, makes life Position and company less efficient” — Colum Colbert, Head of Procurement Services at Paddy Power Betfair
99
IT security and value-add risks in buying.
enabler for people to engage in
By using the Oracle cloud technology,
procurement activity.”
with the help of developer Namos
This concept of partnership with sup-
Solutions, the betting business is
pliers has been key to PPB’s systems
transitioning from a manual to a more
strategy to date. “Many suppliers may
automated process. Paddy Power
claim to be ‘partners’ of their custom-
Betfair are also implementing Market
ers. However, this may often be a mere
Dojo’s eRFx tool to streamline tendering.
cliché or lip-service”, Colbert states.
“Efficiency is critical. We don’t want to
“On our procurement systems journey,
invest in anything that makes life less
our providers truly have been good to
efficient,” says Colbert. “I hope that this
us and for us. I have been astounded
technology and automation develop-
by their flexibility and customer service
ment makes it easier and becomes an
ethic”, adds Colbert. “For example, w w w.suppl yc ha i ndi gi ta l. com
PA D D Y P O W E R B E T F A I R
100
“ Our focus has always been to support the business proactively in engaging with our supply base. Our job is to maximise value and minimise risk” — Colum Colbert, Head of Procurement Services at Paddy Power Betfair
M AY 2 0 1 9
101
PA D D Y P O W E R B E T F A I R
1988
Year founded
2016
Merged with Betfair
190
Shops located in Ireland
102
Market Dojo sold us an eRFx licence.
meet our bespoke requirements. The
They then stayed with us and ‘held our
common denominator among these
hand’ as we actually launched suc-
providers was that they didn’t simply
cessful eRFx events. Efficio, our spend
sell and then leave us”, Colbert states.
analytics providers, have shown great
He adds “my advice here is clear and
agility in quickly turning around requests
simple: choose your suppliers care-
for data loading, analysis and reporting.
fully. They can be critical to your
Namos Solutions, builders of our Deal
success or failure”.
Sheet tool, invested huge efforts in customising Oracle technology to M AY 2 0 1 9
In the coming years, Colbert expects the company to have a more globally
103
integrated procurement function that
of course have to integrate our procure-
collectively encompasses systems,
ment function with these new compa-
processes, policy, and supplier and
nies too,� Colbert concludes.
risk management. “We will globally integrate more of the procurement activity across the existing Paddy Power Betfair entities. There may even be more entities and brands within our business. If Paddy Power Betfair makes further acquisitions, we would w w w.suppl yc ha i ndi gi ta l. com
104
EXPLOSIVE GROWTH: NEW INNOVATIONS, NEW GEOGRAPHIES, NEW INDUSTRIES WRITTEN BY
HARRY MENEAR
M AY 2 0 1 9
PRODUCED BY
ARRON RAMPLING
105
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BIRCHSTREET SYSTEMS
STEVE MARKLE, CEO OF BIRCHSTREET SYSTEMS, DISCUSSES THE NEW INDUSTRIES, NEW GEOGRAPHIES AND NEW, INNOVATIVE PRODUCTS DRIVING THE NEXT PHASE OF GROWTH FOR THE COMPANY
O
ver the past 17 years, BirchStreet Systems has emerged as the leading provider of Procure-to-Pay (P2P) solutions for
enterprises operating in the hospitality space. P2P is comprised of solutions which automate procurement, accounts payable, invoice & payment 106
processing, inventory management, recipe management and capital expense management. These solutions can deliver up to 20%-50% back office and food and beverage cost reduction, and achieve over 80% on-contract spend compliance rates, improving rebate capture. With best-of-breed solutions and strong value proposition, BirchStreet is poised to enter its next phase of expansion. “We’re really entering into a hyper-growth phase,” says CEO Steve Markle. BirchStreet counts such premium hotel brands as Marriott, Hilton, Hyatt, Accor, and Four Seasons among the enterprisewide users of its suite of SaaS on-demand solutions. Markle continues, “having captured most of the major global hotel brands, and a large percentage of the large hotel management companies as enterprise customers, BirchStreet is preparing to M AY 2 0 1 9
107
scale its operations dramatically. We grew in excess of 40% in the last year and can see that growth trajectory continuing for the foreseeable future as we deploy into our customers’ property portfolios, grow alongside our rapidly expanding customer base and acquire additional large enterprise customers. Moreover, we have our sights on growing the company by many multiples in the next few years.� Following two years as BirchStreet COO, Markle, has served as CEO of BirchStreet since July 2018. In our w w w.suppl yc ha i ndi gi ta l. com
BIRCHSTREET SYSTEMS
“ W E HAVE OUR
SIGHTS ON GROWING THE COMPANY BY MANY MULTIPLES IN THE NEXT FEW YEARS” — Steve Markle, CEO, BirchStreet Systems
geographies through its existing customer base of global brands and an enhanced international selling organization. “Our third growth vector is the new suite of products we have recently developed in our roadmap, which is really exciting,” he continues. “These solutions go way beyond traditional e-procurement.” These three elements of BirchStreet’s transformation and growth journey are best illustrated by one of the company’s newest clients, Wynn Resorts. “Working closely with Wynn over the past year, we are quickly
108 sit-down session, Markle outlines an
approaching their goal of becoming
ambitious plan to match the company’s
truly paperless,” says Markle. “Having
bold, dramatic growth targets, sharing
recently gone fully live on BirchStreet,
his vision for BirchStreet’s continuing
Wynn is not only automating its P2P
transformation into a diverse and
processes, but is also utilizing nearly
disruptive global organization.
every tool that we have to eliminate
“There are three major vectors of
paper. Like we did by working with
growth that put BirchStreet into
the leaders in the hotel space in our
context,” explains Markle. “First, we
early years, Wynn has partnered with
are more deeply penetrating our
us as an early adopter to create
traditional hospitality industries, as well
state-of-the-art solutions for the
as entering new industries that are
gaming industry. Innovation through
similar because of the adjacent Food &
collaboration has been the hallmark of
Beverage and direct goods categories
BirchStreet’s development from our
that they share.” Second, BirchStreet is
earliest days as a transformative
rapidly expanding its footprint in new
company”, he explains.
M AY 2 0 1 9
CLICK TO WATCH : ‘BIRCHSTREET CUSTOMER CONFERENCE 2018 HIGHLIGHT FILM’ 109 This new partnership is allowing
BETTER SERVING LONG-TIME CUSTOMERS
BirchStreet to further its penetration of
Over the past 17 years, BirchStreet has
the hotel and hospitality vertical.
continuously sharpened its ability to
Furthermore, it demonstrates that
increase spend visibility & control and
BirchStreet is making a decisive
operational efficiency to significantly
entrance into the gaming, restaurant,
cut costs for its clients in the hotel
managed foodservice and sports &
space. This singular focus on reducing
entertainment events spaces, evi-
the cost of procuring from and settling
denced by customers such as Levy
with their suppliers has resulted in
Restaurants and Delaware North.
BirchStreet capturing the 14,000
The company is also launching a host
businesses that it now claims as its
of new products in order to smooth
customers. BirchStreet’s importance
and improve the operating processes
was cited by AccorHotels CPO
of a world-leading institutional food
Sebastien Brunel in a recent interview
service brand.
with Business Chief. “BirchStreet brings w w w.suppl yc ha i ndi gi ta l. com
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BIRCHSTREET SYSTEMS
CLICK TO WATCH : ‘BIRCHSTEET OVERVIEW’ 112 structure to our process. We have PO
Elaborating further on the value that
approval process, PO management,
BirchStreet brings to its customers,
inventory management, product
Markle says, “There are three big
management and (electronic) interac-
sources of economic value that
tion between (our) hotels and (their)
BirchStreet brings to these organiza-
suppliers. This is essential for AccorHo-
tions besides increased efficiency. The
tels, especially in North America,” he
first big driver is spend control which
explained. “We have been partnered
enables big savings by allowing their
with BirchStreet for 10 years; they’ve
operations to go through a controlled
always supported us in everything
online buying experience that ensures
we’ve done and the platform brings
the properties are buying the right
efficiency, good savings and automatic
goods, from the right supplier, at the
updates to inventory – we probably do
right price.” Second is the prevention
around US$150mn of annual spend
of risks like maverick or off-contract
through the BirchStreet platform.”
buying, and third, BirchStreet’s
M AY 2 0 1 9
platform creates value for its
enterprise customers, rebates and
customers on the revenue side.
allowances add up to big dollars.
“You can increase revenue with us
Our value proposition is amplified
by having tight and efficient controls
when our solution is coupled with a
over your inventories so that you never
Group Purchasing Organization
miss an opportunity to make a sale,”
(GPO) like the one offered by our key
Markle explains. “Suppliers offer
partners at Hilton Supply Manage-
rebates and allowances if you achieve
ment” (HSM), says Markle. “With
certain spend levels with them. Our
HSM, BirchStreet can approach
system automatically tracks all of the
customers in any of their target
spend with each supplier so that the
industries or geographies with
customer can easily capture the
a seamlessly integrated offering
rebates and allowances they earn.
combining P2P technology and
Given annual spend size of our large
supply chain programs” 113
E XE CU T I VE PRO FI LE
Steve Markle, CEO Steve brings over 20 years of technology and business leadership. His responsibilities include driving the strategy and execution of the company. In addition to Markle’s role at BirchStreet, he will continue as an Independent Director on the Board of MarginPoint, a leading Inventory Management SaaS company. Prior to BirchStreet, he was Vice President and General Manager, CLM and SRM for Apttus, the category-defining Quote-to-Cash software provider. Markle was founder and CEO of BuildBeam, job management software designed specifically for specialty trade contractors (acquired by DaftLabs). From 2001 until 2013, Steve was an executive at Ariba (acquired by SAP), a pioneer in Sourcing, Procurement and Business Network space where he ultimately served as Vice President of Solutions Management. Markle earned his BSE in Mechanical and Aerospace Engineering from Princeton University.
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BIRCHSTREET SYSTEMS
NEW PRODUCTS A specific example of how BirchStreet is better serving its existing customer base, while also aggressively expanding into new markets, is the adoption of innovative new products that greatly enhance the efficiency of its customers’ operations. According to Markle, from its earliest days BirchStreet’s focus on the P2P function within the hospitality industry has defined the development of its software platform. “We recognized early on that the large ERP software companies are excellent 114
2002
Year founded
300
Approximate number of employees
200,000+ Registered Users
at meeting generic enterprise management software system needs. But with its emphasis on food & beverage and other items consumed in delivering its ‘product’, or what we call ‘direct goods’, hospitality has very specific needs that were not being met. There are numerous “pain points” in the P2P process that are specific to hospitality and BirchStreet is uniquely positioned to address those needs. We integrate with all the major ERP systems thereby completing the full ERP functionality required by our large enterprise customers”. “Two years ago, we acquired AccuBar, a best-in-class, specialist M AY 2 0 1 9
Processing
25mn
Purchase Orders a year
solution provider, for businesses that handle beverage inventory,” says Markle. Since acquiring AccuBar, BirchStreet has combined both companies’ capabilities to create a single inventory management solution for food and beverage organizations. “It’s very slick,” Markle says. “It has mobile capabilities that allow you to receive goods with your mobile device when it reaches your dock. This is a critical part of the process that enables flow-through automation from receipt to pay. In addition to promoting accuracy in the receiving process, it saves a huge amount of time versus writing things down by hand and then entering data into your accounting system.” Another example is BirchStreet’s investment in infrastructure for global scale. All of BirchStreet’s customer transactional data runs on Oracle databases. By leveraging Oracle’s technology, BirchStreet is able to host more than 2mn logins per month while maintaining a 99.9% uptime. BirchStreet also embeds Softlinx services to send over 50,000 fax pages per month on behalf of its customers to the corners of the globe without internet. By switching to w w w.suppl w w w.busi yc hane i ndi sscgihief. ta l. com
115
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“ W E’RE SAVING OUR CLIENTS SO MUCH MONEY BY ENABLING THEM TO GO THROUGH A TIGHTLY MANAGED ONLINE BUYING EXPERIENCE” — Steve Markle, CEO, BirchStreet Systems
of liquor and wave it in front of your mobile device,” Markle elaborates. “Our mobile app will recognize the shape of the bottle and branding and allows you to take inventory, including partial bottle inventory by moving the fill-line on the bottle image that automatically appears on your mobile screen. Think of the more expensive scotches, or a bottle of Remy Martin Louis XIII Cognac and you quickly understand the power of this quick, easy and accurate inventory management tool. You potentially have a lot of capital locked up in beverage inventory,
Softlinx in late 2017, BirchStreet
particularly when you consider the final
increased its worldwide success
selling price per pour.” Expanding
rate by 20%. And through BirchStreet’s
further on this proprietary technology,
partnership with CapGemini, the pair
Markle continues: “Once you have the
offers Accounts Payable as a Service
contour of the bottle saved to the
(ApaaS) to joint customers such
system – and some weirdly shaped
as FourSeasons. APaaS is a fully
bottles are hard to calculate by eye
standardized and automated
– our patented technology always
business process for end-to-end
recognises the shape of the bottle. All
invoice process.
you do is swipe your finger where the
In addition to automating the goods
liquid line is and it’ll automatically
receiving process, BirchStreet
calculate how much volume you have.”
provides its customers with a patented
Markle maintains that BirchStreet’s
specialized inventory function. “The
inventory software has the potential to
service’s unmatched take-inventory
revolutionize waste mitigation in
capabilities allow you to grab a bottle
high-value beverage management. w w w.suppl yc ha i ndi gi ta l. com
117
BIRCHSTREET SYSTEMS
118
Responding to the needs of its
restaurants manage recipes and
institutional food services clients, the
ingredients, as well as food costs,
company is also introducing innovative
which is the Holy Grail for business
software to help its food production
owners and chefs. Then, if you
operations track stock and ensure
combine recipes with inventory, our
standards of service across multi-loca-
solution will implement automatic stock
tion operations. “For managed food
replenishment notifications or fulfil-
service companies, we’re also
ment of that inventory item depending
introducing our recipe and production
on the recipes you produce. Just think
kitchen modules,” says Markle. “Think
of the labor savings from automating
about how many recipes a large casino
that aspect of food services opera-
or hotel must have and the process of
tions. If you think about a high-end
making and distributing finished goods
casino property, you think of shops on
to their outlets. Our solution helps
the first floor where they’re selling a
M AY 2 0 1 9
where it also hopes to attract a new roster of clients. “We’re making a very large bet on Europe, the Middle East and Asia,” says Markle. “By all indications it will be wildly successful. There are lots of companies within both our old and new industries that operate outside BirchStreet’s traditional market of North America.” As BirchStreet breaks into new sectors and brings new offerings to new and old customers, Markle reflects on his own schedule. “I’m traveling around the world three or four times a year,” he says. “I’m about to do an around the world trip, starting in early March. I’ll just keep going East until I wind up back in wide range of items. Working with
California.” Markle holds town halls with
our customers has allowed us to
employees in every BirchStreet office to
create a retail inventory extension of
keep the company engaged and
our inventory module functionality,”
updated on the next stages of its
says Markle.
development. “Change is constant, and you manage change by making sure
NEW MARKETS, NEW REGIONS
your organization knows where it’s
BirchStreet’s new suite of products are
going and embraces the enthusiasm
allowing the company to aggressively
of its leaders.”
penetrate adjacent or nearby indus-
On the subject of BirchStreet’s
tries. Furthermore, its deeper penetra-
legacy as well as his own, Markle
tion into the multi-national hotel
muses: “We look at our industry of
management sector is allowing the
hospitality as we would any business
company to explore new regions,
that provides a ‘product’. Our customers w w w.suppl yc ha i ndi gi ta l. com
119
End-to-End End-to-End End-to-End YOUR ONE-STOP PROCUREMENT PARTNER YOUR ONE-STOP PROCUREMENT PARTNER Hilton Supply Management works with over 2,000 suppliers to manage YOUR ONE-STOP the entire supply chain from farm to Hilton Supply Management works PROCUREMENT PARTNER restaurant, manufacturer room and with over 2,000 suppliers toto manage
project to completion. We the entireinception supply chain from farm to provide sourcing for 8,000 properties restaurant, manufacturer to room and Hilton Supply Management works (including more than 1,800 non-Hilton project inception to completion. We with over 2,000 suppliers to manage hotels) leveraging massive economies provide sourcing 8,000 properties the entire supplyfor chain from farm to of scale, competitive contracts with (including more than 1,800 non-Hilton restaurant, manufacturer to room and top suppliers and substantial savings hotels) economies projectleveraging inception massive to completion. We for hotels. of scale, competitive contracts with provide sourcing for 8,000 properties top suppliers andthan substantial savings (including more 1,800 non-Hilton To learn more about joining the Hilton for hotels. hotels) leveraging massive economies procurement program please contact of scale, competitive contracts with us at HSM@Hilton.com. To learn more about joining thesavings Hilton top suppliers and substantial procurement for hotels. program please contact us at HSM@Hilton.com. To learn more about joining the Hilton Prototype Custom Operating procurement program please contact Décor Procurement Supplies Packages us at HSM@Hilton.com. Custom Procurement
Custom Procurement
© 2018 Hilton
© 2018 Hilton
© 2018 Hilton
Prototype Décor Packages
Prototype Décor Packages
Operating Supplies Operating Supplies
PA R T N E R S
BirchStreet and Hilton Supply Management (HSM) partner to offer integrated P2P SaaS technology with supply chain programs. HSM’s programs can save up to 61% depending on the commodity purchased and BirchStreet’s technology enforces purchasing compliance to ensure that value is captured.
All of BirchStreet’s customer transactional data run on Oracle databases. Oracle is the leading database software manufacture and handles which lets us handle more than 5,000 per second. By leveraging Oracle’s technology BirchStreet is able to host more than 2 million logins per month while maintaining a 99.9% uptime.
121 BirchStreet and Capgemini have partnered to offer Accounts Payable as a Service (APaaS), a solution offering a centralized mailroom function, process standardization, all integrated using Optical Character Recognition (OCR) for invoice capture with BirchStreet P2P as the underlying technology platform. These two leaders in hospitality, joined hands to create customer value through these shared services and help clients like FourSeasons realize savings up to 40-50% in operating costs and rapid profitable growth.
BirchStreet uses Softlinx services to send over 50,000 fax pages per month on behalf of our customers. By switching to Softlinx BirchStreet increased our worldwide success rate by 20% while cutting costs by 10%.
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BIRCHSTREET SYSTEMS
are enterprises that manage multiple facilities that deliver a wide spectrum of services that make up their ‘product’. The hospitality ‘product’ is effectively made up of parts and labor. We partner with our customers in multiple ways to significantly reduce their labor costs and increase sales. We do this through automating a whole host of manual processes from procuring to paying for the goods they use at their properties day in and day out, and we provide the tools needed to better manage the ‘parts’ used in their food 122
and beverage operations, as well as in the rest of the customer experience. In the end, that is what hospitality is all about: the experience. We wake up every day asking ourselves, ‘what can we do to help our customers deliver the best experience possible at their properties?’ By virtue of what we do, we help our customers to take a fresh look at themselves and evaluate whether their processes and internal capabilities fit their vision for where they want to go as an organization. Our approach is not to be prescriptive, but rather to work closely with our customers and innovate together.” M AY 2 0 1 9
“ O UR SERVICE HAS CAPABILITIES THAT ARE UNMATCHED IN THE INDUSTRY” — Steve Markle, CEO, BirchStreet Systems
123
Markle concludes: “What we do is
excited about what the future has in
not just about deploying our software;
store for us as we innovate with our
it’s about working with our customers
customers to transform the worldwide
to provide the tools and expertise they
hospitality industry.”
need to deliver their desired outcomes: the very best experience to their customers, while using technology to minimize the costs of delivering their product. We could not be more proud of what we have achieved over the past 15 years and couldn’t be more w w w.suppl yc ha i ndi gi ta l. com
124
Mobile assets: Vantage Drilling’s mature supply chain WRITTEN BY
JOHN O’HANLON PRODUCED BY
DENITRA PRICE
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VA N TA G E D R I L L I N G
Maturing Vantage Drilling’s supply chain function over the last six years, with full buy-in from senior management, has seen the department morph from support to partner, says Director of Supply Chain Andy Poosuthasee
B 126
ased in Houston, Texas, Vantage Drilling is one of the most effective players in that specialized niche of the oil & gas busi-
ness: offshore drilling. Offshore operations are generally not as easy as onshore or littoral operations – major, national and independent oil and natural gas companies require a dependable partner to carry this out. Vantage has five ultra-premium jackup rigs capable of operating in up to 375ft of water and drilling to depths of 30,000ft. It also has three ultra-deep-water dynamically positioned drillships designed to operate in water depths down to 12,000ft and drill to 40,000ft. It’s no secret that the entire oil & gas sector is on a slow climb back from its boom days. According to the industry analyst Rystad, offshore drilling in particular may not fully recover till 2027. This has affected drilling contractors like Vantage in a number of ways, says its Director of Supply Chain Andy Poosuthasee. The most notable of these is M AY 2 0 1 9
127
Photos Š Greg Williams
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VA N TA G E D R I L L I N G
“ We won’t sacrifice quality or compliance in order to get something quicker” 128
— Andy Poosuthasee, Director of Supply Chain
that where the norm used to be longer term, multi-year contracts, these days contract terms are often counted in months. This in turn means that the company’s assets have to be moved much more frequently than before. From a supply chain point of view frequent movements call for a greater degree of maturity, says Poosuthasee. “Probably the major challenge we face currently is that our rigs don’t tend to spend a lot of time in one particular country – we’re jumping around to different locations,” he explains. With seven of its eight rigs under contract Vantage is doing a lot better than its peers – the industry average is around 61% utilization, and there’s no lack of rigs waiting to come out of shipyards to further dilute that percentage. Still, the brevity of contract duration that is the price for high utilization is a supply chain challenge. “Even if we are working in the same country, the agreements these operators have with us and with the country itself are different. Looking ahead, I think we will be seeing more rather than fewer movements and that means that we have to be very nimble from a supply chain perspective.”
M AY 2 0 1 9
CLICK TO WATCH : ‘VANTAGE DRILLING SHORT FILM 10 DAILY SAFETY TOOLS’ 129
KEEPING IT CLEAN
West Africa, customs procedures are
A fact of life for Vantage is that much of
more complicated, fickle and constant-
its business is conducted in countries
ly changing. In addition, countries that
that occupy the bottom 30 percentile
are highly dependent on oil are even
of the Corruption Perceptions Index.
more so severely affected in the
“This brings in a whole new level of
downturn, which has a knock-on effect
compliance and complexity into the
of potential added corruption. That has
supply chain organization where we
affected our supply chain strategy
must absolutely comply with transpar-
tremendously. We will obviously
ency and anti-bribery legislation such
comply with the anti-corruption laws
as FCPA (US). If you are working in
and have no tolerance for any devia-
places like the Gulf of Mexico or
tion. Recognizing that import clearance
Canada it is simple enough to organize
times may be measured in months
a compliant and predictable supply
rather than days, a rethink of strategic
chain, but in other locations such as in
sourcing and inventory management w w w.suppl yc ha i ndi gi ta l. com
VA N TA G E D R I L L I N G
130
strategies is called for,� he adds. Poosuthasee is not daunted by such
forced offshore drilling contractors to find ways to be more effective, espe-
difficulties though. As a certified lean
cially within their supply chain. Conse-
sensei from his earlier experience with
quently, supply chain has become
the oil & gas services company
more important than it used to be in the
Halliburton, he looks on both the
past. I believe most companies
general downturn, and the rise in
(especially large ones) don’t take the
corruption that in part comes out of
total cost of ownership into account
that, as opportunities for refining best
because it is difficult to calculate
practices. “In the good times, compa-
especially when they may be working
nies tend to stagnate and the focus
in silos. For example, strategic
was more topline driven for offshore
procurement may be negotiating
drillers. I actually think the downturn
global/regional fixed price agreements,
has been a good thing because it
but not considering the import duties
M AY 2 0 1 9
(which in some countries can be up to
We have seen tremendous benefits
30% of the purchase value), customs
from that exercise.” These benefits
clearance times, freight, and inventory
include a significant reduction in lead
impact because that’s managed by
times, eliminating exposure to import
other departments within supply chain.”
duties (which can be as much as 30%) and customs fines, and enabling leaner
PARTNERING WITH OPERATIONS
inventories. In just three years, he adds,
When moving into a new country, the
Vantage’s local content in all categories
first task is for the procurement and
went from 33.2% to 56.7%, while in the
logistics team to go in, find local
same period lead times were cut by
suppliers and set up a local supply
nearly 40%. Another benefit of local
chain. “In challenging countries, where
sourcing is that it grows the local
it is very difficult to import, our strategy
economy, coupled with the fact that
is to source as much as possible locally.
many countries require foreign 131
E XE CU T I VE PRO FI LE
Andy Poosuthasee Andy Poosuthasee is Director of Supply Chain at Vantage, as well as looking after Engineering, Maintenance and Technical Support. Reporting to the COO, Poosuthasee is responsible for a key part of the company’s strategy. He joined Vantage in 2013, having previously worked at Transocean where he was also a supply chain manager. Prior to this, Poosuthasee was at Halliburton, one of the world’s largest suppliers of products and services for the energy sector.
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expect more
Ship Agency Logistic Operator Customs Broker Main Spanish ports, Canary Islands, Gibraltar, WAF
24/7
ops@alfaship.com
T +34 928 247 978
alfaship.agency
133
operators to maximize local sourcing. Any supply chain organization adds
importation delays or potential ‘penalties’ and ‘fines’. Countries that
value to operations through quality
are heavily dependent on oil and gas
delivery and pricing – in that order of
especially are constantly changing
importance, Poosuthasee believes.
their import/export requirements.
“We won’t sacrifice quality or compli-
Therefore, the potential for significant
ance in order to get something quicker
fines or penalties by local customs is
and we won’t sacrifice meeting our
there if you are not diligent and
internal customer’s operations delivery
focused on trade compliance. Of
requirements just because it’s going to
course among local suppliers, there is
save us some money,” he says. “One of
also a level of corruption so you must
the biggest benefits we see is that
spend a lot of time auditing them and
when you source locally you don’t have
doing due diligence to ensure compli-
to deal with trade compliance issues,
ance with the FCPA.” w w w.suppl yc ha i ndi gi ta l. com
VA N TA G E D R I L L I N G
Vantage now has a mature process for moving into a new market. Its Rig Move Checklist covers 30 logistics actions and 29 supply chain and procurement actions that are done before the rig moves to its new location. “We are very confident with the process because we have successfully used it so many times before,” he asserts. “I think taking the time to complete these 59 actions in advance is one reason we’ve had such success as we go into new countries. Of course, close liaison with the operations team 134
is very important: they are our customer so we spend a lot of time communicating with them to ensure we cover all of their needs prior to the rig’s arrival.”
TECH TOOLS FOR THE TIMES The priority for Vantage has been to identify cost effective rather than big ticket solutions to deliver automation, data management and reporting in the areas of procurement and inventory management as well as other parts of the business, such as maintenance and engineering. This is no time for heavy investment in this industry, and Vantage’s supply chain team discovered inexpensive, cloud-based M AY 2 0 1 9
solutions at a fraction of the price of managed software to be the answer. One implemented cloud-based solution has proven to be a collaborative and work management platform with a relatively straightforward user interface. “It is a tremendous tool that has allowed us to eliminate many of our manual processes. The downturn has meant doing the same job with fewer people but we have not seen a degradation in the service that we provide. That’s because we have been able to automate many of our manual processes through the use of simple and really economical applications.” As a lean six sigma practitioner, Poosuthasee asserts: “One of the hardest things to do is to eliminate a piece of paper from the process.” Even so, a lot of paper processes have been automated by transferring them to this intuitive cloud based system. It’s clear though that he sets more store by the attitudes and commitment people bring to their task than the methodology. “I’ve learnt a lot from mistakes I have made in the past. One of the biggest ones was chasing too many initiatives, too many strategic goals. Now I tell my team to focus on what w w w.suppl yc ha i ndi gi ta l. com
135
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PORT-GENTIL OFFICE contactpog@artgabon.com
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137
“ We have to be very nimble from a supply chain perspective” — Andy Poosuthasee, Director of Supply Chain
Franklin Covey calls the wildly important goals; focus on less so that your team can achieve more.” In furtherance of this principle, which Poosuthasee also characterizes as going “an inch wide but a mile deep”, the supply chain team is focusing this year on trade compliance, both to minimize the risks thrown up by different customs regimes and to further automate procurement systems and processes. w w w.suppl yc ha i ndi gi ta l. com
VA N TA G E D R I L L I N G
138
M AY 2 0 1 9
A PARTNER IN THE ENTERPRISE When Poosuthasee joined Vantage in 2013, the company was still in “start-up” mode, and supply chain was doing a good job, but more as a support function. Since joining, he has worked to build the organization in three phases. The first phase was to strengthen the foundations and streamline the processes to be as effective as possible; the second was to start demonstrating and adding value to the company. “I wanted to show that we could actively impact KPIs and other value-added activities such as on-time delivery, quality, local sourcing, negotiations and inventory management. Show the company we can do more than just transactional tasks such as issuing POs.” Phase three was to become a true partner in the business, being asked to support non-traditional supply chain tasks such as sourcing service personnel and labor, real estate, catering, auditing, compliance, and even marketing right from the bidding stage. “It was truly pleasing from my viewpoint to see us moving from being a support team to being asked for advice on things we w w w.suppl yc ha i ndi gi ta l. com
139
OIL & GAS DIVISION We operate two shipyards in the Canary Islands. Supporting drilling contractors for their SPS, rig reactivation, maintenance, repair and upgrade projects as well as MPD readiness and 2nd BOP Deck Reinforcement in the Canary Islands. We support local workforce knowledge and skills development to meet our global clients
OUR 16,000 yard FACILITIES • Subsea & heavy Mechanical workshop with 126 tons overhead Gantry Crane • Mechanical and Hydraulic workshop
• Blast & paint shop • 500 mtrs quay side with water depth 19mtrs
Our Capabilities • Rig repair and upgrade, SPS projects. • MPD Readiness and 2nd BOP Deck Reinforcement
• Re-engineering and structural analysis with ANSYS
Ontime safely Delivered projects within fixed price contracts Our facilities and capabilities at Las Palmas are also similar
A member of
www.tenerifeshipyards.com www.hidramar.com
VISIT OUR SITE
M AY 2 0 1 9
+34 922 104 982 gara.socas@hidramar.com commercial@tenerifeshipyards.com
CONTACT US
“ We have been able to automate many of our manual processes through the use of simple and really economical applications” — Andy Poosuthasee, Director of Supply Chain
weren’t involved with in the past and becoming a true partner in the organization.” Andy Poosuthasee and his supply chain team are certainly finding ways to add value. Even some relatively mature locations have seen some dramatic results. For example, trade compliance turned out to be a big issue in Indonesia where even airfreight imports were taking a fortnight to clear. By developing local suppliers Vantage went from sourcing 47% to 81% locally. A different challenge faced the company in Qatar following the imposition of sanctions by GCC countries from which most supplies had previously been sourced. In just a couple of years, local suppliers have been brought on, at first being given short contracts but more recently these have been extended and today, he says, it is one of the easiest locations, with more than 80% locally sourced.
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142
Warehouse benchmarking study is a top tool for measuring performance
M AY 2 0 1 9
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WA R E H O U S I N G E D U C AT I O N A N D R E S E A R C H C O U N C I L
Confronting the talent crisis Re-emphasis, re-prioritization of recruitment, retention strategies and practices urgently required
W
ithout a doubt, the distribution and warehousing sector is at the threshold of a significant talent availability crunch
that only threatens to worsen over time. And it’s 144
not restricted to only hourly floor jobs and operations, but impacts all titles and positions across-the-board, including technical and professional staffs, supervisors, managers and even executives. For example, between 2010 and 2020, the number of available jobs in the supply chain will grow by 26 percent, according to Kronos.
RAPIDLY DECLINING WORKFORCE POPULATION A report from CBRE cites U.S. Bureau of Labor Statistics data that indicate the ratio of workingage adults to retirement-age adults is projected to narrow from 3.5 to 2.5 by 2020. “A tighter labor supply will have significant consequences for employers, especially those in the transportation and warehousing industry, where 18 perM AY 2 0 1 9
1977
Year founded
1,700+
Approximate number of employees
145
cent of the supply chain workforce is currently at or beyond retirement age, according to the BLS,� the report says. Another caution in the CBRE report is the growth of the labor force past and present. Between 1970 and 1990 the growth in the labor force averaged 1.9 percent per decade. The growth forecast for 2010 to 2030 is just 0.5 percent. As CBRE concludes: “This trend is particularly alarming for the industrial and logistics sector considering that a single onemillion square foot modern fulfillment w w w.suppl yc ha i ndi gi ta l. com
Nimble. You need to learn fast, stay lean and be gutsy to remain competitive in this brave new world. WERC has an unrivalled education program. We’ve got an in-depth online training, live webinars and self-guided learning choices to fit every schedule. Our annual conference offers exceptional peer-driven learning opportunities. You won’t find better education anywhere. werc.org
Better Everywhere.
CLICK TO WATCH : WERC’S ANNUAL CONFERENCE 2019
center dedicated to e-commerce
PRIORITY ON RECRUITMENT, RETENTION
may require up to 4,000 workers.”
For Jason Minghini, president, FW
A Warehousing Education and
Warehousing, the current strategic
Research Council member recently
focus is in the recruitment of tal-
shared: “For us, 2018 was the first
ent. “Our customer requirements
we really struggled with finding help.
continue to expand and we need a
Retaining has always been a prob-
higher level of talent in place to sup-
lem due to the environment they
port our customer expectations.”
work in and the pay rate in general.
Meanwhile at Murphy Logistics,
However, we are now seeing the ef-
president/CEO Richard Murphy,
fects of baby boomers retiring, and
Jr., states: “Recruitment of talent
we’re struggling with the skills of
and retention are equally impor-
employees that will replace the baby
tant and we’re focusing on both.”
boomers in important positions.”
“In my opinion, it’s the combination w w w.suppl yc ha i ndi gi ta l. com
147
WA R E H O U S I N G E D U C AT I O N A N D R E S E A R C H C O U N C I L
of keeping the good management talent you have, and attracting new talent,” emphasizes Brian Devine, senior vice president, Employbridge. Minghini’s recommendation on the issue is “slow to hire and quick to fire.”
STRATEGIES, PRACTICES TO CONSIDER Williams and O’Connor recommend a three-step formula to achieve success in recruitment and retention. As
“ In my opinion, it’s the combination of keeping the good management talent you have, and attracting new talent” — Richard Murphy, President/CEO
they explain, “Organizations need to optimize their people resources 148
by building flexibility and agility into their workforce. And they need to put processes and systems in place to track key workforce metrics and
chain. It includes using “great intern-
leverage data to better manage labor
ship experience, creating a culture
costs, performance and engagement.”
to mentor millennials, implementing
Minghini shares that in the current
career development plans and giving
labor market (low unemployment,
access to cross-functional programs.
wage discrepancy) FW Warehous-
Devine suggests attracting new
ing is using peer networking to fill
candidates by providing a “fair, com-
current talent gaps. Also, we are
petitive compensation package. For
using experienced recruiters that
management and executive talent
have 3PL and supply chain experi-
this also includes salary and incen-
ence to help fill the talent gaps.
tives in the top 50 percent of the
A Ryder white paper suggests
market, good healthcare plans, lib-
a multi-prong approach to attract
eral PTO, 401K, and/or some com-
and retain millennials to the supply
pany stock accumulation plan.”
M AY 2 0 1 9
• Create flexible work arrangements • Develop a career path with progres sive pay raises based on longevity • Keep injured workers on the job • Review work processes and eliminate difficult, complex, or unnecessary processes An important tool that Murphy promotes is the annual employee survey. “The survey brings to the surface differences that may exist... and provides us with important knowledge about what’s working and what’s not.” Finally, Murphy advises:
IT’S ABOUT CULTURE, TOO
“Don’t take your culture for granted.
Murphy is big on culture. “In this
Don’t take your employees for
very tight labor market we feel that
granted. Over-communicate!”
our culture keeps us alive,” he asserts. The Ryder white paper offers a creative list of best practices to retain key employees and top talent: • Treat employees with respect, as talent joins companies but leaves supervisors • Retrain supervisors regarding how to treat employees • Create clear, predictable work schedules w w w.suppl yc ha i ndi gi ta l. com
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150
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UNITINGCARE QUEENSLAND: A DIGITAL TRANSFORMATION IN COMMUNITY CARE WRITTEN BY
JOHN O’HANLON PRODUCED BY
MIKE SADR
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UNITINGCARE QUEENSLAND
Part of UnitingCare Queensland’s two-year transformation project was the rethinking of its digital strategies under new executive leadership
W
hen BizClik Media last spoke to Nina Du Thaler she was CIO at Queensland Urban Utilities (QUU), the organisation that
provides water to the greater Brisbane area. During her time there she was able to deliver Q-Ops, a platform that aggregates data from business systems into a single location to help operations 152
staff manage Queensland’s sewer and water networks effectively, establish a robust governance framework across the organisation and a mature programme, and deliver a strategic ICT vision and roadmap. The outcome, a better experience for consumers and employees alike, was a great satisfaction to her, though if anything, she’s proudest of her work in improving team effectiveness and culture. She has never been a stereotypical techie, taking a broad view of her contribution, and that of the organisation, in the society at large. In 2016, UnitingCare Queensland approached Nina. UnitingCare is one of Australia’s largest charities, focusing on health and community services across Queensland and the Northern Territories. It employs 17,000 people assisted by more than 9,000 volunteers to deliver community health services, M AY 2 0 1 9
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TRANSFORMING COMMUNITY CARE IN THE DIGITAL AGE
CO-DESIGN PERSONALISED CARE FOR YOUR CUSTOMERS WHILE STAYING AGILE, INNOVATIVE AND CONNECTED. ACCENTURE AND AVANADE SUPPORT UNITINGCARE’S DIGITAL TRANSFORMATION, SO IT CAN FOCUS ON CARING FOR COMMUNITIES.
that a large-scale, digital transformation would be needed to provide the digitally enabled care services that its customers would expect, now and in the future. UnitingCare ran a competitive process and undertook competitive dialogue with shortlisted vendors to form a panel of delivery partners. Avanade’s engagement will give UnitingCare simplified financial management, providing a single source of truth for financial information. This will allow UCQ to become more efficient in resource usage, particularly in back-office functions such as procurement and shared costs. Transforming back-office technology will improve support services for people from all walks of life, including older people, people with disabilities, children, families and indigenous people.
A
ccenture and Avanade are supporting UnitingCare Queensland (UCQ) on its journey to deliver safe, quality digital health and community services to its communities, clients and patients. UnitingCare provides skilled, evidence-based interventions for those facing adversity, and uses its reach and vision to confront injustice. UCQ is a leader in crisis response, the protection of vulnerable children, financial resilience and family wellbeing. They meet people where they are and walk alongside them to achieve positive change and growth. Across Queensland and Northern Territory, UnitingCare supports thousands of people living with a disability in redefining what’s possible in their lives. UnitingCare recently launched its Digital and Technology panel to access high-quality technology capabilities to accelerate the organisation into the digital age. UnitingCare was facing industry disruption, change to consumer directed care and competition, and realised
Australians benefit from a fast-changing world where customer care expectations are shifting. Organisations need to be future-ready and adapt to changes in the digital age. They need to work in agile ways that continually improve processes and experiences. Customers prefer to stay connected at all times and at any location, meaning care organisations need to transform from paper-based workplaces to participate in a digitally connected ecosystem. Accenture and Avanade supports their clients end to end in their transformation journey, which helps clients connect their businesses with their customers digitally. With nearly 5,000 combined resources in Australia between Accenture and Avanade, along with extensive offshore capabilities, we have the pool of talent and can provide targeted solutions that deliver on clients’ digital and technology strategies. At Accenture and Avanade, we value our clients and our people, and we deliver high performance while supporting local communities to build a better future.
CONTACT US »
LEARN MORE »
UNITINGCARE QUEENSLAND
“ We have a great number of extremely effective carers, healthcare and social workers … I think that is a really positive aspect of our organisation” — Nina Du Thaler, Group Executive, Digital and Technology, UnitingCare Queensland 156
M AY 2 0 1 9
care for the elderly, and acute medical services at its not-for-profit hospitals including The Wesley Hospital, St Andrew’s War Memorial Hospital in Brisbane, and St Stephen’s, which became Australia’s first fully integrated digital hospital when it opened in 2014. The new position they created was that of Group Executive, Digital and Technology, reflecting the strategic importance of commoditising the groups’ IT environment, digitising the groups’ services and making sense of the huge volumes of data flowing in from its IT platforms.
CLICK TO WATCH : ‘LACEY’S MISSION POSSIBLE STORY WITH UNITING CARE QUEENSLAND’ 157 The organisation was facing a num-
Wearing her CIO hat she particularly
ber of challenges at the time, she
liked it that UnitingCare was leading
explains. “UnitingCare was undertak-
the digital hospital concept, in which
ing a major transformational change.
patient data is captured and directly
It was working on bringing together
fed into the electronic medical record
unique businesses which had diff
(EMR). It represents a quantum leap in
erent IT teams, different back-office
quality, safety and patient experience,
systems, fragmented data and it
transforming healthcare delivery, she
wasn’t working well for the organisa-
says. However the hospital environment
tion.” The businesses - encompassing
is only one place IT can make a differ-
in-home and residential aged care,
ence. Blue Care is Queensland’s leading
lifeline retail stores and counselling
in-home, retirement living and aged
support, child and family services and
care provider. Many of its service users
hospital services had been operating
rely on Australia’s National Disability
in silos.
Insurance Scheme (NDIS), which has w w w.suppl yc ha i ndi gi ta l. com
UNITINGCARE QUEENSLAND
158
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proved hard to access and navigate
to align her CIO and relational skills
since its rollout in 2016: one of Nina
with the community and healthcare
du Thaler’s pet projects was the
sector which though new to her was
development of NDIS Planning, an
attractive because of its focus on
app launched in 2019 that simplifies
people and role in society. “This job
the complex documentation and
was enticing to me as much from
the application procedure.
the point of view of culture, human
The digital and technology position
interaction and service delivery as of
was defined during the creation of
technology. The two are inseparable
a new executive leadership team (ELT).
really. This organisation has huge
“We needed to be focusing on how we
potential, a great track record and to
could add value to the business, pivoting
be able to say that I’m helping trans-
into the digital space, and how this can
form it and make it sustainable into
help transform the organisation.” Du
the future is a really positive thing
Thaler recognised this as an opportunity
from my point of view.”
E XE CU T I VE PRO FI LE
Nina Du Thaler Nina Du Thaler joined UnitingCare Queensland in 2016. She previously held executive management positions across a range of organisations, including Queensland Urban Utilities and Allconnex Water. She is also a non-executive director in the Industry Advisory Board for the School of ICT, Griffith University. Nina won ‘CIO of the Year (Utilities/Media) at the iTnews Benchmark Awards. She holds an MBA and a Bachelor of Information Technology (AI). She is a graduate of the Australian Institute of Company Directors
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“ This job was enticing to me as much from the point of view of culture, human interaction and service delivery as of technology” — Nina Du Thaler, Group Executive, Digital and Technology, UnitingCare Queensland
commercial accountability. Not for profit organisations still need to be viable, generating surplus funds that can be used for much needed expansion. Nina Du Thaler recognises that her job, to all intents and purposes, is to maintain the balance and keep close control of IT spending whilst delivering change and value for money and keeping UnitingCare sustainable. “My team have a huge responsibility, oversight of risk and cybersecurity, maintaining the health of the supporting infrastructure and applications – all the usual concerns of
BUILT ON COMPASSION
the CIO’s office – but we also have to
One of the things she likes about
strive to deliver a range of projects
UnitingCare is its mission-led ethos.
focused on new products, services
It attracts people like herself. People
and ways of working.”
who are driven by a desire to improve
The last two years for her have been
the physical, mental and spiritual health
a time of readying the organisation
of the community never just see their
to take advantage of the brave new
job in terms of income generation. “We
world of IoT, automation and AI by
have a great number of extremely
dealing with a host of legacy issues,
effective carers, healthcare and social
notably starting the journey towards
workers: they are motivated by a com-
unifying some of the platforms used
mitment to the people in our commu-
by the different parts of the organisa-
nity and I think that is a really positive
tion already mentioned and transform-
aspect of our organisation.”
ing UnitingCare’s service delivery
Maintaining this ethos is vital, though
model. “Those things have placed
it does entail a balancing act, sometimes
us in a good position to embark on
approaching conflict, when it comes to
a more digital and innovative future,” w w w.suppl yc ha i ndi gi ta l. com
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she says, “and we’re now poised for that future.” UnitingCare’s transformation, stemming from the creation of Du Thaler’s Digital and Technology (D&T) organisation, was recognised by the iTnews Benchmark Awards 2019, in which it is a finalist. The citation points to UnitingCare’s focus on reducing overhead costs while also improving the IT service delivery model in ‘an incredibly competitive marketplace with limited funding streams’. In other words, value for money. 162
ETHICAL SOURCING The outcome is worth some attention: a competitive and comprehensive tender process was embarked on, to replace its fragmented, legacy service delivery model with a managed services partner model. There were many companies that could have helped with this, she acknowledges, but capacity and price were not the only consideration. “This procurement process was a bit different because of the influence and guiding ethics of the Uniting Church. We looked deeply into the conduct of these companies to satisfy ourselves they had ethical supply chains, M AY 2 0 1 9
processes and labour management credentials. Another consideration was UnitingCare was very interested in whether the organisations we partnered with could support communities in the areas in which we worked.” The chosen partner was the Indian software provider Wipro, named in 2017 as the most ethical company in the world. “One of the things that attracted us to Wipro was that it is a truly global company, with a large Foundation driven by the company’s chairman Azim Premji. Wipro gives an amount of its revenues back to the community in the form of, among other things, support for education in India, community support programmes in India and the Philippines, and, of course, primary healthcare. We were determined to partner with a large organisation that had the depth and breadth of skills that can help support our growth.” The transformation, largely completed in mid-2018, has already reduced internal labour, lowered service delivery costs and improved the health of the IT environment. Though projected savings in the current financial year are expected to be minimal, by year 3 of the agreement savings are expected to reach $4.3 milw w w.suppl yc ha i ndi gi ta l. com
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165 lion. In addition, the project has shifted operational delivery and the risks associated with this away from the organisation, while also freeing up Nina Du Thaler and her team to focus on value-add projects and “customer intimacy”, a key outcome for future innovation.
DELIVERING THE BENEFITS OF AUTOMATION The in-house team is lean and getting
“ UnitingCare was very interested in whether the organisations we partnered with could support communities in the areas in which we worked” — Nina Du Thaler, Group Executive, Digital and Technology, UnitingCare Queensland
much more focused now. It continues to oversee business critical functions like governance and the strategic w w w.suppl yc ha i ndi gi ta l. com
UNITINGCARE QUEENSLAND
“ One of the things that attracted us to Wipro was that it is a truly global company” 166
— Nina Du Thaler, Group Executive, Digital and Technology, UnitingCare Queensland
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167
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UNITINGCARE QUEENSLAND
2000
Year founded
17,000
Approximate number of employees
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direction and design. A lot remains to be done, and many learnings have been surfaced but in some areas, there have been real functional improvements. A good example is the service desk. When she came in, Du Thaler recalls, people phoning in to UnitingCare were experiencing an abandonment rate of over 40%, that is to say that calls were either not answered or people were kept waiting so long they hung up. Today the abandonment rate is below 3%, and over 60% of queries are fixed at the service desk without needing to be referred on. That’s a huge improvement, but there’s room for further improvement she says. Currently, she is targeting her D&T organisation in a limited number of directions. “One of the big ones continues to be bedding in all the new ways of working and frameworks that we have designed over the past 12 months. We are working closely with specific areas of our business that need refinement of the service delivery model and we are realigning many of our service level agreements (SLAs) with business criticality and business need. UnitingCare is also moving to a consumptionbased cost reallocation model: we w w w.suppl yc ha i ndi gi ta l. com
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UNITINGCARE QUEENSLAND
want to share the drivers of cost with
are implementing foundational technol-
our internal customers so that they can
ogy,” she adds. “Like an integration hub,
manage those themselves.”
an identity management platform and
Customers are going to see further
an information analytics platform, and
service improvements in the coming
we are also replacing some back-office
year, she promises, with more self-ser-
systems like our financial management
vice capability. They might not even
information and CRM systems.” Post
notice some of these changes, but will
implementation, all of these systems
appreciate new ways of engaging
will be transitioned to Wipro for support.
through AI tools such as chatbots,
Nina Du Thaler confesses that her
which she plans to introduce to further
job with UnitingCare takes up most
enhance the service experience. “We
of her resources, but she retains
170
M AY 2 0 1 9
a long-standing passion for education
job allows.� She is also an industry
and the advancement of understand-
advisory board member and adjunct
ing and the entrepreneurial spirit
fellow at the school of ICT at her
especially among young women. She
alma mater Griffith University helping
is the author of a series of cyber-safety
to shape their degree courses and
books called Diary of Elle that address
hopefully bring on the women execu-
issues of current concern like the use
tives of the future.
of mobile phones and the social impacts of our online world, and continues to run her own publishing company Bright Zebra. “The books are a labour of love and I pursue that when my executive
171
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FRESH HOPE: Communication and synergy in procurement WRITTEN BY
HARRY MENEAR PRODUCED BY
STUART IRVING
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FRESH HOPE
Darrell Johnson, Procurement and Property Services Manager at Fresh Hope, discusses synergy between facilities management and procurement
F
or more than 170 years, a network of over 95 churches across New South Wales and the ACT, has coordinated and led
benevolence services, support for the elderly and community welfare initiatives. Headquartered in Rhodes, NSW, Fresh Hope is a non-profit organisa174
tion dedicated to transforming individual lives and whole communities through aid and ministry. The company functions as a group organiser for Fresh Hope Care, Fresh Hope Venues, and Fresh Hope Mission and Ministry. Darrell Johnson has been in the elderly care space for 10 years, and in the procurement industry for just under a decade. In April 2017, he joined Fresh Hope as a procurement coordinator, and has since seen his responsibilities grow, rising to Procurement and Property Services Manager in March 2019. Excitedly, Johnson explains that the combination of procurement management and facilities oversight in a single role has the potential to create significant benefits for the company. “Procurement and facilities management are really one and the same,” he says. “It’s a journey of synergy between the two; the strategic alignment M AY 2 0 1 9
175
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FRESH HOPE
176
of the two functions really helps an
support from all my directors and the
organisation move forward.” Johnson
team. We’re viewed as an integral part
discusses his role at the com-
of the organisation. We’re a vital piece
pany and Fresh Hope’s journey to
of the puzzle when it comes to strategy:
standardise and transform its procure-
ensuring compliance and governance
ment operations in order to continue
– in many ways, we’re an information
scaling sustainably in the future.
gateway to the company choosing the
Johnson has seen the business
right course of action. All contracts
community’s attitude to procurement
come through me to be double checked
change dramatically over the past
from a legal standpoint and so on.”
decade. “When I first started, procure-
As an organisation that coordinates
ment was always relegated to the back
operations across multiple agencies,
of the room and never really heard,” he
establishing an overarching procure-
recalls. “Now at Fresh Hope I’ve got full
ment infrastructure has been at the core
M AY 2 0 1 9
“ If I can help and make someone’s day easier, that will make my day easier too” — Darrell Johnson Procurement and Property Services Manager, Fresh Hope
of Johnson’s role. “We’ve centralised and streamlined our contracting and tendering process, as well as our documentation, policies and procedures,” he explains. “We’re transforming from an organisation that was very immature in this space, very siloed in its operations and supplier relationships, to a truly centralised company. We’ve transitioned from being all paper based, with a loose association of contract documents spread across the organisation, to being centralised onto a SharePoint site. Now, all of our policies
E XE CU T I VE PRO FI LE
Darrell Johnson Darrell Johnson is Procurement and Property Services Manager for Fresh Hope and has had many years’ experience working in Procurement and Property in an aged care sector. Darrell enjoys a reputation for being a tough but fair negotiator who has made significant cost-savings and process refinements to bring about positive change to organisations. Darrell strives to continue to learn and evolve in his role using his knowledge and experience from procurement and property and many other environments to bring positive change and insightful ideas to the table. Darrell is also currently studying a Bachelor of Law.
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“ We’re looking at developing more in the age care space and trying to hone in on the best way that we can help the communities there” — Darrell Johnson Procurement and Property Services Manager, Fresh Hope
force change; you have to take people on that journey with you; you have to explain and educate them on the benefits.” Communication not only helps Johnson’s team effect change that will improve Fresh Hope’s procurement process, but also makes changes to the procurement arm of the business that will benefit its other elements. “It’s about finding out from your stakeholders what would help them fulfil their roles better, because in turn that will make my role easier. If I can help and make someone’s day easier, that will make my day easier too,” Johnson says.
and procedures are readily available,
An emphasis on communication is
all our contracts are searchable with
more important than ever to Johnson
all their insurance documentation; we
and his team, since his expansion of
have access to anything we need from
responsibilities. Responsible for both
a compliance point of view.”
procurement and the management
As a procurement veteran who is
of Fresh Hope’s numerous facilities,
now managing the operations of Fresh
he maintains that if greater exchange
Hope’s facilities, Johnson stresses that
of information can be beneficially harn-
communication, and initiatives and
essed, the role extension will lead to
solutions to enable this communication,
increased synergy in the business.
are the key to success. “As an organi-
“It gives us more of a brief to look at what
sation, if we can’t communicate, we’re
we’re doing with our retirement living
dead in the water,” he says. “We’ve really
age care services. We’re now able to
got to understand who our stakehold-
deliver very strategically on certain
ers are. It’s also important that we don’t
issues,” Johnson says. “We’re looking w w w.suppl yc ha i ndi gi ta l. com
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$100mn+ Approximate revenue per annum
1800s established
1,000+
Approximate number of employees
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FRESH HOPE
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M AY 2 0 1 9
183 at streamlining all our renovations so,
but to us as an organisation. It’s part
for example, we will have all our tiles,
of my remit to ensure stewardship
plumbing supplies and so on pre-
and sustainability for the organisa-
selected and included in our contract
tion,” he says.
to the supplier, so we can just say: ‘It’s
For Johnson, sustainability and new
this unit, it’s this colour scheme with
technology come hand in hand. “We’re
these appliances.’” This approach,
always looking at what the next big
Johnson believes, will also create
thing is. I’m looking at new technologies
budget synergies by streamlining and
that can monitor residents’ vitals wire-
consolidating the procure-to-pay
lessly while they’re lying in bed. We
process, as well as further empower-
also have a government grant to install
ing Fresh Hope to create positive
solar power in some of our age care
change in the community. “There are
facilities, and we’re looking at manag-
all sorts of things we can do that are
ing waste,” Johnson explains. “We
beneficial, not only to the community
realised we’ve regularly been throwing w w w.suppl yc ha i ndi gi ta l. com
FRESH HOPE
“ We’re transforming from an organisation that was very immature in this space to a truly centralised company” — Darrell Johnson Procurement and Property Services Manager, Fresh Hope
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away 65 tonnes of food from just one site. By cutting that down we’ve realised we can save money and make our operation more environmentally sustainable.” Fresh Hope is growing rapidly. “We’re looking at developing more in the age care space and trying to hone in on the best way that we can help the communities there,” Johnson says. “With regard to procurement and property, we’re looking to streamline and strengthen a lot more of our systems, policies and strategies for supporting the business.” He maintains that more digitalisation of the business is on the horizon, which will continue to empower Fresh Hope’s employees to focus on their true task: “Caring for our residents, looking after school camps, and working in the conference centre or for our outreach programs.”
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