OC T OB E R 2 0 2 0
www.supplychaindigital.com
Asia’s Logistical Transformation
SUPPLY CHAIN EXECUTIVES
IBM’S GLOBAL PROCUREMENT TRANSFORMATION Exclusive Interview: Bob Murphy, Chief Procurement Officer of IBM
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FOREWORD
W
elcome to the October edition
executives at AVEVA, Dassault
of Supply Chain Digital!
Systèmes and LLamasoft about
In this month’s cover feature, we speak exclusively with Bob Murphy,
how the technology is leveraged in a supply chain setting.
T:297 mm
CPO at IBM, as he discusses
This magazine is packed full of
digital transformation and the
in-depth company reports, featuring
effect COVID-19 has had on his
companies such as: AdoreMe,
organisation’s operations and the
Lufthansa Cargo AG, Dallah Trane
wider industry. “For IBM, as well
Manufacturing, Mediterraneo
as for many other companies who
Hospital and more that you won’t
have progressed on this journey,
want to miss!Finally, check out our
the transformation of procurement
Top 10 on the leading supply chain
has been driven by innovation,”
executives worldwide.
comments Murphy. Further, Tim Bridges, Global Head of Consumer Goods and Retail at Capgemini, talks about the influence of drones and AGVs as a result of the global pandemic, while we also
Would you like to be featured in the magazine? Get in touch at sean.galea-pace@bizclikmedia.com Enjoy the issue!
explore the impact of digital twin technology in the supply chain.
Sean Galea-Pace
Elsewhere, we explore the influence of digital twins and hear from www.supplychaindigital.com
03
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05
PUBLISHED BY
EDITOR-IN-CHIEF
Sean Galea–Pace DEPUTY EDITOR
Georgia Wilson EDITORAL DIRECTOR
Scott Birch CREATIVE TEAM
Oscar Hathaway Erin Hancox Sophie-Ann Pinnell Sophia Forte Hector Penrose
PRODUCTION DIRECTORS
MEDIA SALES DIRECTOR
Georgia Allen Daniela Kianicková
James White PROJECT DIRECTORS
Owen Martin
Justin Brand Caroline Whiteley
DIGITAL VIDEO PRODUCERS
DIGITAL MEDIA DIRECTOR
PRODUCTION MANAGER
Kieran Waite Sam Kemp DIGITAL MARKETING MANAGER
Shirin Sadr CHIEF MARKETING OFFICER
Jason Westgate CHIEF OPERATIONS OFFICER
Stacy Norman PRESIDENT & CEO
Glen White
Leigh Manning DIGITAL MARKETING EXECUTIVE
Jack Grimshaw www.supplychaindigital.com
10 28 DIGITALISATION IN SUPPLY CHAIN POST-COVID -19
40
The rise of Drones in Supply Chain Post-COVID-19
66
52 SUPPLY CHAIN EXECUTIVES
84 The Evolution of Digital Twins in Supply Chain
TwinThread
98 Lufthansa Cargo AG
116 Mediterraneo Hospital
126 Ooredoo Kuwait
138
150
Anheuser-Busch InBev Africa
PZ Cussons
ADORE ME
10
Digitally disrupting the fashion supply chain WRITTEN BY
SEAN GALEA-PACE PRODUCED BY
CAROLINE WHITELEY
OCTOBER 2020
11
suppl y c ha i ndi gi ta l. com
ADORE ME
Romain Liot, Chief Operating Officer, Adore Me, discusses his firm’s digital transformation journey in the fashion industry
A
dore Me is a disruptive ecommerce startup that is driven to revolutionise and transform the lingerie industry through
digital technology. Founded in 2012, Adore Me has 12
grown into a team of over 300 employees across the United States and Europe and is considered one of the fastest-growing companies in New York and one of the fastest-growing retailers in the United States. Romain Liot is the Chief Operating Officer and co-founder of Adore Me and has been with the organisation since 2013, having previously worked at McKinsey. “Adore Me is engineered for disruptions and we began with the intent to disrupt the lingerie market,” explains Liot. “We initially targeted a branding disruption to start with and originally began online; our tech team now consists of 40% of the total full-time employees.” Liot affirms that, as Adore Me was born digital, the company isn’t undergoing a classic digital transformation from little to no technology to a fully digitalised OCTOBER 2020
13
suppl y c ha i ndi gi ta l. com
ADORE ME
“ Adore Me is engineered for disruptions and we began with the intent to disrupt the lingerie market” —Romain Liot, Chief Operating Officer and Co-founder, Adore Me
14
OCTOBER 2020
AMS CLICK TO WATCH | 2:55
15
environment, but is instead leveraging
order management process, which
and implementing technology that cre-
brings state-of-the-art technology
ates value. “We’re digital-native, so it’s
to life. As a result, Adore Me became
a bit different,” he says. “We launched
one of the first companies to adopt
our warehouse three years ago and
Autostore and SureSort technol-
we’ve combined two technologies
ogy. Following the launch of the
together: Autostore and Suresort. This
warehouse, Adore Me can now fulfill
gives us an edge because we can list
over 20,000 orders every day, which
the products that are ready to ship
represents four times the volume of a
quickly on the website.”
conventional distribution centre. The
Considered an integral part of Adore
cutting-edge warehouse utilises robot-
Me’s second phase into expanding
ics technology and has been launched
internationally, the 126,286 sq.ft ware-
in a bid to allow Adore Me to stream-
house is home to a highly-automated
line operations and accommodate the suppl y c ha i ndi gi ta l. com
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One of the world’s leading mail and goods shipping providers. Asendia USA is the US arm of Asendia, one of the world’s leading parcel and mail shipping providers. Founded in 2012 as part of a joint venture with La Poste and Swiss Post, Asendia specializes in international shipping of packages, business mail, direct marketing materials, and publications. Asendia offers high quality B2C global delivery solutions for its customers. The organization is present in 17 countries across Europe, Asia, Oceania, and the US and provides a diverse range of ecommerce and mail solutions to empower businesses to grow across borders. Gary Shunk is Asendia USA’s Senior VP of Marketing, Pricing and Partnerships, with additional responsibilities in Sales and Key Accounts/Customer Care Management. “My experience in the logistics sector goes back 39 years,” he says. “I started out in sales and then went into management with FedEx back in the 1980’s. It was at FedEx that I benefited from solid sales management and leadership training. I left FedEx in 1989 to become an entrepreneur and have since contributed to the growth and development of the organization we are today.” With such extensive experience, Shunk has observed the transformation of e-commerce first-hand. “Global eCommerce has become a fantastic opportunity for growth, but can be challenging in the world we live in today,” he says. “The customs, security changes, and guidelines for shipping internationally require the ability to adapt to constant changes. Flexibility with choices while ensuring security and customs compliance is how we help companies achieve their goals. Parcel shipping is 60% of our business. Asendia’s strategy had to change in order for us to succeed, and that is what we did. Transporting sold products versus mail or printed matter is much different in many ways – and, as everyone now knows, speed and visibility are critical to the customer experience. Transportation companies have had to improve and expand their scope and coverage. Asendia is doing just that through expansion of facilities, acquisitions, improved automation, increased tracking capabilities, and above all employee safety. The e-commerce industry demands reliability and ease of use, and our strategy is to ensure we continue to provide both as one of the top players in the industry.” Having established a key, strategic relationship with Adore Me, Shunk believes that collaboration has been influential. “Adore Me began with a strict interest in the US market, but quickly saw the opportunity to grow their subscription model business into other English-speaking countries,” he
Gary Shunk @ Asendia USA
says. “Because of the trust we have built in each other’s people, systems, and capabilities, we are successful at working together and finding creative ways to adjust services. This flexibility allows us to find cost-effective solutions that meet the expectations of both organizations.” Shunk understands the importance of an individual approach and believes it is vital to create custom solutions for each customer. “We understand that one size does not fit all, so we make a point to work with each customer to create a customized solution that suits their business plan,” he says. “Some may want the most economical method for international distribution because their product value is low, and high international shipping costs on low-value orders can deter consumers from shopping outside their home country. Others want speed, and cost is not as critical. Almost all retailers want to be able to have the tracking visibility their consumers expect and the data that supports the performance.” With COVID-19 disrupting organizations globally, Shunk affirms that employee safety has become critical. “We’re very fortunate to have operations managers and operation workers that we have because they’ve gone above and beyond,” he says. “The pandemic has brought people closer together as a team. Communication has been positive and we’ve worked extremely hard. All six of our operating facilities have been able to stay open, but it has changed the way we manage our employees and how we remotely manage the company.” With the future in mind, Shunk has a clear idea of what he expects the next few years at Asendia to look like. “As the ecommerce industry continues to grow and adapt to the ever-changing needs of consumers, Asendia looks forward to continuing along on this journey with our customers to help them evolve with the changes and enjoy long-term growth and success with both domestic and international sales.”
ADORE ME
18
fast-paced growth of the organisation.
apart is its ability to be lean and agile in
“Imagine a giant cube with 73 robots
the market. “We have the right leader-
crisscrossing and bringing products
ship that empowers all of us to take
to an operator. We’ve married two
on responsibilities,” explains Shetty.
technologies together to essentially
“We are quick and agile, and embrace
sort orders and ensure the customer
technology that enables us to deploy
gets the perfect order,” affirms Nikhil
projects at scale. I feel this differenti-
Shetty, Supply Chain Manager. “It’s
ates us from our competitors and will
powered with strong algorithms where
help us grow over the next few years.”
we have intelligently stored products
“From a supplier management
and the finished product is a finalised
perspective, having tools that we’ve
sequence which allows the customer
developed internally and allow our
to have the right order that they want.”
suppliers to have access to has ena-
He adds that what sets Adore Me
bled us to speed up certain pieces
OCTOBER 2020
within our development process,”
processes and manage the shipment
explains Christina Chang, Product-to-
process is critical.”
Market Manager. “This has allowed
Liot believes that the most
us to have faster feedback from
important reason to introduce the
our manufacturers and has helped
warehouse was to be more autono-
reduce timings and has allowed us
mous and independent, while saving
to make decisions in a very effective
money. “We’ve made the decision to
way. Having those tools in place to
be more autonomous,” he explains.
allow us to manage our manufacturing
“We felt it was possible to disrupt the
E X E C U T I V E P R O FILE :
Romain Liot Title: Co-founder and COO
19 Company: Adore Me
Industry: Fashion Romain Liot is a co-founder and COO of Adore Me. Romain leads Adore Me’s team of 250 employees across the U.S. and Europe, focusing primarily on marketing and operations. With revenues growing exponentially from $1M in 2012 to over $100M in 2019, Romain has led Adore Me to become one of the fastest-growing companies in New York (ranked #17 on Crain’s Fast 50 in 2017) and one of the fastestgrowing retailers in the U.S. (ranked three times on the Inc. 500 list of the fastest-growing private companies in America). Prior to Adore Me, Romain spent seven years working as a management consultant for McKinsey & Company on projects in Europe and South-East Asia. He holds an MBA from INSEAD and a Masters from the London School of Economics. suppl y c ha i ndi gi ta l. com
ADORE ME
20
fashion industry and be more effi-
in terms of its procurement strategy.
cient with a better cost. Our cost of
“Our business model is not necessarily
shipment is now 70-80% lower than
fast fashion because we often see a
the benchmark in the industry. We
14-month time gap from product con-
empower them and make them oper-
ception until the product is delivered at
ate at a much higher efficiency.”
the warehouse,” explains Chang. “We
The COVID-19 pandemic has
spend time on sourcing the materi-
impacted organisations and industries
als as it’s essential that we have high
across the world. As a result, Chang
quality products. We’ve experienced
explains that Adore Me was forced
delays in shipping from Asia because
to adjust its mindset and processes
of COVID-19 and we’ve had to work
E X E C U T I V E P R O FILE :
Christina Chang Title: Product-to-Market Manager
Company: Adore Me
Industry: Fashion Christina Chang joined Adore Me in 2018. As Product-to-Market Manager, Christina is responsible for vendor management and sourcing strategy, as well as production and inventory management. Christina also collaborates with Adore Me’s IT developers in building proprietary tools to manage and streamline business processes. Prior to Adore Me, Christina worked in the financial services industry, first at AllianceBernstein and more recently at Morgan Stanley. She has also worked in strategy & operations at two consumer product startups. Christina holds an MBA from The Wharton School, University of Pennsylvania, and a BA from Columbia University. OCTOBER 2020
“ We’ve married able to leverage our partnerships two technologies with our manufacturers has been together to sort vital.” Shetty adds that Adore Me put a considerable amount of effort in its orders and logistics to better meet the challenge ensure the of COVID-19. “We tested a new set of robotic arms in order to keep our customer gets the operational rhythm up and running as perfect order” usual and allow our orders to get to our quickly to procure more inventory to
meet demand. Being nimble and being
— Nikhil Shetty, Supply Chain Manager, Adore Me
suppl y c ha i ndi gi ta l. com
21
ADORE ME
“ I believe being as agile and as nimble as we were during that tough time was one of our key strengths during the pandemic” — Christina Chang, Product-to-Market Manager, Adore Me 22
customers,” he says. “The logistics network was hit fairly bad because of a surge in sales and limited staff due to safety protocols which meant a delay in shipments. This seemed like a very good opportunity or a time for us to test out this new decentralised carrier system in the Northeast and allow next day delivery to our customers. I believe being as agile and as nimble as we were during that tough time was one of our key strengths during the pandemic.” OCTOBER 2020
Adore Me recognises the value of establishing key, strategic partnerships with companies to create mutually beneficial collaborations. Chang stresses how essential business relationships are in order to be successful in the industry. “We rely heavily on our manufacturing partners in Asia and across the world, because without them, we really wouldn’t be able to deliver high quality products to our customers,” she explains. “I believe the key for us has been cultivating partnerships with our manufacturers that are really meant for the long-term and can last. We want to grow with our partners and join forces on innovation, sustainability and establish that mutual trust to increase efficiency across the supply chain.” Chang affirms that the strength of Adore Me’s partnerships has really shone through during the COVID-19 pandemic. “Having that mutual support during this really difficult and challenging time has allowed us to go beyond the normal timelines and procure at a greater pace and without that backing, it would have been a lot harder,” suppl y c ha i ndi gi ta l. com
23
ADORE ME
24
E X E C UTIVE P R O FILE :
Nikhil Shetty Title: Supply Chain Manager
Company: Adore Me
Industry: Fashion Nikhil Shetty has a Masters in Engineering and Industrial Management at Syracuse University. Nikhil has had the opportunity to intern at both a Distribution Center and an early-stage healthcare startup in India. This instilled a love of startups and logistics, which helped him find the perfect combination at Adore Me. He oversees logistics networks and strategic sourcing of packaging. OCTOBER 2020
25
she explains. “When we’re seeking to
We have a very open and understand-
form a partnership, we’re searching
ing partnership and it has generated a
for partners that are aligned to our
lot of value. Asendia also places con-
strategy and can mutually grow with
siderable importance on sustainability,
us.” Liot points to its partnership with
which is incredibly important to us too.”
Asendia as a particularly important
With sustainability in mind, Shetty
relationship. “We’ve worked with
affirms that Adore Me is committed to
Asendia for several years and we
its sustainability goals and has under-
challenge them every year,” explains
taken several initiatives to achieve a
Liot. “Asendia have shared values
more environmentally friendly packag-
with us and acknowledge when things
ing output. “We now have an ecomailer
aren’t perfect and are always willing
which is made up of recycled content
to work with us to make things better.
and can be recycled. We’re using suppl y c ha i ndi gi ta l. com
ADORE ME
26
OCTOBER 2020
smarter materials to leave a smaller carbon footprint, while also reducing the logistical footprint too.” Looking to the future, Liot believes the fashion industry will have to change and believes it will transform in three directions. “The industry will become more digital across all platforms. There will be a digitalisation in the supply chain and in operations which will be essential and will leave organisations with no choice,” he says. “Secondly, sustainability will become more influential and prominent in everyday operations. As climate change continues to have an effect and impact, it will be imperative to reduce the carbon footprint. Lastly, there will be a change in globalisation. I believe there needs to be a much shorter cycle and I expect there will be a geographical shift in the coming years.”
suppl y c ha i ndi gi ta l. com
27
S U P P LY C H A I N
28
DIGITALISATION IN SUPPLY CHAIN POST-COVID -19 WRITTEN BY
SEAN GALEA-PACE
OCTOBER 2020
29
suppl yc ha i ndi gi ta l. com
S U P P LY C H A I N
Bob Murphy, CPO at IBM, discusses digital transformation and the effect COVID-19 has had on his organisation’s operations and the wider industry
30
B
BM is a global technology company with a leading cloud platform. Founded in 1911, it has become the largest technology and
consulting employer globally, with more than
350,000 employees serving clients in 170 countries worldwide. Bob Murphy is the Chief Procurement Officer at IBM. With over 40 years in the industry, Murphy is a highly experienced procurement executive and has overseen the rise of digital transformation first-hand in the industry. “For IBM, as well as for many other companies who have progressed on this journey, the transformation of procurement has been driven by innovation,” explains Murphy. “The innovation of technology has played a huge role in our transformation, as we initially moved from manual to electronic processes and systems. In recent years, the introduction of technologies like cloud, AI, advanced analytics, blockchain and RPA have enabled procurement to reach new OCTOBER 2020
31
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“ For IBM, as well as for many other companies who have progressed on this journey, the transformation of procurement has been driven by innovation” — Bob Murphy, CPO, IBM
levels of digitisation and automation — allowing us to offer faster and simpler solutions to our clients, higher cost savings and increased strategic value to our companies. The biggest innovation may be with regards to our people. Along with improving the procurement processes and harnessing these new technologies, we’ve transformed the procurement professional into someone who has the tools and skills to deliver increasingly higher value outcomes for their clients. They are armed with insights from data they couldn’t previously access, and proactively offering strategic consulting to their stakeholders and clients — a big change from their role in the past.” The COVID-19 pandemic has disrupted supply chains on a worldwide scale. Murphy explains that while it’s normal for IBM to monitor supplier status closely through its global management system, the firm did enhance its processes and communication further during the pandemic as it monitors changes in demand and assesses lines of supply, commitments, logistics and contingency plans. “This pandemic is unprecedented in scope and scale suppl yc ha i ndi gi ta l. com
33
S U P P LY C H A I N
IBM & COVID-19: Today isn’t a restart. It’s a rethink. CLICK TO WATCH | 2:10
34
“ The innovation of technology has played a huge role in our transformation, as we initially moved from manual to electronic processes and systems” — Bob Murphy, CPO, IBM
and has affected all geographies, sectors and industries,” he explains. “At IBM, we’re fortunate that we already had the technologies and processes in place to handle crises such as natural disasters and pandemics, which was a great help. We have also been working with suppliers across the globe to source new products and services from new suppliers that we couldn’t have anticipated. For example, we have been sourcing masks and sanitizer for the last several months to get us through the various phases of returning to the office that are ahead
OCTOBER 2020
of us. We also implemented dedicated
ensure their safety and well-being
freight carrier lanes to maintain deliv-
with frequent contact, surveys, and
ery routes and have been pre-booking
employee assistance programs,” says
flight space to secure shipping capac-
Murphy. “While many of us are used to
ity. On the payables side, we executed
working from home now and then, over
urgent accounts payable supplier
80% of our procurement profession-
setups and expedited payments for
als have never done so on a regular
business-critical requirements.”
basis. Yet our procurement outsourc-
IBM’s strategy for managing the
ing service delivery organisation, for
impact of the coronavirus was to pri-
example, was able to move 99% of the
oritise its employees’ wellbeing and
staff from working onsite to work-from
safety. “We enabled our workforce to
home within 10 days back in mid-
work from home with secure tools and
March, which was pretty remarkable.
technology; and we work to continually
We were able to achieve that because
suppl yc ha i ndi gi ta l. com
35
S U P P LY C H A I N
most of our staff already had laptops and remote access to IBM systems so we just needed to get access to the client systems they supported. We already embrace collaborative tools because we are a geographically diverse organisation that values innovation and technology. But some of the changes we did need to make were to hold more frequent meetings and to have more one-one-one time with our employees to ensure they had what they needed to remain productive as 36
well as to ensure their well-being.” Murphy believes that in the aftermath of COVID-19, it’s important to reimagine supply chains and navigate disruption through risk mitigation, visibility and insights. “Instead of basing your supply chain design on the assumption that materials flow freely globally, enabling you to source, produce, and distribute products at the lowest-cost locations around the world, consider what we learned from COVID-19 — unforeseen events can trigger major disruption to entire supply chain networks,” says Murphy. “Opportunities for supply chain transformation exist across the value chain, OCTOBER 2020
“ Our procurement outsourcing service delivery organisation, for example, was able to move 99% of the staff from working onsite to work-from home within 10 days back in mid-March, which was pretty remarkable” — Bob Murphy, CPO, IBM
from demand planning and manufacturing execution to order orchestration and fulfillment. Understanding supply chain risks requires gaining visibility into tier 2 and tier 3 suppliers that, despite their relatively small size, can quickly and significantly disrupt production. With smarter supply chain modeling and scenario analysis we can get an immediate assessment and continued evaluations for risk mitigation. Analytics, AI, and visualisation suppl yc ha i ndi gi ta l. com
37
S U P P LY C H A I N
38
tools allow us to assess geopolitical
While Murphy recognises it’s impos-
risks, climate change risks, cyber secu-
sible to predict exactly what the future
rity risks, and natural disasters. We can
will hold, work is already underway to
proactively identify alternate sources
build a smarter global supply chain.
wherever possible, test and contract
“Organisations can leverage artificial
multiple logistics routes, and maintain
intelligence (AI) and other technolo-
the flexibility to reposition inventory
gies – such as automation, blockchain,
across their supply chains.”
IoT, 5G, and edge computing – to help
OCTOBER 2020
technologies can help maintain busi-
“ I get excited when I look to the future, as I know we’re not done yet” — Bob Murphy, CPO, IBM
ness continuity during these times of disruption and uncertainty.” Murphy remains optimistic for the future of IBM. “I get excited when I look to the future, as I know we’re not done yet,” he affirms. “IBM’s journey to becoming the Premier Cognitive Procurement Enterprise is about automating the end-to-end procurement workflow and deriving proactive alert-driven insights across the board. We’re working towards deploying this automation and intelligent workflows throughout procurement, and then also integrating that with the rest of IBM and with our external ecosystem of suppliers and clients. I’m focused on driving that for the IBM enterprise, but also as we progress, I’m committed to sharing what we learn and develop with others who are interested.”
turn the unanticipated into the envisioned,” he says. “Systems based on these exponential technologies can help organisations build smarter supply chains and reduce vulnerabilities from unforeseen circumstances like this. Smarter supply chains that leverage the power of AI and other emerging suppl yc ha i ndi gi ta l. com
39
L O G I S T I C S - D R O N E S & AV G S
40
The rise of Drones in Supply Chain Post-COVID-19 WRITTEN BY SEAN GALEA-PACE
OCTOBER 2020
41
suppl yc ha i ndi gi ta l. com
L O G I S T I C S - D R O N E S & AV G S
Tim Bridges, Global Head of Consumer Goods and Retail at Capgemini, discusses the influence of drones and AGVs as a result of COVID-19 Q. As a way of introducing yourself, can you start off by telling us a bit about your career and your journey to finding yourself with Capgemini? A. “I lead Capgemini’s Consumer Goods and Retail global sector practice – a portfolio which includes 42
major global retail, fashion, restaurant, consumer products, transportation, and distribution brands like McDonald’s, Coca-Cola, Meijer, Office Depot, Domino’s, and Unilever. I’ve been with Capgemini for over 20 years and was previously a partner at EY, where I created and led the Structured Lending practice for blue chip clients in the financial services and lending capital industry.” Q. How would you describe Capgemini? What gives it an edge over competitors? A. “Capgemini is at the forefront of innovation to address the entire breadth of our clients’ opportunities in the evolving world of cloud, digital and platforms. We harness the power of data-driven insights to help brands compete against
OCTOBER 2020
43
suppl yc ha i ndi gi ta l. com
Plug-and-Play Predictive Analytics with TwinThread. Find out how: twinthread.com
45
“ The future of robotics and automation in the supply chain will feature self-orchestration” competitors, engage customers,
Q. What does digital transformation
enter new markets and, ultimately,
currently look like in the supply
positively disrupt the world we live in.
chain industry today?
We’re also a company which is actively
A. “COVID-19 has heightened the
pursuing a positive future for our
frailties of many supply chains. A lack
company, clients and wider society.
of visibility and agility has brought
Sustainability, digital inclusion and
many firms to a literal stand-still. Last
inclusivity are central to our values.”
year, Capgemini research found that suppl yc ha i ndi gi ta l. com
L O G I S T I C S - D R O N E S & AV G S
Capgemini’s Demand Planning Supply Chain Solution CLICK TO WATCH | 2:24
46 just 14% of organisations had scaled
The goal is to create a single, end-to-
their pilot plans to digitise their supply
end, unified view of the ecosystem
chain, with 86% still at the pilot stage.
so that organisations have precise,
In the wake of the pandemic, innova-
real-time visibility into their opera-
tion has become an imperative. Recent
tions – from the suppliers of materials,
events have shown us it is impossible
the transporters of those supplies and
to plan for what’s coming next, so
finished goods, and finally to the cus-
adaptability is critical. This can only
tomers demanding fulfillment.”
come about from digitalisation, which will give organisations the effective-
Q. How has automation and robotics
ness, transparency and resilience
transformed supply chains?
they need.
A. “Most supply chain organisations
“Firms need to move away from lin-
already use some form of robotic pro-
ear, traditional supply chain models to
cess automation (RPA), particularly in
become connected, supply networks.
areas that are high-volume, repetitive
OCTOBER 2020
and rule-based like orders and claim
for pick-pack-ship activities and
processing. RPA software bots can
self-driven trucks for logistics.”
monitor inventory, generate notifications and reorder products when
Q. What are the real benefits to using
levels go below a set threshold, freeing
drones in logistics? How were drones
up time and resources for people to
and Automated Guided Vehicles
work on high-value exception-based
(AGVs) considered in the industry
requirements.
pre-COVID and what do you feel their
The future of robotics and automa-
future looks like in the supply chain?
tion in the supply chain will feature
A. “Pre-crisis, 97% of retailers felt their
self-orchestration. Radio-frequency
delivery models were not sustain-
identification (RFID) and GPS are
able. Consumers want fast and cheap
not new, but, as artificial intelligence
deliveries, but this is hard for organisa-
and 5G mature, so do the use cases
tions to deliver while making a profit.
for these technologies: examples
Drones have huge potential as a last
include using autonomous robots
mile resource because they reduce
suppl yc ha i ndi gi ta l. com
47
L O G I S T I C S - D R O N E S & AV G S
the need for human intervention and are exceptionally fast. They can also reach isolated locations which are tricky to get to via traditional vehicles – potentially opening up new customer bases. Drones have been experimented with over the years as a delivery option by the likes of Amazon and Walmart. However, airspace restrictions and concerns about drones crossing over flight routes meant they have never taken off – until now. 48
“COVID-19 spurred the world’s first drone delivery service into existence in Ireland and we’ve seen more players utilise this delivery method in the wake of the pandemic[1]. If these test deliveries are successful, logistically possible on a wider scale and public opinion of their use is positive, we may see restrictions around drones eased, leading them to become a viable device for remote orders. While this may not be the future of delivery on a mass scale, drones do offer an interesting solution to ongoing issues of social distancing and the overwhelming levels of demand.”
OCTOBER 2020
“ Our focus has been to help our clients build resilience – quickly – through digitalisation”
Q. Can you talk me through your COVID-19 approach? What kind of impact did it have in the industry and how are drones and AGVS being used? A. “Many of the challenges that companies faced at the beginning of the pandemic were not solely the result of the virus. It was more that the sudden change in working conditions and increase in demand put a spotlight on pre-existing issues. Our focus has been to help our clients build resilience – quickly – through digitalisation. By helping organisations to enhance immediate supply chain visibility, adopt emerging technologies to limit disruption, and rethink supply chain strategies, we are protecting them in the short-term while setting them up for long-term success.” Q. What are the major trends you are observing in the industry and how is your business responding to them? A. “Building resilience is a critical theme, as is sustainability. We found that 79% of consumers are changing their purchase preferences based on social responsibility, inclusiveness, suppl yc ha i ndi gi ta l. com
49
L O G I S T I C S - D R O N E S & AV G S
50
“ We found that 79% of consumers are changing their purchase preferences based on social responsibility, inclusiveness, or environmental impact, and this trickles down to the supply chain too” or environmental impact, and this
sustainable through initiatives like
trickles down to the supply chain too.
waste reduction, energy efficiency
For these organisations, there is a
and using more sustainable materials.
huge onus to make practices more
Many manufacturers and retailers are
OCTOBER 2020
Q. What’s next for the Consumer Goods and Retail sector at Capgemini? A. “Capgemini recognises that service needs and solutions vary by subsector. For example grocery is looking for fast progression in both contactless commerce of consumer engagement as well as profitable fulfillment, while apparel looks to restructure as well as find direct to consumer (DTC) solutions. “Capgemini is evolving and applying specific solution and service emphasis to drive tailored client needs. We’re also helping organisations to develop what we call invisible infrastructure – operating models that are agile, fluid worried that implementing sustain-
and adaptable. In line with this, we see
able approaches is too costly, but
simplification as a key theme for our
technology is opening new frontiers
clients. Emerging technologies like
to manage and scale up sustainability
5G and Internet of Things (IoT) can
initiatives while boosting revenue and
seem overwhelming to business and IT
reducing operational costs. More
leaders, but through simplification, we
importantly, they may find that the
look at real-world use cases for these
price of not pursuing these aims may
technologies, making them tangible
also cost them dear.”
and exciting for our clients.”
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T E C H N O L O G Y - D I G I TA L T W I N S
52
OCTOBER 2020
The Evolution of Digital Twins in Supply Chain 53 WRITTEN BY SEAN GALEA-PACE
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T E C H N O L O G Y - D I G I TA L T W I N S
Supply Chain Digital explores the influence of digital twins and how the technology is leveraged in a supply chain setting
T
he supply chain of today is unrecognisable
from a decade ago. As a direct result of the influence of technology, supply chains are
complex and dynamic, and it has never been so
important to adopt an agile approach. With the added challenge of COVID-19, having 54
real-time data available is a critical competitive advantage. Industry 4.0 constitutes a technological framework that focuses on digitalisation and analytical capabilities to identify events on a realtime basis. This is where digital twins come in. A digital twin is essentially a virtual supply chain replica that consists of hundreds of assets, warehouses, logistics and inventory positions, and it is gaining more attention in the industry due to improvements in technical and computational capabilities with operations technology. Ravi Gopinath, Chief Cloud Officer and Chief Product Officer at AVEVA, believes the value of digital twin technology is directly proportional to the reliability and depth of the data powering the underlying model; such as operating data, OCTOBER 2020
55
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“ Digital twins have been a key force behind the improvements in supply chains and the digitalisation of industries has increased margins and operational performance in good times, whilst allowing industries to adapt better in the bad” — Ravi Gopinath, Chief Cloud Officer and Chief Product Officer, AVEVA production data or supply chain 57
data. “Digital twins support the entire lifecycle, from design time, through construction and commissioning, all the way through to operations,” says Gopinath. “While there is value in just collecting current and historical data for analytics, the real power of the digital twin is realised when it covers the full asset lifecycle. This makes it a single repository for the information needed by both the operations and maintenance of a plant or an organisation’s supply chain. In addition, this critical engineering and operational data enables the use of big data analytics, such as planning, optimisation and predictive analytics.” suppl yc ha i ndi gi ta l. com
T E C H N O L O G Y - D I G I TA L T W I N S
58
“Ultimately, digital twins have been
global supply chains and the domino
a key force behind the improvements
effect of lockdowns was second to
in supply chains and the digitalisation
none,” says Murthi. “Now, businesses
of industries has increased margins
must prepare for what could be further
and operational performance in good
lockdowns countrywide and regionally,
times, whilst allowing industries to
as well as for the threat of a second
adapt better in the bad.”
wave. We have been through this once
Vikram Murthi, Vice President,
before and businesses have to pre-
Industry Strategy at LLamasoft,
pare to respond to the inherent risks
believes that COVID-19 has show-
in their supply chains, with strategies
cased how underprepared companies
to be more resilient and continuously
were for such a disruption. “There
respond as demand patterns changes
have been events over the years that
and supply issues occur.”
have impacted supply chains, but the
Murthi recognises that through
scale at which COVID-19 affected
digital twins, businesses will be able
Introduction to Digital Twin: Simple, but detailed CLICK TO WATCH | 7:18
OCTOBER 2020
59
to understand the impacts and trade-
considerations – this model is
offs of decisions by running ‘what-if’
referred to as the digital twin,” he
scenarios and making informed rec-
explains. “The digital twin with AI,
ommendations both horizontally and
machine learning and optimisation
vertically throughout the supply chain.
techniques can be used to simulate
“The supply chain system is a complex
and optimise the supply chain. The
network of entities which needs an
digital twin encapsulates suppliers,
end-to-end representation that can be
factories, contract manufacturers,
leveraged to respond to market pres-
distribution facilities, transportation
sures, external factors and internal
lanes and customer locations. Using suppl yc ha i ndi gi ta l. com
T E C H N O L O G Y - D I G I TA L T W I N S
S T E V E T R E A G U S T, V I C E PRESIDENT OF INDUSTRIES P R O G R A M M A N A G E M E N T, I F S
60
“If an organisation is a collection of people managing operations for a collective goal, then the digital twin of an organisation (DTO) is the automation of the inputs, calculations and outputs of the same processes, but without physical assistance or constraints. “Within an Enterprise Resource Planning (ERP) context, the digital twin covers the processes which are prevalent within the ERP system and can utilise the existing ‘actual’ values and ‘actual’ calculations where appropriate. The benefits of this are that setup and maintenance of the DTO is quicker and more accurate, and the data security is the same as that used within the ERP. “With a DTO in place across an organisation, operational simulations can be run to determine
OCTOBER 2020
outcomes throughout the processes. The benefits of using DTOs to run operational simulations is that not only are the decisions evident at each calculation point, but requirements in terms of capacities are also determined and the supply chain can be prepared to deliver the required capacities. The other benefits are that decisionmaking becomes more familiar with decisions being made backed by the scenario planning. “Of course, DTOs do come with challenges. Simulations are based on static processes, with system-based data and calculations, which if inaccurate only seek to extrapolate into inaccurate results. Also, there are only so many simulations that can be planned, which is why a range of outputs and inputs is the best outcome.”
the digital twin, businesses can
technology, businesses are finding
evaluate the complex interconnected
new ways to ensure operations are
trade-offs in capacity, service, inven-
running as they did pre-pandemic.
tory and total landed cost.”
Most recently, we have seen a surge in
Jonathan Bailey, Director of
digital twin technology, to not only help
Business Transformation, EuroNorth
address immediate business needs,
at Dassault Systèmes, has observed
but to future-proof and help build resil-
first-hand how businesses trans-
iency for the long-term.”
formed their operations almost
“Dassault Systèmes has been instru-
overnight, which has aided the rise of
mental in developing and leading these
digital twin technology. “Society has
capabilities since its infancy; we used
come a long way in the last six months
it to help support the creation of the
during the COVID-19 pandemic,” says
Boeing 777 plane as early as 1989,”
Bailey. “From the implementation
adds Bailey. “Implementing digital
of artificial intelligence to simulation
twin solutions means that whether it
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61
T E C H N O L O G Y - D I G I TA L T W I N S
62
“ The scale at which COVID-19 affected global supply chains and the domino effect of lockdowns was second to none” — Vikram Murthi, Vice President, Industry Strategy, LLamasoft is used by aircraft designers or manu-
matches the needs of what is hap-
facturers, you have full visibility of the
pening day to day and experiment in
entire production process. Using this
the virtual world to see how the parts
real-time data, you can ensure what
fit and perform together. This limits
is happening in your supply chain
time spent on manufacturing and
OCTOBER 2020
Short-term planning and execution: A digital twin can identify execution risks early and this means that companies can mitigate risks rather than manage crises. It enables the company to reduce the idle time of bottleneck assets and improve inventory positions. Sales and operations planning: The digital twin can optimise sales and operations planning (S&OP) by simulating the execution of a specific plan, highlighting risks
© BCG analysis
and opportunities and feeding the insights back into the planning process. This allows the company to
getting the parts delivered for assem-
minimise the losses that arise from
bly, and the testing phase. Digital twins
misalignment of plans and system
are also widely used in the automotive
constraints, as well as latent bot-
sector precisely for this reason.”
tlenecks. The insights also allow
Digital twins help companies
the company to better align mainte-
address challenges by simulating
nance plans and inventory build ups
all assets and interconnections in
with market demand.
a complex supply chain. In BCG’s
Longer-term planning: A company
report “Conquering Complexity in
can improve the efficiency of capex
Supply Chains with Digital Twins”,
and optimise the setup of the overall
it was detailed how a company
supply chain system by understand-
can apply the insights to augment
ing where the most significant
decision-making across multiple
structural bottlenecks exist and how
planning horizons.
much additional capacity is needed. suppl yc ha i ndi gi ta l. com
63
T E C H N O L O G Y - D I G I TA L T W I N S
“ We have seen a surge in digital twin technology, to not only help address immediate business needs, but to future-proof and help build resiliency for the long-term” — Jonathan Bailey, Director of Business Transformation, EuroNorth, Dassault Systèmes It is important that for any technology deployment that the effort to introduce 64
a digital twin is led by the business. Companies that clearly understand the value potential and opportunities to gain an edge will be in the best position. For example, by better understanding and protecting bottleneck assets in the supply chain, a company can increase throughput, improve service levels and react faster to changes
• Leveraging a data and digital plat-
in its sales portfolio. According to BCG,
form in order to release data from core
to create sustainable change, com-
IT systems and quickly build analytics-
panies should address three enablers
based minimum viable products.
from the start: • Changing processes so that they
Ultimately, Murthi believes that the
can effectively use the new insights.
‘winners’ are the companies that are
• Building up the required capabilities
proactive and agile. “From a recent
and changing the way of working.
LLamasoft retail research report, the
OCTOBER 2020
65
most successful retailers are those
will be using AI, advanced analytics
that are already recognising and
and IoT in supply chain operations.
implementing technologies such as
If businesses are to survive and thrive
digital twins, artificial intelligence and
in the new normal, they must imple-
machine learning – they are the ones
ment the right enabling technology
that are staying ahead of the curve in
that will help them gain insights into
tough times,” he explains. “As stated
their supply chains and make them
in the 2019 Gartner report, by 2023 at
more agile to respond to rapidly
least 50% of large global companies
changing conditions.” suppl yc ha i ndi gi ta l. com
T O P 10
Supply Chain Executives 66
We examine 10 of the leading supply chain executives in the industry, ranked by company revenue.
WRITTEN BY
SEAN GALEA-PACE
OCTOBER 2020
67
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T O P 10
HQ
NEW YORK, UNITED STATES
$15.5bn REVENUE IN US$ DOLLARS
34,500 NUMBER OF EMPLOYEES
68
10
Michael Corbo Chief Supply Chain Officer, Colgate Palmolive
Corbo is an experienced Chief Supply Chain Officer with a comprehensive history in the consumer goods industry. He has spent his entire career with Colgate, working across a variety of different positions. He is skilled in negotiation, operations management, supply chain optimisation, consumer products and demand planning. Corbo is currently leading Colgate Palmolive’s transformation to a digital supply chain.
OCTOBER 2020
09
Ivanka Janssen
Senior Vice President, Global Integrated Supply Chain, Philips
Janssen is an experienced supply chain leader with more than 20 years of international management experience in operations, manufacturing, supply chain, route to market, logistics, customer service and procurement. She is the Senior Vice President of Global Integrated Supply Chain at Phillips and is focused around creating a competitive edge. Prior to her role at Philips, she served as Vice President of Supply Chain, Europe, Eastern Europe and Sub Saharan Africa at PepsiCo. 69
HQ
AMSTERDAM, NETHERLANDS
$21.4bn REVENUE IN US$ DOLLARS
77,400 NUMBER OF EMPLOYEES
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T O P 10
HQ
AMSTERDAM, NETHERLANDS
$23.5bn REVENUE IN US$ DOLLARS
53,000 NUMBER OF EMPLOYEES
08
71
Dirk Holbach
Corporate Senior Vice President, Chief Supply Chain Officer, Henkel
Holbach is the Corporate Senior Vice President and Chief Supply Chain Officer, Laundry & Home Care at Henkel Global Supply Chain. He has over 20 years of experience in supply chain, operations, purchasing and sales, having held a number of roles on a local, regional and global level at Henkel. Holbach’s special focus has been on supply chain strategy and organisational development, network optimisation, continuous improvement and post-merger integrations. Holbach holds a master’s degree in business and mechanical engineering and a PhD in information science.
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T O P 10
HQ
BAGSVÆRD, DENMARK
$19.4bn REVENUE IN US$ DOLLARS
42,100 NUMBER OF EMPLOYEES
72
07
Susanne Hundsbæk-Pedersen Senior Vice President - Devices and Supply Chain Management, Novo Nordisk
Hundsbæk-Pedersen is the Senior Vice President of Devices and Supply Chain Management. In her role, Hundsbæk-Pedersen is responsible for the global end-to-end supply chain management operations ranging from the procurement function across manufacturing planning and the distribution to 70 global affiliates serving 170 countries. She is also responsible for manufacturing development of assembly and packaging operations across her organisation’s global sites.
OCTOBER 2020
06
Mourad Tamoud Chief Supply Chain Officer, Schneider Electric
Tamoud is the Chief Supply Chain Officer at Schneider Electric. He has worked at Schneider Electric in a variety of different roles over the past 24 years, holding positions in Low Voltage and Medium Voltage Industrial Operations, Industrial Strategy, Manufacturing Logistics, Production & Logistics, Procurement, and ERP Information Systems. Tamoud has a passion for the customer and is well versed in how supply chains must evolve in the future to serve as growth engines and keep Schneider competitive. He has a degree from Institut National Polytechnique de Grenoble. 73
HQ
RUEIL-MALMAISON, FRANCE
$32.2bn REVENUE IN US$ DOLLARS
135,000 NUMBER OF EMPLOYEES
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T O P 10
HQ
BRENTFORD, UNITED KINGDOM
$44.1bn REVENUE IN US$ DOLLARS
99,437 NUMBER OF EMPLOYEES
05
75
Regis Simard
President, Pharmaceutical Supply Chain, GSK
Simard is the President, Pharmaceuticals Supply Chain at GSK. In his role, he is responsible for the manufacturing and supply of GSK’s pharmaceutical products, including innovative new machines, and he leads Quality and Environment, Health, Safety & Sustainability (EHSS) at a corporate level. Prior to joining GSK, Simard held leadership positions at Sony and Konica-Minolta and also at Tyco Healthcare where he gained valuable experience working with Japan, UK and France. He is also a mechanical engineer and holds an MBA.
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T O P 10
04
Thomas Panzer SVP, Head of Supply Chain Management, Bayer AG
Panzer serves as Senior Vice President and Head of Supply Chain Management for the Pharmaceuticals division of Bayer AG. In this role, it includes overseeing the supply of all pharma products including launch management for all three technological areas of small and large molecules and medical devices. Panzer’s department oversees the planning and execution of Bayer’s supply chain network from end-to-end within the organisation and is accountable for the inventories, S&OP/IBP, risk management as well as being the key interface partner for our commercial and marketing organisation. 76
HQ
BERLIN, GERMANY
$51.5bn REVENUE IN US$ DOLLARS
103,824 NUMBER OF EMPLOYEES
OCTOBER 2020
HQ
CALIFORNIA, UNITED STATES
$51.9bn REVENUE IN US$ DOLLARS
75,900 NUMBER OF EMPLOYEES
03
77
John Kern
Senior Vice President, Cisco Systems
Kern is Senior Vice President of Supply Chain Operations at Cisco where he leads a global and diverse team responsible for manufacturing, new product introduction, product lifecycle management, sourcing and supplier management, planning, logistics and product quality. Kern has led the efforts to digitise Cisco’s supply chain as well as evolve the practice to accelerate Cisco’s business model evolution, building the capabilities required to enable Cisco’s growth in software and cloud delivered solutions. Kern is also leading Cisco’s circular economy effort and is serving as the executive country sponsor for India and Brazil.
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E M E A | A P A C | | APAC N O R T H | A EMEA MERICA AMERICAS FIND OUT MORE
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T O P 10
Marc Engel Chief Supply Chain Officer, Unilever
Having worked at Unilever for over 20 years, Engel has extensive experience in supply chain operations, covering procurement, logistics, finance and strategy development. Before being appointed Chief Supply Chain Officer, Engel had an executive leadership role in Unilever’s East Africa business where he was responsible for laying the foundations for accelerated growth. He has an MSc in applied physics from the University of Groningen in the Netherlands. 80
Investor Event 2019 - Marc Engel CLICK TO WATCH | 44:35
OCTOBER 2020
81
HQ
LONDON, UNITED KINGDOM
$61.5bn REVENUE IN US$ DOLLARS
155,000 NUMBER OF EMPLOYEES
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T O P 10
HQ
NEW JERSEY, UNITED STATES
$82bn REVENUE IN US$ DOLLARS
132,200 NUMBER OF EMPLOYEES
82
Hub Culture Davos 2019 - Kathy Wengel, Executive VP of Johnson & Johnson CLICK TO WATCH | 9:46
OCTOBER 2020
Kathryn Wengel Executive Vice President and Chief Global Supply Chain Officer, Johnson & Johnson
Wengel is Executive Vice President and Chief Global Supply Chain Officer at Johnson & Johnson. She leads all aspects of the Johnson & Johnson Supply Chain across its three business sectors: Consumer Health, Medical Devices and Pharmaceuticals. Wengel has a passion for building globally diverse teams and is also a Chairman of the Board of GS1 Global, an organisation that sets and maintains standards regarding the exchange of critical business data. In 2019, Wengel was recognised on the Council of Supply Management Professionals (CSCMP) with their Distinguished Service Award, the top cross-industry supply chain honor for individuals, and was inducted into the Supply Chain Hall of Fame.
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83
84
Driving value-added technology in manufacturing WRITTEN BY
GEORGIA WILSON PRODUCED BY
CAITLYN COLE
OCTOBER 2020
85
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TWINTHREAD
Erik Udstuen, CEO at TwinThread discusses digital innovation, realizing value and the current technology trends in the manufacturing industry
W
orking in the industrial automation and manufacturing space for 25 years, Erik Udstuen began his career as a chemi-
cal and process engineer working in the pulp and paper industry, before forming his own company in the early nineties providing customers with manufacturing optimization solutions for multiple 86
sectors. After selling the company to General Electric (GE) in 2003, Udstuen joined the firm in 2007 as a Senior Executive driving digital transformation across multiple business units. “I left GE in 2012 and went back into the startup world and formed a couple of other companies, the latest company is TwinThread,” comments Udstuen, who believes that a significant differentiator between TwinThread and other organizations is its results guaranteed position. “The idea of TwinThread is to provide similar capabilities and concepts that monitor and optimize a fleet of power plants or gas turbines to other industries like manufacturing, consumer products, food and beverage, and automotive. The enabler for this is the fact that we have these pre-built applications that someone can just take, apply and OCTOBER 2020
87
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TWINTHREAD
With this in mind, when it comes to digital innovation, TwinThread’s vision is “to be able to optimize on a global basis and drive 1 or 2% more efficiency out of manufacturing operations or a network of assets,” adds Udstuen. In order to achieve this he further explains that “the enabler is algorithms and the power of technology such as machine learning to make that practi-
88
gain valuable insights without having
cal. We have a customer, for example,
to go through a long deployment.
that is monitoring 450 data centers
“We embrace the opportunity to
across the world and they’re doing that
deploy pilot projects that deliver proof
with just a few people. The only way
of value for outcomes and that as well
that becomes practical and economi-
is very unique. In doing so, we want to
cally feasible is if you apply algorithms
roadmap and fund future opportunities
and machine learning technologies.
for our customers.”
With these capabilities, organizations
“It may be a bit of a cliche, but really the executive buy-in sponsorship commitment to any kind of digital transformation effort is essential” — Erik Udstuen, CEO, TwinThread
OCTOBER 2020
89
can drive innovative opportunities to
terms of the culture and mindset
drive efficiency.”
in this new digital age, and with the
When it comes to deploying a digi-
incorporation of machine learning
tal strategy, Udstuen highlights the
and artificial intelligence technolo-
importance of having the right culture
gies, leaders have to think in terms of
and mindset. “It’s critical. It may be a
their change management strategy
bit of a cliche, but really the execu-
- how do you bring together the roles
tive buy-in sponsorship commitment
of the IT teams, the data scientists
to any kind of digital transformation
and the engineer to understand the
effort is essential. But maybe what
data and solve business problems
potentially is less obvious is that in
using digital technology.” suppl y c ha i ndi gi ta l. com
TWINTHREAD
“ With the advancement of innovative technology such as machine learning, cloud computing, artificial intelligence (AI) and 5G, the concept of connected environments are becoming more and more feasible and in real-time” — Erik Udstuen, CEO, TwinThread
90
TwinThread - Digital Innovation CLICK TO WATCH | 1:53
OCTOBER 2020
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TWINTHREAD
92
Within the industry, Udstuen
implementing artificial intelligence
explains that when it comes to the
and machine learning based tech-
importance of technology, ‘we’re
nologies. But, only 16% actually have
obviously very biased given that we’re
a program that’s deploying that
a technology company, focused on
technology. So there’s a huge gap
applying machine learning and artificial
between the desire and the people
intelligence technologies. However,
that are actually implementing.
in a recent Harvard business review
The trends in terms of the applica-
article, it was suggested that 84%
tion of that technology are clear,
of leaders believe they should be
but the trends of how to actually
OCTOBER 2020
get moving and start deploying that
began investing in sensor technology,
technology, those trends are only just
the technology to record the data
emerging.” Udstuen also highlights
from the sensors and the technology
that within that article, it was refer-
to store the data for long periods of
enced that successful companies
time. In the mid two thousands this
that are applying this technology are
expanded into most industries which
doing two key things. “One is the use
means that there are billions of sen-
of cross functional teams, and the
sors that have been deployed and
other is making the commitment and
are collecting data.
adopting technology in production as a first step.”
Today, the concept of connected factories and fleets is to mine new
Other trends within the industry
insights from not only the informa-
seen by Udstuen include the concepts
tion that’s already been collected,
of connected factories, connected
but also new data being created.
fleets and predictive maintenance.
With the advancement of innovative
“Starting with manufacturing there
technology such as machine learning,
are multiple innovations and layers
cloud computing, artificial intelligence
to the technology, some are new and
(AI) and 5G, the concept of connected
some have been around for a while.
environments are becoming more
In the mid nineties, organizations
and more feasible and in real-time.”
“ There’s a lot of value in looking backwards and understanding what went wrong and what went right, but it is a whole new level of value to be able to look forward and anticipate problems” — Erik Udstuen, CEO, TwinThread suppl y c ha i ndi gi ta l. com
93
TWINTHREAD
94 E X E C U T I V E P R O FILE :
Erik Udstuen Title: CEO
Company: TwinThread
Industry: Internet
Location: Charlottesville, Virginia
Erik’s in-the-field industrial experience working as a chemical and process engineer, paired with his proven acumen for co-founding successful tech. start-ups is what fuels his passion for developing and driving innovative, game-changing solutions specifically tailored for manufacturing organizations committed to ever-improving efficiency and performance. His 25 years in the manufacturing sector have equipped him with the background necessary to know exactly what it is engineers, operators, problem-solvers and domain experts need. They need a predictive platform that will cater insights to their understanding, so they may be unleashed to expand their reach and effect greater operational change. OCTOBER 2020
TwinThread - Trends in the Industry CLICK TO WATCH | 2:55
95 Another part of TwinThead’s vision
the problems might be, and to be able
is that “a modern operating strategy
to act before those problems manifest
should be one where a company can
themselves. There’s a lot of value in look-
optimize their entire enterprise of assets
ing backwards and understanding what
efficiently. It’s no longer about optimizing
went wrong and what went right, but it is
a single plant or a single line. It’s about
a whole new level of value to be able to
how to optimize the performance of all of your assets and do that efficiently. This is where predictive maintenance comes in. It’s one thing to be able to look backwards and say, these were the problems that I had and this is how I applied these resources enabling me to solve the problem. It’s another to be able to look forward and to anticipate where
2018
Year founded
30+
Number of employees suppl y c ha i ndi gi ta l. com
TWINTHREAD
“ A modern operating strategy should be one where a company can optimize their entire enterprise of assets efficiently, it’s no longer about optimizing a single plant or a single line” 96
— Erik Udstuen, CEO, TwinThread
TwinThread - Future Innovations CLICK TO WATCH | 4:09
OCTOBER 2020
97
look forward and anticipate problems
blocks, and actually create applica-
and to have strategies in place, to deal
tions out of them so that customers
with problems in real-time in a proactive
can just deploy the application that
and predictive way,” comments Udstuen.
solves the problem without having to
Reflecting on the future, Udstuen
conduct the development work based
believes that from a TwinThread per-
on a tool set. This helps to eliminate
spective what the company is trying to
the development time so that custom-
continuously achieve, “is that with any
ers can get straight to deploying and
adoption of technology, an organiza-
straight to getting value.”
tion requires a tool set to do their own development work, in order to turn the technology into an actual application that delivers value. So what we’re trying to drive is the ability to take those building suppl y c ha i ndi gi ta l. com
Lufthansa Cargo: Accelerating Digital Amid COVID -19 98
WRITTEN BY
SEAN GALEA-PACE PRODUCED BY
LEWIS VAUGHAN
OCTOBER 2020
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LUFTHANSA CARGO
Jochen Göttelmann, Chief Information Officer, and Boris Hueske, Head of Digital Transformation at Lufthansa Cargo, discuss the rise of digital in air freight
L
ufthansa is one of the world’s most renowned airlines. With hubs in Frankfurt and Munich, the organisa-
tion is committed to operating one of the most technologically-advanced and fuel-efficient fleets 100
globally. Its division, Lufthansa Cargo, is a leader in air freight and serves 300 destinations across over 100 countries. Jochen Göttelmann is the Chief Information Officer at Lufthansa Cargo. Over the past 18 months, Lufthansa has refreshed its existing infrastructure and applications significantly. “We’ve defined a clear data centre strategy and it will mean that every new project and application will be cloud native,” says Göttelmann. “The cloud strategy came just in time for the coronavirus pandemic. We could seamlessly make our staff work from home with our cloud-based collaboration and communication platforms. On the business side our main focus remains on the modernisation of our sales applications and the implementation
OCTOBER 2020
101
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Your partner for air cargo logistics 4.0
Air freight is a key driver of the German economy, especially in times of crisis. As an IT service provider, Lufthansa Industry Solutions is using its technical expertise combined with industry know-how to play a key part in shaping the digital transformation in the air cargo industry. We asked Rainer Liebhart, Vice President Air Cargo Logistics, what challenges the industry must now face.
Mr. Liebhart, the airline industry is particularly affected by the Corona pandemic. What is the current situation with air freight? Rainer Liebhart: Until now, the Corona crisis has affected passenger traffic far more than air freight in Germany. The present shortage of belly capacity in passenger aircraft is currently leading to capacity bottlenecks across the market, resulting in a temporary increase in cargo rates. Having said that, the air cargo business is highly dependent on the global economy. It is precisely these prospects that are an indication of some difficult years ahead for air freight.
disciplines substantially. One especially decisive factor will be who can offer a good product on the market and to customers that is easy to understand and, most importantly, easy to book. The booking platforms we are all familiar with from the consumer sectors are also gaining ground in the cargo business. And it is precisely here that you must stand out from the competition with a market-driven price, a simple process and value-added digital services. It will be important to know and better understand your customers, the market, and the competition. Smart algorithms will allow you to predict behavior accurately and respond to it automatically.
Will the crisis give new impetus to digitization in air freight?
What can Lufthansa Industry Solutions do to help its customers achieve this?
How innovative is the aviation industry and what projects are pioneering?
Liebhart: I would speak less of a new impetus and more of a different one – a higher speed. More than anything else, the crisis has demonstrated just how much easier digitization makes arriving at better and thus more controlled and conscious decisions, including in extreme situations. In particular, the digital services offered and the interaction at the customer interface will be a key differentiating factor on the market and thus significantly influence success.
Liebhart: It’s varied. We focus our efforts on both disciplines for our customers: cutting costs and increasing revenue opportunities. Regarding costs, we help through the deployment and operation of our DevOps platform for example, which is available for our customers to use. Additionally, the combination of our industry and technical expertise allows us to help our customers not only obtain the right data, but also draw the right conclusions from it and implement it technologically in automated systems. Our experience in designing and implementing customer interfaces and background systems allows us to save customers a lot of time, resulting in speed advantages.
Liebhart: In terms of innovation, the industry is not as bad as it is often portrayed. However, we must not forget that the industry is subject to a great deal of regulation, meaning a lengthy decision-making and approval process awaits many innovative projects. But I am convinced that the speed is increasing despite the tense economic situation, especially in the case of those projects that contribute greatly to the company’s business. Despite the difficult overall situation, I am pleased to be able to carry out projects with my customers at such an exciting time, projects that will help to change logistics lastingly and make it even better than it already is in many respects.
What do air cargo customers need to do now to be prepared for the future? Liebhart: It is now a case of increasing the speed of digitization in the relevant
LUFTHANSA CARGO
“ We want to drive At the end of last year, the firm introdigitalisation in the duced a new dynamic pricing and has air freight industry to recently launched a smart booking API offer our customers to increase the connectivity to their better, faster and more partner and customer network. The next big milestone will be a completely convenient services” of new digital services to our clients.”
refreshed client-facing booking frontend in November. Göttelmann is also helping to renovate the internal sales system like CRM and the pricing tools. “It’s clear our current priority lies with the sales side, however, we continue 104
to invest in our other domains too. In handling, we got rid of our legacy host application already some years ago, and now have a state-of-theart IT platform which is the base for customer oriented process innovations like eFreight, targeting for 100% paperless document flows, or selfservice terminals to reduce waiting time for the truckers. In addition, a completely new production planning system is introduced for the internal capacity planning, steering and monitoring in our Frankfurt freight hub. And last but not least, we have migrated our analytics environment to the cloud and will also modernise our traditional OCTOBER 2020
— Boris Hueske, Head of Digital Transformation, Lufthansa Cargo
#GoDigital
CLICK TO WATCH | 1:01
105 BI and data warehouse over the next
services,” he says. “We’ve been quite
years to better support data-driven
busy over the past one and half years
decisions. We still invest lots in IT and
but the global situation is very differ-
plan to continue that as we move for-
ent now. Although we already had
ward as well.”
some good solutions in place prior to
Boris Hueske, Head of Digital
COVID-19, we extended our services
Transformation, states that the
on digitised processes. For example
impact of digitalisation accelerates
the high share of electronic docu-
the change happening in the logistics
ments we receive in the meantime
and transportation industry. This also
allows us to pre-check the information
requires the right perspective on IT
provided by the customer on a ship-
and data as a production factor. “We
ment and give feedback upfront on
want to drive digitalisation in the air
completeness and correctness which
freight industry to offer our customers
makes the freight delivery at the air-
better, faster and more convenient
port much easier and faster.” suppl y c ha i ndi gi ta l. com
A Partner in Pricing PROS is an important partner in our digital transformation. With PROS real-time pricing solutions, we’ve revamped how we provide services to customers while giving our internal teams the tools they need to work with greater speed and efficiency.”
Lars Mueller L U F T HA NS A C A R G O Director of Pricing
pros.com
info@pros.com
Learn more about the PROS solutions that are transforming businesses now.
“ COVID-19 has sped up a number of initiatives to drive automation and support new working models in a bid to connect our clients and partners” — Jochen Göttelmann, Chief Information Officer, Lufthansa Cargo
“We’ve accelerated the rollout of our new pricing services, for dynamic prices, the spot quotations. The automated price calculation is based on analytics available for our customers 24/7 which makes it easier to get an offer. We improved our API services for our customers which allows direct bookings by customer interfaces through the API into our system. The tracking services through the API are improved and provide an automated update if there’s a change in the shipment status. We’ve had a full set of improvements during the
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LUFTHANSA CARGO
108
1994
Year founded
$2.5bn+ Revenue in US dollars
past 18 months based on digitalised processes, the improved IT infrastructure and new technology focusing on customer-driven services.” Hueske adds that he believes that logistics still has work to do to catch up with other industries that are further along on their digital transformation journeys. “Compared to other sectors logistics is a little behind the
4,500 Number of employees
digitalisation development but also in logistics digitalization accelerates and was massively accelerated by the COVID19 crisis,” he explains. “The industry still has papers left in the processes that accompany shipments
OCTOBER 2020
and is still working on modernising
at Lufthansa. “It’s clear that COVID-19
backend IT systems. One topic we are
has a severe impact on our invest-
working on is to further digitalise the
ment capabilities as an airline group.
booking process of further services
But it has sped up a number of initia-
that couldn’t be booked through
tives to drive automation and support
online services yet. It’s really about
new working models in a bid to con-
driving the digital processes forward
nect our clients and partners,” adds
for our customers. Our core pro-
Göttelmann. “I believe that some of our
cesses shall become digital, real
projects have even accelerated over
time and convenient.”
the past few months as a result of the
Göttelmann believes the coronavi-
crisis. IT always has a cost component,
rus has actually acted as a catalyst for
but is also a strong enabler to make
the acceleration of digital initiatives
a business run more efficient and to 109
E X E C U T I V E P R O FILE :
Jochen Göttelmann Title: CIO
Company: Lufthansa Cargo
Industry: Air Freight
Location: Frankfurt
After studies and a PhD in mathematics, physics, computer sciences and economics Jochen Göttelmann started his professional career as software developer at Dresdner Kleinwort Benson. After several IT positions in reinsurance and IT consulting he spent 12 years at Allianz Global Investors before he joined Lufthansa Cargo as CIO in 2015. He always worked in IT with a high business focus, dedicated to apply technology to enable business and drive digitalisation.
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LUFTHANSA CARGO
“ It’s now more important than ever before to determine what is adding value to the company and what no longer serves us” — Jochen Göttelmann, Chief Information Officer, Lufthansa Cargo
110
OCTOBER 2020
111
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Microsoft enables digitalization in logistics for resilient, intelligent supply chains Learn more
drive costs down through automation
our portal or APIs. We’re seeing a
and digitalisation.”
large trend in online booking because
“It’s all about information and trans-
it is the most accurate information
parency,” adds Hueske. “It’s important
available and the customer is in need
to provide customers with as much
of this information at the moment.
information as early as possible,
We’ve been lucky that we’ve been pro-
whether that’s about the capacity
active enough in the past to develop
available or shipment status. But, this
solutions and we’ve got some good
is centered around the availability of
services in place for our customers
data and the right interfaces through
and accelerate that rollout.”
E X E C U T I V E P R O FILE :
Boris Hueske
113
Title: Head of Digital Transformation Company: Lufthansa Cargo Industry: Air Freight
Location: Frankfurt
Boris Hueske has a degree in business administration of the Philipps University Marburg with a focus on logistics and finance. Within 20 years of industry experience in logistics, transportation and airfreight he took over management positions at DB Cargo, Lufthansa Cargo, XPL and Aerologic in the fields of supply chain management, sales, strategy, JV management, finance, revenue management and digitalistion. Since 2018 he is responsible for defining and achieving the Digital Transformation approach of Lufthansa Cargo with activities in automation, new digital services and digital business models.
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LUFTHANSA CARGO
PA R T N E R M E N T I O N S
114
Lufthansa Industry Solutions: The internal company with a strong cross-industry expertise is one of the most important partners for Lufthansa Cargo’s digital transformation mainly in the business domains Sales, Analytics and Revenue Accounting. As an IT service provider they combine technical know-how with process and industry knowledge and entrepreneurial thinking. PROS: Lufthansa Group has had a longstanding, strategic partnership with PROS for its deep expertise in pricing and revenue management, and more recently, quoting that powers Lufthansa Cargo’s booking and pricing platform. PROS has established itself as a strategic SaaS partner for Lufthansa Cargo’s digital OCTOBER 2020
transformation by powering accelerated quoting, delivering real-time pricing, modernizing the customer experience, and eliminating revenue leakage through consistent, disciplined pricing management. Microsoft: Microsoft enables Lufthansa Cargo’s digital transformation substantially as supplier for cloud services. Since we started the cloud transformation, all new software products are designed cloud-native on the Microsoft Azure PaaS and IaaS layers. Also our new CRM system is based on Microsoft Dynamics. Microsoft Teams has been introduced Lufthansa Group-wide already in 2019, enabling seamless communication and collaboration throughout the whole crisis.
“Compared to other sectors logistics is a little behind the digitalisation development, but this has been massively accelerated by the COVID-19 crisis” — Boris Hueske, Head of Digital Transformation, Lufthansa Cargo Hueske recognises that the global
With the future in mind, Göttelmann
situation has been difficult to navigate,
adds that focusing on what is actually
particularly for airlines, however, he
generating value is essential moving
stresses it is why it’s key to gain ground
forward. “From an IT side, it’s all about
on harnessing efficiency in digitalisa-
continuing to modernise the landscape
tion. “It’s a very unique situation in air
to enable the digital transformation,”
freight and for airlines at the moment,”
says Göttelmann. “It’s now more impor-
he explains. “COVID-19 has majorly
tant than ever before to determine
impacted the industry and we have
what is adding value to the company
to consider that in the future too. We
and what no longer serves us. That’s
had significant reduction in capacity
the challenge for us; we need to revise
in our markets on the passenger side,
our service portfolio. We also have to
with almost 50% of the capacity being
ensure we’re flexible and enable our
provided through passenger aircraft.
planning and governance processes to
We don’t know how fast this will change
be faster and more agile.”
either. However, it shows the importance of data insights and analytics. We confirm our goal to have greater data insights and leverage data in the best way to improve services and transparency for our customers.” suppl y c ha i ndi gi ta l. com
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OCTOBER 2020
The Digital Evolution of Procurement WRITTEN BY
GEORGIA WILSON PRODUCED BY
JUSTIN BRAND
117
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MEDITERRANEO HOSPITAL
Pavlos Tamvakis, CPO at Mediterraneo Hospital, discusses the evolution of its procurement operations alongside its digital transformation journey
W
ith 15 years of experience in the medical field, Pavlos S. Tamvakis, CPO at Mediterraneo Hospital, began his
career in the pharmaceutical industry conducting imports and exports for pharmaceutical drugs in the European Union (EU). After a few 118
years in the industry, Tamvakis moved into the medical device sector, where he was introduced to Mediterraneo Hospital. “I came to provide Mediterraneo Hospital with some medical devices, and they offered me the chance to set up a purchasing department for the hospital, which I have now been running for the past eight years,” says Tamvakis. When Tamvakis first came to the hospital there wasn’t a procurement department. “They had certain individuals managing procurement in each department sending purchase orders to the suppliers. By doing it like that, we did not have an overall clear picture of all the purchase orders. As a result one of the main implementations I made when I joined the hospital was developing a centralised procurement department,” OCTOBER 2020
119
2000
Year founded
€36m+ Revenue in Euros
350
Number of employees suppl y c ha i ndi gi ta l. com
MEDITERRANEO HOSPITAL
“ The main difference between our procurement operations before and now is that we have a clear picture of our procurement year on year” — Pavlos S. Tamvakis, CPO, Mediterraneo Hospital
comments Tamvakis. In addition to establishing a centralised procurement department, Tamvakis worked with his team to set up an e-store for the hospital. “The e-store allows people who need certain items to access the B2B store and make their purchase order on a centralised system, that notifies the procurement department and suppliers via email,” adds Tamvakis. In doing this, Mediterraneo Hospital has reduced its paper-based methods for its procurement. “This centralised system
120
also provides the hospital warehouse with visibility on what to expect coming in and out of the hospital, as well as what each department requires,” explains Tamvakis. For certain purchases made in the e-store, the products require approval, to implement this within the system, Tamvakis is working on an approval system, where for expensive products people can describe their requirement for the item and what it will achieve, which can then be approved or declined via the system. This system began development in the summer and is expected to be complete in October 2020. OCTOBER 2020
“The main difference between our
of what our people and patients
procurement operations before and
are using for the operations, but we
now is that we have a clear picture
didn’t have a very clear picture of
of our procurements year on year,”
our disposables.” Since develop-
comments Tamvakis. Mediterraneo
ing its procurement operations,
Hospital has two types of procure-
Mediterraneo Hospital has clearer
ment, one disposables used in the
transparency over its disposables.
hospital, and one specifically for
“We know the exact quantities of
operations. “In the past we have
what we have bought, which depart-
always had a clear picture
ment uses them and how many
E X E C U T I V E P R O FILE :
Pavlos Tamvakis
121
Title: CPO
Company: Mediterraneo Hospital
Industry: Healthcare
Location: Greece
Pavlos S. Tamvakis is an accomplished CPO who partners with senior management to mitigate and manage procurements through strategic planning following all regulatory compliance. Having followed courses in ISO Certifications, MDR 745/2017, ISO 13485:2016, ISO 9001:2008 and CFA Common Assessment Framework, he builds efficiency in procurement processes and implements new technologies in business operations with cost effectiveness always being his main goal. His continuous efforts have led to significant operational changes in the digital procurement transformation of the hospital over the past 8 years, making him an asset to the organization. Being challenged is what drives his success.
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MEDITERRANEO HOSPITAL
patients we have throughout the year. As a result we have a clear picture on our average daily costs, which we didn’t have before,” adds Tamvakis. With the adoption of new technologies and implementation processes, the hospital continuously develops its visibility into its procurement, gaining further insight into the hidden costs of the hospital. When it comes to the industry as a whole, Tamvakis has seen an uptick in the purchase of large quantities. “To ensure that we have
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Reference: 1. Greiling M: A multinational case study to evaluate and quantify time-saving by using custom procedure trays for operating room efficiency. Poster presented at European Association of Hospital Managers, September 2011
“ When establishing new collaborations with multinational companies, it’s important to have mutual trust” — Pavlos S. Tamvakis, CPO, Mediterraneo Hospital
Mediterraneo Hospital CLICK TO WATCH | 4:01
123 enough materials to last the next
focusing on the hidden costs, such
month or throughout the year, we
as the time it takes to conduct a task
will buy stock for six months. This
and how it can be done more effec-
is something that we never used
tively, as well as reducing the amount
to do because we knew that the
of waste produced at the hospital.”
suppliers and distributors would
Since joining Mediterraneo Hospital,
have the quantity that we needed.”
Tamvakis’s department has devel-
Another trend Tamvakis is seeing in
oped partnerships with companies
the industry is the focus on hidden
such as Molnlycke. As part of its oper-
costs. “Due to competition being
ations, Mediterraneo Hospital tries
harsh, everything is quite cheap to
to establish direct line partnerships
purchase, so you can’t really get
with multinational companies to get
much cheaper prices, instead we
better prices for those working in the
are looking at ways to reduce costs.
hospital and its patients. “Molnlycke
At Mediterraneo Hospital we are
is a Belgium based company that suppl y c ha i ndi gi ta l. com
MEDITERRANEO HOSPITAL
“ We are using automations in our warehouses day to day, but we also have two surgical robots, one for laparoscopic and one for orthopaedic surgeries” — Pavlos S. Tamvakis, CPO, Mediterraneo Hospital
provides the hospital with sterile 124
packs used in operations. Our partnership with Molnlycke took three years to establish due to the changes we made in the way that the hospital operates in order to increase the speed of our operations.” Molnlycke has also helped the hospital to diminish its costs by becoming a provider of personal protective equipment (PPE). “We didn’t originally buy our PPE from Molnlycke, but by switching to Molnlycke it has opened our eyes to the hidden costs and reduced a lot of the headaches during the current situation, which we would not have been able to do without our strong collaboration.” OCTOBER 2020
When looking for strategic partners, Tamvakis stresses the importance of mutual trust. “When establishing new collaborations with multinational companies, it’s important to have mutual trust and a sense of safety. Another factor is track record. We like to work with big companies to ensure that if something goes wrong, we have a big company behind us to find out the answers and solutions.” Looking to the future, Tamvakis sees a lot of automation happening. “We are using automations in our warehouses day to day, but we also have two surgical robots, one for laparoscopic and one for orthopaedic surgeries. We’re seeing more and more new technologies emerging which is exciting and important to drive paperless operations. I believe this is something that not only healthcare will experience, but a lot of other sectors too.” Tamvakis also reiterates the importance of identifying hidden costs in the future. “There are a lot of costs that we have not taken into account in the past, but they do make a difference over time.”
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126
OCTOBER 2020
Ooredoo Kuwait: Combating COVID-19 with Smart Solutions WRITTEN BY
GEORGIA WILSON
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127
OOREDOO KUWAIT
How Ooredoo Kuwait is helping organisations stay connected during COVID-19 and, as restrictions lift, resume business operations with smart solutions
F
ounded in 1999 as Wataniya Telecom, Ooredoo Kuwait is a member of the Ooredoo Group. The group rebranded
its name to Ooredoo Group in 2013 following its significant growth leading up to 2013, which transformed the company from a single market 128
operator, into an international communications company. Commenting on the rebrand in 2013, Ooredoo Group’s CEO Dr Nasser Marafih said it signaled its readiness to take the company to the next level. “It is our belief that we can better serve our global customers by leveraging the combined resources and assets of a strong, unified global business under one brand. We also believe that rebranding now will help us to maintain our momentum in the face of new realities for the industry, signalling our commitment to become a global force.” As part of its operations in Kuwait, Ooredoo provides tailored mobile, broadband internet and corporate managed services for consumers and businesses. “Ooredoo is guided by its vision of enriching people’s lives and its belief that it can OCTOBER 2020
129
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Diyar United Company PA R T N E R S I N T E C H N O L O G Y
Anything IT Our solutions and services have been carefully selected to add value to our clients, while also addressing industry specific challenges in various sectors including government, homeland security, oil, financial services, telecommunication, transportation, education, retail and health. We are committed to continually pursuing technical innovation, expanding our international technology alliances, investing in our intellectual property portfolio and differentiating our services to contribute to the advancement of our society, citizens, governments and countries. When it comes to anything IT, we always deliver
Learn More
“ Ooredoo is guided by communications to help people achieve its vision of enriching their full potential,” says Ooredoo. people’s lives and Ooredoo is also committed to its belief that it can empowering Kuwait’s society by stimulate human driving digital transformation and enriching people’s digital lives. To growth by leveraging achieve this,Ooredoo Kuwait strives communications to to be a ’one stop shop provider’ of help people achieve leading integrated communicatheir full potential” tions in the region that are simple, stimulate human growth by leveraging
transparent, responsive, reliable, trustworth and innovative.
— Ooredoo Kuwait 131
COMMITTED TO SUPPORTING ITS CUSTOMERS With COVID-19 having a significant impact on organisations around the world, Ooredoo has reaffirmed its continuous commitment to supporting its customers. In support of the Kuwait government and its entities, to adhere to all instructions issued by the official authorities in Kuwait related to the current situation, Ooredoo Kuwait has implemented several initiatives since the outbreak in order to ensure that customers stay home. 1. Collaboration with the Information Technology Regulatory Authority (CITRA) suppl y c ha i ndi gi ta l. com
OOREDOO KUWAIT
132
OCTOBER 2020
133
to provide its customers with free 5GB
“We aim to continuously serve
internet and free calls for a month.
all our customers with high qual-
2. The launch of its ‘Be Safe. Be Home.
ity telecommunications services,
Be Online’ campaign. The campaign
while keeping in mind the safety and
features digital offers and services
precautionary measures to ensure
designed to support customers as well
the safety and well-being of all
as maintain connectivity and communi-
employees. We are also committed
cation of information.
to ensuring the safety of our custom-
3. Implementation of its ‘Work from
ers and employees while ensuring
Home’ strategy in order to maintain
that the Company’s business and
safety within its operations, to protect
core functions continue to operate
the health, safety and well being of its
smoothly during this volatile period,”
employees while maintaining busi-
comments Ooredoo. “In these difficult
nesses operations.
times, we understand the importance suppl y c ha i ndi gi ta l. com
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“ In these difficult times, we understand the importance of staying connected with each other” — Ooredoo Kuwait
staying indoors. Ooredoo continuously evaluates peak Internet data usage to stay on top of that demand,” it states.
INNOVATIVE SMART SOLUTIONS TO MITIGATE THE IMPACT OF COVID-19 While being online and staying connected at all times is essential to organisations who have migrated their
of staying connected with each other.
operations online, for those emerging
Whether conferencing with co-work-
out of the lockdown such as the supply
ers, reaching out for help and support,
chain, manufacturing and retail sec-
accessing sources of education and
tors, Ooredoo Kuwait has launched
entertainment, or staying connected
innovative smart solutions for those
with friends and loved ones, we know
preparing to ‘return to life’.
you depend on us to stay safe, stay home, and stay connected.” In its continued effort to support its
The innovative smart solutions provided by Ooredoo Kuwait include: multipurpose thermal cameras, walk
customers, Ooredoo Kuwait has an
through thermal detectors, sanitizer
important network of people work-
gates equipped with thermal detec-
ing to keep its customers connected
tors, facial recognition, contactless
“Our engineers and technicians take
attendance systems and social
great pride in offering our customers
distancing solutions equipped with
Kuwait’s best and most reliable net-
artificial intelligence (AI) analytics.
work to meet the expectations of our
These solutions provided by Ooredoo
customers. Being online and staying
Kuwait to mitigate the impact of
connected at all times remains essen-
COVID-19 and help organisations
tially important to all our customers as
return to work, reiterate the organisa-
they expect uninterrupted connection
tions commitments to being a pioneer
and strong network coverage while
in Kuwait for digitalisation, as well as suppl y c ha i ndi gi ta l. com
135
OOREDOO KUWAIT
“ We aim to continuously serve all our customers with high quality telecommunications services, while keeping in mind the safety and precautionary measures to ensure the safety and wellbeing of all employees” — Ooredoo Kuwait its ambition to keep up with the latest 136
trends within technology and ensure the safety and well being of others. “Ooredoo is committed to ensuring the safety of all employees reporting back to work in the next phase, and for this reason, we are providing a number of smart solutions customised for companies,” says Abdulaziz Al-Babtain, Chief Business Officer at Ooredoo Kuwait. “The world has changed since the onset of COVID19, and we must adapt to the ‘new normal’. It is our duty to protect the nation by ensuring the availability of smart solutions to control the spread of COVID-19. Ooredoo provides a number of smart solutions used by OCTOBER 2020
our enterprise customers to prepare for phase two in which employees will gradually report back to work. These smart solutions include multipurpose thermal cameras used to monitor employees’ temperatures and report high temperatures.” Harnessing the capabilities of AI Ooredoo Kuwait tools will not only allow organisations to utilise facial recognition and contactless attendance but will also optimise safety by enforce social distancing with line crossing analytics to keep employees within the own work area, as well as providing the capability to track compliance with health guidelines “Ooredoo is keen to ensure the safety and well-being of the employees and customers of its clients, and we will continue to provide our clients and the government with all their needs during this phase and we ask God to protect this great nation and its people from all harm,” concluded Al-Babtain.
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137
AB InBev: Procurement and Sustainability Strategy in Africa WRITTEN BY
138
MARCUS LAWRENCE PRODUCED BY
RYAN HALL
OCTOBER 2020
139
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ANHEUSER-BUSCH INBEV AFRICA
AB InBev harbours significant sustainability goals and is aiming to create a “company to last” through its green approach and initiatives
A
nheuser-Busch InBev (AB InBev) is “building a company to last”, and this claim has historically been backed by its
strong consciousness of the environment and supply chain ethics. As procurement and sustainability have become more central to many businesses’ operations worldwide, so too has 140
their inextricable relationship. AB InBev is one company whose sustainability-driven business ethos hasn’t been born during this new era of climate consciousness; instead, it has been supercharged by it. The realisation of the company’s 2025 Sustainability Goals, informed by reflection on the United Nations’ 17 Sustainable Development Goals (SDGs), relies on the strength of AB InBev’s procurement function in environmental and economic ethics, and in developing robust supply chains that ensure smooth business operations whilst having a positive impact on communities and the natural world. Across its global operations, AB InBev serves and operates in territories across the market readiness spectrum. At AB
OCTOBER 2020
141
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ANHEUSER-BUSCH INBEV AFRICA
2008
Year founded
$52.3 bn Revenue in US dollars (2019)
breweries and charge an incoming fleet of EV trucks, as an example, there are particular challenges in the Tanzanian market. The breweries in Tanzania, from the facility in the densely populated Dar Es Salaam to the spaciously located one in Mbeya, lack the support structures capable of sustaining large solar panel arrays on their rooftops. In
170,000+ 142
Number of employees
Mbeya, this can be rectified by using a ground-level solar field in the area around the brewery but, in Dar Es Salaam, space limitations and the risk of flooding close off the possibility of
InBev Africa, a microcosm of that spectrum can be seen across the continent’s markets, and rising to the strategic dynamism needed for this environment is a core focus of procurement. AB InBev Africa alignment with the 2025 Sustainability Goals necessitates a region-specific approach to partnering for large-scale projects but, in some African markets, in-country expertise at the standard required can be challenging to source. Using the company’s on-site solar power objectives, namely installing panels at sites to power both the OCTOBER 2020
© Hideki Machida - cleantechnica.com
Ricardo Tadeu, Africa Zone President at AB InBev CLICK TO WATCH | 3:17
143 developing a local solar field, meaning technology must catch up with the needs of the Dar Es Salaam plant. This desire to run independently of the grid is compounded by the company’s wider emissions reduction targets, with electric vehicles (EVs) set to replace fleets around the world. AB InBev Africa currently has one operational EV truck in its fleet, but its size limits it to journeys between its facilities and its smaller suppliers and customers. However, in the long-term, AB InBev aims to get a larger vehicle that can be used for the bigger bulk suppl y c ha i ndi gi ta l. com
PIONEERING AFRICA’S SOLUTIONS TO CHEAPER, GREENER ELECTRICITY FOR BUSINESSES CrossBoundary Energy pioneered the Solar-As-A-Service model in Africa, which is now enabling businesses across the continent to enjoy cheaper, cleaner power with no upfront cost or technical risk. Customers just sign an agreement to purchase solar electricity and we provide 100% financing, installation, and all-inclusive maintenance.You only pay for the power produced. In fact, if it doesn’t produce, we’ll pay you. CBE owns the largest portfolio of commercial & industrial solar solutions in Africa with our customers, including Unilever, Diageo, Coca-Cola Bottling, Heineken, Actis and many leading local companies. If you’re interested in receiving more information or to schedule a site visit and presentation, please contact us via the details below. Become a part of the movement and switch your company to cheaper, cleaner power today by completing this form and sending it to James Shoetan projects@crossboundary.com. We’ll respond within one week to get you started.
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• AB InBev’s 2025 Sustainability Goals are split into five key pillars: Smart Agriculture, Water Stewardship, Circular Packaging, Climate Action, and Smart Drinking. • Smart Agriculture – ensuring farming practices are powered by the latest technology and strategies to maximise yield, minimise spend, and mitigate environmental disruption. • Water Stewardship – exploring novel methods to cut water usage and waste across operations. • Circular Packaging – developing packaging that can be reused and recycled, as well as supporting the infrastructure that is vital to OCTOBER 2020
both encouraging and enabling consumers to return packaging to the manufacturing ecosystem wherever possible. • Climate Action – working to cut greenhouse gas emissions across operations by deploying new energy technologies, developing on-site electricity generation solutions, optimising waste management, and optimising logistics operations to lower fuel consumption and switch to greener alternatives. • Smart Drinking – fostering healthy attitudes to alcohol consumption across the breadth of AB InBev’s employees, partners, and customers.
deliveries to its key customers. The
efficiency, and a new fleet of LNG-
organisation’s overall aim is to source
fueled forklifts has been deployed
less fuel from an organisational point
across its continental operations. The
of view across Africa and reduce its
trial has been successful, with its LNG
carbon footprint in Africa.
forklift performing at 100% the same
Electricity, and the infrastructure
as a diesel equivalent.
to produce and use it sustainably, are
Having signed a contract with
not the only solutions that AB InBev
Tetra4, 50% of its fleet has been
is deploying for its procurement
converted to LNG, resulting in a 15%
operations in Africa. Its plants, where
CO2 emissions reduction. Forklifts,
necessary, have been relaid to accom-
being nimble and easy to move in and
modate its forklift trucks for maximum
out of facilities, represent a far more 147
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ANHEUSER-BUSCH INBEV AFRICA
148
efficient method of transporting loads
higher performance at smaller sizes
around sites than trucks, and LNG
and weights, will be closely watched
itself is easier to store and more dif-
as solutions to energy demands
ficult to spill than diesel. Another key
around AB InBev’s African breweries
advantage over electric units is that
are addressed.
LNG forklifts do not require sizable
The fact remains that, owing to the
batteries and space to store them.
challenges of infrastructure, expertise,
The lifespan of the batteries would
and market readiness, developing
also be an unwelcome additional
sustainable procurement operations
variable, particularly as solutions
in African markets via locally sourced
to the company’s on-site solar ambi-
solutions is a considerable challenge.
tions are still a work in progress.
In order to rise to it, AB InBev has
Battery technology’s incremental
sought to solidify its supply chain
advances, namely in delivering
through a mentorship programme
OCTOBER 2020
149
for both its suppliers and customers.
capabilities and explaining the value
By developing their skills in business
that expanding those capabilities will
management, and coaching through
have for business growth, they are
operations, AB InBev works to grow
encouraged to seek the investment
the business of its suppliers and cus-
required to diversify their offer-
tomers to increase their capability
ings. In effect, AB InBev creates the
whilst boosting their own profitability.
partners it needs, and the partners’
This approach reaps dividends, with
success in the market is positioned to
more competitive and financially
grow simultaneously.
stable links in the supply chain opening up new possibilities for improved business and more efficient operations. By approaching suppliers with propositions beyond their current suppl y c ha i ndi gi ta l. com
150
PZ Cussons: Transforming Logistics in Asia WRITTEN BY
WILLIAM SMITH PRODUCED BY
CAROLINE WHITELEY
OCTOBER 2020
151
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PZ CUSSONS
Tofan Yudianto, Head of Logistics, Asia, for manufacturer PZ Cussons, on thriving despite regional and COVID-19-caused logistics challenges
T
ofan Yudianto is Head of Logistics, Asia, for consumer goods company PZ Cussons. Since being brought into the
company in 2015, he has relished the opportunity 152
to transform the logistics strategy in an Asian setting. “PZ Cussons logistics business was operating in-house, but then they wanted to focus on their core business and work with external business partners for logistics.That’s where me and my team’s journey started - creating and articulating that long term strategy.” Yudianto identifies PZ Cussons’ “can-do values” as a key driver of its success, alongside the raft of watchwords such values inspire. “The question is whether we can stand for courage, accountability, networking, drive and also oneness. That last word, that last value of oneness is very important. I know this is implemented within PZ Cussons because even as this organisation is growing, people are remaining together.”
OCTOBER 2020
153
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That can-do culture was some-
The market in Asia has tradition-
thing Yudianto noticed straight away
ally relied on businesses driving
upon his arrival at the firm. “I was
consumer’s desires. No longer, with
challenged to adapt,” he says. “In
more empowered consumers certain
the beginning I had to work out how
about what they want. “The way I see
to adapt with my team and how to
it, now the customer drives the busi-
synchronise the frequency, and the
ness. What I mean is that in India,
rhythm of the way I work with the
China, and Southeast Asia, people
people in the organisation. That was
want a certain product delivered within
especially true with my team because
this time, with this quantity and at this
they have a real strength instilled in
price. The old industry and logistical
them by the culture.”
challenges were about distributing
OCTOBER 2020
“ Logistics and procurement have to be close” — Tofan Yudianto, Head of Logistics, Asia, PZ Cussons bigger volumes to the market, and
going to be provided. It’s about what
then the consumers going and buying
they want and what they need.
your product. But now the challenge is
“The biggest challenge in Asia is how
totally different. The consumer doesn’t
we can map and connect the dots and
care where the product is going to be
solve the puzzle between sourcing and
manufactured, where the product is
demand. In Asia for example, if you
E X E C U T I V E P R O FILE :
155
Tofan Yudianto Title: Head of Logistics
Company: PZ Cussons
Industry: Consumer goods
Location: Asia
Tofan Yudianto is Head of Logistics, Asia, for consumer goods manufacturer PZ Cussons. Alongside his logistics experience, he has extensive knowledge of differing parts of the fast moving consumer goods (FMCG) industry thanks to previous roles. “I started in my current role in 2015, but before that I was working with another multinational FMCG company, Unilever,” he says. “There I played several roles, working as the business system manager, working with a staff on projects, and also in the marketing and sales area.”
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PZ CUSSONS
1879
Year founded
$895.03m+ Revenue in US dollars
3,986+ 156
Number of employees
want to produce one product, you have to find the correct source at a competitive price, and it’s often not in one country. Logistics is going to enable that by working together with procurement on how to source a certain material, for example. You have to be good at mapping sources and demand and agile to work out how you’re going to manufacture something.” As with all organisations worldwide, The COVID-19 pandemic affects the way of doing business OCTOBER 2020
and PZ Cussons is also adjusting to shifting demand. “Demand is now more focused on the hygienic product categories instead of beauty products, for instance, with demand for our hand sanitiser product increasing significantly.” There have been plus points for the business, with the extraordinary situation accelerating pre-existing trends. “We see that the online business is actually growing quite aggressively because people are stuck at home. So it’s direct to consumer and now
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“ We believe that sustainability is good for business” — Tofan Yudianto, Head of Logistics, Asia, PZ Cussons
OCTOBER 2020
SERVICES INCLUDE: Domestic Freight Forwarding
Customs Clearance
International Freight Forwarding
Project Cargo
Contract Logistics
E Commerce Logistics
consumers are driving the business,
points and routes will be much more
telling us exactly what they want. And
online, with small volumes of quantity.”
it’s not just the millennial generation -
Sustainability is a key focus for the
because of the situation we’re seeing
company. “At PZ Cussons we believe
all age groups heading online, and the
that sustainability is good for business.
winner of the situation is going to be the
So the business has a responsibility
business that can adapt quickly to the
to align the way it operates with the
new normal. The difference between
cause of sustainability. For logistics,
online versus offline distribution is in
the challenge is about reducing the
the complexity, where the destination
carbon footprint. For example, at a
159
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PZ CUSSONS
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OCTOBER 2020
“ The biggest challenge in Asia is how we can map and connect the dots and solve the puzzle between sourcing and demand” — Tofan Yudianto, Head of Logistics, Asia, PZ Cussons
number of our distribution centres, we are increasing the efficiency of our electricity use.” Another avenue of exploration is the efficiency of transport, which can be challenging in less developed parts of the APAC region. “One question is how we can move from a fleet of small vehicles to more efficient transport. So we are reducing the number of trucks on the road and therefore the carbon footprint. Beyond that, we’re working on utilising rail as much as possible.” The work PZ Cussons does is enabled by the support of a number of key partners. “We work with some multinational and local logistics providers as our partners for warehousing, suppl y c ha i ndi gi ta l. com
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PZ CUSSONS
162
“ These pillars enable logistics and the growth of the business” — Tofan Yudianto, Head of Logistics, Asia, PZ Cussons
OCTOBER 2020
163
and we also have a number of vendors
chain strategy. “The whole supply
for transportation and freight,” says
chain is facing the challenge to the
Yudianto. We work with our regional
manufacturing and procurement
procurement partners in Singapore in
strategy together, and as part of that,
order to be aligned with what we are
logistics has to be ready.“
trying to achieve.” Yudianto is confident that PZ Cussons is well placed to thrive in the future, despite changing market conditions and the impact of COVID19, thanks to a clear and united supply suppl y c ha i ndi gi ta l. com
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