The ethical approach to powering sustainable supply chains
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FOREWORD
W
elcome to the September issue of Supply Chain Digital!
In our cover issue this month, we take a closer look into how Nando’s is adopting technology to ensure its
Jungheinrich is aiming to take warehouse efficiency to a whole new level, and the company maintains a real drive to embrace digitisation in its supply chain. “The pressure is
supply chain operations become more efficient. “Digital transformation will herald a new era for us – with the business growth we have experienced it would be counterproductive to merely throw bodies at the increase in activity,” says Deon Pillay, Head of Supply Chain – Nando’s Grocery International. “We commenced our technology journey 18 months ago and it has already yielded benefits.”
on to drive productivity, increase efficiency, improve accuracy and reduce costs at every stage of the process,” affirms Richmond.
Our leadership piece zones in on Jungheinrich as Steve Richmond, Director of Logistics UK, and Michael Von Forstner, Head of Jungheinrich’s lithium-ion division, discusses the impact of lithium-ion battery technology on their firm’s digitisation in the supply chain space.
Would you like to be featured in the next issue of Supply Chain Digital? Get in touch at sean.galea-pace@
There are also in-depth features with Allegis, Asahi Europe, Staples, DECATHLON, Corning Incorporated and PepsiCo that you won’t want to miss! Lastly, this month’s Top 10 counts down the largest sustainable supply chains worldwide.
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Enjoy the issue! Sean Galea-Pace
www.supplychaindigital.com
03
Click the home icon (top right of page) to return to contents page at anytime EDITOR-IN-CHIEF
SEAN GALEA–PACE EDITORAL DIRECTOR
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CONTENTS
12
NANDO’S: BEYOND AUTOMATION – THE TEAM BEHIND THE TECHNOLOGY
34
44 SourceDay:
unlocking the potential of the buyer-supplier ecosystem
DIGITISATION IN THE SUPPLY CHAIN SPACE
54 CUSTOMER DEMAND DRIVING THE AUTOMATED WAREHOUSE
06
72
62
90
WAYS TO ACHIEVE SUPPLY CHAIN SUSTAINABILITY
Largest sustainable supply chains worldwide
Events & Associations
96
106
Allegis
Asahi Europe
120 Staples
130 CONTENTS
Decathlon
162 PepsiCo
148 Corning
176 Sealed Air Corporation
12
NANDO’S: – N IO T A M O T U A BEYOND D IN H E B M A E T E H T Y G O L O N H C E T E TH WR ITT EN BY
SO PH IE CH AP M AN PR OD UC ED BY
CH AR LO TT E CL AR KE
SEPTEMBER 2019
13
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NANDO’S
AS NANDO’S ADOPTS NEW INNOVATIVE TECHNOLOGIES TO ENSURE ITS SUPPLY CHAIN OPERATIONS ARE NIMBLE IN LINE WITH ITS GROWTH, THE HEAD OF SUPPLY CHAIN ALSO HAS A STRONG FOCUS ON PEOPLE TO ENSURE THE TEAM IS UPSKILLED, ENGAGED AND ARE THE FOCAL POINT BEHIND AUTOMATION
N 14
ando’s was built on the solid foundations of family, integrity, pride, passion and courage. When Deon Pillay, Head of
Supply Chain – Nando’s Grocery International, joined the company in 2014, he was also introduced to the motto “Have fun and make money” – in that order. In 2016, Pillay become Nando’s Head of Supply Chain, and has always endeavoured to ensure this motto is included in everything he does, and is passed on to his team and to business partners. “My role has evolved over the time I have been at Nando’s – it has been the most exciting evolution I have ever experienced. I started in the role of Logistics Manager, handling export shipments out of South Africa with one person in my team. Today, in my role, I look after the wider supply chain which is strongly focused on four primary and overarching areas: Global Production,
SEPTEMBER 2019
15
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NANDO’S
New Product Development, Operations & Integrated Business Planning,
16
“ THE SUPPLY CHAIN AND PROCUREMENT ROLES HAVE BEEN EDGING CLOSER AND CLOSER TO CENTRE STAGE – MOVING CLOSER TO TAKING THEIR RIGHTFUL PL ACE ON THE BUSINESS PODIUM” — Deon Pillay, Head of Supply Chain, Nando’s
and Product Integrity.” Despite being only nine members strong, the grocery supply chain team manages a huge portfolio of products and activities that it is incredibly proud of. “I am often guilty of making some ridiculous asks of my team and pushing them well beyond their perceived limits. Fortunately, (I believe) this has helped grow them even more than just playing safe in any comfort zone would,” adds Pillay. As supply chain and procurement operations gain momentum across a range of industries globally, no longer being viewed as back-office functions, their role at Nando’s is changing too. “The supply chain and procurement roles have been edging closer and closer to centre stage – moving closer to taking their rightful place on the mainstream business podium. We are continuing to integrate across all functions to bring business equilibrium to an ever-turbulent commercial world,” he says. Pillay is still concerned that supply chain does not always receive the appropriate recognition it deserves:
SEPTEMBER 2019
CLICK TO WATCH : ‘WHITEBOARD ANIMATION: THE NANDO’S SUPPLY CHAIN STORY’ 17 “We are fortunate that at Nando’s the
“Even as a young, small team
supply chain is seen as a critical cog
we have achieved so much,” Pillay
in the company’s well-oiled machine.
notes. “The team has managed
When I joined, supply chain – or rather
to be so nimble to adapt and react
logistics – was viewed as a peripheral
to changes in our ecosystem, both
and basic function that got containers
macro and micro. We have moved
out the door. It was a functional depart-
entire production capabilities and
ment tasked with handling order adminis-
expertise across continents, we have
tration,” he adds. Since then the business
researched, developed and imple-
has seen steady growth and the supply
mented new packaging substrates
chain operations have transitioned to
and formats at break-neck speeds
a key business discipline consisting
without compromising quality whilst
of order administration and customer
staying current and abreast of
supply, logistics, packaging development,
regulations and the happenings
regulatory, compliance and food integrity.
in the industry.” w w w.suppl yc ha i ndi gi ta l. com
By using digital as a catalyst to handle growth, Nando’s is able to achieve more without being resource-heavy, as well as becoming more time efficient.
TION “ DIGITAL TRANSFORMA RA WILL HERALD A NEW E FOR US – WITH THE E BUSINESS GROWTH W HAVE EXPERIENCED IT WOULD BE COUNTERLY PRODUCTIVE TO MERE THROW BODIES AT THE ” INCREASE IN ACTIVITY — Deon Pillay, Head of Supply Chain, Nando’s
“It allows the team to free up their time spent doing the mundane activities and focus on the value adding actions,” Pillay notes. “This has been particularly refreshing for our supply chain – so much so that we were able to extract superfluous costs out of our value chain and bring immense, sustainable value to our processes and continue to deliver these cost-saving efficiencies to the business. “I quite often say to my team that technology is not the future, but
With supply chain having significant
technology is now,” enthuses Pillay.
touch points to every part of the business
Nando’s endeavours to be a strong
and fully integrating into all Nando’s
player in the fields of Internet of Things
functions, the department is firmly on
(IoT), Robotic Process Automation
its way through its digital transforma-
(RPA) and Blockchain. Crucial to
tion journey. “Digital transformation
transparency and efficiency, these
will herald a new era for us – with the
technologies have caught the attention
business growth we have experienced
of the firm. But it is also important for
it would be counter-productive to
Nando’s that these initiatives are fit
merely throw bodies at the increase
for purpose for their business. The
in activity. We commenced our technol-
company is looking to introduce RPA
ogy journey a year and a half ago and
to reduce the time associated with
it has already yielded benefits.”
repetitive tasks – Nando’s made w w w.suppl yc ha i ndi gi ta l. com
19
NANDO’S
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SEPTEMBER 2019
Contact Us
previous attempts to integrate electronic data interchange (EDI) services to tackle these issues, but found RPA more adaptable and impactful with a quicker implementation timeline. “With more focus on creating transparency in the supply chain, I firmly believe every professional in the sector will need to step up to technology or get left behind. Once you see it in action you get inspired as to how supply chain digitalisation is such a real and relatively easy win for any company,” he adds.
“ WITH MORE FOCUS ON CREATING TRANSPARE NCY IN SUPPLY CHAIN, I FIRMLY BELIEVE EVE RY PROFESSIONAL IN THE SECTOR WILL NEED TO STEP UP TO TECHNOLO GY OR GET LEFT BEHIND” — Deon Pillay, Head of Supply Chain, Nando’s
In December 2016, Nando’s transitioned to a new enterprise resource planning (ERP). “Our new ERP added the next layer of value to our business by providing easy access to information and allowing the team to plan and perform better. We are at the stage now where we are engaging with our partners to unlock their next level of value by developing the current workspaces or opening up new ones,” says Pillay. He remarks upon the resilience of his team for dealing with any changes introduced to their operations: “They have an incomparable drive, discipline and enquiring mind w w w.suppl yc ha i ndi gi ta l. com
21
NANDO’S
22
which compliments my management
to streamline operations. “The team
style. The team have embraced all
took on more commercially functional
the changes and take continuous
roles which played an important part
improvement firmly in their stride.
in reprioritisation as well as shifting
“To adapt a Nando’s adage that
the focus to a more strategic mindset
‘it is the people behind the chicken’,
and way of thinking,” explains Pillay.
I firmly believe it is the team behind
Following the change, more focus
the processes, and more recently
was placed on planning, action-oriented
behind the technology. Technology
meetings and partner engagement.
is only as good as the team that are
“The people part is what most compa-
firmly rooted behind it and that support
nies neglect or omit, which leads
it. The supply chain team at Nando’s
to inappropriate processes that do
recently took a decision to reengineer
not support the technology in place.”
it’s supply chain portfolios in order SEPTEMBER 2019
As well as its focus on technology
as a driver to handle growth, Nando’s
the talk on this purpose and has
recognises the importance of sustain-
already delivered on several initiatives
ability. Pillay remarks that the team is
to prove it. “The humbling part
dedicated to ensuring a decrease in
of Nando’s purpose for me is that
carbon emissions and the incorpora-
Nando’s chooses not to publicise
tion of recyclability and recycled
these initiatives, which shows genuine
materials. Currently, Nando’s retail
heart to live the purpose.”
products’ packaging is 99.3%
Pillay has also undertaken his own,
recyclable, with the goal to raise the
personal project. With his passion for
figure to 100% well underway. Nando’s
his job so apparent, he wants to encour-
has also adopted ‘Changing Lives…
age younger generations to join the
Together’ as its company-wide purpose
industry: “I want to make supply chain
statement. The business really walks
a profession of choice for school 23
E XE CU T I VE PRO FI LE
Deon Pillay Deon is the Head of Supply Chain at Nando’s. A very experienced, dynamic leader, he is able to engage and develop highly motivated teams to achieve sustained company growth and profitability. An energetic visionary with a proven history of delivering excellence across the enterprise, Pillay as regarded as a consummate professional by his peers for consistently exceeding expectations in supply chain for more than 20 years, spanning from senior strategic roles in the FMCG, Electronics, Telecommunications, Paper & Pulp, Food & Beverage and Management Consulting. Innovation and ‘disruption’ in problem solving is his driving force, but developing leaders is his true passion. w w w.suppl yc ha i ndi gi ta l. com
NANDO’S
24
35,000+ Grocery stores that globally sell the bottled sauce
1987
Year founded
1,440
Farmers growing chillies for PERi-PERi sauce SEPTEMBER 2019
25
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NANDO’S
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SEPTEMBER 2019
leavers. Many people merely wash up on the shores of supply chain, but I want to make sure school leavers buy a ticket to board the supply chain luxury cruise. I want them to under-
“ DEON, FOR ME PERSONALLY, HAS ALWAYS BEEN NIST A FANTASTIC SOLUTIO GUY…THERE ARE NO PROBLEMS, ONLY SOLUTIONS…WE CAN !! ALWAYS MAKE A PL AN ERE AND I, LOVE THAT… TH AS IS ALWAYS A WAY… IT H E TO BE RIGHT, IT HAS TH BE THE NANDO’S WAY… ND BUT BEING POSITIVE A O INSPIRED IS THE WAY T … MAKE THINGS HAPPEN BEING PART OF THE SOLUTION, NOT THE PROBLEM! LOVE HIM!!” — Robbie Brozin, Founder of Nandos
stand from the beginning what they are subscribing to, and more importantly be excited to get on board when they learn how magnanimous supply chain can be. The supply chain professional has just as much, if not more, commercial leverage within business than any other C-suite executive. The personal project I have embarked on will see complete integration of the supply chain fraternity, making talent enrichment a priority for business through a collaborative network of professionals. I’m very excited about this.” As the proliferation of technology adoption in the supply chain sector continues, Nando’s is keen to be a key player. In food supply chains, digitalising is an absolute must to enhance the way activities are processed and executed. Getting partner buy-in is not always easy, but is always a real bonus. “Our partner companies have their own strategy on where to take their automation, but we have been w w w.suppl yc ha i ndi gi ta l. com
27
NANDO’S
fortunate to partner with companies who understand our needs as well, even though they themselves may not be ready for it in their own businesses,” Pillay explains. “In some cases, we have had our partners learn from us and implement our processes into their business; we have supported and assisted them in doing this as part of our partner engagement and development programme. “Forming relationships and connections between partners through digital 28
platforms is high up on our agenda. Supply chain technologies are evolving at a rapid rate and the important thing is to think of the big picture, start relatively small but try and scale up as quickly as possible. Integrated platforms allow for real time-data sharing and live updates. If you are not working towards building relationships in digital space, your reaction time to new information will slowly but surely take longer than your competitors who are becoming increasingly focused on this. Again, I cannot emphasis enough that people are more important that the technology you implement.” SEPTEMBER 2019
29
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NANDO’S
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CONTACT US
“The future is bright for the business, but we will have to face the usual industry challenges with the added complexity
“ NEVER LET THE FEAR OF STRIKING OUT PREVENT YOU FROM STEPPING UP TO THE PL ATE” — Deon Pillay, Head of Supply Chain, Nando’s
of our involvement in over 30 countries. Product integrity, which is a Nando’s supply chain responsibility, continues to be firmly under our watchful eye – we want the best product with the best ingredients. We always want the best for our consumers. To achieve this, it is important we have transparency and traceability from farm to fork.” Whilst upgrading its digital offerings to ensure these challenges are met, Nando’s will never sacrifice product integrity in any way. Pillay still maintains the most important part of achieving all of this is an engaged team. We also have part of the supply chain team that is based in South Africa, the spiritual home of Nando’s. Being 10,000km away, or anywhere in the world, is not
Based in South Africa. Left to right: Robert Du Preez, Alpheus Muchini & Jesse Thaver
w w w.suppl yc ha i ndi gi ta l. com
31
NANDO’S
32
SEPTEMBER 2019
a challenge anymore with technology but there is always a vested interest by all of us to make these Nandocas feel inclusive in everything we do. Again signifying the importance of people even if they are not physically in sight. Giving an engaged team the leverage, trust and respect to act on their own and try things they can justify is key to innovation and controlled disruption. And he encourages his team to take a page from Babe Ruth who said, ‘Never let the fear of striking out, prevent you for stepping up to the plate’. Apt words from the Nando’s grocery supply chain team, which has, and continues to have, successes
Left to right: Catarina Nascimento, Deon Pillay, Laura Bacon, Eliza Hall, Gareth Griffith-Swain & Nick Gundersen
of hitting many out the park!
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33
P R O C U R E M E N T T R A N S F O R M AT I O N
34
DIGITISATION IN THE SUPPLY CHAIN SPACE Steve Richmond, Director of Logistics UK at Jungheinrich, and Michael Von Forstner, Head of Jungheinrich’s Lithium-ion division, discusses the impact of lithiumion battery technology on their firm’s digital transformation WRITTEN BY
SEAN GALEA-PACE
SEPTEMBER 2019
35
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P R O C U R E M E N T T R A N S F O R M AT I O N
W
ith a drive to redefine the manufacturing sector, Jungheinrich plans to leverage
the latest trends in order to remain
a leader in the industry. Through the implementation of lithium-ion batteries, Jungheinrich introduced new forklift trucks such as the EKS 412s and EFG series in 2019. Lithium-ion provides a compelling alternative to diesel or liquefied petroleum gas (LPG) and batteries also enable new charging models that not only provide a chance to reduce downtime,
36
but also enable businesses to introduce more employee welfare policies that are becoming increasingly important in a labour starved market. Boasting the largest range of lithium-ion powered trucks available on the market, it’s clear Jungheinrich is continuing to set the bar for the opposition to follow. Steve Richmond, Director of Logistics UK at Jungheinrich, affirms the importance of this new technology to his company. “On average, trucks are charged for more than four hours each day. Lithium-ion’s longer life cycle delivers a complete shift from a single charge, removing the need for operatives to take time out to change batteries,” says Richmond. “In addition to the reduced charging time, using an intelligent Battery Management System, lithium-ion technology can be repeatedly topped up without suffering any SEPTEMBER 2019
37
“ We’re a premium supplier and we have to differentiate, but it’s not engineering for the sake of it. It has to benefit the customer because otherwise, we can’t sell it” Michael Von Forstner, Head of Jungheinrich’s Lithium-ion division
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P R O C U R E M E N T T R A N S F O R M AT I O N
CLICK TO WATCH : ‘WAREHOUSE SOLUTIONS’ 38 degradation, which means operators
better-placed to talk than Michael Von
can embrace opportunity charging –
Forstner, Head of Jungheinrich’s Lithi-
such as during a tea-break or over
um-ion division. He stresses the
lunch – further reducing the need for
importance of differentiating from in-
time-consuming battery changes.
dustry rivals by launching new tech-
Looking ahead, this technology can
nologies. “We’re a premium supplier
provide a platform for significant
and we have to differentiate, but it’s not
cultural changes within a warehouse
engineering for the sake of it. It has to
– changes that can further reduce
benefit the customer because other-
the need for operatives to understand,
wise, we can’t sell it,” explains Von
even consider, the battery, and ease
Forstner. “I recently spoke with a Span-
the introduction of new staff into the
ish salesperson, and they informed me
operation.”
that an increasing number of Spanish
In terms of what the lithium-ion batteries provide, there is no person SEPTEMBER 2019
customers are buying lithium-ion batteries. If you calculate the total cost of
“ The pressure is on to drive productivity, increase efficiency, improve accuracy and reduce costs at every stage of the process” Steve Richmond, Director of Logistics UK at Jungheinrich
ownership and look into the lifetime maintenance-free arguments and so on, you enable the customer to say ‘over the lifespan, I saved money through the new technology so it makes sense to purchase the new technology.’” On the road ahead, Jungheinrich is seeking to take warehouse efficiency to a whole new level. Richmond affirms his ambition to embrace digitisation in the supply chain. “The pressure is on to drive productivity, increase efficiency, improve accuracy and reduce costs at 39
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P R O C U R E M E N T T R A N S F O R M AT I O N
every stage of the process,” explains Richmond. “This means that it’s never been more important for organisations to ensure that they are moving beyond siloed operations, and that logistics and supply chain managers are adopting a holistic approach, where man, machine and software work in harmony. The importance of fully integrating solutions into business operations, digitalisation and connectivity are key. Whether a global player, mid-sized company or small business, organisations of 40
“ It matters to us that we ensure we remain the best-in-class and create a sustainable competitive advantage for our customers. I believe this makes us the envy of the industry” Steve Richmond, Director of Logistics UK at Jungheinrich
all sizes must look to digitalise and connect their processes to become more profitable and more competitive.”
mated warehouses all over the UK and
Operating with a firm customer-
in Europe across a variety of different
centric approach, Jungheinrich is an
industries. “When it comes to automa-
innovative, fast-growing company at
tion, many organisations will have
the forefront of the automation indus-
similar goals and challenges, but each
try. The company is recognised as the
is different in numerous aspects of
only single brand organisation that
their setup and as a result, there is no
provides a complete solution which in-
one-size-fits-all automation solution,”
cludes trucks, racking, warehouse
affirms Richmond. “Expanding Jun-
design, systems integration and cus-
gheinrich’s portfolio of automated and
tomer service. Offering a business-led
networked intralogistics solutions is an
approach to intralogistics, Junghein-
important focus for the business, as re-
rich understands customers’
flected in the acquisition this year of ISI
challenges and deploys automation
Automation. This move is one of many
in order to create value with fully auto-
and is enabling Jungheinrich to strength-
SEPTEMBER 2019
en its end-to-end offering to customers and tailor the exact solution to each individual business. One of our key objectives is to continue to add to our range of core automation products.” With the future in mind, Richmond has a clear vision of how his company can continue to thrive over the next few years and beyond. “Our culture and energy are so important. Great products are vital but it’s the people that make the difference and determine success. We talk of “yellow blood” and our passion for being the market leader in all aspects of intralogistics. It matters to us that we ensure we remain the bestin-class and create a sustainable competitive advantage for our customers. I believe this makes us the envy of the industry,” summarises Richmond. “Our aim is to shift from an integrator into a manufacturing integrator. We hope to expand our own manufacturing product portfolio, which will mean the vast majority of products in the portfolio will be manufactured, delivered, installed and integrated by Jungheinrich.”
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41
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TECHNOLOGY
SourceDay: 44
unlocking the potential of the buyer-supplier ecosystem Tom Kieley, co-founder and CEO of SourceDay, discusses the ways in which his company provides its customers with visibility, and therefore trust, in their ERPs, allowing them to unlock the power of the modern supply chain ecosystem WRITTEN BY
HARRY MENEAR
SEPTEMBER 2019
45
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TECHNOLOGY
T
he role of the supply chain and the supply chain professional is changing. As
the global business landscape evolves
in response to megatrends like increased customer centricity, closer buyer-supplier relationships and the staggering technological
advancements of the fourth Industrial Revolution, an ever expanding number of the old silos and attitudes have come crashing down. Founded in 2013, procurement and logistics platform company SourceDay entered the space at exactly the right time. “It’s down to 46
luck, hard work and timing. I think you can make your own luck to an extent, but the fortuitous timing of when we came to market has contributed significantly to our success,” says Tom Kieley, Co-Founder and CEO of SourceDay. “The digital transformation of the supply chain is real, and it’s creating roles that never existed before: the Digital Transformation Officer, the Chief Supply Chain Officer and the Chief Procurement Officer, that are specific to the discipline.” Kieley founded SourceDay alongside manufacturing veteran Clint McRee, who became the company’s COO. “When he was in manufacturing, he used an ERP system,” explains Kieley. “That ERP system was continually telling the team their schedule, their SEPTEMBER 2019
— Tom Kieley, co-founder and CEO, SourceDay plan, what they were going to build and when, but the challenge was that their supply chain was completely disconnected from that process.” With an education centered around supply chain management and logistics as
“ We’re still seeing mid-sized companies tiptoeing into new technologies” — Tom Kieley, co-founder and CEO, SourceDay
well as experience working on software for companies like Dell, Kieley and McRee are well aware of the need for harmony on top of structurally firm foundations in order for the complex symphony that is the enterprise supply chain to operate smoothly. The increased and ongoing integration of enterprise supply chains, both w w w.suppl yc ha i ndi gi ta l. com
47
TECHNOLOGY
48
internally into their respective busi-
use of their supply chain management
nesses and externally, with increas-
and procurement systems, to help-
ingly interconnected ecosystems
ing them build and maintain supplier
of suppliers, buyers and customers is
relationships, the company is working
only serving to highlight the critical role
tirelessly to be the value-creating glue
that the discipline will play in driving
that holds the supply chain ecosystem
profits and increasingly the sustain-
together.
ability of digital enterprises. In 2019,
“With his vision and our shared
every enterprise expecting to survive
knowledge of those everyday pain
past 2025 is digital. It is this intercon-
points, we came together and built
nectedness that Kieley and Source-
SourceDay,” recalls Kieley. “We boot-
Day are aiming to help foster. From
strapped it from the ground up. It’s
empowering companies to make full
been a long, exciting journey watch-
SEPTEMBER 2019
CLICK TO WATCH : ‘SOURCEDAY CUSTOMER – BENEFITS OF USING SOURCEDAY’
ing the platform grow into the original
source Planning (ERP) platforms, but
vision over the past few years.” Now,
the data that powers them. “We’re still
SourceDay provides a digital interface
seeing mid-sized companies tiptoe-
between a manufacturer’s ERP system
ing into new technologies. Part of that
and its suppliers, using proprietary
is probably caused by the fact when
software to automatically update the
they bought their ERP system – which
system in response to delivery dates,
probably cost millions of dollars – they
pricing, and quantity changes.
expected it to solve all their prob-
Currently though, Kieley notes, it
lems. That’s just simply not the case,”
is all too common for adoption to lag
explains Kieley. While all ERPs contain
behind innovation. He believes that
some elements of a mature resource
many of the pain points are created by
planning engine, which informs pro-
a lack of trust in not only Enterprise Re-
curement professionals what to buy w w w.suppl yc ha i ndi gi ta l. com
49
TECHNOLOGY
“ The digital transformation of the supply chain is real, and it’s creating roles that never existed before” — Tom Kieley, co-founder and CEO, SourceDay
companies visibility into their suppliers’ processes through trustworthy data that can then allow their ERP to function correctly. “By doing that, we’re enabling the suppliers to perform at a higher level and be better suppliers to their customers,” says Kieley. At the heart of SourceDay is an idea that, Kieley admits, the company often undersells. “We are a true multi-tenant platform. We’re basically an ecosystem of all suppliers that service the customers that use SourceDay,” he says. “We enable a buyer to be more strategic.
50 based on stock level, inventory, cus-
The actual role of buying in a manufac-
tomer sales, orders, building materials
turing distribution organisation is really
etc., Kieley maintains that, all too often,
to find and contract and manage lead
a key element is missing. “Your ERP is
times from their supply chain and get
only as trustworthy or as accurate as
the best prices, lead times and quality.
the data you feed into it,” he says.
Those things all too often fall by the
This is where SourceDay comes in.
wayside because buyers are chasing
“We’re enabling the procurement team,
their tails trying to get suppliers to ship
the supply chain organisation and oth-
what they need to ship on time, which
ers, to get real-time data from suppli-
rarely happens.”
ers on their performance, from large
By bringing visibility to the buyer-
scale orders down to a single part,”
supplier relationship, which creates
says Kieley. In elaborate manufactur-
trust in companies’ ERPs and added
ing projects, the absence or delay of a
value, SourceDay is further grow-
single piece of metal can derail million
ing and supporting the ecosystem of
dollar deals. SourceDay works to give
interdependencies that represents
SEPTEMBER 2019
51
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TECHNOLOGY
the modern supply chain. “Without visibility into your supply chain’s ability to meet its targets, you’re just guessing
$18bn
Total Processed Spend
and hoping,” says Kieley. “Hope is not a strategy that’s very effective in the manufacturing world; you need to have a platform and data quality that is collaborative outside of the organisation with your supply chain.” While manufacturing is currently SourceDay’s mainstay vertical, the company has plans to continue its impressive growth record, spreading 52
out into other regions. After all, the digitisation of the supply chain isn’t restricted to any one industry or market. “Last year, we grew our customer count by 56%. What we continue to see is that manufacturing really is our sweet spot. We’re currently focused on North America, but we have customers in Europe and Asia, and I see those as markets where we’re going to go more strategically in the next 18 months,” Kieley says. SourceDay focuses primarily on mid-market companies ($50mn to $1bn in revenue) and serves manufacturers across a multitude of industries, including aerospace, oil and gas, automotive, transportation, packaging, food SEPTEMBER 2019
2015 Year founded
100
Sites Deployed Globally
and e-commerce retailers. “Anyone with a supply chain that is creating pain for their organisation is a perfect fit for SourceDay,” he affirms. Coming off the back of a $6.5mn funding round, Kieley reveals the plan moving forward will be to grow the company’s leadership team, hire new engineers to work on production design and refine its go-to-market strategy. Looking to the future, he is confident in the role SourceDay has to play in the future of the global supply chain ecosystem. “In 2020, I see us continuing to expand in other markets in North America. Then, towards the end of 2020, we’ll focus on some global markets, as well. Most certainly, the company’s staff size will have doubled by this time next year. By 2025, we’ll absolutely be in Europe and Asia as a go-to-market strategy,” he concludes. “Part of our core values is that we put our customers first, listen to them and build our roadmap according to their needs. The modern supply chain is inherently global, so we need to be where our customers and
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53
TECHNOLOGY
54
CUSTOMER DEMAND DRIVING THE AUTOMATED WAREHOUSE Richard Seel, Managing Director, Supply Chain & Logistics (UK & US) of Delaware, discusses the impact consumer expectations have on automation in manufacturing warehouses in the modern world WRITTEN BY
SEPTEMBER 2019
RICHARD SEEL
55
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TECHNOLOGY
I
n today’s fast paced world, consumer expecta-
tions on receiving products and services is higher than ever as we want it all instantly. Customer
demand is one of the clear leading factors driving
uptake of automation in manufacturing warehouses today, as customers expect next-day delivery or at the very least ever-shorter delivery lead times. In order to achieve this, manufacturers are under pressure to muster resources at short notice to satisfy demand. Adding to that pressure is the fact that demand 56
often fluctuates over time, due to seasonality, weather conditions or unexpected events that result in spikes in interest in a particular product line. It is difficult for manufacturers to pull people in for short periods, and train and them up quickly, so that they can respond to these demand spikes in a timely manner. Given all this, it is not surprising that we are seeing an ever-growing range of automated systems being put to use in warehouses today: from cranes and conveyors to automatic guided vehicles (AGVs); automatic sorters; palletisers and RFID tags. Automated equipment such as cranes, conveyors and sorters can be used to support better space utilisation, decrease error rates, and deliver faster and more accurate picking – and by enabling task SEPTEMBER 2019
‘ I N TODAY’S FAST PACED WORLD, CONSUMER EXPECTATIONS ON RECEIVING PRODUCTS AND SERVICES IS HIGHER THAN EVER AS WE WANT IT ALL INSTANTLY’
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57
TECHNOLOGY
‘ A UTOMATING WAREHOUSE PROCESSES SPEEDS UP THE PICKING, SCANNING AND MOVING OF GOODS’
interleaving and slotting can further optimise time consuming picking processes. AGVs can be used to follow operators around the warehouse handling goods, thereby decreasing the walking distance required and the time spent by the operator on each specific task. Finally, RFID tags help track the flow of stock through the warehouse and minimise the need for human intervention when automatically checking stock during the receipt and issue of unopened handling units such as boxes.
58
SEPTEMBER 2019
CLICK TO WATCH : ‘THE WAREHOUSE OF THE FUTURE – WITRON’S OPM TECHNOLOGY AT MEIJER IN WISCONSIN’ 59
Manufacturers will be able to tap into many benefits as a result of this growing use of automated systems
ers significant cost savings and drives sustainable growth. Finally, warehouse automation also
as technology increases accuracy by
helps manufacturers leapfrog their
avoiding the errors inevitably made
competitors. A smart automated
by human operators, in addition to
warehouse boosts efficiency, produc-
boosting productivity by aiding work-
tivity and helps accelerate the entire
ers. Automating warehouse processes
supply chain and giving manufacturers
speeds up the picking, scanning and
an edge over their rivals.
moving of goods. It helps ensure satis-
Many of the largest manufacturers
fied customers through the fast and
across the world are now automating
efficient delivery of undamaged goods.
their warehouse processes. However,
Improved productivity, fewer errors
for the foreseeable future, there will
and improved customer service deliv-
continue to be a place for people and w w w.suppl yc ha i ndi gi ta l. com
TECHNOLOGY
manual work, even in highly automated environments. Today, the focus for most automation
sations rely on zero-hour contracts and employment agencies specialising
is centered around picking larger bulk
in short-term temporary staff to supply
items such as pallets and boxes. Piece
resources into the warehouse at times
picking single items, such consumer
of peak demand and to meet seasonal
sales or within the spare parts industry
changes. As automation gets more
for example, is difficult for automated
sophisticated and enabled throughout
systems and still typically requires
warehouses, this requirement will
a great deal of human intervention.
decline. However, in parallel with this,
Manual pickers and packers will still be needed to carry out this kind of intricate task for some time. Coupled with this, we see a growing 60
Today, many manufacturing organi-
need for resources that understand these more complex systems and are able to operate them, as opposed to warehouse operatives who are simply following a defined unoptimised series of warehouse instructions.
SEPTEMBER 2019
‘ M ANY OF THE LARGEST MANUFACTURERS ACROSS THE WORLD ARE NOW AUTOMATING THEIR WAREHOUSE PROCESSES’
the requirement for more skilled workers is likely to increase. There will be a growing need for employees who can understand these sophisticated automated warehouse systems and be able to apply creative thinking to make the systems even more efficient to drive productivity and improve customer services. To summarise, manufacturers want their warehouses to work in an optimised, efficient and accurate way to meet and exceed customer demand. As a result, manufacturers are increasingly looking to automation to help them achieve this due to unskilled resources alone not being able to provide this. That said, there will still be need for people to work in the warehouse but increasingly they will not need to be the traditional pickers and packers on short-term contracts, but instead experts in automated solutions who can help ‘supervise’ and optimise the technology, ensuring effective operations to improve the overall contribution to the business.
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61
S U S TA I N A B I L I T Y
06 62
WAYS TO ACHIEVE SUPPLY CHAIN SUSTAINABILITY Mike Hachtman, CEO of Relogistics, lists his six best ways to accomplish supply chain sustainability WRITTEN BY
MIK E HACHT M AN
SEPTEMBER 2019
63
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S U S TA I N A B I L I T Y
T
he sustainable supply chain has become a vital – and ever more visible – element of social corporate responsibility. Fueled
by consumer demands, increasing regulations
and a mounting business case, steering supply chains in a more sustainable direction has grown from laudable ambition to requisite for long-term preservation. A sustainable supply chain is about far more than the environment, though that’s where consumers might focus their attention. Sustainability is a confluence of social, ecological and economic environments.A sustainable supply chain must avoidcompromising both the environment 64
and the business itself. It’s also important to recognise that a “responsible” supply chain isn’t necessarily the same thing as a “sustainable” supply chain. A responsible supply chain typically ensures it operates within all legal and ethical parameters. This doesn’t affirm sustainability, however. A sustainable supply chain takes into account environmental and societal reference points. The sustainable chain requires that all partners consider how their processes and actions can be supported by nature and society over the long term. There’s no quick and easy path to sustainability, but the right supply chain solutions can help your business strive toward,and eventually achieve, a bottom line defined by not just profit but also by people and the planet. SEPTEMBER 2019
65
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S U S TA I N A B I L I T Y
“MANY COMPETING COMPANIES SHARE PORTIONS OF SUPPLY CHAINS,AND COLLABORATING ON EFFORTSTO DEVELOP AND ESTABLISH SUSTAINABLE PRACTICES CAN BENEFIT ALL” — Mike Hachtman, CEO of Relogistics 66
CREATE A DETAILED MAP
help you understand environmental,
Little, if nothing, can be accomplished
economic and social challenges
within your supply chain if you don’t
faced by suppliers. These can be
have useful visibility of it. Shockingly
extremely variable based on your
few companies actually have detailed
industry, but a thorough map of the
views of their entire supply chains,
chain accounts for how human and
which are more complex and global
natural resources are used along
than ever. Mapping your entire supply
each step of operational and
chain is the starting point. A quality
production process.
map of your supply chain will allow you to identify impacts, risks and
EDUCATE AND CHANGE THE CULTURE
drivers of waste.
Some measures to sustainability
This “aerial” view of the chain can SEPTEMBER 2019
require not only procedural changes,
67
but behavioral and cultural changes.
ENCOURAGE AND ASSIST UPSTREAM
An important step to achieving
Sustainability can’t be accomplished
sustainability is earning buy-in from
unilaterally. You’ll need support
your own staff and that of suppliers.
and co-operation all the way back
Education and training resources can
upstream. Though you may not have
help align everyone with the mission.
the kind of persuasive power over
Showcase success stories and
your chain like a Walmart or Amazon,
leverage successful case studies
you do have the ability to influence
to build momentum within your
supplier practices. Performing audits
organisation and throughout the chain.
and/or enacting codes of conduct
Develop training programs that instill
can encourage suppliers to promote
the mission from the time new
your sustainability efforts.
employees are onboarded.
Furthermore, be willing to assist w w w.suppl yc ha i ndi gi ta l. com
S U S TA I N A B I L I T Y
CLICK TO WATCH : ‘RELOGISTICS: FASTER,BETTER, SMARTER’ 68 them when possible. Helping them
to analyze, tweak, measure and
with best practices design and imple-
optimise operational processes like
mentation advances your sustainability
inventory management, order and
efforts while furthering the overall
distribution management and
goals. It might be necessary to apply
transportation management. Insights
pressure in some instances, but don’t
gained through data and machine
be afraid to do so if the ultimate
learning can be leveraged to find
objectives are important to you.
and exploit opportunities for sustainable processes.
LEVERAGE TECHNOLOGY Technology has taken supply chain
COLLABORATE
management from art to science.
Individual efforts don’t solve complex
Continued advances in technology
supply chain issues, at a personal
are providing organisations with
level or even a company level. Many
once-unconceivable abilities
competing companies share portions
SEPTEMBER 2019
you can’t measure, so develop
“ULTIMATELY, A SUSTAINABLE APPROACH TO SUPPLY CHAINS WILL BE THE ONLY VIABLE CHOICE FOR ANY COMPANY’S LONGTERM SUCCESS” — Mike Hachtman, CEO of Relogistics
sustainability objectives and track their successes. Then, build on these successes and use them as springboards to further your efforts. The road to sustainability can’t be accomplished overnight, and it won’t be done with shortsighted or apathetic efforts. It might also require initial investment to facilitate the necessary procedural and cultural changes. By starting your efforts now and building on each small success, innovation will breed throughout the process and strengthen the business case to work in conjunction with the social case.
of supply chains, and collaborating
Consumer demands and changing
on efforts to develop and establish
regulations have pushed environmental
sustainable practices can benefit all.
concerns into the discussion for busi-
While it may feel counterintuitive to
nesses across the globe. Ultimately, a
work with rivals, combining efforts
sustainable approach to supply chains
on sustainability practices not only
will be the only viable choice for any
advances the objectives, but offers
company’s long-term success.
an opportunity for positive public perception and to build credibility with industry and consumers.
BUILD ON SUCCESS You track financial objectives, such as revenue and profit, of course. It’s said you can’t improve what w w w.suppl yc ha i ndi gi ta l. com
69
EUROSTARS HOTEL BERLIN September 10th - 11th, 2019 Berlin, Germany
72
SEPTEMBER 2019
Largest sustainable supply chains worldwide Supply Chain Digital counts down the top 10 largest supply chains based on the company’s individual supply chain initiatives, according to CDP Global Supply Chain report WRITTEN BY
SEAN GALEA-PACE
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73
T O P 10
74
10
TSMC [ TAIWAN ]
Founded in 1987, TSMC has become a leading manufacturer of discrete semiconductor components and is the world’s first dedicated semiconductor foundry. With the aim of becoming a practitioner in green power, TSMC carried out 667 projects in energy and water conservation to achieve a long-term target of 20% renewable energy for the entire company. In 2018, TSMC purchased 880GWh of renewable energy which was the largest amount bought in the Taiwan semiconductor industry. As part of its continued sustainability drive, all overseas sites now use 100% renewable energy as of the end of 2018.
$33bn Approximate revenue
SEPTEMBER 2019
48,000
Approximate number of employees
HQ
Hsinchu, Taiwan
J.K. Lin Senior Vice President —
09
Sodexo
75
[ FRANCE ]
Sodexo, the international food services and facilities management company, serves more than 100mn consumers every day and provides more than 100 different services to 72 countries. The company’s solutions include food and catering, property and
Francois Blanckaert CPO —
technical services, benefits and rewards as well as home care services. Having established a “Better Tomorrow 2025” roadmap, Sodexo has made a commitment to reducing all carbon emissions produced in the UK and Ireland by 2025. This promise is in collaboration with a continued review of how to improve its approach to energy and observing the impact of its use.
$24bn Approximate revenue
460,000
Approximate number of employees
HQ
Issy-lesMoulineaux, France w w w.suppl yc ha i ndi gi ta l. com
THE DIGITAL PROCUREMENT EVENT OF THE YEAR.
300
20
Startups
40
Attendees
Speakers
2
1
Days
Hackathon
08
Microsoft
77
[ USA ]
The technology giant develops, manufactures, licenses, supports and sells computer software, consumer electronics, personal computers, and related services. Microsoft aspires
Mike Simms CPO —
to create a sustainable future by empowering every person and organisation in the world to thrive in a resource-constrained world. Microsoft is focused on four critical areas, with artificial intelligence projects underway in the areas of climate, agriculture, biodiversity and water. The company aims to reduce carbon emissions by 75% through continued carbon neutrality and energy investments and commitments.
$110bn Approximate revenue
144,000
Approximate number of employees
HQ
Washington, USA w w w.suppl yc ha i ndi gi ta l. com
T O P 10
78
07
NRG Energy [ USA ]
Considered the US’s leading integrated competitive power generator, NRG Energy has a broad sustainability strategy that features five key pillars, sustainable: business, operations, customers, suppliers and workplace. NRG Energy embeds
Chris Haas, VP Supply Chain, RG Energy —
sustainability into the culture and fabric of the business to ensure that it becomes a core function of how the firm operates. Serving around 3.1mn customers, the company is 73% of the way to its 2030 greenhouse gas reduction target and has reduced 7% of its revenue carbon intensity since 2014.
$10bn Approximate revenue
SEPTEMBER 2019
4,900
Approximate number of employees
HQ
Houston, Texas, USA
06
Sky
79
[ UK ]
As one of Europe’s leading entertainment and communications companies, Sky serves more than 22mn customers across five countries. Through its Responsible Business Sky strategy, the company considers the environment in every initiative it
Giles Harvey Group Supply Chain Director —
undertakes. Focusing its attention on energy, travel, waste and water, it has worked in the UK & Ireland to achieve nine key goals for 2020. Having already accomplished a 55% reduction in its carbon intensity, Sky has met its target for fuel efficiency across its fleet and now seeks to achieve zero carbon across its value chain by 2050.
£13.6bn Approximate revenue
31,000
Approximate number of employees
HQ
Osterley, London, UK w w w.suppl yc ha i ndi gi ta l. com
Pullman Melbourne on the Park | 17 - 18 September 2019
Developed by UNLEASHING HUMAN EXCELLENCE TO DELIVER VALUE ACROSS THE SUPPLY CHAIN
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Mike Chaffins Sr. Director of Supply Chain & Purchasing Nikola Motor Company
Jaun Paul Rebola Sanjay Mukherjee Chief Procurement & Supply Senior Director Logistics Officer Supply Chain Management St John of God Health Care Whirlpool
Tony Broughton Honourable Vice President Melissa Horne Operations Minister for Ports and Freight & Thales Minister for Public Transport Victorian State Government
Adel Salman Head of Supply Chain Bega Cheese
Thomas Debandt Advisor - Supply Chain UN World Food Programme
Honourable Sandra Indramohan Martin Pakula Supply Chain Director Minister for Jobs, Oceania Innovation and Trade Xylem Victoria State Government
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05
Tokyo Gas
81
[ JAPAN ]
Established over 130 years ago, Tokyo Gas is recognised as the largest gas utility company in Japan and serves over 11mn gas customers. The firm is used to setting an example for rivals to follow as it became the first organisation in Japan to introduce and propagate the use of liquefied natural gas (LNG), integrate large-scale combined heat and power (CHP) and advertise the development and use of residential fuel cells.
$2bn
Approximate revenue
17,000
Approximate number of employees
HQ Tokyo, Japan
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T O P 10
82
04
Rolls-Royce [ UK ]
Rolls-Royce designs, manufactures and distributes power systems for aviation and other industries. The company operates with the mantra “pioneering the power that matters” and is
Pernille Boisen CPO, Rolls-Royce —
committed to a strong sustainability approach. By minimising the impact of its products, it seeks to unlock new business opportunities and deliver more efficient products and services to accelerate the transition to a low carbon global economy. RollsRoyce invests £1.3bn (US$1.5bn) in research and development annually, a high proportion of that fund is dedicated to environmental improvement and the reduction of its engine impact.
$16bn Approximate revenue
SEPTEMBER 2019
50,000
Approximate number of employees
HQ Derby, UK
03
Coca-Cola
83
[ USA ]
The beverage giant provides more than 500 brands in over
Mark Westfall CPO, Coca Cola —
200 countries. With clear 2020 sustainability goals in mind, the company in collaboration with its 250 bottling partners has devised targets to drive change beyond small operational upgrades. Coca-Cola targets key areas in: agriculture, climate protection, giving back, human & workplace rights, packaging & recycling, water stewardship and women’s economic empowerment. Since beginning this strategy in 2010, the company has achieved a 19% reduction on its carbon footprint, with the aim of achieving a 25% reduction in 2020.
$31.85bn Approximate revenue
62,000
Approximate number of employees
HQ
Atlanta, Georgia, USA w w w.suppl yc ha i ndi gi ta l. com
T O P 10
02
Apple [ USA ]
Global electronics company, Apple, is considered one of the big four technology organisations alongside Facebook, Amazon and Google. With its products manufactured all over the world, Apple recognises that sustainability is just as important as innovation. 84
With new products such as the MacBook Air and Mac mini made from 100% recycled aluminum, sustainability is firmly at the forefront of Apple’s decision-making. With a core ambition to create products without taking from the Earth, Apple focuses on three key areas: climate change, resources and smarter chemistry. It has overseen a 70% decrease in average product energy use in 10 years, 35% reduction in its overall carbon footprint compared to 2015, as well as ensuring that 100% of all its global facilities are generated by 100% renewable energy.
SEPTEMBER 2019
Paul Curtin Director Procurement —
$265bn Approximate revenue
123,000
Approximate number of employees
HQ
Cupertino, California
CLICK TO WATCH : ‘APPLE – OPENING FILM’ 85
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T O P 10
01
Accenture [ IRELAND ]
Topping the list is the leading global professional services firm, Accenture, specialising in consulting, strategy, technology, digital and operations. A Fortune 500 company, Accenture has a multi-billion-dollar supply chain and leverages its purchasing power to drive positive 86
change on a global scale. Accenture has a deep understanding of sustainability and innovation across the value chain which identifies how sustainability topics impact the bottom line and society overall. With the importance of accelerating business value to deliver sustainable growth and profitability in a digitally disrupted world, Accenture provides support to businesses to achieve their sustainability goals and create sustainable value. READ THE EXCLUSIVE DIGITAL REPORT WITH SUPLY CHAIN DIGITAL
SEPTEMBER 2019
Kai Nowosel CPO, Accenture —
$41.6bn Approximate revenue
482,000
Approximate number of employees
HQ Dublin, Ireland
Kai Nowosel, Chief Procurement Officer: “With a multi-billion-dollar supply chain, Accenture has the purchasing power to drive positive change on a global scale, creating a more economically inclusive world and helping to shape the future of procurement. Our ambition is to shift the culture of buying both inside and outside Accenture, while generating long-term value for our clients, suppliers and communities. By improving the efficiency of our operations, harnessing the innovative spirit of our people and developing new sustainability solutions, we aim
to accelerate the global shift to a lowcarbon economy and to lessen the effects of climate change. Accenture is using the power of new technologies such as AI, blockchain and extended reality to address a variety of complex societal challenges in areas including health, human rights, inclusion and environmental sustainability. We believe through these technologies we can create solutions that make a positive, lasting impact for people and communities in ways that were not previously possible. We are going beyond responsible buying.”
CLICK TO WATCH : ‘KAI NOWOSEL, CPO OF ACCENTURE, TALKS EXCLUSIVELY WITH SUPPLY CHAIN DIGITAL’
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87
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LAB VENTURES
EVENTS & A S S O C I AT I O N S
The biggest industry events and conferences WRITTEN BY SEAN GALEA-PACE from around the world
15–18 SEPT 2019
90
3–5 SEPT 2019
Transport Compleet [ GORINCHEM, NETHERLANDS ]
InterModal Expo [ LONG BEACH, CALIFORNIA ] Tackling the key issues which face the intermodal supply chain, the Expo is
Now in its 15th year, the Transport
the intermodal’s platform for products,
Complete Gorinchem is a networking
services and solutions and provides
event which brings the entire road
a classroom for new skills and knowl-
transport industry together. Welcom-
edge to be shared. With more than
ing 12,000 visitors annually, the event
125 exhibitors showcasing the latest
will enable both international and
products and services that is driving
regional providers to showcase
the supply chain industry forward,
their latest products and solutions
there is also set to be over 60 industry
to a professional audience.
experts in attendance.
SEPTEMBER 2019
24–26 SEPT 2019
15–18 SEPT 2019
CSCMP Edge 2019
Supply Chain & Logistics Summit and Expo 2019
[ ANAHEIM, CALIFORNIA ]
[ HILTON ANTWERP, BELGIUM ]
The Council of Supply Chain Manage-
The EMEA Supply Chain & Logistics
ment Professionals is gathering at
Summit & Expo is one of the most
CSCMP Edge over three and a half
established events of its kind in
days to share insight from a range of
Europe. Now in its 21st year, it is
supply chain executives. Providing
a highlight in the calendar where
valuable insight into new, cutting-edge
world-class organisations meet to
solutions and the latest updates in
maximise efficiency and minimise
the supply chain space, this event is
costs through supply chain
certainly one for the calendar.
strategies of the future.
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91
EVENTS & A S S O C I AT I O N S
1–3 OCT 2019
Post-Expo 2019 92
[ AMSTERDAM, NETHERLANDS ] The three-day event at the beginning of
14–16 OCT 2019
3PL & Supply Chain Summit: Europe [ BRUSSELS, BELGIUM ]
October will show off products such as
With 400 attendees and 70 leading
security solutions and safety products,
speakers in attendance, the Belgium
consultancy and management strate-
event is set to be full of interactive
gies, post-office counter solutions,
sessions such as coaching sessions,
automation, e-commerce technology
live interviews and 1-2-1 meetings.
and digital marketing in the Automotive,
Supply chain executives from a range
Logistics and Transportation industries.
of manufacturers, retailers and
The event will play host to global visi-
Consumer Packaged Goods are
tors and will be used as a platform to
expected to attend. The event will be
present new innovations and products
centered around four core themes
to a professional audience of business
which are: Agility, Visibility, Respon-
leaders and directors from the postal,
sive and Growth.
parcel and logistics industry.
SEPTEMBER 2019
16–17 OCT 2019
The Responsible Supply Chain Summit 2019 [ AMSTERDAM, NETHERLANDS ] Following its largest and most successful conference to-date, The esponsible Supply Chain Summit is set to return in 2019, bringing together more than 250 CEOs and sustainability and supply
23–25 OCT 2019
36th International Supply Chain Conference [ BERLIN, GERMANY ]
chain practitioners to discuss and
In one of Europe’s top annual business
shape the future of responsible supply
gatherings to discuss logistics and
chains. Previous speakers include Ste-
supply chain management, the three-
ven Stone, Chief Resources & Market
day event brings industry leaders
Branch at the United Nations Environ-
together to tackle the current issues
ment, David De Schutter, Innovation
and future themes in the supply chain
& Technology Officer for AB InBev and
management sector. On average, the
Joe Franses, Vice-President, Sustain-
event attracts over 3,500 attendees
ability at Coca-Cola. With speakers yet
from over 40 countries, 120 speakers
to be announced for 2019, it looks set
and welcomes more than 200
to be another unmissable event on the
exhibitors every year.
global calendar.
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93
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96
ALLEGIS GLOBAL SOLUTIONS CONTINUES TO BUILD STRONG RELATIONSHIPS THROUGHOUT ITS SUPPLY CHAIN
WRITTEN BY
SOPHIE CHAPMAN PRODUCED BY
CHARLOTTE CLARKE
SEPTEMBER 2019
97
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ALLEGIS
Allegis Global Solutions’ Supply Chain Manager for EMEA, Amy Fitzwarine-Smith, discusses how the company is maintaining trust with suppliers and staff
A
llegis Global Solutions (AGS) is a global leader in the talent solutions industry, providing client-focused strategies
for securing top talent. “We employ a variety of recruitment methods, including managed service provider (MSP) solutions, recruitment process outsourcing (RPO) solutions and procurement 98
solutions. My role is centred around the MSP area of the business within supply chain”, says Amy Fitzwarine-Smith, Supply Chain Manager of the EMEA region at AGS. “The supply chain team are responsible for ensuring we have the right programme delivery suppliers supporting each of our accounts and that they’re getting the same experience from AGS as a partner”. The company regards open communication, relationships, serving others and commitment to excellence as its core values, interlacing these standards into all of its operations. “One of the most important values for me is building relationships with all parties with whom we work. The respectful and trusting partnerships we have with our suppliers are the key to our business success,” remarks Fitzwarine-Smith. Having SEPTEMBER 2019
99
“ AGS has a huge focus on technology. We understand that investment in technology is what is setting companies apart in the industry” — Amy Fitzwarine-Smith, Supply Chain Manager, EMEA, Allegis Global Solutions
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ALLEGIS
“ One of the most important values for me is building relationships, with all parties with whom we work” 100
— Amy Fitzwarine-Smith, Supply Chain Manager, EMEA, Allegis Global Solutions
previously worked on the operations side of MSP, Fitzwarine-Smith highlights how crucial these relationships are to all aspects of delivery to AGS’ clients. “My experience working with a specific client account made me realise just how important suppliers and the supply chain function are to a company. I became really passionate about getting it right, putting more processes in place to ensure consistency and good communication and getting the team in a better position for us to deliver a great service, not only to the clients but to our supply chain as well.” Reaffirming strong relationships as fundamental to the company’s legacy, Fitzwarine-Smith reveals that coopera-
SEPTEMBER 2019
CLICK TO WATCH : ‘WORKING AT ALLEGIS GLOBAL SOLUTIONS’ 101 tion is a required trait from suppliers.
Over the past several years, AGS
“We ask all of our agencies to work
has invested in a proprietary business
together with us regarding all aspects
intelligence platform to capture data
of the end-to-end process so that both
from its vendor management tools.
parties are still getting their desired
AGS has branded the platform as
outcome whilst giving the client the
ACUMEN Workforce Intelligence,
most efficient and effective experience
which displays and monitors key
working with us”. AGS wants to establish
performance indicators across the
a mutually beneficial dynamic with
entire AGS ecosystem of suppliers,
suppliers – it wants agencies to feel
clients and the firm’s internal teams.
comfortable asking for information
This system collects and combines
about the business whilst also using
data from a range of vendor manage-
their strong supply chain to learn
ment tools, enabling the firm to
more about the market and potential
heighten its visibility of suppliers.
upcoming challenges or opportunities.
“We have the data from the MSP w wew.suppl uro pe .busi yc hane i ndi sscgihief. ta l. com
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Contact us
accounts we hold globally and are able
benefits. “As strategic suppliers, they
to filter that down to specific categories,
have access to the Strategic Supplier
such as location, industry and skill set.
Portal and recently released Supplier
AGS has a huge focus on technology.
Scorecards. This access gives them
We understand that investment in
visibility to all the accounts that they
technology is what is setting compa-
support. The strategic suppliers have
nies apart in the industry. It’s enabling
access to key statistics, which allow
us to remove administrative tasks and
them to benchmark their performance
make our operations more efficient,”
in comparison to their competitors
says Fitzwarine-Smith.
within a particular program,” she adds.
The company runs a strategic supplier
“We’re being completely transparent
programme which recognises the top
with them and using this to motivate
1% of its global suppliers, offering full
improved performances whilst
access to ACUMEN as one of the
maintaining the quality of candidates.
E XE CU T I VE PRO FI LE
Amy Fitzwarine-Smith Amy took the role of Supply Chain Manager for EMEA in April 2019, following seven years of experience working in MSP operations, two of which were at AGS. During that time, Fitzwarine-Smith managed recruitment in challenging locations, including Azerbaijan and Iraq. Working with agencies in these countries sparked her passion for building strong relationships and ensuring that AGS gives them the same experience given to our UK partners. Fitzwarine-Smith also leads the MySelf EMEA employee resource group, which provides colleagues with guidance and support in looking after their mental health in and out of the workplace.
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103
ALLEGIS
£12.3bn+ Approximate revenue
2001
Year founded
3,100
Approximate number of employees
This effort has been very well received
with the best suppliers for our clients,
by our partners.”
and I think by putting visibility on our
Another benefit to being part of
strategic suppliers it helps us to
the Strategic Supplier Program is
achieve that goal,” notes Fitzwarine-
an invitation to AGS’ annual regional
Smith.
summit, which brings together profes-
Although AGS is dedicated to its
sionals from the business to discuss
relationships with outside partners,
the market and opportunities that are
the organisation ultimately considers
important to the attendees. “Some
its people to be its biggest asset.
of the feedback we’ve had from our
In order to ensure its staff are highly
strategic partners is that this is some-
engaged with the company, AGS has
thing quite unique to AGS and proves
launched employee resource groups
to them how much we value their
(ERGs), which allow people to suggest
partnership. We want to be working
ideas that they feel will provide extra
SEPTEMBER 2019
“We know that if we don’t invest in and show our people that we are growing with the industry and that we really care about them, then our company wouldn’t be anywhere near as successful as it is” — Amy Fitzwarine-Smith, Supply Chain Manager, EMEA, Allegis Global Solutions support to them and their peers.
success – both with suppliers and its
“I think our ERGs prove how we feel
own staff. “We know that if we don’t
about our employees – they demon-
invest in and show our people that
strate how much time and willingness
we are growing with the industry and
we put in to make sure they feel they
that we really care about them, then
are part of the group and the society
our company wouldn’t be anywhere
beyond their usual work team,”
near as successful as it is,” says
Fitzwarine-Smith says. The firm also
Fitzwarine-Smith. “We ensure that
offers its employees access to an
we take the time to really look after
online learning platform called
our team members and our industry
Degreed. This system provides online
colleagues.” As it continues to strength-
articles supplied by the learning and
en its reputation and relationships
development team. “It’s a self-learning
within the industry, the firm is also
tool that can help staff develop their
seizing opportunities in terms of
soft skills and grow their knowledge
technology, innovation and transforma-
around all parts of the business,”
tion – enabling it to grow its supply
she explains.
chain and team.
For AGS, building and maintaining strong relationships is vital to its w w w.suppl yc ha i ndi gi ta l. com
105
106
WRITTEN BY
WILLIAM SMITH
PRODUCED BY
JUSTIN BRAND
SEPTEMBER 2019
107
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A S A H I E U R O P E LT D
IAN BRENTON, HEAD OF PROCUREMENT AT ASAHI EUROPE, DETAILS PROCUREMENT’S ROLE IN REINFORCING THE PREMIUMISATION OF ASAHI’S BRANDS
108
J
apanese beverage company Asahi is internationally known for products such as its eponymous Super Dry lager. More
recently, it has acquired several European brands such as Peroni and Grolsch under its Asahi Europe subsidiary. Asahi Europe was indirectly formed following the acquisition of SABMiller by AB InBev, with one of the conditions being to divest part of its European business. Ian Brenton is Head of Procurement at Asahi Europe, having formerly been at SABMiller. “I was responsible for a number of the packaging categories globally. When Asahi acquired the Western European Business Unit from SABMiller they needed a procurement team. They kindly offered me the opportunity to move from running a packaging specific agenda to managing the entire procurement agenda. As such, we’re a team of 23 people, working from the UK, Italy, Holland and Switzerland.” SEPTEMBER 2019
109
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A S A H I E U R O P E LT D
110
Brenton’s procurement department has been key to supporting the growth aims of Asahi Europe’s purchases. “Asahi bought the businesses because it wanted a footprint with global premium brands” says Brenton. “The procurement function’s primary aim is to support the growth of the business through competitive, predictable costs, improved working capital, assured supply and suppliersourced innovation, all generated in an environmentally and socially sustainable manner.” As part of that SEPTEMBER 2019
CLICK TO WATCH : ‘ASAHI EUROPE CORPORATE VIDEO’ 111
journey, the company acquired the
that used to focus solely on Indirect
beverage, brewing and distribution
Procurement and very quickly intro-
business of Fuller, Smith & Turner
duce some experience in procure-
PLC in 2019, which brought its own
ment of brewing and packaging.”
challenges in terms of procurement.
A number of partnerships have
“In the UK we used to be a predomi-
been crucial to maintaining and
nantly import-focused business. We
accelerating that level of growth.
had little manufacturing of scale,
Aside from gleaning market informa-
but almost overnight we acquired
tion from a valuable source of trusted
half a million hectoliters worth of
suppliers, Asahi Europe has also
manufacturing in three different
partnered with procurement intel-
production locations – in London,
ligence firm Beroe. “We retained a
Cornwall and West Sussex. We’ve
strong relationship with Beroe after
had to take a procurement team
working with them previously. From w w w.suppl yc ha i ndi gi ta l. com
a market intelligence standpoint,
our primary aim, significantly increas-
Beroe offers a great deal. Whether
ing our hop yields and developing
we need it for budgeting or sourc-
innovative downstream products
ing activities, they give really good
for use in our premium portfolio .
insight that we’ve found very benefi-
One of the key tasks procurement
cial.” Other partnerships have come
fulfils is in providing packaging, to
into play across the company. “On
contain products as well as empha-
the agricultural side of the business,
sising their premium nature. “Part of
staying close to our farmers and
the challenge is ensuring that we can
cooperatives is really important to
readily respond to business requests
us. These relationships have led to
overcoming the specific challenges
the development of proprietary maize.
unique to each packaging type.
Similarly, by working with agricultural
Primary packaging, in most cases,
development companies we have met
is quite a capital intensive business
SEPTEMBER 2019
“PROCUREMENT ENABLES THE CONTINUED GROWTH OF THE BUSINESS THROUGH COMPETITIVE, PREDICTABLE COSTS, IMPROVED WORKING CAPITAL, ASSURED SUPPLY AND SUPPLIER-SOURCED INNOVATION, ALL GENERATED IN AN ENVIRONMENTALLY & SOCIALLY SUSTAINABLE MANNER” — Ian Brenton, Head of Procurement, Asahi Europe
113
E XE CU T I VE PRO FI LE
Ian Brenton, Asahi Europe Ian joined Asahi Europe on its very first day on Wednesday 11 October 2016 as Head of Procurement, based in Switzerland. He previously worked at SABMiller and before that PepsiCo, in roles spanning manufacturing, change management and procurement. Outside of work, a keen cyclist & climber, he is well on his way to becoming a Munro ‘compleater’ with 18 peaks left to climb of the total 284. Ian anticipates that by the time he reaches his final summit, it will have taken 20 years of dedication.
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A S A H I E U R O P E LT D
114
SEPTEMBER 2019
2016
Year founded
â‚Ź2bn
Approximate revenue
2,000+
Approximate number of employees
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115
A S A H I E U R O P E LT D
“WHEN WE WORK WITH SUPPLIERS WE DELIBERATELY LOOK FOR PROGRAMMES WHICH WILL HELP TO REDUCE OUR CO2 FOOTPRINT, IMPROVE RECYCLING RATES, REDUCE WASTAGE, INCREASE RECYCLED CONTENT AND AID OUR TRANSITION TO GREENER ENERGY” 116
— Ian Brenton, Head of Procurement, Asahi Europe – there’s quite a large capital investment before you bring on stream new capacity.” For cans, Asahi Europe partnered with a new entrant in the market. Their mutual relationship helped the upcoming company to establish itself, while Asahi gained a partner aligned with its strategy. “Supporting growth in glass or aluminium, or stainless steel for kegs, are not quick decisions to implement,” says Brenton. “You have to plan for the long term, and we often see five year plus contracts. If it’s corrugated or cardboard, typically used for conSEPTEMBER 2019
CO MPAN Y FACT S
• Procurement team working out of the UK, Italy, Holland and Switzerland • Acquired the UK beverage, brewing and distribution business of Fuller, Smith & Turner PLC in 2019
sumer facing secondary packaging multi-packs, there are many suppliers and therefore more competition. This means that change can be implemented more quickly and contracts therefore tend to be a lot shorter.” Field Sales Distribution Units (FSDUs), Point of Sale Materials (POSMs) and glassware are examples of how we interact with consumers in the off trade. To meet the glassware needs of a relaunched Asahi Super Dry and updated Peroni, it was crucial to find suppliers who could act as both glassmakers and decorators to produce a premium product, which the company duly w w w.suppl yc ha i ndi gi ta l. com
117
A S A H I E U R O P E LT D
accomplished. For FSDUs, these are in-store display units and key opportunities to emphasise the premium nature of products. A tender for suppliers resulted in a 50% reduction in lead times as well as a move to higher quality printing, whilst paying significantly less than before. POSMs, meanwhile, were previously delivered by a number of different suppliers. Following a tender, Asahi Europe has been able to consolidate orders for fewer shipments, streamlining the 118
process and having the knock-on effect of reducing the carbon footprint stemming from reducing its need to ship goods around the planet. For Asahi, sustainability is always a consideration in the process of procurement. “From a sustainability standpoint, when we work with suppliers we deliberately look for programmes which will help to reduce our CO2 footprint, improve recycling rates, reduce wastage, increase recycled content and aid our transition to greener energy,” says Brenton. For Brenton, Asahi Europe’s aim for the future is simple: “to become a premium beer powerhouse.” SEPTEMBER 2019
“ALMOST OVERNIGHT WE ACQUIRED HALF A MILLION HECTOLITERS WORTH OF MANUFACTURING IN THE UK” — Ian Brenton, Head of Procurement, Asahi Europe
119
To achieve this target will require the contribution of every part of the business, but it is clear that procurement has an important role to play. From its packaging efforts supporting premiumisation to integrating its latest UK acquisition, the work of procurement means that Asahi Europe is indeed becoming a premium beer powerhouse.
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120
FROM OFFICE SUPPLIES GIANT TO LOGISTICS CHALLENGER WRITTEN BY
LAURA MULLAN PRODUCED BY
JUSTIN BRAND
SEPTEMBER 2019
121
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S TA P L E S
Kevin Lewis, Supply Chain Director at Staples UK, outlines how the office supply behemoth is proving to be a world-class contender in the logistics market
W
hen consumers think of Staples, they might recall the company’s famous office essentials. From its ink and toner to its
office furniture, the firm is renowned as a worldclass, multi-channel retailer. However, after selling off its retail business in the UK, Staples is pivoting towards a new market: the world of third-party logistics (3PL). 122
Kevin Lewis, Supply Chain Director at Staples UK, has helped to steer the firm’s supply chain transformation, consolidating its six warehouses across the UK and Ireland into one cutting-edge facility. “We’ve moved into a state-of-the-art distribution centre in Corby, Northamptonshire. In retrospect, it was much larger than we needed and it pushed us to look at how we could better utilise this asset. Now, we have some large-scale brands that have closed their own warehouses and made use of ours as a shared-user facility.” Winning business from traditional 3PL providers, Lewis contends that around 60% of the activity on the site now revolves around 3PL. “Our expertise has been focused on consolidated deliveries, consolidated invoices and the ability to mix our core product with actually almost any other product,” he adds. SEPTEMBER 2019
123
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S TA P L E S
“ THERE ARE FEWER ABSENCES, MORE EFFICIENCY AND A LOWER TURNOVER OF PEOPLE BECAUSE WE’RE INVESTING IN OUR TEAM” 124
— Kevin Lewis, Supply Chain Director, Staples UK
The distribution facility is an impressive feat but perhaps the most exciting aspect of the facility is its ingenious use of technology and automation. “About 70% of our operations are automated so we use Pick to Belt and Pick to Light solutions. On top of this, we also have implemented an order, storage and retrieval (OSR) system by Kanpp” explains Lewis. “It was a £9mn investment just for the picking tower alone, but by using the full height of the building we can be much more efficient.” It also allows people to pick economically; adjustable platforms mean that people don’t have to reach or bend down to pick up items. Instead, they can pick from a height that’s comfortable for them. On top of this, Staples has also experimented with weighing technology that adds an additional layer of protection. “It’s an extra safety net,” observes Lewis. “We know the weight and dimensions of every single product so if there is any weight deviation, we would be able to see that and alert the team.”
SEPTEMBER 2019
CLICK TO WATCH : ‘STAPLES SUPPLY CHAIN: A PARTNERSHIP OF EMPLOYEES AND TECHNOLOGY’ 125 With this state-of-the-art facility,
an investment in technology and
Staples is well equipped to tackle any
automation unless they can recoup
logistical challenge. It’s also worth
that investment within the lifetime
noting that in recent years the com-
of the contract,” he explains. “The
pany has closed many of its brick-and-
difference with Staples is that we have
mortar stores and pivoted towards
already made that investment. We want
ecommerce. This means it has first-hand
to make shared use of our assets and
experience of the challenges of
we can also offer competitive contracts.”
efulfilment. Furthermore, having
Indeed, Staples has already won
already made significant capital
over big-name clients like Adidas,
investments in automation, Lewis
and car servicing and repair company
contends that Staples can offer its
Kwik Fit. “If a Kwik Fit branch needs
clients more competitive contracts.
some brake cleaner or if an Adidas
“When you go to a traditional third-party
store wants to order some carrier bags,
provider, they’re not going to make
they can only get it from this warehouse,” w w w.suppl yc ha i ndi gi ta l. com
S TA P L E S
“ WE WANT TO MAKE SHARED USE OF OUR ASSETS AND WE CAN ALSO OFFER COMPETITIVE CONTRACTS” — Kevin Lewis, Supply Chain Director, Staples UK
making complexity simple KNAPP is a leading global supplier of warehouse automation solutions, with over 1700 active systems worldwide. The group’s advanced conveying, storage and fulfilment technologies are combined in solutions that feature seamless integration and intelligent software. Successful projects in the UK recently include systems for Staples, John Lewis, Boots, M&S, Clarks, British Gas, Debenhams and Well.
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shuttle storage
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KNAPP UK Ltd Unit 60, Monument Business Park Warpsgrove Lane, Chalgrove Oxfordshire OX44 7RW Tel: 01865 965 000 | sales.uk@knapp.com www.knapp.com
127
E XE CU T I VE PRO FI LE
Kevin Lewis An experienced, commercially driven supply chain professional with a successful background in online fulfilment, large-scale parcel operations and multi carrier management. Strategic approach to successful business leadership and delivery, engaging with key business stakeholders and third parties alike, delivering effective supply chain solutions through managing People, Technology, Relationships and Processes. Extensive experience outsourcing, new site start up and muti-site consolidation both in the UK and internationally. PRINCE2 qualified, with experience of introducing practices and processes tailored to business requirements that enable and facilitate the wider strategic goals of the organisation. w w w.suppl yc ha i ndi gi ta l. com
“ Staples may have sold its retail business but we’re very much thriving in terms of e-commerce and third-party logistics” — Kevin Lewis, Supply Chain Director, Staples UK
70%
of operations are automated
1986
Year founded
bespoke, tailored solutions exclusively for Staples,” says Lewis. This strong sense of collaboration can also be seen within the company too. By paying competitive, living wages rather than a minimum wage and investing in its team, Staples has worked hard to build a dynamic logistics business. “In the past,
10,000+
Approximate number of employees
we relied on agency workers and temporary labourers, whereas now it’s predominantly a permanently employed workforce,” says Lewis. “There are fewer absences, more efficiency and a lower turnover of people
Lewis notes. “Elsewhere, our biggest third-party client is Saint-Gobain,
because we’re investing in our team.” With this strategy in mind, Staples
which owns businesses such as glass
is ready to continue on its upward
companies and Graham heating and
trajectory, running more and more
plumbing. For this customer alone
supply chains on behalf of customers.
we have over 9,500 bespoke SKUs.”
“Staples may have sold its retail
Staples may be known for its retail
business in the UK, but we’re very
business but the firm is quickly making
much thriving in terms of e-commerce
waves in the logistics sphere. This
and third-party logistics,” affirms Lewis.
is partly thanks to its tech-savvy operations and global experience, but also its successful strategic partnerships. “We work with last-mile partners including TNT Fed Ex Group and Pallex. Both partnerships offer w w w.suppl yc ha i ndi gi ta l. com
129
130
SEPTEMBER 2019
131
SUSTAINABLE SUPPLY CHAINS FOR GROWTH WRITTEN BY WILLIAM SMITH PRODUCED BY CAROLINE WHITELEY
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D E C AT H L O N
THAO NGUYEN, HEAD OF PROCUREMENT & LOGISTICS FOR DECATHLON VIETNAM, AND NUNO TINOCO, HEAD OF FOOTWEAR, EXPLAIN THE ETHICAL APPROACH TO SUPPLY CHAINS POWERING THE COMPANY’S SUSTAINABLE GROWTH IN SOUTH EAST ASIA
S
porting goods company Decathlon has in recent years found new avenues for expansion in South East Asia (SEA).
Identifying its potential, the company’s first store in the region was opened in Thailand in 2015. Since 132
then, openings in SEA include a further nine stores in Thailand, six in Singapore, two in Vietnam, four in Malaysia, three in Indonesia, three in the Philippines and one in Cambodia. Nuno Tinoco is Head of Footwear for Decathlon Vietnam, and explains the company’s vision in this area. “Decathlon has changed a lot, both externally and internally over the past 10 years. We’ve expanded to more countries in the past decade than in the previous 33 years. This challenged us to re-think our product offering and our organisation. The main idea is to go faster by giving our teams power to decide locally, in each country, in each city, where the consequences have the most impact. We’ve gone for smaller teams, passionate about sport, who can better connect with their users and design more relevant products.” SEPTEMBER 2019
133
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D E C AT H L O N
134
“ By being usercentric, we can involve our sport users in the creation of the products of tomorrow” — Nuno Tinoco, Head of Footwear, Decathlon Vietnam
SEPTEMBER 2019
The fulfilment of Decathlon’s plans is being aided by the procurement function, as Thao Nguyen, Head Of Supply & Logistics for Decathlon Vietnam, explains. “Procurement is an important part of making sport accessible to the many. Local teams based in manufacturing countries are responsible for sourcing and managing the suppliers that produce Decathlon products. Once they are manufactured, Decathlon products are shipped by transport providers right into warehouses, then allocated to stores or
CLICK TO WATCH : ‘DECATHLON VIÊT NAM – XIN CHÀO TP. HÔ CHÍ MINH’
directly supplied to customers and
right people at the right place in a long
users after an online order.” This
term sustainable environment. We
vertical structure is vital for the
must preserve our planet and its
business as it expands its operations.
people to protect our purpose. Profit
“Our fully integrated chain which
will be a consequence of that, but that
stretches from retail to production
is not our first goal.” More than just
allows us to better master our costs,
words, the ‘three Ps’ guide and inform
the quality of our products and our
the company’s operations, for instance
supply chain,” says Tinoco.
ensuring it goes above and beyond in
Decathlon is clear that the character
its interactions with suppliers. “For
of its expansion is always conscientious.
many years now, we have had our own
“‘People, Planet, Profit’ are our watch-
requirements to assess the level of
words,'' says Tinoco. “For Decathlon,
our suppliers,” says Tinoco. “These
profit is a consequence of having the
requirements are more demanding w w w.suppl yc ha i ndi gi ta l. com
135
D E C AT H L O N
136
than local laws and aligned with best
creating teams organised by sport
international standards. These assess-
three years ago, whether that’s
ments are done regularly through
volleyball, trail, boxing or more,” says
official audits but critical points are
Tinoco. “These sports teams work
checked daily by our compliance team
closely with retail, production and
with suppliers in the field. We are able
more importantly with our sport users.
to do this by having offices inside
For example, we have one team-mate
our factories with a daily Decathlon
currently based in Vietnam who is a
presence and by building close relation-
high level road runner and also part of
ships with our suppliers’ teams.”
the road running team at Decathlon.
This inclusive, personal, sustainable
He develops the products of the
approach extends throughout the
sport he practices every day,
company, and even into the creation
collecting feedback from the
of products themselves. “We started
community of runners he is part of.
SEPTEMBER 2019
“More than 96,000 people in Decathlon are working every day to realise our purpose: sustainably make the pleasure and benefits of sports accessible to the many” — Thao Nguyen, Head Of Supply & Logistics, Decathlon Vietnam
137
E XE CU T I VE PRO FI LE
Thao Nguyen Thao Nguyen is a specialist with a decade of successful experience and comprehensive understanding of supply chains. Her experience widely covers activities including procurement, international freight, customs clearance, warehousing, ecommerce fulfilment and last mile delivery. She is a leader with proven skills of recruitment, team development and project management, with a commitment to identifying and implementing continuous improvement. She believes that the responsibility of companies and individuals should be in the ‘3 Ps’: Planet, People and Profit. Nguyen works to build effective, caring and environmentally friendly supply chain solutions, implemented in a human focused way. She is also passionate about healthy living and travelling.
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YOU DON’T BUILD A BUSINESS, YOU BUILD PEOPLE WHO BUILD YOUR BUSINESS AND INTUITIVELY CLIENT SATISFACTION TNG manufactures high quality garments, specializing in outer and sportswear since 1979. TNG is one of the top 10 multi factory apparel manufacturers in Vietnam and one of the most transparent companies in the Hanoi Stock Exchange.
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TNG is very well certified by third party compliance firms, major brands and retailers. TNG has the capacity to handle high-volume projects in a timely fashion with 11 sewing factories and several support facilities.
DESIGN Our Design Team is conscious of current trends and has the ability to provide creative and commercial designs across various categories.
COMPLETE IN HOUSE SERVICING TNG has 7 support facilities. We offer all services, from design to printing, quilting, padding, washing, packaging and shipping. This ensures complete control and effective communication.
SOURCING TNG Ě s wide ranging and year long experience in the industry established professional and reliable relationships with top suppliers all over the world.
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By being user-centric, we can involve
innovation and digitalisation of the
our sport users in the creation of the
supply chain. Once per year we
products of tomorrow to better fit
organise a forum during which each
better their expectations.”
supplier can present to others.” Such
As well as ensuring its own opera-
a consideration dovetails with
tions have this culture, Decathlon
Decathlon’s extensive sustainability
extends its reach to influence those
goals targeting risks across human
around it. “We have established
rights, health and safety and the
numerous examples of good industry
environment, which are backed by
partnerships with suppliers all over
concrete targets. For instance,
the world,” says Tinoco. “Each of them
Decathlon is aiming for 100%
is skilled in some of the specific key
renewably-sourced electricity for
strategies and challenges of tomorrow
all of its distribution and logistics
such as automation, continuous
activities by 2026, and as of
improvement, big data management,
now, 82% of its suppliers are
SEPTEMBER 2019
receiving A, B or C rating for working conditions, up 28% from 2017. By 2021, the company is targeting a 20% decrease in CO2 emissions thanks to energy consumption and renewables investment. One specific example of Decathlon’s behaviour inspiring transformative change in others comes from its work with manufacturing partner Dovitec. “Dovitec was inspired by our sustainable development strategy,” says Nguyen. “One of their Decathlon exclusive sites has instituted an energy saving project
“ Profit is a consequence of having the right people at the right place in a long term sustainable environment” — Nuno Tinoco, Head of Footwear, Decathlon Vietnam
E XE CU T I VE PRO FI LE
Nuno Tinoco Nuno Tinoco studied sport sciences and shoe engineering in France. Following his passion, Tinoco has 11 years of successful experience in the Footwear industry, ranging from Lab Research, Quality, Strategic Purchasing, and management. Living in different countries such as Portugal, Switzerland, France, Romania, Bangladesh and Vietnam, he has built strong skills in cultural adaptation, learnt six languages and is able to make decisions in challenging environments. Through all of his experiences he has been driven by his passion for sports and footwear going through business management and team development. He is also a family oriented person and a player of basketball and guitar.
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141
D E C AT H L O N
1976 Year founded 96,000 Approximate number of employees globally
+ €1 1.bn Turnover (excluding taxes) end of 2017
142
SEPTEMBER 2019
143
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D E C AT H L O N
C O M PA N Y FACT S
• Decathlon is aiming for 100% renewably-sourced electricity for all of its distribution and logistics activities by 2026 • Recently opened ten stores in Thailand, six in Singapore, two in Vietnam, four in Malaysia, three in Indonesia, three in the Philippines and one in Cambodia.
144
• The company is targeting a 20% decrease in CO2 emissions by 2021
which has resulted in a number of improvements. Solar panels now provide 56.9% of the office’s energy consumption, they’re using daylighting and walls are being made from non-baked bricks to reduce heat gain and save the CO2 emissions produced by the baking process. Thanks to these and other solutions they’re reduced their energy costs by 50%. They’ve also put in place wastewater treatment and rainwater harvesting systems. SEPTEMBER 2019
“ We are working on implementing cloud-based transportation management systems with AI optimisation tools, as well as a green project to reduce CO2 emissions” — Thao Nguyen, Head Of Supply & Logistics, Decathlon Vietnam
Free sport facilities are provided for workers, and facilities for disabled people have also been set up.” Another comprehensive collaboration comes in the form of Decathlon’s work with DHL. “DHL International Supply Chain (DHL ISC) runs a dedicated DHL control tower which provides a single point of contact in Vietnam and Taiwan for Decathlon's operations,” says Nguyen. “The control tower
oversees Decathlon's air, sea and road shipments from factories in Vietnam and Taiwan to the world. DHL's ISC services offer comprehensive solution design and project management backed by a global governance structure that guarantees consistency across operations. The collaboration we set up involved a high level of coordination, understanding and continuous improvement mindset for the mutual benefit of both w w w.suppl yc ha i ndi gi ta l. com
145
D E C AT H L O N
companies. The results were very satisfying. We achieved 91% container optimisation, 100% data on-time and 100% document on-time. We believe this partnership can go even further, and we are working on implementing cloud-based transportation management systems with AI optimisation tools, as well as a green project to reduce CO2 emissions.” Decathlon is not planning to rest on its laurels as it follows its plans for growth. “Over the next 10 years, we will 146
regularly re-write our vision,” says Tinoco. “Doing that helps us to identify the main challenges of tomorrow, whether that’s the environment, data management, digitalisation, industry 4.0 and beyond. We want to connect with our sport users and make sure our products are accessible as fast as possible through physical stores or online.” Ultimately, Decathlon is confident in the resilience of its strategy going forwards, with rewards on offer not just for itself but for customers and the world at large. “More than 96,000 people in Decathlon are working every day to realise our purpose: sustainably SEPTEMBER 2019
147
make the pleasure and benefits of sport accessible to the many,� says Nguyen. “Going into the future, our strategy of empowering people, decentralisation, user centricity and digitalisation will help Decathlon become more agile and better able to adapt to fluctuating environments and answer to the increasingly complex requirements of our customers.
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C O R N I N G I N C O R P O R AT E D 148
leveraging supply chain collaboration and procurement consortiums for a successful supply chain WRITTEN BY
SEAN GALEA-PACE PRODUCED BY
CHARLOTTE CLARKE
SEPTEMBER 2019
149
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C O R N I N G I N C O R P O R AT E D
Tom Kruse, Global Head, Supply Chain Collaboration & Consortiums, Global Supply Chain Management at Corning Incorporated, discusses the importance of supply chain collaboration amidst its transformation journey in the manufacturing industry
A 150
s one of the leading innovators in materials science worldwide, Corning Incorporated is used to being in the
ascendency. Established in 1851, Corning has become a major heavyweight in the glass manufacturing space, with its products used in applications including smartphones, automotive interiors, large-size televisions and displays, and even pharmaceutical packaging. Tom Kruse, Global Head, Supply Chain Collaboration & Consortiums of Corning, understands the importance of procurement to his firm’s operations and believes it is considered a vital priority. “As a manufacturing company, supply chain and procurement are front and center of everything that we do,” says Kruse. “It’s an old adage, but every dollar that we save contributes directly to the bottom line of the company and reduces our adjusted manufacturing costs.” SEPTEMBER 2019
151
“ As a materials science and technology manufacturing company, supply chain and procurement is front and center to everything that we do” — Tom Kruse, Global Head, Supply Chain Collaboration & Consortiums, Corning Incorporated
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C O R N I N G I N C O R P O R AT E D
152
Corning has a range of business
the suppliers via e-auctions and nego-
lines including products that serve and
tiations,” he says. “You can do value
enable the latest trends in the optical
engineering, optimize and manufacture
communications, mobile consumer
products more effectively, but what
electronics, life sciences vessels, auto-
we’ve found is the next threshold is
motive, and display markets. “Overall,
really to work with other like-minded
we manufacture a really mixed product
organizations and highlight the impor-
line with our clients, customers and
tance of supply chain collaboration
other multinational companies in mind,”
and to leverage procurement consor-
Kruse explains.
tiums where applicable. We can look
He stresses that the key to success is
at it from two ways in our collabora-
a clear procurement strategy. “There’s
tion: either combine our volumes if
only so many times you can keep going
our products align and go to market
to the well and reducing costs from
together or approach it from a suppli-
SEPTEMBER 2019
153
E XE CU T I VE PRO FI LE
Tom Kruse Kruse is currently based in Singapore where he is the Global Head of Supply Chain Collaboration & Consortiums within the Global Supply Management organization at Corning. Mr. Kruse has over 20 years of strategic procurement and supply chain management experience in high-tech, manufacturing and service environments. He has lived and worked in three geographies, has established new Procurement organizations and developed and implemented Procurement transformation strategies.
w w w.suppl yc ha i ndi gi ta l. com
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Procurement is tasked to do all of the above (and more) while operating in an ever-evolving business environment. Group purchasing organizations (GPOs) can narrow the scope of priorities for procurement as they take on and deliver on the most important value drivers. In our guide, “Reshaping the Future of Purchasing,” you’ll discover the benefits and value-added drivers that you'll gain through GPO membership.
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CLICK TO WATCH : WHERE IS CORNING? 155 er’s perspective and say: ‘We’re buying
seeking out new consortiums or Group
these 10 cubes of packaging from the
Purchasing Organizations (GPO’s), in
same suppliers that you’re buying from,
different markets to understand what
it’s just that you’re buying different
they’re doing and how we can benefit
products – but by combining our spend
by joining them,” explains Kruse.
together, we’re making it more attrac-
“Ultimately, we measure the savings by
tive to the suppliers’.”
evaluating the contribution to operat-
Corning has overseen a rapid trans-
ing margins (COMs) and decide how
formation in the number of consortia it
we can make them perform. Other than
has become involved in over the past
savings we need to ask ourselves: what
few years. Having participated in just
other value can we gain from them? For
one consortium two and a half years
example, we’re pursuing market intel-
ago, the company has experienced a
ligence, understanding best practices
major surge, with the figure increasing
and working with other organizations
to 11 in a short space of time. “We’re
to exchange information.” Some of w w w.suppl yc ha i ndi gi ta l. com
C O R N I N G I N C O R P O R AT E D
156
1851
Year founded
$11.4bn+ Approximate revenue
50,000
Approximate number of employees
SEPTEMBER 2019
157
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C O R N I N G I N C O R P O R AT E D
Intelligent | Connected | Predictive
WELCOME TO THE FUTURE OF PROCUREMENT WELCOME TO CHAIN IQ Cognitive Computing & AI
Predictive & Advanced Analytics
Distributed Ledger (Blockchain)
Smart Joint Sourcing
Robotic Process Automation
Cyber Tracking
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CONTACT US
Corning’s key supply chain collabora-
manufacturing sector, companies must
tion partners include Chain IQ, who
adopt and embrace new technologies
is a leading global Sourcing Service
in order to remain a leader in the field.
Provider (SSP) and OMNIA Partners,
Kruse affirms how crucial digital trans-
the largest GPO in the US. “Both
formation is to Corning’s decision-
organizations have proven to be vitally
making processes moving forward.
important in our collaboration journey
“We have different internet platforms
and we work closely with them to
where we exchange information
seek out new opportunities across
externally with collaboration partners,
different markets and categories,”
suppliers, like-minded organizations
Kruse explains.
and customers,” he explains. “We’re
With the introduction of Industry 4.0
working on this with a great sense of
and the Industrial Internet of Things
urgency because we recognize that
(IIoT) over the past few years becom-
digitalization and digital transforma-
ing increasingly prevalent in the
tion are becoming vitally important to
SEPTEMBER 2019
us.” Whilst the implementation of new technology can often seem like a good idea, there is no value in introducing new systems that do not enhance the current processes already utilized by companies. Kruse affirms that the only way to achieve his company’s goals is by learning from mistakes. “You’re never going to
“You have to make technology useful for you in order to shape the direction you want it to go in” — Tom Kruse, Global Head, Supply Chain Collaboration & Consortiums, Corning Incorporated
159
than the current one you already have – you just have to use trial and error. You have to seek this new technology, try it, incubate it and keep what works for you as well as understanding how you can be consistently successful with all of
improve it to enable better practices.”
the different technological and supply
With sustainability in mind, Kruse rec-
chain collaboration elements,” he says.
ognizes how important recruitment
“It’s not a given that the new technology
is to ensuring long-term success at
you’re introducing is going to be better
Corning. “In my particular area, it all w w w.suppl yc ha i ndi gi ta l. com
C O R N I N G I N C O R P O R AT E D
Breakthrough Innovations 1879: Light Bulb Glass Corning developed the glass encasement for Thomas Edison’s lightbulb and a mass-production process that made them more widely available.
160
1947: Cathode Ray Tubes Corning revolutionized the television industry by inventing a process to mass-produce TV picture tubes. 1970: Optical Fiber Corning developed the very first opticle fiber capable of maintaining laser light signals over significant distances, paving the way for fiber optics in telecommunication. 2007: Corning ® Gorilla® Glass Corning developed a revolutionary glass that’s thin, light, and damage resistant, making it an ideal cover material for consumer electronics.
SEPTEMBER 2019
boils down to people. I have to
few years. “I think we just need to con-
constantly find the right peo-
stantly seek out new innovations and
ple in my organization to help
understand them as much as we can in
drive our collaboration and
order to help embed them into Corning
consortium interests forward,”
and make them work for us,” Kruse
he says. “I will then help to find
concludes. “You have to make technol-
and shape a successor who will
ogy useful for you in order to shape the
continue to drive this forward, adapt
direction you want it to go in.”
to change and modify when required to be changed.” Looking to the future, Kruse harbors clear goals of where he wants his supply chain and collaboration function to be over the next
161
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162
PEPSICO LATAM: DRIVING INNOVATIVE SUPPLY CHAIN OPERATIONS IN A HIGH PERFORMANCE MARKET WRITTEN BY
MARCUS LAWRENCE PRODUCED BY
DENITRA PRICE
SEPTEMBER 2019
163
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PEPSICO
PEPSICO LATAM HAS BEEN UNDERGOING A SIGNIFICANT SUPPLY CHAIN TRANSFORMATION AS THE COMPANY AT LARGE CONTINUES TO STREAMLINE AND OPTIMIZE THE EFFICIENCY OF ITS OPERATIONS
P
epsiCo’s portfolio of evocative household names has a foothold in every major market around the world, and delivering
those products to consumers in the most effective manner possible has become a company-wide 164
strategic imperative. For PepsiCo’s operations in Latin America (LATAM), the centralization of procurement has been an ongoing endeavor for the past several years and the transformation is reaping dividends. As a key region for PepsiCo’s wider balance sheet, optimization of procurement and logistics in the region stands to have a significant impact on success at large. The procurement function is, in effect, essential to the company’s wider growth strategy. When new CEO, Ramon Laguarta, came in last year, there was a refinement in the company’s vision focused on how PepsiCo can become the leader in convenience food and beverages by winning with purpose rather than just performing – and this mentality is central to the company’s supply chain transformation.
SEPTEMBER 2019
$64.6bn Approximate revenue
1898
Year founded
250,000+ Number of employees worldwide
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165
PEPSICO
“ THE FIRM’S STRONG PARTNERSHIP MANAGEMENT IS TIED INTO THE SUCCESS OF ITS NEW FLEET MANAGEMENT CAPABILITIES”
With its LATAM operations accounting for around 11% of PepsiCo’s global revenues, optimizing supply chain and procurement operations in the region is essential for continued growth at both a national and global level. Leveraging relationships with suppliers worldwide is key, along with the capacity to negotiate on a global scale whilst simultaneously servicing and supporting local markets. In 2012, previous CEO Indra Nooyi set a goal of securing $1.5bn in cost savings through streamlining and incrementally upgrading the company’s productivity,
166
SEPTEMBER 2019
CLICK TO WATCH : ‘PEPSICO SUPPORTS RECYCLING IN LATIN AMERICA WITH INNOVATIVE PROGRAMS’ 167 citing the firm’s positive performance
of this ambitious goal. By combining
in the five volatile preceding years
procurement and operations, both
for world economies. “Our goal is to
delivering more cost-effective ways
continue on that earnings trajectory
of purchasing and enabling the supply
over the next five to 10 years, fully
chain with new technologies – such
recognizing that we need to make
as the new fleet management system
changes to the way we operate to
– quarterly productivity has been
address the challenges identified in the
enhanced significantly both on a local
review process,” said Nooyi in a press
and wider level.
statement at the time. “2012 will be
Partnerships have been particularly
a transition year, in which we will be
crucial to the cost-saving strategy, as
taking the appropriate steps to build
more effective relationships can yield
a stronger, more successful company
higher quality solutions at cheaper
going forward.” Latin America, as a
rates. Not only that, but the complex
region, has been vital to the realization
nature of Latin America’s established w w w.suppl yc ha i ndi gi ta l. com
www.volkswagen-commercial-vehicles.com
We transport your future.
Tomorrow’s mobility is what drives us today. Electricity is the fuel of the future – not just because switching to electric vehicles is good for both your business and the environment. Thanks to compact batteries, short charging times and unrestricted access to ultra-low emission zones, you will have a head start in urban mobility. Where will your cars take you in the coming years? Let us be part of your journey.
About Volkswagen Commercial Vehicles: As an independent brand within the Volkswagen Group, Volkswagen Commercial Vehicles (based in Hanover, Germany) is responsible for the Group’s worldwide activities in the area of light commercial vehicles, people carriers and camper vans. This includes the systematic further development, the production and the sale of the successful Transporter, Caddy, Crafter and Amarok model ranges (almost 500,000 sold units in 2018) as well as the development of new vehicle types, (digital) services and (electric) mobility solutions. By doing so, Volkswagen Commercial Vehicles focuses on the individual transport and mobility needs of its commercial and private customers and contributes decisively to their economic success by offering added value for their work, their business models and their everyday lives. Beyond that, the brand is responsible and will set the pace for the strategic future field of autonomous driving for the entire Volkswagen Group, aiming to become the leading company for individual mobility and interconnectedness by 2025.
Mission: we transport success. Volkswagen Commercial Vehicles is fully concentrating its activities on the fundamental changes taking place in the industry and to the changing customer requirements. Therefore, we pursue a clear strategy for our future business – called GRIP 2025+ (Growth, Responsibility, Innovation, People) – allowing us to design the necessary transformation, to stay competitive and to secure the long-term success of our brand.
For all our products and mobility solutions, we aspire to minimize environmental impact along the entire life cycle – from raw material extraction until end-of-life disposal – in order to keep ecosystems intact and to create positive impacts on society. Compliance with environmental regulations, standards and voluntary commitments is a basic prerequisite of our actions. Facing the task of shaping mobility in a cleaner, safer and more efficient way with our vehicles and services, Volkswagen Commercial Vehicles, too, just like the other brands of the Volkswagen Group, is committed to the target of the Paris Summit on Climate Protection, which aims to restrict global warming and to target a fully CO2-neutral balance by 2050, for example. The opinion and feedback of our customers is very important to us. That is why we always work closely together with them when developing new products. In addition, a huge capital employment enables us to consistently push the transformation towards zero-emission mobility. With the all-electric e-Crafter, ABT e-Caddy and ABT e-Transporter (the last two developed together with our strategic partner ABT), our portfolio contains solutions for urban traffic that are already sustainable now. Expected in 2022, the fully electric ID. BUZZ, which has entirely developed anew, will be one of our most important products for the future and is our technology carrier for autonomous driving. In the end, working together responsibly in all areas of the organization, developing and involving enthusiastic and talented employees, and working together as one team with the best partners of the industry are the crucial things that enable us to live up to our promise: we transport success.
For more info on Volkswagen Commercial Vehicle’s Fleet solutions, visit: www.volkswagen-nutzfahrzeuge.de/de/geschaeftskunden/grosskunden/kontakt-international.html
PEPSICO
170
and varied markets necessitates
source locations. The aforementioned
a high degree of expertise on the
regional and intra-regional quirks are
business side to initiate and maintain
similarly vital to consider when it
such relationships. Every country
comes to both partner selection and
has its particularities, so having the
the application of innovative techno-
necessary talent and capability
logical solutions. Driverless vehicles,
to connect with the correct partners,
for example, are not currently viable in
provide the right efficiencies and
places like Sao Paolo and Lima due to
scale relative to different countries
both infrastructural and technological
is essential for PepsiCo’s delivery
limitations. However, these limitations
of its supply chain objectives.
have not prevented the company from
PepsiCo proactively and regularly
establishing a new fleet management
assesses its partners and ensures it
solution in the region replete with
is leveraging the most cost-effective
benefits to productivity, efficiency,
SEPTEMBER 2019
171
logistics, sustainability, driver safety
implications for enhanced sustainability
and more. Focusing on safety and
are a particular boon as consumers
making sure hard braking, hard
around the globe become more
cornering, inefficient acceleration
conscious of the environmental
and so forth are reduced has reaped
impacts of the products they buy.
myriad benefits, improving the
The firm’s strong partnership
employee experience along with wider
management is tied into the success of
ranging results. Beyond safety, the new
its new fleet management capabilities,
fleet management system has a much
too. Leveraging key relationships with
broader reach: the platform pilot is
expert fleet managers to augment its
seeing a reduction of 10% in both
ability to build and deploy customized
idling and travel distance, significantly
systems has enabled PepsiCo to boost
reducing fuel consumption and
efficiency, automatic dispatching,
greenhouse gas emissions. The
roadside assistance, and more. w w w.suppl yc ha i ndi gi ta l. com
PEPSICO
172
“ IT’S CLEAR THAT THE POTENT INTEGRATION OF TECHNOLOGIES AND BLENDING OF THEIR CAPABILITIES HAS BEEN KEY TO PEPSICO LATAM’S SUCCESS”
SEPTEMBER 2019
173
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PEPSICO
174
“ PEPSICO PROACTIVELY AND REGULARLY ASSESSES ITS PARTNERS AND ENSURES IT IS LEVERAGING THE MOST COSTEFFECTIVE SOURCE LOCATION” SEPTEMBER 2019
These efforts have resulted in a 90% reduction in associated administrative work, enabling employees to focus on more fulfilling value-added activities. No single technological solution or platform is responsible for or capable of securing such successes, however, it’s clear that the potent integration of technologies and blending of their capabilities has been key to PepsiCo LATAM’s success. The transport management system is tied into the telematics system, the last mile system, the route planning systems and so on, enabling the best qualities of each solution to be available in the same place. Taking a broader view of business operations, growth of the company at a global level, and the focus on a clear strategic vision are collectively bringing PepsiCo ever further forward as an example of procurement and supply chain operations done right.
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175
176
SIGNED,SEALED & DELIVERED WITH SEALED AIR WRITTEN BY
DAN BRIGHTMORE PRODUCED BY
STUART IRVING
SEPTEMBER 2019
177
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S E A L E D A I R C O R P O R AT I O N
HOW SEALED AIR IS AIMING TO BALANCE ITS USE OF TECHNOLOGY TO INCORPORATE SUSTAINABILITY, COST EFFECTIVENESS, SPEED AND PROTECTION FROM WAREHOUSE TO DOORSTEP
S
ealed Air’s genesis came in a moment of accidental innovation back in 1957. Two engineers, Alfred Fielding and Marc
Chavannes, in Hawthorne, New Jersey, attempted to create a new wall covering by laminating 178
two plastic sheets with air bubbles in between. Although their invention never caught on as interior decoration, it was later discovered as the perfect material for protecting items, starting the pop culture legacy commonly known as bubble wrap. Fast forward to the present day, and Sealed Air’s mission has grown to help businesses succeed across the packaging space in both the food and brand protection markets. “The underlying theme for Sealed Air today is to pick up on the sustainability pillars within the industries we serve,” explains Michael Basagre, NZ 3PL and Fulfilment Sector Leader. Our team specialises in reducing damages, cube optimisation, fulfilment velocity and enhancing the overall customer experience through better packaging design. Our innovation has always been driven SEPTEMBER 2019
179
$4.5bn+ Approximate revenue
1960
Year founded
15,000
Approximate number of employees w w w.suppl yc ha i ndi gi ta l. com
S E A L E D A I R C O R P O R AT I O N
“ THE UNDERLYING THEME FOR SEALED AIR TODAY IS TO PICK UP ON THE SUSTAINABILITY PILLARS WITHIN THE INDUSTRIES WE SERVE”
by the market and the customers. As a result, today’s technology has evolved around those key drivers, challenging us to re-invent how we interact with packaging, whether that be ensuring products of all shapes and sizes arrive safely to its destination or reducing food waste such as meat, fish and produce to achieve a longer shelf life.” Basagre says these innovations range from tabletop devices capable of making packaging on demand such as bubblewrap, to large, fully automated, IoT-enabled machines that require little to no human interaction. “It’s a wide
180
Michael Basagre, NZ 3PL and Fulfilment Sector Leader
spectrum, depending on the industry and the particular customer that it might be appealing to,” he adds. The big challenge for Sealed Air is to continue to meet the changing needs of customers. “With the continued rise of e-commerce, the consumer is now demanding, if not already conditioned to more convenience, such as same day delivery, free shipping and more eco-friendly or sustainable packaging,” says Basagre. “That wave of customer influence is driving us back to the heart of the supply chain to reinvent how retailers and warehouses package their orders with the customer in mind.
SEPTEMBER 2019
CLICK TO WATCH : ‘NEW AIR I.B .® NANO PACKING APPLICATIONS’ 181 We’re trying to break the traditional
share the same forward-thinking ethos.
mentality of the warehousing and
“In particular, the solutions we are
fulfilment centres we deal with. There
seeing today, that are really taking off
has been a focus on traditional
are in that sustainability area.” he says.
processes when it comes to packag-
“Businesses choose Sealed Air
ing, especially in the logistics industry
because our solutions match their
here in New Zealand. However, as the
values as a company. My role has
demands of customers increase such
traditionally been focused on the
as same day delivery, so too does the
backend of that supply chain where
pressure to fulfil those orders, which
packaging meets a person packing an
means non-value-added activity in the
order, but with the rise of sustainability,
supply chain must be carefully reviewed
e-commerce and enhanced customer
with a more customer centric approach.”
experience, my role has very much
Basagre believes customers are now choosing retailers and brands who
shifted towards a more holistic view, a view that connects the person packing w w w.suppl yc ha i ndi gi ta l. com
S E A L E D A I R C O R P O R AT I O N
182
the order with the customer receiving
wrap. The process may look like this:
the order.
the packer goes to a bulky storage
“I now focus on ensuring that the
area to cut and collect this traditional
packaging benefits everyone across
bubble wrap before taking it back to
the supply chain process, and that
the pack bench to wrap around three
means being responsible for communi-
to four times around the fragile order
cating all the health and safety benefits
before taping and placing into a carton.
of our solutions as well as how it will
However, this process can be im-
help drive brand awareness and loyalty
proved by one of our machines that
for a retailer,� Basagre continues. “For
produces bubble wrap on demand,
example, say a customer orders a
called New Air iB. This means it can
fragile item that is prone to getting
easily eliminate the unnecessary
damaged, a packer will aim to protect
process of walking to cut and collect
that order by using traditional bubble
bulky bubble wrap, and because our
SEPTEMBER 2019
film is perforated there is no need for
sufficient for the product it is protect-
a knife, add to the fact that this
ing, meaning it’s not over packed. And,
on-demand Bubblewrap is much
because it was packed much more
stronger than traditional bubble wrap
quickly, the customer has a better
meaning less layers are required to
chance of getting their order in time,
achieve the same amount of protection.
enhancing the unboxing experience
“Overall this improved process
and the overall customer experience
reduces the manual aspect found in
with the retailer.” Such streamlining
traditional bubble wrap, by improving
strikes the right note for sustainability
the packer’s performance and
targets as, from a purely packaging
eliminating the potential health and
perspective, Sealed Air’s innovation is
safety risks such as knife cuts or
focused on helping businesses reduce
fatigue,” says Basagre. “Now, when the
the amount of packaging they use
customer receives their order, they are
without compromising on integrity as
now receiving packaging that is
per the example provided by Basagre.
E XE CU T I VE PRO FI LE
Michael Basagre Michael Basagre prides himself on being able to help others succeed. “Packaging is just a by-product of that conversation,” he says. “If I can have a conversation with a person that allows them to become better versions of themselves, whether that’s using our packaging more efficiently, or providing insights to a better approach to recycling, then that’s what success looks like in this space. If you are genuinely interested in helping others succeed by enabling them to unearth their potential, then the chances that you will succeed becomes greater.”
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S E A L E D A I R C O R P O R AT I O N
Sealed Air’s approach to reverse logistics is also addressing the waste hierarchy, while keeping the company on target to meet its sustainability goals with materials used on demand. “Many of our protective packaging materials can be reused,” confirms Basagre, highlighting the ability to use the same packaging for product returns via the supply chain or re-forwarding orders to other destinations. “What we’re also seeing in the B2B supply chain is this active awareness to reuse our packaging materials
It’s how businesses get along.
Leading the revolution in Distribution Centres to create world class automated warehouse conveyor systems.
185 instead of disposing them. Most of
“ I’VE EXPERIENCED THAT PEOPLE ARE MOTIVATED TO DO THE RIGHT THING, IF ITS ACCESSIBLE AND EASY TO DO”
these solutions are strong enough to be used multiple times in that supply chain whether that is return logistics or reusing for new order.” This commitment to reuse is echoed in Sealed Air’s partnership with Soft Plastics, a New Zealand recycling initiative. “We provide financial assistance around drop-off points so that they can recycle a lot of our soft plastics – our clear mailer bags, bubble
Michael Basagre, NZ 3PL and Fulfilment Sector Leader
wrap bags and protective packaging plastics can be put back through the system to be regrinded, reprocessed, w w w.suppl yc ha i ndi gi ta l. com
S E A L E D A I R C O R P O R AT I O N
and reused to make other plastics. In this particular case, here in New Zealand, it’s being transformed into plastic fence posts by an innovative company called Future Post” says Basagre. “Future post in particular is aiming to replace traditional timber fence posts found in the agriculture industry by converting the plastics into post, which means they minimise plastics ending up in landfill.” Sealed Air also works with Astron Plastics, which regrinds plastic material for much of the New Zealand market. “We send our 186
off cuts to Astron and they reprocess it for us to purchase back, in which we are then able to re-use in our own processing plant here in Auckland,” he says. “We’re trying to ensure we have that closed-loop process as we aim for a more circular economy.” Sealed Air carried out a survey back in 2014 around ecommerce and online orders, and found that 58% of consumers are more conscious about packaging materials than they were five years previously. Meanwhile, 77% of consumers believe that packaging should reflect a retailer’s environmental values. Basagre says the study’s insights drove many back-of-house changes. SEPTEMBER 2019
“Part of my role is to link, the front-ofhouse with the back-of-house operations and make sure retailers are aware of what their packaging is reflecting to their customers and market. I’m finding more and more that retailers are looking for environmentally friendly or more sustainable packaging to meet the growing concern of their customers and the market they serve. Along with helping connect packaging with people, my role is to also help educate and ensure that decisions on packaging materials or processes involving packaging are made with as much information as possible, and that often includes advising decision makers on the trade-offs such as any extra costs, changes to packing process, performance of the packaging materials and of course the environmental impact. I believe it is equally important to understand these trade-offs as much as it is about choosing the right packaging material. What I am finding more and more of is - if the packaging material is too hard to recycle, or the packaging is perceived to not be environmentally friendly, then the chances of it being put through the correct recycling system becomes less w w w.suppl yc ha i ndi gi ta l. com
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S E A L E D A I R C O R P O R AT I O N
TECHNOLOGY
188
“Our technology is seen more as a value add to the entire supply chain as opposed to one element, which is traditionally focused on getting the orders out the door quicker,” says Sealed Air’s Michael Basagre, NZ 3PL and Fulfilment Sector Leader. The company’s e-Cube void-reduction system automatically creates rightsized packaging for a variety of industries – ideal for businesses shipping between 300 and 3,000 boxes per day. The system measures the height of the contents, scores and folds excess corrugated material and then seals the carton. “It takes the guesswork out of the equation for our customers, while reducing the amount of labour required in the packing
SEPTEMBER 2019
process,” adds Basagre. Sealed Air also offers a powerful solution for the high-volume e-commerce market. The FloWrap system produces customised, ready-to-ship, rightsized polybags. The FloWrap automated platform can produce packs at up to 30 bags per minute, “It eliminates human error as the packer doesn’t have to calculate which size bag should I use, the FloWrap enables that for them,” says Basagre. Customers can choose their best match from options including film length, width and height, and length. A powerful solution for the high-volume e-commerce market, the FloWrap system produces customised, ready-toship, rightsized polybags.
likely. I’ve experienced that people are
supply chain, then there will be no raw
motivated to do the right thing, if its
materials for us to recycle.”
accessible and easy to do.” Sealed Air’s 2025 Sustainability and
Collaboration is key to drive educational awareness in the sustainability
Plastics Pledge sets ambitious goals for
area, he believes. “The everyday
recycling, showing the company is keen
consumer is wanting to do their part to
to lead by working towards innovative
help reduce waste, let alone eliminate
packaging solutions that are 100%
plastics waste. So, it’s important that
recyclable or reusable. The challenge is
we also focus on recycling and
to eliminate plastic waste and achieve a
reducing as well continuing to investi-
target of 50% average recycled content
gate and develop more alternative
across all packaging solutions, 60% of
options. We need to bring to light that
which is post-consumer recycled
not all plastics are evil and not one
content. Stressing the difficulty of this,
packaging material is best fit for every
Basagre warns: “If we can’t get
application. For example, if we can
post-consumer plastics through the
extend the shelf life of red meat using
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S E A L E D A I R C O R P O R AT I O N
Sealed Air’s proven Cryovac packaging material, and enable that piece of meat to see another day and increase its chances of being purchased and consumed rather than thrown away, then that to me is being more sustainable. Or, if we can prevent fragile items from getting damaged by focusing on packaging performance, such as stronger protective bubble wrap, then the chances of that order turning up in one piece improves drastically, whereas if the wrong packaging material was used and it ended up 190
getting damaged then that’s the worst sustainable outcome that could happen because now you have to re-send, re-deliver and re-package
is protective paper packaging was
that order which is then contributing
once thought of as a dying breed.
to the carbon footprint.
It’s great that they are trending now
“Yes, the rise of more eco-friendly
because it means consumers are more
packaging is increasing and currently
likely to recycle paper, which means
it tends to gravitate towards paper-
our paper-based solutions are
based options, but it is also important
empowering consumers to recycle
to remember the purpose of the
more often. At the end of the day
packaging material and the applica-
sustainable packaging doesn’t have
tion,” Basagre states. “The great thing
a silver bullet, but it does have good
is we have both plastic and paper
intentions and we are for discussing,
alternatives to help provide brands and
informing and collaborating on the
customers the choice based on values
best packaging solutions”.
and purpose. What’s really interesting SEPTEMBER 2019
Looking to the future, Basagre can
191
see automation becoming more
mental hump that they can transform
accessible to the New Zealand market,
their business using this technology
and not just for the big guys. “SMEs are
without the burden of having to be the
reaching out to us to try and future
a large player to access this technol-
proof their businesses. We’re having
ogy, instead, they can see that our
more conversations now around how
technology could actually help enable
to use technology to build their
them to become the next large retailer,
business, grow their customer base
which is great to see.”
by getting orders out the door more quickly, and become more sustainable. I’m seeing a breakdown in the mindset that automation in the packaging space is exclusive to larger customers. It’s great to see they are getting over the w w w.suppl yc ha i ndi gi ta l. com
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