The Business Profile 2/23

Welcome

Another issue briming with intriguing content.

HEINEKEN’s Regional Procurement Manager for the AMEE region Niels de Gooijer headlines this edition. In a far-reaching interview Niels offers a great overview of how HEINEKEN’s procurement function is creating opportunities for its people and the wider communities it serves. Fully deserving of the front cover position, you can read more in our ‘Leadership’ section.

Atlantic Grupa’s Danijel Banek provides the detail to a procurement transformation that has been 15 years in the making. With supporting content from category management specialists Cirtuo it is great example of the value true partnership can create.

Tomas Šilinikas has spearheaded the development of the procurement function at digital logistics champions Girteka over the past 3 years. He discussed how the business is a big believer in practising what you preach.

SAP’s Venkat Venkataramani explains how the Tech giant is bringing visibility to near and real time. Plus, there is content from CDP on their push to get more companies to disclose environmental data, Logitech unveil how they are advancing circularity goals, plus much more.

Enjoy!

HEINEKENlocalising and leveraging procurement

HEINEKEN’s global procurement function is held up by many as blueprint for how a procurement function should look and feel in a multinational. The key to their continued success seems to lay in the synergy between their people, processes, and HEINEKEN’s global ethos.

Niels de Gooijer has been at HEINEKEN for more than a decade. An analytical leader who has influenced numerous successful programs, it can be said that he seeks the best in himself and everyone around him on a never ending continuous improvement journey. Presently as Regional Procurement Manager for the AMEE region Niels opens up on the dynamics of his function and why more international businesses should invest in the region.

Hi Niels, what is the scope of your role?

Securing supply against competitive pricing and in line with HEINEKEN’s sustainability ambitions is a joint responsibility of global category teams and local procurement teams. In the Africa Middle East and Eastern Europe (AMEE) I am responsible for local procurement teams in 11 out of 15 markets where we produce beer and other beverages. Roughly 50-60% of the spend is sourced by the global teams and the remainder is owned by the local teams.

As regional procurement representative I am also involved in HEINEKEN’s business development in the AMEE region, including our latest acquisition in Southern Africa; Distell.

Your responsibility covers a dynamic region, with many cultural, political, and geographical challenges. In many markets HEINEKEN is also not a main player. This I assume does not open itself to mirrored operations? What does the structure and reporting process look like in your team?

Procurement in HEINEKEN has its global procurement team based in Amsterdam. Here global category teams define global category strategies that cascade to local markets for them to localise and help deliver. Cross OpCo sourcing opportunities are also driven by the global teams. Alongside the categories there are regional teams that functionally manage the OpCo procurement functions. Then there are teams that run commodity risk management and enable future capabilities for the procurement function.

All AMEE teams are headed by a procurement manager, with a team of varying size reporting into them. As their dotted line manager, I work with the procurement managers and their finance directors (solid line manager) to deliver the OpCo and AMEE region objectives. We do so by leveraging and localising the global category strategies and further development of local capabilities to increase functional productivity.

There are many challenges in your territory. What would you point to as the main challenges and how many of these are addressable from a HEINEKEN perspective?

Our production and sales operations in these markets vary in size and number. All these markets are highly volatile, with challenges like steep inflation, hard currency shortage, continuous changes to legislation and in some markets cultural opposition against alcohol.

Conscious development of a more domestic and regional supplier base ensures multiple supply options and reduces the need for foreign currency. This also reduces our dependency on sea-freight, resulting in supply chains with increased agility and less stock in transit. As an additional side effect this reduces and even eliminates complexities involved when transporting across borders. More sophisticated and complex ways of mitigation involve unbundling and upstream sourcing of input materials to enable local supply. This allows HEINEKEN scale to be used on sourcing of these materials as well as the inbound logistics, and then benefit from local conversion.

A great opportunity of doing business in these markets is the local people. In many countries it is only possible for few to attend higher quality education, whereas the majority of the population is less fortunate. By investing in our people, educating them on the job on professional procurement practices they often are in a strong position when working with domestic suppliers.

HEINEKEN prides itself on adding value to the communities in which it operates. A big passion for yourself and responsibility within your role revolves around empowerment. How important to you is it that as an individual and business, you not only empower and upskill your team, but also open opportunities to the wider supplier community?

I am indeed a strong believer in setting up people to use their talent and skills where it adds value and use technology, automation, and standardisation where this frees up human capacity. I use this philosophy in an attempt to elevate the capabilities of local procurement functions. This firstly benefits our business, but people that acquire skills and knowledge can take these home to educate and provide for their spouse, family, and friends. Should they at some point choose to move beyond HEINEKEN they will help other companies thrive with their unique profile with experiences gained in our global company. It does however fill me with great pride that I have supported a number of our AMEE procurement talents who have moved into positions in European OpCos and our Head office.

By working with domestic vendors or those in surrounding countries we develop them to mature their service proposition. This benefits them in more efficiency, more sustainable ways of working and the building of capabilities with their employees. Not only we as HEINEKEN benefit from this but also other customers. Personally, I’d like to see traditional industries that currently supply us from outside Africa make an effort to expand their footprint into Africa.

If we continue to rely on importing materials our markets remain exposed to a multitude of supply chain risks.

So your role as Regional Head of Procurement is not just about getting the best price today, it is also about empowering the right supplier for tomorrow. Often a lack of skills within the markets you operate can force your hand into looking further afield. What opportunities exist for local suppliers and how do you support supplier growth?

With our aim to mature our procurement operations, it has to be an integral part of our agenda to do the same with our supplier base. If we continue to rely on importing materials our markets remain exposed to a multitude of supply chain risks. By continuously assessing the materials and services we import, we

identify opportunities we can unlock by offering HEINEKEN capabilities to suppliers. A recent example is the development of a glue supplier in one of our markets. We used to import this from European suppliers as a finished product. By supporting a local production company with one of our quality experts we enabled the vendor to blend glue with all the right characteristics for our products.

As HEINEKEN holds safety as priority number one, we require any service provider to meet our quality standards and certification criteria. In one of our markets only one welding company was certified, who happened to be owned by a European. Procurement then worked with

Al-Baha Company for Caustic and Chlorine Industry

Al-Baha Company for Caustic and Chlorine Industry (Private Free Zone), is a limited Liability Company that has been established in the Hashemite Kingdom of Jordan, Al-Zarqa Province since 2006.

Al-Baha is a specialized company in Caustic Soda and Chlorine manufacturing and considered as one of the biggest companies in the MENA region in Chlor-Alkali industries. The company has been registered in the Jordan Free Zones Corporation. Al-Baha Company adopted the latest cell technologies bipolar membrane (INEOS Technologies)

Bichlor electrolysis system, which is one of the modern technologies that are

environmentally friendly and preserve the health and safety of workers and community members. Moreover, Al-Baha applies many modern operating systems in the purpose of coping with ongoing industrial developments that secure higher efficiency in operation and lower variable cost. The main systems are Distributed Control System (DCS) Nexus by Baker Hughes a GE company, the Motor Control Center (MCC) is equipped by (ALLEN-BRADLEY). In addition many other reputable companies in the plant Units like, BERTRAMS, THERMAX and SIMENS.

The operating capacity of Al-Baha Company is 93 tons of Caustic Soda per day, according to the highest/international quality standards. The quality of products is analyzed by the company laboratory that is certified by the Jordanian Accreditation System (ISO/IEC 17025:2017) which is awarded by the Royal Scientific Society “RSS”. The laboratory is equipped with the latest laboratory equipment and tools. Al Baha Company always seeks to secure the needs of local markets, neighboring countries and Africa. Therefore, the company owns a fleet to transport their products, which ensures the sustainability of work and accuracy in the delivery time.

Find us at www.bcci-jo.com

Mufeed Khalaf Omar, CEO

BCCI Reputation

Al-Baha Company for Caustic and Chlorine Ind. Is the leading company in the development and manufacturing of advanced Chlor-Alkali products in the Hashemite Kingdom of Jordan, BCCI has earned a well-known reputation throughout the Middle East and North Africa.

The Business Profile | Premier Sponsor

AL-Baha Company and HEINEKEN

AL-Baha Company is proud to supply and collaborate with HEINEKEN throughout Africa & the Middle East. The opportunity of servicing the HEINEKEN network in AMEE is a fantastic launch pad as we seek to expand our business across borders.

Niels de Gooijer – Regional Procurement Manager – AMEE HEINEKEN

“When I first heard about BCCI Chemicals’ 100% sustainably produced caustic soda

in Jordan, we immediately organised for a meet. By using hydro and solar powered technology they can produce caustic soda we need for cleaning our bottles and equipment in a sustainable way, contrary to many of their European competitors that rely on chemical processes and nonsustainable energy”.

Leadership | Heineken

Continued from page 13 a renowned certification agency to help train and certify other domestic welding companies so they can come and work on our sites. This does not only benefit HEINEKEN, but for sure these suppliers and any other customer who will receive qualified welding services safely.

especially when operating in dynamic markets. How successful have you been in achieving this?

By design our markets used to operate autonomous, including planning, risk management and in supplier relationship management. Through the introduction of cross-OpCo end-to-end supply (chain) planning we improved our own demand fluctuations and are better at matching supplier production plans. Now that we use tools for supplier collaboration we still have the benefits of our decentral footprint, whilst collaborating with our supplier base as a united front.

Did COVID force the hand slightly on this endeavour to bring the supplier base closer or has it always been a longerterm plan?

Covid made it a necessity to find alternative supply options, but HEINEKEN has been on a journey that prioritises social responsibility and sustainability way before Covid impacted our supply chains. Our local sourcing programme looking after Barley, Sorghum, and maize crops dates back to way before Covid came into our world and is a great example of how we seek to brew our beverages using local ingredients and package them in re-usable packaging.

Outside of supplier development there is always a requirement to seek innovation and collaboration within the supply chain,

Strong collaboration exists with many of our suppliers to optimise material specifications, reduce CO2 emissions, increase security of supply and improving the conditions for employees in terms of fair wage and safety. With several of our glass bottle suppliers we work on production technologies that allow for lighter, stronger bottles. This provides more production output and lower CO2 emissions both in production as well as in logistics.

Many of our innovation efforts now target reducing the CO2 footprint of our value chain. Therefore, when I first heard about BCCI Chemicals’ 100% sustainably produced caustic soda in Jordan, we immediately organised for a meet. By using hydro- and solar powered technology they can produce caustic soda we need for cleaning our bottles and equipment in a sustainable way, contrary to many of their European competitors that rely on

Through these initiatives we allow domestic suppliers to make an income and extend their service offering to a wider range of companies. This stimulates local economies.

chemical processes and non-sustainable energy. The possibility of servicing the HEINEKEN network in AMEE offered a great opportunity for them to expand their business across borders. We are now looking at expanding BCCI supply into the Caribbean.

Procurement within HEINEKEN has excellent visibility. Procurement in many of the countries you operate does not. What can be done about this?

Several of my markets are small- to midsize operations, where across functions a trade-off has to be made where to allocate resources. Needless to say, business starts with successful sales and producing quality products for our consumers, thus staffing these functions remains priority one. As local procurement does not have an MT seat, the function is often light staffed and aimed at making transactional procurement run smooth and compliant. Capabilities required for more tactical or strategic sourcing tend to be thin or not available at all, causing these operations to fully rely on the global sourcing teams who service 80+ markets. No doubt we are missing out on opportunities that could benefit our operations.

Where many may claim we need more resources in procurement I would argue we need to staff local procurement teams with higher educated and better skilled people. In order to do so we need to elevate job positions to be able to recruit at the right level. When these resources then act as a procurement network across

geographies, I am convinced more value will come from procurement than continuing with the domestic transactional focus. Better utilising technology and data for transactional processes will support this direction. Even considering having the procurement function as a member of the MT will help the business to commercially make better decisions.

Across my markets we are already using a network way of working, where procurement managers jointly define capability development objectives. These objectives are then pursued through an agile methodology, where we learn, share, and reapply across markets. By empowering the teams to set their own priorities I continue to be surprised by their creativity, delivery, and motivation. Some results include a ‘text book’ on how to prepare for and run a supplier visit, or on how to scan domestic and surrounding markets for supply. My OpCos now also have the best e-sourcing statistics in HEINEKEN through consistent ways of working and utilising the system to its full extend.

It’s fair to say you are a strategy man.

During your time with HEINEKEN you have been involved and led many projects. What is the long-term strategy for procurement in your territory? What do you foresee as the primary barriers to the advancement of the strategy? If we were to speak again in 18 months, what would you have liked to have achieved?

The development of a supplier base for raw, packaging and production materials with

increased domestic and regional suppliers performing alongside our global partners I view as pivotal for sustained operations in Africa. This requires our global procurement teams to continue setting category strategies and to leverage our scale for cross-OpCo sourcing. Our global suppliers should dare to invest in the region, where HEINEKEN can reduce the risk on these by positioning itself as preferred client.

To strengthen the power of the global teams I believe in establishing a network of regional procurement talent that operates from various geographies. By leveraging talent from one market into another I am sure we can drive new sources of value, whilst growing capabilities within our OpCos and suppliers. This will also strengthen the relationship of procurement with our production and sales functions, who are in need of procurement to act as an equal business partner.

18 months from now we will see further tangible developments in localising our supplier footprint in Africa, reducing our supply risks, and supporting our journey towards becoming a more sustainable business. I’m convinced initiatives like we have with BCCI Chemicals is a first of many. AMEE procurement teams will have improved capabilities, where there is a visible shift from transactional procurement to tactical and strategic procurement. For me personally the above can only be called a success if we have visible exciting people moves from AMEE into other markets, spreading the great work we do in Africa into wider HEINEKEN.

Last but very much not least, I will be having the pleasure to join the HEINEKEN Ethiopia team as their Head of Procurement. In 18 months I will be able to brief you on all that is happening in one of HEINEKEN’s fastest growing markets.

22 | Procurement & Supply

Procurement Chain

Atlantic Grupa Offsets Industry Challenges Thanks to a Transformation 15 Years in the Making

While notions of adaptability and agility have become even more pressurised in recent years, Atlantic Grupa had a slight head start on many competitors having already laid out its digitisation roadmap long before. Recent cost and materials challenges have inevitably made life more difficult, but the company’s procurement organisation - headed by Danijel Banek, Executive Director of Central Procurement - remains resilient thanks to strong supplier relationships and a dynamic culture.

Hi Danijel. I understand you’ve been with Atlantic Grupa for 15 years now – how would you assess the journey so far?

Atlantic Grupa was founded in the early 1990s as a distribution company with

only six employees, before expanding at the beginning of the 2000s through acquisitions of food and beverage production companies. I joined at the beginning of 2008 as, by the end of the same decade, it had already reached a critical size to require a Central Procurement department within the company. From a blank canvas, I was tasked with organising the newly internalised Central Procurement team. A decade-and-a-half later, I’m still in that role as Executive Director of Central Procurement, now leading a mature and experienced procurement organisation that has grown and developed together with the growth and development of the company.

Of course, your experience in procurement dates even further back than these 15

Offsets Challenges Transformation Making

years. Have you ever witnessed industry challenges like those faced since the pandemic?

My first contact with the procurement profession dates back to the end of the ‘90s and in the 25 years since, I do not remember being faced with so many different, huge challenges in such a short period of time. Supply chain challenges brought about by the outbreak of the COVID pandemic were followed by shortages of many goods and services as a result of reduced supply that could not cope with growing demand.

As if all that was not serious enough, geopolitical tensions and a terrible war in the heart of Europe has followed, leading to an explosion in the prices of goods and

services. In the middle of last year, the prices of certain commodities reached doubled or even triple the prices seen at the end of 2020. In the past six months, those prices, including for energy, have reduced slightly, but are still ultimately high.

Finally, our industry - like many others - is also facing a labour shortage. Taking all of this into account, we can undoubtedly say that the industry has been operating in the conditions of a perfect storm for the past three years, with the potential to have a hugely negative impact on business performance.

How has Atlantic Grupa looked to weather the storm and reduce the subsequent risks?

My first contact with the procurement profession dates back to the end of the ‘90s and in the 25 years since, I do not remember being faced with so many different, huge challenges in such a short period of time.

Danijel Banek

The accumulation of out-of-stock situations, cost increases, and a forthcoming recession more recently, have led to a drop in private spending and purchasing power among customers. We have naturally had to adapt as a consequence, with greater procurement dynamism a priority.

First, from a risk management perspective, and to mitigate the challenges being faced, we switched to monthly - rather than quarterly - risk detections and assessments, while also expending the scope of these risk assessments, from tier 1 suppliers, to the whole upstream supply chain.

At the same time, we also introduced advanced technologies based on artificial intelligence (AI), which have enabled us to perceive a much wider portfolio of risks in a shorter time, using the minimum necessary resources for each activity.

We regularly share information about all significant risks that we detect in this way with all important stakeholders. Likewise, we define risk mitigation activities together with them and work jointly to minimise the impact of these risks on our business.

More specifically, how have you looked to combat the dramatic pricing fluctuations?

We have adjusted the specifications of some production materials, and raised material stocks in order to prevent shortages or rising prices of these materials. More broadly, in times of high

price volatility of most commodities, there has been a need to continuously monitor procurement markets and price movements.

With the help of adequate tools and technologies for predicting price movements of these commodities, we were in a position to react relatively quickly, to prevent further increases in purchase prices by timely hedging. However, all of this would not have been enough without good management of supplier relationships.

During the period of a typical seller’s market like we had two years ago, it was extremely important to be the customer of choice to our suppliers who often had to choose which of their clients they would deliver their products to, as there were not enough to satisfy the needs of all customers. Now, with this time lag and in a situation where procurement markets are mostly normalising in recent months, we can say with great certainty that it is the excellent and open relations with our strategic suppliers that have led us to a largely uninterrupted supply chain even in the most rigorous of conditions.

As a result, we have been able to supply our customers with sufficient quantities of our products.

You mention the importance of relationship management there. Do you have any examples where this close collaboration has really helped to mitigate recent challenges?

I’d like to highlight our packaging suppliers in particular, as they too have struggled with the challenges of securing sufficient materials, with the costs of those materials, and with their own labour shortages. Even still, they have regularly supplied us throughout.

Whether it is the supply of metal packaging from Eviosys, or PET packaging from Alpla, they have been real examples of management excellence, crisis aversion and partnership fulfilment. In such challenging times, they never left us without deliveries for even a single moment. This is especially significant when we know how difficult it is to predict the needs of our customers

recently, and therefore plan deliveries effectively. The operational teams made up of representatives of our suppliers and our procurement organisation did an excellent job; while Eviosys, Alpla and our other suppliers matched our level of flexibility and timeliness throughout.

How does technology fit into this adaptability effort? You touched upon AI, but presumably this is part of a much broader digitisation initiative?

Our digital transformation roadmap was actually created a few years before the COVID outbreak, shooting into two primary directions.

The first relates to strategic tactical procurement activities such as category management, supplier management, risk management, contract management and spend management. The second was targeted towards to the use of technology in the automation of operational procurement activities such as ordering, invoice management and preparation for payments of invoices.

Before introducing new technologies, we conducted a comprehensive business process redesign project where we first mapped all existing processes within the company and analysed areas of potential efficiency improvements, and the removal of gaps or overlaps across processes. After that, we looked at which technologies and tools would help us improve these processes and give them an additional quality, while reducing the need for human interventions in the field of operational work. As far as procurement is concerned, we clearly recognised the need to introduce a procure-to-pay tool to support operational procurement processes, which until then were quite manual.

Despite the outbreak of the COVID crisis, it was at that time that we started implementing the selected procure-topay tool, but rather than simultaneous deployment across all countries and operating companies within Atlantic Grupa, we enacted more of a phased rollout. In this way, we could react and fix any issues that arose, with each implementation then becoming more robust and advanced.

How responsive and positive has the team been to this period of digital transformation?

It was clear to us that the implementation of new digital tools couldn’t take place unless it was accompanied by appropriate change management. It was very important to us that satisfied users of these tools and processes, who are not from the purchasing organisation, would spread information about their satisfaction with the newly implemented processes, and that they would act as kind of brand ambassadors for these changes.

That being said, the transition was made easier by the fact that digitisation has been occurring within the business for around 15 years. We started then by digitising the tactical element of procurement activities such as category management (integrating both supplier and supplier relationship management). We implemented a tool that, at first, helped us to create a digital record of our view of procurement categories to facilitate optimal strategies that maximised the value of procurement category management. The tool was created by a Croatian-Austrian company (then, startup) called Cirtuo who sought to continuously improve the tool and its functionality.

In the meantime their tool integrated many advanced functionalities that enabled a structured approach to category management, and a simple sharing of information within the purchasing organisation, as well as with a wider base

Procurement is at a turning point. Pandemics, natural disasters, war, increasing inflation, rising interest rates, soaring prices, political instability, and talent shortages continue to send ripples through global supply chains, creating the perfect storm for Procurement. While some saw it coming, most have not.

Organizations with strong category strategies that balance risks and opportunities have weathered the storm better than their peers. While they have no crystal ball, an established category management methodology and process increases organizational resilience through identifying and mitigating risks, diversifying the supplier base, and identifying cost savings opportunities. But Procurement still heavily relies on disconnected tools and information to manage their core competence, which makes responding to challenges cumbersome and inefficient. Therefore, category management is at a turning point, too.

Cirtuo is pioneering the digitalization of category management and category strategy creation in Procurement. Based on the original consulting blueprint for category management and refined in countless workshops with clients, Cirtuo distills the insights from hundreds of category strategies across global and local procurement organizations and spend categories into a digital consultant: Cirtuo Guided Strategy Creation™.

Organizations such as Atlantic Grupa are developing category strategies tailored to their internal demands, business requirements, and external market developments with the help of Cirtuo. Through the integration with market intelligence provider Beroe, Procurement teams have access to external insights on nearly 2000 categories, over 3.5 million discrete data elements, cost breakdowns, and real-time intelligence on market and price movements throughout the strategy creation process.

The Cirtuo Guided Strategy Creation™ platform allows category managers to utilize information effectively by contextualizing it within the strategy development process. The systematic and standardized approach to category management combined with AI-powered recommendations increases the agility of category managers and the quality of their category strategies. This way, they can respond to changing market developments quickly and achieve their goals during volatile times.

Strategic category management makes Procurement the real differentiator for their business and their stakeholders. While objectives for strategies vary, from risk management to supply chain continuity, supplier relationship management to supplier innovation, ESG compliance to supplier diversity, or organizational efficiency to cost savings, the structured framework combined with efficient and intelligent technology is the key enabler for successful Procurement teams.

While formal category management has historically been in PowerPoint and helped mostly large and mature procurement organizations to keep their teams ahead of the curve, Cirtuo’s Guided Strategy Creation™ platform simplifies and democratizes the creation, management and tracking of winning category strategies. The unique combination of guiding questions, external insights, and AIpowered recommendations allows organizations of all sizes to harness the benefits of digitalizing their strategic procurement processes. With this, category management moved beyond its turning point. It is time for Procurement to do the same.

Procurement & Supply Chain | Atlantic Grupa

Continued from page 29 of internal stakeholders. This later ushered in the use of AI – complex algorithms that would help to more accurately define optimal procurement strategies, which they called ‘Guided Strategy Creation’ technology.

I am sure that, as time goes by, procurement category managers and procurement professionals in general, with the growing use of advanced digital technologies, will increasingly feel like pilots in the cockpit of modern airplanes. In them, once adequate parameters or data are entered, the technology does a lot and could actually manage everything almost independently. However, the control stick is still in the hands of the pilot who has the opportunity and often the need to choose the direction, altitude and speed that they believe will bring the aircraft and passengers to the desired destination safely and quickly.

I have already mentioned that a good part of the success of procurement organisations lies in the quality of relationships with suppliers, and this is an area where, for a long time, and perhaps forever, social rather than technical or artificial intelligence will dominate.

How do you foresee the relationship between ‘man and machine’ evolving from this point, within Atlantic Grupa?

AI is now a big part of our organisation. In addition to our category management evolution, we have recently introduced a tool that, powered by AI, scans

thousands of announcements, news reports and other data sources about our suppliers and purchasing categories on a daily basis.

Based on the risks identified, the tool is able to provide a quantified assessment of the manifestation of these risks on our business. Also, we regularly use several digital tools for monitoring and forecasting commodity price movements - the estimates of which we use when making decisions about hedging production materials and energy.

With each new implementation, we know it won’t have its full effect if we don’t have people who know how to use these technologies and who have the capacity to co-develop these tools with the vendors, by setting continuous requirements for their refinement and improvement. In this sense, we also had to make certain organisational and personnel adjustments to raise the level of competence, motivation and general openness around the use of technology within the procurement organisation.

This process actually never ends but represents the continuous development of our people and organisation, which we carry out by occasionally bringing in people from outside, or ideally through permanent education and competency raising of existing employees. The great thing is that most of the new employees of the younger generation bring with them an innate curiosity and inclination to use digital technologies.

The onus is on us to match this curiosity and to satisfy their appetites for advanced digital technologies.

Presumably that’s where you come in, in creating a culture that blends the best of both manual and automated inputs?

The overall concept of ‘culture’ was actually discussed during Atlantic Grupa’s most recent Annual Management Meeting, and it’s a difficult thing to define.

Thanks to the fact that the purchasing function interacts with absolutely all functions and parts of the company, as well as the fact that purchasing performance affects the company’s financial results

more than any other, the purchasing function has truly become the core function of any company.

Therefore, today’s leadership in procurement must simultaneously focus on creating a procurement function that attracts the best talent, while also improving existing employees. This requires leaders to sell a compelling vision of what the procurement function of the future will include. It means enabling the best people using the best technologies to support optimally set processes. It means visualising a department that has its reputation earned through an excellent track record, top performance, and high professional and ethical standards by which it is guided.

Instead of coming up with a specific definition, we agreed that corporate culture is depicted through a series of elements that make up the experience of our employees. This includes the way colleagues from the company greet each other when they meet in the hallway, through the music that is played in the corporate cafe or in employees’ offices, through the way in which employee meetings are conducted and various ideas and proposals are discussed, through the celebration of small and large results of the company or individual departments, or also through the way less favourable results are discussed and dealt with.

These symbolic gestures, dynamics and problem-solving capabilities are inspired and encouraged by diversity and democracy. We encourage democracy in the expression of views so that the best ideas and proposals, regardless of who and where they come from, always get a chance to be realised. We are also ready to accept mistakes that were made with the best intentions, and from each situation we try as an organisation to learn something and draw certain lessons. We consider ourselves a stilllearning organisation and every employee has the opportunity for personal growth and development together with the development of the company itself.

Attributes such as being curious, open, informal, creative and inspiring are the ones that best describe Atlantic Grupa and our corporate culture.

More generally, how significant has the procurement function become in dictating and protecting the overall performance of Atlantic Grupa?

Procurement organisations generally manage costs that sometimes amount to 60% of a company’s income. At times of high price volatility, there is an exceptional opportunity to create a competitive advantage for your company through the optimal timing of contracting goods and services… ‘hedging’, as we call it.

One of the most important tasks of such a strategic function is the protection of the company’s planned business results - ensuring the company’s profitability and liquidity. However, it is often forgotten that procurement organisations in times of shortages of certain goods on the market, by ensuring the continuity of deliveries, actually enable sales and directly affect the top-line results of the company.

In this regard, I think that in the procurement organisation of Atlantic Grupa we can be very satisfied that we managed to enable our company to achieve stable sales growth even in times of hard lockdown, when it was really not easy to secure all goods and services.

That being said, there are very few companies from our industry - food and beverage production - that have been able to achieve operating and net profits equal to results from recent years, and Atlantic Grupa is no exception.

These symbolic gestures, dynamics and problem-solving capabilities are inspired and encouraged by diversity and democracy. We encourage democracy in the expression of views so that the best ideas and proposals, regardless of who and where they come from, always get a chance to be realised.

Procurement & Supply Chain | Atlantic Grupa

I would have liked if, despite all the difficulties, we had been able to maintain the financial performance from that earlier period, but unfortunately this was not possible due to our intention not to pass on all cost increases to our customers and consumers.

We certainly wish to return to the results that we regularly achieved over the year to come, hoping that the market circumstances and supply market conditions will allow us to do so.

Speaking of those ‘years to come’, what are your overriding ambitions looking forward?

When we formed Central Procurement a little more than 15 years ago, we set ourselves the goal of becoming one of

the best procurement organisations in Central-Eastern Europe over the next 10 years.

In 2015, in the middle of that timeframe, according to the criteria set by the European Institute of Purchasing Management (EIPM) based in France, we were pronounced the purchasing organisation of the year in all of Europe. External awards and recognitions are always important, but it is equally important how our own company perceives us as a purchasing organisation - how much trust it has in it and how satisfied it is with the business support and the realisation of business requirements.

What motivates us most is the fact that this trust in our purchasing organisation has not been lost even during the period of the past three years where the entire company has been operating in extremely challenging circumstances, and when the bottom-line results of the company could not be secured at previously familiar levels. This trust of the company and its management motivates us hugely, and obliges us to continue working and developing even faster and more dynamically in the future.

We enjoy the responsibility, as a purchasing organisation, of building and developing a procurement function based on positive, equal and inclusive values. Moreover, we enjoy the responsibility of being an important differentiator within the wider company – a differentiator that creates visible added value for the Group and its customers.

Girteka - championing digital logistics

We caught up with Girteka’s Tomas Šilinikas who over the past three years has spearheaded the development of the procurement function in line with Girteka’s digital logistics ambitions. Trials, tribulations, and a lot of success in between Tomas offers the detail and acknowledges the value of collaboration in achieving success

Hi Tomas, you have spent the majority of your career in Sales. How did you end up in Procurement?

Throughout my career, I have always been drawn to new challenges and opportunities to push myself beyond my comfort zone. I’ve had the pleasure of working in a variety of industries, from the fast-paced world of commodity trading to the dynamic realm of e-commerce. Each experience has taught me valuable skills and allowed me to expand my knowledge base.

I took on the head of procurement, which has been an incredibly rewarding and stimulating experience. I’ve had the opportunity to dive deep into the intricacies of supply chain management and negotiate complex deals with

suppliers from around the world. It’s been a fascinating journey so far.

But I don’t plan on stopping there. As someone who is constantly seeking out new experiences, I’m always on the lookout for the next exciting opportunity to learn and grow. Whether it’s in my professional life or personal endeavors, I’m committed to pursuing a life full of color and vibrancy. Hence my move into the Trade Marketing Director from January 2023.

Typically the relationship between sales and procurement functions is not always the most cohesive. What tools and knowledge gained in previous sales based experiences do you feel have stood you in good stead for the transition into procurement?

championing

You are right that the relationship between sales and procurement can sometimes be a bit challenging. However, I believe that my previous experience working in sales has been incredibly helpful in my transition to procurement.

One of the main advantages of having a sales background is that it has given me a deep understanding of the sales process from start to finish. I have a strong grasp of what motivates buyers and what it takes to close deals. This has been invaluable when it comes to negotiating with suppliers, as I am able to see things from their perspective and understand their needs and goals.

Additionally, my experience in sales has taught me how to effectively communicate

and build relationships with clients. This skillset has translated well into procurement, as it has allowed me to build strong partnerships with suppliers and work collaboratively with them to achieve mutual goals.

Finally, I think one of the biggest advantages of having a non-procurement perspective is the ability to question and challenge existing processes and procedures. Sometimes, when you’ve been working in the same field for a long time, it can be easy to become complacent and accept things as they are. However, coming from a different background has given me a fresh perspective and a willingness to think creatively and approach problems from different angles. This has allowed me to identify inefficiencies and areas

for improvement within the procurement process and implement changes that have resulted in cost savings and increased efficiency.

Overall, I believe that my sales background has given me a unique skillset that has been incredibly beneficial in my transition to procurement. It has allowed me to view processes and procedures with fresh eyes and approach problems from a different perspective, ultimately leading to more effective procurement practices.

You joined Girteka in 2020 as Head of Procurement. What did you inherit and what was the remit?

When I joined Girteka in 2020 as Head of Procurement, I was faced with the challenge of transforming a bare-bones function into a sophisticated and efficient department. The company had been operating without a strong methodology, analysis, or understanding of negotiations. It was clear that a lot of work needed to be done to create a robust procurement function.

My remit was to build a team of procurement professionals and drive transformation across the department. This meant implementing new processes, tools, and techniques to improve methodology and efficiency. One of my first tasks was to create a methodology from scratch to calculate how efficient we were in procuring fuel, ferries, and other categories compared to the market, competition, and ourselves. We also needed to establish a system for calculating tangible benefits to the company.

As Head of Procurement, I was responsible for overseeing the entire procurement process, from identifying suppliers to negotiating contracts and managing relationships. I worked closely with other departments to understand their needs and requirements and ensure that procurement was aligned with the company’s overall strategy. I also had to ensure compliance with regulatory requirements and manage risks associated with procurement activities.

To drive transformation and improve methodology, I implemented new tools and technologies to streamline processes and make them more efficient. I also invested in training and development programs for my team to ensure that they had the skills and knowledge necessary to excel in their roles. By focusing on these areas, we were able to create a strong and effective procurement function that delivered tangible benefits to the company.

Overall, my role as Head of Procurement was to drive transformation and improve methodology across the department. By building a strong team and implementing new processes and tools, we were able to create a robust procurement function that delivered real value to the company.

Girteka has operations and presence across a diverse geographical area. What are the complexities of this geography and how is procurement structured to reflect this?

Tomas Šilinikas

Girteka has a vast geographical presence, which presents many complexities for procurement. When it comes to structuring procurement to reflect this, one of the key decisions I had to make was whether to centralize only sourcing or the entire supply chain. Given the size and diversity of the company’s operations, it quickly became clear that it would not be feasible to efficiently procure and deliver everything to stakeholders.

After careful consideration, we decided to centralise the sourcing part of the procurement process. This involved gathering demand, consolidating it, finding suitable suppliers, negotiating contracts,

and controlling the execution of those contracts. By centralizing this function, we were able to achieve greater efficiency and economies of scale. It also allowed us to standardize processes and procedures, which was important for ensuring consistency and reducing risk.

To support this centralised sourcing function, we also started implementing SAP in procurement. This will help us to control and manage the operation more effectively, and to gain greater visibility into the procurement process across the entire organization.

Overall, the procurement structure at Girteka consists of a central team

operating in a Competence Centre, which supports all of the company’s operations in the sourcing function. This structure allows us to achieve greater efficiency and standardisation, while also ensuring that procurement activities are aligned with the company’s overall strategy. Of course, there are still challenges associated with the company’s diverse geographical presence, including geopolitical challenges, but we are confident that our procurement structure is well-suited to handle these complexities.

Girteka is determined to drive the digital logistics agenda. Your role in driving the improved methodology and

automated digital processes within the supply chain is vital. How are the ongoing transformation and subsequent implementations progressing? What other digital milestones has Girteka achieved in recent years?

One of the key ongoing transformations we are currently undertaking is the implementation of SAP, which will allow us to consolidate all our procurement data and processes into one system.

This will provide us with greater visibility and control over our supply chain and help us to optimize our operations for greater efficiency and cost savings.

DKV Mobility

DKV Mobility is the leading European B2B platform for on-the-road payments and solutions.

GIRTEKA LOGISTICS has already experienced the benefits of DKV BOX EUROPE, one of DKV Mobility’s products. Single toll box for eleven European countries.

The DKV BOX EUROPE supports EETS, the European Electronic Toll Service, making it seamless and convinientfor road users to pay tolls while driving through Europe with a single device and a single contract partner. In addition, the plug-and-play installation, automatic billing and convenient operating functions ensure maximum time savings.

www.dkv-mobility.com/en

Overall, Girteka is committed to driving the digital logistics agenda, and we are making significant progress in this area. Our ongoing transformation and subsequent implementations are progressing well, and we are excited about the opportunities that digital technology presents.

In addition to this, we have already achieved several digital milestones in recent years. For example, we have automated the refuelling process for our trucks using a mobile app, eliminating the need for fuel cards and streamlining the entire process. We have also implemented digital route planning, which has helped us to optimize our delivery routes and reduce our carbon footprint.

Another achievement that we are proud of is our focus on data analytics. We are constantly gathering data on our truck operations, including fuel consumption, route efficiency, and other key metrics. This allows us to analyse the data and identify areas for improvement, ultimately leading to greater efficiency and cost savings.

Overall, Girteka is committed to driving the digital logistics agenda, and we are making significant progress in this area. Our ongoing transformation and subsequent implementations are progressing well, and we are excited about the opportunities that digital technology presents for improving our supply chain methodology and delivering greater value to our customers.

Girteka’s digital ambitions and achievements do not just sit within the company, there is also a driving ambition to facilitate the supply chain in embracing these practises and in turn improve and empower the logistics sector. Why is this important to Girteka?

At Girteka, we understand that our digital ambitions and achievements can have a

wider impact on the logistics sector as a whole. This is why we are committed to facilitating the adoption of digital practices and technologies within our supply chain, empowering our suppliers to improve their own operations.

There are several reasons why this is important to Girteka. Firstly, by sharing our expertise and technology with our suppliers, we can help to create a more efficient and streamlined supply chain. This can ultimately lead to cost savings for all parties involved, as well as greater sustainability and reduced environmental impact.

For example, in the future, we could explore the possibility of sharing our digital fuel card technology with our partners,

allowing them to benefit from the same streamlined refuelling process that we have implemented for our own trucks. This could help to reduce administrative burdens and improve efficiency across the entire supply chain.

Secondly, by facilitating the adoption of digital practices within our supply chain, we can help to create a more level playing field for our suppliers, particularly smaller companies who may not have the resources to invest in digital technology themselves. This can help to promote fair competition and ensure that all suppliers have equal opportunities to succeed within the logistics sector.

Overall, Girteka is committed to driving digital innovation and adoption within our

supply chain, and we believe that this is not only important for our own business, but for the wider logistics sector as a whole. We will continue to explore new ways to share our expertise and technology with our suppliers, and to work together to create a more efficient, sustainable, and fair logistics ecosystem.

How would you say procurement was perceived internally when you joined? Has this perception changed over time?

Over time, we have managed to change this perception and show our value to the company. By implementing strong procurement processes and methodology, we have been able to deliver significant savings to the company. We have also successfully completed several projects

that have had a positive impact on the company’s bottom line. As a result, people have started to see procurement as a strategic function that plays a crucial role in the success of the company. Our consistency in delivering results has also helped change the perception of procurement from being a weak administrative function to a valuable and respected department. Overall, we have made significant progress in changing the perception of procurement within the company and we will continue to work hard to maintain this positive reputation.

How vital have creating aligned strategic partnerships with key vendors been to the overall change in how procurement performs and is perceived?

Aligning with key suppliers has been crucial to our success in procurement. By working closely with our major fuel suppliers, we have aligned our long-term visions to expand our network, set price levels, and decarbonize our operations. We also discuss the construction of new refuelling stations and what facilities they need to have for our drivers. Our IT providers and digital refuelling partners also work closely with us to align on product launches and other IT products we need.

Moreover, with ferries, it’s essential to agree on future routes, our needs on those routes, and our long-term vision. We have even gone as far as discussing chartering a ferry ship solely for our operations, but due to the war in Ukraine, those plans had to be changed. These examples show

the importance of strategic partnerships with key vendors in driving success in procurement. By working together, we can ensure that our needs are met, and our operations are efficient and effective.

The logistics industry is constantly under scrutiny from a sustainability perspective. How is procurement influencing Girteka’s sustainability ambitions?

As a procurement department, we play a crucial role in facilitating communication with our suppliers to understand what they can offer and in turn, offer their solutions to our business. We also work closely with our customers to identify their needs and find ways to meet them. Our primary focus is on finding the best alternative fuels that are both environmentally sustainable and

competitively priced. This helps us stay competitive in a market that is moving towards decarbonization, and we explore a range of options, including HVO, bioLNG, bio-diesel, and more.

You joined the business at the start of 2020 and unbeknown to yourself an unprecedented time globally. What challenges did this offer and what has the trials and tribulations of the past three years taught you about yourself and Girteka?

Joining Girteka at the start of 2020 presented unique challenges due to the unexpected and unprecedented COVID-19 pandemic. As a result, there was an urgent need to quickly adapt to the new realities and ensure business continuity. We had to navigate through various challenges, such as supply chain disruptions, travel restrictions, and changes in customer demand. These challenges required us to be agile, flexible, and innovative in finding solutions.

Over the past three years, the trials and tribulations have taught me the importance of resilience and adaptability. As a procurement leader, it’s essential to stay up to date with industry trends and innovations to ensure we’re always ahead of the curve.

Over the past three years, the trials and tribulations have taught me the importance of resilience and adaptability. As a procurement leader, it’s essential to stay up to date with industry trends and innovations to ensure we’re always ahead of the curve. Additionally, it has shown me the importance of having a strong team and the value of collaboration in achieving success.

Furthermore, these challenging times have demonstrated Girteka’s commitment

to its employees and customers. The company was able to adapt quickly to the changes brought about by the pandemic and remained focused on delivering high-quality services to our customers. It has reinforced the company’s culture of agility, innovation, and customer-centricity, which are essential values in today’s fast-paced business environment.

Harmonising a global procurement function

Maxam is one of the largest explosives manufacturers in the world. Present in 40 countries with more than 60 industrial facilities the business is focused on applying all of its talent, energy, and knowledge to the mining and civil engineering sectors at any time anywhere. This year celebrating its 150th Anniversary, like any business with this history Maxam has continuously evolved. We spoke with the then Head of Procurement at Maxam – Carlos Acha Garcia-Noblejas, who played an integral role in centralising the procurement function in the most unprecedented of times.

Carlos, what does your responsibility as Head of Procurement cover?

We currently negotiate in the Corporate

Purchasing team and its subsidiaries, more than €250 million across Raw Materials, Services and Capex.

We have a team of 6 people located in Madrid, divided by categories, which makes it easy to reach suppliers and meet the needs of our subsidiaries.

With two main plants in Spain, 35 in total, and representation in 150 countries and as the 4th largest explosives manufacturer in the World, Maxam has a considerable footprint. How is procurement structured to handle the complexities that must exist considering your presence across such a diverse area?

We really operate in 59 active sites, spread across 7 regions.

As you say, this really is a challenge in terms of atomising our locations and getting raw materials to our destinations.

More than 75% of our contracts are negotiated globally, with suppliers who can cover more countries geographically. Given the degree of geographical dispersion we have there is a requirement for categories to stay away from reliance on one or two suppliers to ensure security of supply.

In addition, we have distributors of raw materials that help us to supply in those countries where the purchase volumes are lower, and where certain product categories cannot be delivered directly by the manufacturer.

The unprecedented global supply chain challenges of the past 2 years have caused

headaches for many procurement and supply chain functions. How has your function adapted during this time to mitigate risks and maintain continuity?

Fundamentally, we have based all our efforts on ensuring that all our plants worldwide do not suffer from a lack of raw materials supply. New suppliers have been sought who could supply the main raw materials in time so as not to stop any production that could affect commitments to our customers.

We had to create a system to manage the most critical raw materials, ensuring there were alternative suppliers in case is of supply challenges. Everything was monitored from Spain, supporting all plants globally..

Carlos Acha Garcia-Noblejas

Did the supply chain challenges caused by covid result in a review of your processes and proposed implementation of new practices?

Honestly, we have tried to implement, fundamentally, tools of analysis of market indices, evolution of raw materials and services.

The post Covid era was very complicated when it came to being able to travel freely around the world, analyse new markets and look for new suppliers, so these type of tools have allowed us to analyse many critical points from a different perspective.

Maxam has typically grown via acquisition. This growth pattern can cause issues as the legacy of previous systems and processes are not always compatible. What has been done to rectify this?

In fact, since my incorporation in 2017, that has been the goal. Harmonising and homogenising the entire purchasing system of the company globally.

There have been (and still are) many years of trips to our subsidiaries, meetings, formations, to be create alignment and a common strategy.

Times change and company structures change. But the process of centralisation from 2016 to 2021 helped that today, due to the changes of world order that was created by Covid, we can have the peace of mind that our regions and subsidiaries, follow the same purchasing management system.

The emphasis on procurement is to work strategically with key suppliers and leverage relationships. A vast majority of your spend is within commodity-based products. Does this limit the opportunity to work strategically or has Maxam managed to forge long term strategic relations?

Absolutely. In the end, it’s all about relationships. Whether it’s with suppliers or customers. As you say, this has allowed us to move forward with suppliers who have supported us (and continue to do so) despite the difficulties experienced for two years to this part.

Never in my professional life have I experienced a pandemic, an inflation like the one we are witnessing, much less a war in Europe. All this has meant that our main suppliers have wanted to be at our side and support us, while, from Maxam, we have recognised the issues with pricing in the markets and factored this into our activities. Today, in 2023, we are reaping the fruits of that work.

Never in my professional life have I experienced a pandemic, an inflation like the one we are witnessing, much less a war in Europe. All this has meant that our main suppliers have wanted to be at our side and support us, while, from Maxam, we have recognised the issues with pricing in the markets and factored this into our activities. Today, in 2023, we are reaping the fruits of that work.

What have the supply chain challenges of the past years taught you about your function, the business, and of course the value of supplier relations?

I think we have learned to consider and try to control what is not even in our hands. That is, think beyond what is always possible and try to think about what may be impossible, because sometimes it happens.

Anticipate possible market contingencies, act quickly.

Would you say procurement is perceived differently now to what it was in 2019?

No doubt. Before 2019 there was a time of great price decreases, of need to do business and bill, so both suppliers and buyers lived a sweet time in shopping, with large price decreases and the possibility of reaching agreements in the medium and long term.

We have spent several years where that was unthinkable. Manufacturers demanding advance payments, inability to secure purchase volumes and, worst of all, no guarantees to transport raw materials.

Today the market has changed again. The logistics has adapted and reduced its cost and the suppliers are again wanting to take out, somehow, the stock that remained in their warehouses for the causes we have commented before.

Sustainability

Over 1600 non-disclosing high-impact companies share environmental data 300 leading financial institutions

n A record 288 financial institutions with nearly US$29 trillion in assets –Schroders, Cathay Financial Holdings (Cathay FHC), Aviva Investors and Manulife – are directly engaging with 1,607 highest-impact companies not currently disclosing environmental data through CDP.

n Saudi Aramco, Exxon Mobil Corporation, Glencore, Chevron, Tesla Inc, Volvo Group, Roche Holding AG, Swatch Group, and Caterpillar among non-disclosing companies, with over US$21 trillion in assets, to be directly targeted in the financial institution-led campaign.

n The number of financial institutions backing the CDP campaign has more than quadrupled since it launched in 2017, as mandatory disclosure regulation across the UK, EU, Brazil, Japan, and US inches closer.

non-disclosing urged to data by nearly institutions

n Demand for disclosure on companies’ impacts on climate change remains high at nearly 72%, while demand for disclosure on forests rises by 3%.

The annual financial institution-led NonDisclosure Campaign (NDC) launches with an unprecedented 288 global institutions directly engaging 1,607 of the world’s highest-impact companies to demand that they disclose environmental data through CDP, the global environmental disclosure non-profit. The campaign sees financial institutions using their influence and market position to help drive responses from companies that have failed to respond to CDP’s disclosure request.

CDP’s analysis of its 2022 non-disclosure campaign, which drove responses from 388 high environmental impact companies, revealed that companies were overall 2.3 times more likely to disclose if they were directly engaged by financial institutions. This year, Schroders, Cathay FHC, Aviva Investors, Manulife, Sumitomo

Life Insurance, AQR, Legal & General Investment Management (LGIM) and PGGM will join financial institutions from across 31 countries, with a staggering total US$29 trillion in assets, to urge nondisclosing companies to respond to CDP’s disclosure request. Since the campaign launched in 2017, financial institutions’ participation has more than quadrupled –showing an average yearly growth of 33%.

The companies targeted in the 2023 campaign include repeat non-disclosers such as Saudi Aramco, Exxon Mobil Corporation, Glencore, Chevron, Tesla Inc, Volvo Group, Roche Holding AG, and Caterpillar. Combined, all 1,607 highimpact companies sprawled across 51 countries, represent a combined +US$21 trillion in global market capitalization (as of February 2023), and emit an estimated +4,200 mega tonnes (Mt) of carbon dioxide equivalent (CO2e) annually –almost equivalent to the GHG emissions of the United Kingdom, the European Union and Canada combined.

Companies will be asked to disclose data on at least one of three priority themes of climate change, forests, water, and for the first time a new module of plastics in the water questionnaire – as relevant to their operations – with an aim to drive greater transparency on environmental impacts and investment risk and increase capital market action on sustainability.

Keeping with the trends from previous campaigns, data on climate changerelated disclosure remains the most highly sought data by financial institutions – 72% of companies targeted will be asked to disclose on this theme. Despite the higher rate of requests for climate change data, financial institutions are increasingly pushing for disclosure and action on water and deforestation – this year, 28% of the companies targeted will be requested to report on their water-related impact, while 26% will be asked to disclose on forests.

With deforestation rates at 10 million hectares per year and 22% of emissions coming from land use, the consistent rise in the number of companies being asked to disclose on forests impact points to both an awareness of the impact of corporate activities on forests and the increasing risks deforestation poses to business operations.

Companies like Glencore, Swatch Group, DTE Energy, and South32 failed to disclose their climate change, forests, and waterrelated impacts in 2022 and will be targeted for disclosure this year. BP, Amazon, and BMW disclosed on climate change the previous year, but did not respond on

forests and water security. They will be called to disclose across all three themes in the 2023 campaign.

Water-related impact is growing as a priority focus for financial institutions. Biotech and pharmaceuticals, retail as well as oil and gas extraction and production companies, are the industries most targeted for disclosure on water in this year’s campaign. CDP’s NDC supporters will be seeking disclosure from corporations such as Walgreens Boots Alliance, TJX Companies, Inc. and Lockheed Martin (all three disclosed on climate change previously but not on their water impact), and GlaxoSmithKline Pharmaceuticals (India). The apparel and textiles industry, due to heavy use and pollution of water throughout the production process, are also key targets for disclosure on this theme –Shenzhou International Group, Moncler, Skechers, Aldo, Samsonite and Geox are some of the companies that will be asked to provide data on their water-related impact.

Incoming mandatory disclosure regulation across the UK, EU, Brazil, Japan, the US, and most other major economies has increased pressure on financial institutions and companies alike, if they are to remain agile and competitive in a rapidly evolving market.

Sophia Cheng, Chief Investment Officer, Cathay FHC, said: Cathay has been participating in Non-Disclosure Campaign since 2017, recognizing transparency is essential for net-zero transition. In 2022, Cathay has set validated ScienceBased Targets (SBT) and become the

first Taiwan RE100 financial institution member. We believe responding to CDP is an important part of corporate disclosure and allow investors to understand the climate governance and performance of investees. From our experiences, over half of companies were enhancing climate management performance in the following years. Cathay is committed to being the responsible investor to cultivate resilience and sustainability.

Claire Elsdon, Global Director, Requesting Authorities - Capital Markets, CDP, said: “Despite ongoing discourse over the role of ESG in financial decision-making, the continuous growth in supporters of the CDP’s non-disclosure campaign demonstrates that financial institutions worldwide require data to support risk management practices, tracking portfolio alignment to net zero goals and unlocking sustainability-linked opportunities. These uses can serve to not only safeguard but also boost long-term profitability.”

“CDP’s financial institutions-led nondisclosure campaign continues to raise demand for corporate transparency and provide a powerful incentive for companies to step up their environmental reporting and action. The unprecedented support for the campaign signals recognition that robust transition plans necessitate higher rates of transparency across all segments of the environment, and a holistic understanding of financial risks, to better future-proof operations and accelerate the path toward a net-zero, nature-positive global economy.”

The platform is now open, and the deadline for companies to submit their questionnaires in order to be eligible for scoring is July 26, 2023. Financial institutions will be engaging with companies during CDP’s disclosure period, during which target non-disclosing companies will be asked to submit their response via the CDP online response system.

Water-related impact is growing as a priority focus for financial institutions. Biotech and pharmaceuticals, retail as well as oil and gas extraction and production companies, are the industries most targeted for disclosure on water in this year’s campaign.

Holcim to deploy 1000 Volvo Electric Trucks

Holcim will deploy up to 1,000 electric trucks from Volvo by 2030. Delivery for the first trucks will start in the fourth quarter of 2023. This is the largest commercial order to date for Volvo electric trucks. Both companies are founding members of the First Movers Coalition (FMC), a coalition of companies that use their purchasing power to create early markets for innovative clean technologies. The deal is part of a wider partnership between Holcim and Volvo Group to deploy electric trucks across Holcim’s operations in Europe between now and 2030. Replacing diesel trucks with electric ones will reduce CO2 emissions from road transport by up to 50% per year.

Jan Jenisch, Holcim Chairman and CEO:

“The net-zero transition requires deep collaboration across value chains. We are excited to be partnering with Volvo to decarbonize our European operations’ logistics with electric fleets, advancing our goal to reach 30% of zero-emission heavyduty truck purchases or contracts by 2030.”

Martin Lundstedt, President & CEO

Volvo Group: “Long-term collaboration and a strong commitment to really make a difference are essential for making big CO2 reductions a reality. I’m very proud of the partnership we have developed with Holcim, and the results we are achieving together.”

The agreement will contribute to the sustainability targets set by both Holcim and Volvo Group. In addition to being members of the FMC, both companies are committed to the Science Based Targets initiative (SBTi), which drives ambitious, science-based climate action in the private sector. In November 2022 Holcim launched its upgraded 2030 climate targets, validated by the Science Based Targets initiative SBTi, in line with its sector’s new 1.5°C science-based framework. With these upgraded targets, Holcim confirms its commitment to decarbonize building in line with the most advanced science.

The

agreement will contribute to the sustainability targets set by both Holcim and Volvo Group.

Logitech partners with iFixit to advance circularity goals

Repairability efforts help to reduce e-waste and extend the life of devices, components and materials

International (SIX: LOGN) (Nasdaq: LOGI) announced that it is partnering with iFixit, a global repair community that sells replacement parts and provides toolkits and repair guides for consumer electronics devices. Logitech is working with iFixit to facilitate the availability of spare parts, support beyond-warranty repair on select products, and develop relevant repair guides to support this repair.

“Consumers often struggle to find avenues to repair and extend the life of their product,” said Prakash Arunkundrum, chief operating officer at Logitech. “More can be done by brands and by broader value chains who wish to play an active role in the shift to a more circular economy. I am excited that we are able to collaborate with iFixit to develop better designs and make it easier for consumers to have a self-repair option to extend the life of our products.”

Global electronic and electrical waste (e-waste) is projected to grow to over 75 million metric tons by 2030 according to The Global E-Waste Monitor 2020 Report. Design and repairability will need to go hand-in-hand in order to reduce the amount of e-waste the world generates. The growing e-waste challenge is fueled by higher consumption rates, short life cycles, and few repair options. Logitech is working to address this challenge by elevating its repair capabilities to increase the life-span of Logitech devices, Design for Sustainability (DfS) and drive more circular business models. Essential to Logitech’s product development process, DfS plays an important role in informing design decisions, including those around repairability, refurbishment, and recycling.

“Making spare parts available and designing more-repairable devices are the best things manufacturers can do to make their products sustainable,” said Elizabeth Chamberlain, Director of Sustainability at iFixit. “We’ve been working with Logitech to develop designs that make it easier for people to fix their stuff. And now, we’re

thrilled by the opportunity to help get Logitech repair parts to people around the world. To give a healthy planet to the next generation, we need to keep our things working for as long as possible, reduce our demand for raw materials, and cut down the amount of e-waste we’re generating. It’s wonderful to see Logitech working towards those goals, and we’re beyond happy to do what we can to help.”

The iFixit Logitech Repair Hub will be the source for genuine replacement parts and batteries for our chosen launch products of Logitech MX Master and MX Anywhere mouse models. Parts will be available as standalone or in Fix Kits that contain everything needed to complete a repair such as the replacement part, tools, and a precision bit set. Genuine Logitech replacement parts for these devices will become available for purchase starting this summer in the US.

Logitech is taking action and investing in ways to innovate by designing for sustainability and developing circular models that reduce waste and extend life, such as trade-in and refurbishment programs, and also using recycled materials. Recently, Logitech also accelerated its climate action strategy and has set itself on a direct path to be climate positive beyond 2030 by capturing more carbon than it creates. It is also the first consumer electronics company to commit to providing detailed carbon impact labeling on product packaging and online across the entire portfolio. Learn more about all of Logitech’s sustainability initiatives in the FY22 Impact Report or on the website.

66 | Technology

SAP Diageo

Technology

Making a Difference inNear - Real Time

SAP’s reputation as a globally prominent, market-leading tech manufacturer brings a sense of responsibility in times of transformation. The company must lead by example, and hasn’t shied away from this pressure as it looks to reshape the image of enterprise resource planning in the current climate. Regional Vice President Digital Supply Chain & Industry 4.0 at SAP Venkat Venkataramani tells us more.

Hi Venkat. SAP has such a rich history and legacy around the world. How has your role within the company evolved over the years?

I have been with SAP now for more than 10 years serving in several different roles, but all of them in a customer facing and advisory capacity. Throughout, I’ve focused on driving pipeline development and revenue for SAP in the digital supply chain space. Prior to SAP I have worked for both large organisations and startups across areas of sales, as an account executive and even in an engineering

capacity across a more-than 25-year career. Supply chain and manufacturing are where my skills lie, and I lean on that experience now to help SAP in its mission.

So, what is that mission in the present day?

I think it’s a reassessment of what ERP means in the current context, and what SAP actually offers through its renowned enterprise resource planning systems (ERP). Most people consider ERP as transactional financial systems, which

may be how they were intended initially. But if you look at our 50-year history, while we started as a business system with financial capabilities, we have always looked at the overall business and operational elements of an enterprise.

The key difference here is time. Financial systems require reporting that can arrive a day or even a week after an event. However, when dealing with the portfolio of customers we have, often in the manufacturing and supply chain space, they don’t want just a transactional system to run their business. They’re looking for an operational ERP, and we have often been recognised as the operational ERP of choice, especially in manufacturing and asset-intensive industries.

This is important as it reflects these industries’ needs to be able to pivot in near-real time. If you’re using that financebased rear-view mirror approach, then you can’t react effectively or prepare efficiently. An operational ERP such as the one we offer enables the ability to drive capabilities according to data feeds that are inputs to the overall systems of operation.

How much has this mission, and the need for near-real time agility evolved in recent years given everything that’s occurred?

The COVID-19 pandemic really shone a light on the challenges in company’s supply chains, especially from the perspective of building risk resilience.

Shortages in materials and components and the challenges seen across logistics functions were serious issues. These issues also drove the need for manufacturing companies to look at ways to leverage newer technologies to implement smart factories. This was not only to gain improved efficiencies but to also address labour issues while looking at “re-shoring” their manufacturing operations as well.

Essentially, this was to address risk and improve resiliency in their end-to-end supply chain operations following the challenges experienced.

Please talk me through the role of SAP in aiding these efforts…

SAP’s approach to building risk-resilient supply chain and manufacturing operations is to leverage our S/4 ERP platform which has been recognised as the operational ERP of choice by thinktank, IDC.

The aim through this technology is to facilitate a data-led, context-based and outcome-driven end-to-end set of processes. This spans all the way across design, planning, production, operations and delivery. Data provides business context, and the ability to mine that data, coupled with a real-time in-memory ERP with S/4, provides the ability to establish “cause and effect” decisions in that near real-time. Companies are then able to drive efficiencies and pivot when there are risks identified.

Enabling the move to Industry 4.0 with the right MES

Johan Carstens Industry Advisor Fujitsu

In today’s fast-paced and competitive manufacturing environment, it’s crucial to have an efficient and streamlined process that can optimize production and increase profitability. A Manufacturing Execution System (MES) can help you achieve this goal by providing real-time visibility and control over your manufacturing operations. An MES integrates with your existing ERP and process control systems to provide a comprehensive view of your production process. It enables you to track and trace all aspects of your manufacturing operations, from raw materials to finished goods, and provides real-time data and analytics to help you make informed decisions.

One of the key benefits of an MES is improved quality control. With real-time production process data, you can quickly identify and address quality issues before they become a major problem. This helps you improve product quality while reducing the risk of product recalls and customer issues. MES can increase uptime. By providing real-time monitoring and control of your production process, you can quickly identify and address any issues that may cause downtime or production delays. This helps minimize downtime and maximize the efficiency of your production process.

An MES can also help reduce inventory levels by providing real-time visibility into your production process. With accurate and up-to-date data on inventory levels, you can optimize your production process to minimize waste and reduce the amount of inventory needed to maintain.

Finally, an MES can help you create a paperless factory of the future, eliminating the need for manual data entry and paper-based processes. This not only improves the efficiency of your production process but also reduces the risk of errors and improves data accuracy.

If you’re considering implementing an MES system in your manufacturing operation, it’s important to work with a trusted partner who can help you navigate the complex landscape of MES technology. Fujitsu and SAP are two of the leading providers of MES systems, and they have the expertise and experience to help you implement an MES platform that is tailored to your specific needs and goals. By working closely with our manufacturing experts, we can assess your manufacturing environment and process goals to determine whether an MES system is right for your business. If it is, we can help you design and implement a system that will improve quality control, increase uptime, reduce inventory, and create a paperless factory of the future.

Manufacturing Execution Systems are a powerful tools to help optimize manufacturing operations and increase profitability. If you’re considering implementing an MES platform, contact Fujitsu or SAP to learn more about how we can help you achieve your goals today and in the future.

Our industry leading and vast business network further offers the opportunity for customers to collaborate with their own suppliers for raw materials, components, logistics and even contingent labour requirements. Again, the end result is a more agile and risk-averse supply chain function.

What has been the crux of your digital transformation strategy during this period?

Digital capabilities, including the ability to leverage data, apply newer technologies such as AI/ML to identify trends, and adopting systems that apply those inputs to a feedback loop to optimise decisions, are all critical.

Data is the “new oil”, and our platformbased approach is a differentiator in terms of leveraging data across the end-to-end processes to drive transformation. As well as this commitment to data, and the AI technologies that filter it, we have also championed other Industry 4.0 capabilities such as robotics, RFID, vision systems and even drones in some cases. They all combine to build on the operational ERP platform that SAP’s S/4 provides; breaking down siloes and connecting for optimum efficiency.

These newer technologies are the bedrock of companies’ smart factories because of the data they yield. Orchestrating these elements as part of the execution of

manufacturing processes, by leveraging data in near-real time, is the holy grail within the context of ‘digital transformation’.

It sounds as though the industries you work with had a bit of a mindset shift during the pandemic, that SAP was already prepared for and championing prior?

Certainly in terms of that consolidation of data sources. They had all these new technologies and repositories of data but they weren’t making the most out of it because there wasn’t a way to bring them together under the banner of a business context, or a clear strategy. This meant that pivoting quickly was very difficult as the information wasn’t clear, or contextual. This was a risk, and it was risk that COVID really shone a light on.

The other mindset shift was more generally among the general public. My parents didn’t even know what I did for a living before the pandemic! ‘Supply chain’ seemed to be a term only the few that worked in that realm were aware of. A few panics about the availability, or lack thereof, of toilet paper on shelves and suddenly everyone is very interested in supply chain optimisation!

It’s a bit of a cliched question, but where do you feel that people fit into this digital transformation equation, especially from the vantage point of a digital enabler?

To use another cliché, my opinion around the success of any digital transformation, is that it must revolve around people,

processes and technology. The pivotal part being, that it must be in that order!

With such rapid advances in technology, the need to bring workers along with each incremental evolution is critical. I think for manufacturing in the US, this is especially important with the trend of nearshoring and businesses opening facilities up domestically once again. Skilled techies are needed, but those industrial stalwarts also need to be brought up to speed with the digital transformations taking place in these reopening and high-potential factories.

With that, there also needs to be a rethink about who makes up the workforce, I feel. Diversity is paramount, pointing to a mix of age, education, ethnicity, background, sexual orientation and all other factors. This is an opportunity to not only reignite, but to refresh the industrial sector, and to do that it must be attractive to all people who can lend their differing ideas and perspectives in an era of transformation.

To use another cliché, my opinion around the success of any digital transformation, is that it must revolve around people, processes and technology. The pivotal part being, that it must be in that order!

SAP’s own commitment to diversity and ESG is reflected in our own HR stack capabilities, while we practice what we preach when identifying suitable suppliers within our own network too. We have a responsibility to set an example.

That responsibility presumably spans the sustainability conversation, too?

Absolutely. As mentioned, we at SAP want to be regarded as the platform of choice for customers, both because of our ESG credentials, and because we enhance their own ESG needs.

Simply, for every customer of ours, sustainability is no longer just a buzzword but is tied to regulatory requirements as well as shareholder commitments that are required. The plastic tax in Europe is an example of upcoming regulatory requirements here in the United States, and given the global nature of many of our Fortune 100 and Fortune 500 customers for whom SAP is the ERP of choice, sustainability and ESG are key elements that we need to incorporate within our technology stacks.

We are currently building key capabilities in our core ERP platform that enable us to track and report on ESG and sustainability metrics, as well as additional capabilities in the edge to make elements actionable.

Going back to that word, ‘responsibility’, do you feel there is more pressure on a company the size of SAP to set an example in these areas?

There is but we want that responsibility. We strive to be an exemplar and to set a precedent for how a large organisation should operate in these sectors and in this era. This might relate to the renewable energies used to power our facilities, or the approach we take to flexible working to further decrease the organisational carbon footprint.

Most importantly, it’s about ensuring that we don’t just say we’re doing things to tick boxes. We need to actually quantify improvements, speak to workers to gauge their ideas and preferences, and ultimately translate these environmental impacts into business opportunities too.

Sometimes, companies say they are ‘being green’ but when asked exactly what they’re doing, and to what end, they struggle. For our stakeholders, for regulators, our customers and our employees, we need to be able to show what impacts we’re making through our sustainability and ESG initiatives.

I understand this ethos fits into your actual tagline at SAP?

Indeed, our company tagline is “Help the World Run Better”. It’s a core paradigm which not only informs our behaviours, but every customer engagement we’re involved in. We want to help every customer run their operations in a more considered, efficient, risk-averse way. As such, we remain their partner of choice at such a crucial time of transformation. It’s also led to IDC recognising us as the operational cloud ERP of choice among manufacturing companies.

Meanwhile, we’ve also received several shoutouts for being placed in the top rung for a number of solutions; including SAP Digital Logistics, and SAP Transportation Management being positioned as a leader in Gartner’s Magic Quadrant for TMS 2023 as a further example.

We spoke about your vision and mission at the very beginning. How do you assess that in the context of looking forward, and what you are now striving towards?

Our vision today is more relevant than ever. Our purpose has always been to help our customers be agile and intelligent enterprises, and with the rising importance of data, and the need to be robust against risk, those notions of intelligence and agility are more important than ever before.

Being able to make decisions in real time is dependent on these qualities, but also on a business network that we can facilitate through our ongoing partnerships and acquisitions. This expanding network and connecting software can enhance

communication, predictive forecasting, real-time decision making, mitigating decisions, and sustainability strategies across the supply chain; with all key companies feeding into a single source of reliable data that is generated on a continuous basis.

To that end, what is your own, personal vision, for the future of supply chain management?

Well, really, it interlinks with SAP’s in that it is a vision for a risk-resilient, equitable and sustainable supply chain that leverages

the global-local network of capabilities; all enabled by a platform that provides end-to-end capabilities in near real-time. Meanwhile, limiting the value leakage that most customers experience when they cobble together disparate systems.

In doing so, we address both regulatory and business needs as companies look to be more sustainable, report more accurately, and achieve more with less. We also address how these capabilities can make for a more risk-resilient, sustainable and equitable supply chain.

Diageo partners with SAP and IBM on fiveyear global digital transformation programme

The collaboration will leverage SAP and IBM’s expertise to modernise Diageo’s IT environment and standardise its business operations across 180 countries.

Diageo, the maker of Guinness, Smirnoff and Johnnie Walker, today announces a five-year business transformation program in partnership with SAP (NYSE: SAP) and IBM (NYSE: IBM). This new initiative, which marks the company’s most significant ever investment in technology and services, will redesign and improve Diageo’s processes across the 180 countries where it operates.

Fully global in nature, the programme will revolutionise Diageo’s IT environment by introducing intuitive processes, powered by market-leading technology, to provide more information to enable the company to make better and quicker decisions. This transformation will enhance Diageo’s business resilience in a constantly evolving external landscape, improve its customer

service offering and help the company adapt to a fast-changing consumer base.

The programme involves a move to RISE with SAP S/4 HANA Cloud, with the support of IBM Consulting. Diageo’s implementation of the new cloud-based model will ensure its IT infrastructure is simplified and supported in a unified way.

IBM Consulting, which has been selected to lead the project, has a proven track record in the consumer sector and supporting client transformations and migrations to the SAP S/4 HANA Cloud platform. Diageo, SAP and IBM will work together to apply the latest technology to make Diageo’s business more efficient.

The five-year programme will transform Diageo’s business finance operations in a number of areas:

n Advanced workflow solutions will allow orders to be tracked in real-time on a

global scale and facilitate more effective customer engagement and better customer service.

n By moving to a single operating platform, Diageo will simplify its technology support model and IT landscape, making it easier for the company to do business and evolve amid changing consumer trends and market needs.

n The program will transform Diageo’s performance reporting capabilities, giving the company better insight into trade and growth opportunities.

n The digitisation of controls and compliance will make the business more robust, resilient and adaptable to changing market conditions.

Lavanya Chandrashekar, Chief Financial Officer, Diageo, said: “This partnership with IBM and SAP demonstrates our continued investment in digital transformation. It will enable greater agility in how we respond to our global consumer and customer needs. It will provide us with world-class actionable insights and enhanced data capabilities to support growth whilst allowing us to be more efficient in our day-to-day operations.”

Scott Russell, Executive Board Member, Customer Success, SAP, said: “In today’s disruptive consumer goods industry, success lies in navigating unpredictable supply chains, managing ongoing macroeconomic volatility and staying one step ahead of ever-shifting customer demands. Through our continued partnership with

Diageo, one of the world’s leading brand builders, we’re proud to support them in building a more resilient business that is enhancing the customer experience and can adapt to rapidly changing market pressures, realising its vision to revolutionise the consumer goods industry.”

Rahul Kalia, Managing Partner, IBM Consulting, UK & Ireland, said: “The consumer goods industry is striving to address the challenges posed by inflationary pressures and supply chain disruptions, while staying focused on delivering exceptional products and services for its customers and consumers. IBM is proud to partner with Diageo and SAP to bring our global business and digital transformation experience on this exciting journey.”

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