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INSIGHT

HP and the drive for people power

w w w.businessreviewusa.com

September 2017

THE CUSTOMER

IS KING TOP10

US AIRPORTS

Transforming

Sprint’s

S U P P LY C H A I N

TA L K I NG

BIZ WI T H

DEDON

COLOGIX

M+W

NEX-TECH


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FOREWORD WE KICK OFF with our in-depth cover feature on telecoms giant Sprint, looking at how the company has successfully embarked on its supply chain transformation journey. Chief Procurement Officer Mariano Legaz describes what has been a project several years in the making. “We think of 2015 as our recovery year; last year we call our comeback year,” he tells John O’Hanlon. Read on to find out exactly how this transformation got underway, and what it is expected to deliver on the frontline of the business. Also featured this month is HP, with Global Head of Sustainability and Product Compliance Judy Glazer

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talking about how the company is putting people first in its supply chain. Following this you will find our Top 10 US Airports, which recognises airports across the country which have won awards in 10 different categories, from best small airport to the most efficiently ran. Other exclusive company insights span several industries, from food and furniture to data centres and education. Look out for interviews with Los Rios Community College District, DEDON, Cologix, M+W, Martin Preferred Foods, Nex-Tech and Iowa Communications Network. We hope you enjoy the read!

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CONTENTS

F E AT U R E S

HP and the drive for PEOPLE

POWER INSIGHT

08 The customer

isKING TECHNOLOGY

16

Top10

TS R U S A IR PO

TOP 10

24 5


CONTENTS

Company Profiles

36 Sprint

SUPPLY CHAIN 36 Sprint 70 DEDON 80 WERC Association

CONSTRUCTION 90 Cologix, Inc. 104 Los Rios Community College District 116 M+W U.S. Inc

TECHNOLOGY 128 Iowa Communications Network 140 Nex-Tech

FOOD 152 Martin Preferred Foods

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September 2017

DEDON


80

WERC Association

90

Cologix, Inc.

116

M+W U.S. Inc

104 128

Los Rios Community College District Iowa Communications Network

140 Nex-Tech

152

Martin Preferred Foods


INSIGHT

HP and the drive for PEOPLE

POWER Judy Glazer, Global Head of Sustainability and Product Compliance at HP, explains why the company is focusing on empowering its workforce… Wr i t t e n by : LE I L A H AW K I N S


INSIGHT

IT GIANT HP has not only set itself an ambitious goal to dramatically improve the wellbeing of its supplier factory workers, but it’s also nurturing the next generation of professionals in areas that most need the technology company’s help. HP is investing in the power of people. As one of the world’s biggest technology companies, HP’s supply chain is one of the most extensive, with manufacturing plants operating all over the globe, in some of the poorest communities. For almost 20 years the organisation has been committed to ethical issues, 10

September 2017

beginning with the establishment of its Supply Chain Responsibility programme in 2000, which works to reduce the negative impacts of its processes on the environment while protecting the wellbeing of its supplier factory workers. This is nothing new for the company. HP is also very well known for its socially responsible approach to business. In 2010, HP topped Corporate Responsibility Magazine’s 100 Best Corporate Citizens list (called one of America’s most important business rankings by public relations bible PR Week), and was named the


HP AND THE DRIVE FOR PEOPLE POWER

“IT giant HP has set itself an ambitious goal: TO DRAMATICALLY IMPROVE THE WELLBEING OF ITS SUPPLIER FACTORY WORKERS” – Judy Glazer, Global Head of Sustainability and Product Compliance at HP

second most admired company in the world by Fortune Magazine. In 2015, HP set itself an even more ambitious target: to develop the skills, and improve the lives of, half a million of its workers over the next decade, by teaching them worker safety, ‘how to achieve a better work/life balance’, financial security and health care. Empowering the workforce The training programmes are being delivered where HP’s factories are located, predominantly in China and Southeast Asia. Judy Glazer, Global Head of Sustainability and Product 11


INSIGHT Compliance, explains why they are focusing on specific demographics: “We pay particular attention to vulnerable groups including students and foreign migrant workers as well as women. Women make up a substantial part of our workforce and supporting their wellbeing is a priority and doing so contributes directly to our business success.” Programmes are tailored, so women’s health teaching is delivered

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September 2017

face-to-face. They are also trained to become teachers of the sessions themselves. “In this way, the information is conveyed peer-topeer, which increases participation and trust,” Glazer adds. “They are learning valuable leadership skills that extend beyond the factory walls.” In the case of young workers and students, in China, HP has partnered with WeChat, the country’s most popular instant messaging


HP AND THE DRIVE FOR PEOPLE POWER

app. By scanning QR codes from posters around HP’s sites onto their smartphones, workers can access videos, quizzes and games that are all educational in nature. To put these programmes into place HP works with governments, NGOs and big-name corporations including Disney and Walmart. As well as the obvious benefits to the welfare of the workers, it’s advantageous to the business, as happier staff traditionally means higher productivity and employees who will stay at the company longer, thus strengthening relationships with investors. As Glazer explains: “Vendors with better management practices can deliver higher-quality products and reduce costs, which in turn creates savings for HP.” Training future generations As well as developing its own workforce, another part of HP’s 2025 target is to improve the learning and job prospects of 100mn people around the world. Haiti made headlines around the world after the 2010 earthquake; a disaster that ravaged an already hugely impoverished nation. The country was

Judy Glazer,

Global Head of Sustainability and Product Compliance at HP in fact chosen as the starting point for HP’s sustainability programme. “Haiti is the poorest country in the Western Hemisphere,” Glazer says, “so driving systemic change there, is essential.” With limited access to clean drinking water, the population of Haiti is largely reliant on bottled water, leading to tremendous amounts of waste, so HP employs people to collect the littered plastic bottles, which are then recycled to make ink 13


INSIGHT

“Quality education seeds the NEXT GENERATION OF THINKERS and INNOVATORS that are vital to the sustainability of our business and the global economy” – Judy Glazer, Global Head of Sustainability and Product Compliance at HP cartridges. HP is also investing in education, healthcare and start-ups. In North America, Europe, Australia and New Zealand, HP Learning Studios have been installed into 60 schools so far, equipped with the latest software and hardware to train students in design and social entrepreneurship. A further six studios are in development in Jordan and Lebanon to specifically support young Syrian refugees who’ve lost their homes in the country’s civil war. In Istanbul’s Maharat Centre, refugees can train using the free, online HP LIFE 14

September 2017

(Learning Initiative for Entrepreneurs) programme, which has 27 courses including business and IT skills (available in seven languages across 200 countries). In Tunisia alone, HP LIFE is reaching over 25,000 people and has helped generate more than 1,250 jobs in technology, services, and graphic design among other sectors as part of the Mashrou3i project for start-ups and young entrepreneurs. Another HP scheme is World On Wheels; 48 vehicles kitted out as mobile classrooms with HP technology delivering digital


education to remote parts of India. All of these initiatives are run by the HP Foundation, the company’s nonprofit organization, and they all carry largely the same purpose: to make training and education accessible to all, and improve job prospects for those who’ve faced hardships. Beyond 2025 Working with tens of thousands of people around the world while trying to bring about change is complex, whether it’s because of differences in language,

culture, geopolitics, regulations or infrastructure. “Innovating, disrupting the status quo, breaking barriers, and doing unprecedented work is always a challenge,” Glazer says. However, stakeholders, suppliers and customers, along with policy makers and industry bodies see the benefits. “Quality education is a fundamental building block of the United Nations Sustainable Development Goals. It reduces inequalities, empowers healthier and more sustainable lives, and is crucial to fostering tolerance and advancing more peaceful societies. “It also seeds the next generation of thinkers and innovators that are vital to the sustainability of our business and the global economy. As a global multinational company, we are aware that our business actions can have a tremendous impact, yet we know we can’t do it alone.” Glazer adds that by 2025, HP would like to see industries worldwide taking action to ensure their workers feel empowered and protected. “Our ultimate goal is that everyone, everywhere, will have the skills and opportunities to thrive,” she concludes. 15


TECHNOLOGY

The customer

isKING

Tim Dimond-Brown of GMC Software explains how American businesses can use customer journey mapping to thrive in an ultra-competitive market… Writ ten by: TIM DIMOND-BROWN


TECHNOLOGY WITHOUT AN IN-DEPTH understanding of their customers, American businesses will struggle to achieve long-term success. Take bookstore chain Borders, for example. Borders filed for bankruptcy in 2011, after a slow approach to ecommerce, and its reluctance to adapt to the demands of the consumers, who were starting to purchase e-books instead of the physical ‘hard copies’. This contrasted greatly with the approach taken by another organisation, Amazon, which understood what the customer wanted. Borders paid the price and was forced to close its doors. Putting yourself in your customers’ shoes makes it possible to understand how to give people more of what they like, and address pain points. As industry analyst Forrester recently observed, if you want to create a

great customer experience you need to have the right strategy and agility to keep pace with customer demand. By just standing still, businesses can start to veer off course – failing to listen to customers sets businesses up for a fall. It sounds simple, but this is a mistake many are making. One recent anecdote about a literal customer journey illustrates this rather effectively. I was told about a bus scheme specifically designed for disabled members of the community. However, by failing to speak with the very people it was supposed to be helping, the project failed and buses drove around the district almost empty. The reason? The bus stops were not in locations people had a need to travel to or from. Such a fundamental flaw – and waste of time and money – could have been

“Putting yourself in your customers’ shoes makes it possible to understand how to give people more of what they like, and address pain points” – Tim Dimond-Brown, VP Sales & Operations at GMC Software Technology 18

September 2017


avoided by taking the time to better understand the customer journey. Customers are becoming more powerful than ever before, so it is crucial to make an effort to understand them. Businesses can get a firm grip on this by visualising customer behaviour, which is where customer journey mapping can prove critical. It’s a route many are already considering, with recent Ovum research finding more than half of enterprises will invest in customer journey mapping in 2017. Over the course of the year, we will see a footrace to get a full understanding of the paths customers take, and what this means.

Four key steps to success Customer journey mapping could be a daunting prospect for organisations that have not carried out the process before. Ploughing a lonely furrow could lead to mistakes, and wasted time and investment. So, working with a consulting expert to ensure the customer journey map fits well with the rest of the organisational ecosystem, is helpful to many organisations and will help them to fully understand their customers. But what does successful customer journey mapping implementation look like? Here are four key steps to follow:

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“Customers are becoming more

powerful than ever before, so it is crucial to make an effort to understand them” – Tim Dimond-Brown, VP Sales & Operations at GMC Software Technology

1) GATHER METRICS AND IDENTIFY DATA SOURCES Data has been referred to as ‘the new oil’ for some years now, and it’s certainly true that customer journey mapping couldn’t run without it. To make it work, as many credible data sources as possible need to be identified so they can be used to paint a full picture. In the bus service example outlined earlier, the organisation would need to identify the target users and speak with them about what their requirements were. In addition to the obvious direct points of customer interaction, back-office data sources such as CRM and ERP systems can also provide rich data sources.

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September 2017

2) USE DATA TO CREATE A COMPREHENSIVE MAP Different streams of data can prove weak on their own, but drawing them together can create a much stronger river of information. When multiple data sources are amalgamated, they can reveal what each customer is doing. Returning to the bus example; by drawing together pieces of information about customers you can sketch out a journey map, which will allow you to pinpoint specifics around where key interactions with them will take place This could be the first-time separate departments have thought about what happens to the customer once they no longer need to interact with their part of the business – something which could prove pivotal in terms of changing mind-sets. If everybody in the organisation is thinking about the entire journey, they will be increasingly likely to behave in a manner that is more beneficial in the longer-term.


TECHNOLOGY

THE CUSTOMER IS KING

Customer Experience. Transformed: Introducing GMC Inspire R11

3) IDENTIFY PAIN POINTS The next part is to pick out where problems occur on the journey. Seek to highlight the ‘moment of truth’ – are there any specific points on the customer journey where things go wrong? How can these be addressed? For example, is there a customer communications issue that relates to one specific communications channel? On this step, our bus operators

should have looked at the problems, such as buses heading to destinations passengers hadn’t requested and routes that became congested and even customers trying to give cash to a driver that only accepts card payments. Once these pain points have been recognised, recurring problems can also be identified, making it clear exactly what the big issues are with the current customer journey. 21


TECHNOLOGY

4) TAKE ACTION The final step is to improve the customer journey by acting on the insights that have been gathered. For example, this could mean addressing one specific area that regularly poses problems for customers – such as a mobile app that crashes when the chat function is launched. The bus scheme should have taken action as soon as it found out its buses weren’t being used, amending the routes to ensure they met the needs of the target customers. Changes can be made relating to any area of the business; from the more obvious CRM and marketing teams to IT, and even the legal and billing departments. 22

September 2017

“Recent Ovum research finds

more than half of

enterprises will invest in customer journey mapping in 2017” – Tim Dimond-Brown, VP Sales & Operations at GMC Software Technology


THE CUSTOMER IS KING

Long-term benefits As well as plugging short-term customer communications systems holes, customer journey mapping can also bring longerterm strategic benefits. A deep understanding of customer behaviour is a great way to identify gaps and segments, and find inefficiencies across the customer journey.

American businesses will then be in a much better position to know which customer service initiatives to prioritise – ensuring the customer gets the right message, through the right channel, at the right time. This invaluable exercise will spot problems and opportunities, which will ultimately allow businesses to differentiate experience and increase revenues.

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Top10 TOP 10

S T R O P US AIR

There are more than 500 airports in the United States that serve commercial flights. The following are the ones that have risen above the rest to earn a spot on our list of the top 10 airports in the US Writ ten by: ANDREW WOODS


TOP 10

Best wait time for TSA checkpoints

TAMPA INTERNATIONAL (Florida)

Flying can be such a hassle, and one of the main reasons is the TSA checkpoint lines, where new screening procedures seem to crop up every

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September 2017

few months. While it may seem like you spend an eternity in those lines, the average wait time is actually not as bad as you might think. JFK, which has the worst average wait time for a large US airport, clocking in at 16.8 minutes. The airport with the best wait time at its TSA checkpoints? That would be Tampa International Airport, where the average wait time is just 11.4 minutes.


US AIRPORTS

Fastest free internet speed

DENVER INTERNATIONAL (Colorado)

It’s the bane of many business travellers. Just minutes before boarding a plane, they get a request to forward an important file. But at some airports, slow wifi speeds can lead to some truly panic-inducing moments. So what airport will give you the best

chance to get that file to its intended destination before you board your plane? According to Speedtest.net, the airport that boasts the fastest free wifi is Denver International. Its wifi service is actually faster than any other airports in the world with 78.22 Mbps downloads and 78.29 Mbps uploads. The next fastest airport in the United States is available at Philadelphia International Airport, which boasts 48.39 Mbps downloads and 53.33 uploads.

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TOP 10

Busiest airport

HARTSFIELDJACKSON ATLANTA INTERNATIONAL (Georgia)

It services more than 100 million passengers a year, according to the Airports Council International, and is located just a two-hour flight from approximately 80% of the population in the United States. It’s HartsfieldJackson Atlanta International Airport in Georgia, and it’s not only the busiest airport in the US, but the busiest in the world. Fortunately, HartsfieldJackson Atlanta International Airport is also considered the most efficient in the entire world too. A $6bn capital improvement program that began in 2013 has helped this airport handle its huge passenger load.

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September 2017


US AIRPORTS

Best airport for saving money while you wait

PITTSBURGH INTERNATIONAL (Pennsylvania)

Pittsburgh International Airport was built with a ‘significant commitment of taxpayer dollars’ and county leaders insisted that the pricing in its shops and restaurants should be approximately the same as what you pay for the same item in a mall

or convenience store. As Allegheny County Controller Chelsea Wagner wrote in a statement: ‘Those who paid to build the airport shouldn’t have to pay more for a bite to eat or a gift for a grandchild.’ To ensure that the airport was complying, Allegheny County even audited the airport in 2015. They did find some discrepancies in pricing, for example, some food and drink items were priced between five cents and a dollar higher than on the high street. But once Airmall Pittsburgh – the organisation that runs the shops – learned of these price differences, it made the necessary corrections.

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TOP 10

Most profitable hub in the United States

HARTSFIELDJACKSON ATLANTA INTERNATIONAL (Georgia)

According to Delta’s CEO Richard Anderson, the airline’s HartsfieldJackson hub is the most profitable in the world. One of the reasons for Delta’s success is because the airline and its partners control more than 80% of this airport’s market.

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US AIRPORTS

Airport with the best amenities for a layover

DALLAS/ FORT WORTH INTERNATIONAL (Texas)

If you ever have to endure a long layover or a delayed flight, hopefully it will be at Dallas/Fort Worth International, which boasts a slew of amenities to help you pass the time. For starters, its Wi-Fi is free, so you can always pass the time on your phone. There are also plenty of charging stations so you won’t have to worry about killing your battery. And if you’re feeling a bit more ambitious, this airport also boasts a walking path and a yoga room where you can burn off some calories before you board your plane. Rather catch some Z’s? No problem, as there are Minute Suites available for rent.

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TOP 10

Best operated airport

NORMAN Y. MINETA INTERNATIONAL (California)

Norman Y. Mineta International Airport, located in San Jose, is a lean, mean operating machine. Between 2010 and 2015, the growing airport saw its passenger count increase by 16% and expanded its revenue by 28%. At the same time, the airport streamlined its personnel and cut its head count and payroll by a third. This airport also increased its non-flight revenue by 43%. Norman Y. Mineta is also known for its simple and clean layout that is easy for passengers to navigate.

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September 2017


US AIRPORTS

Most technologically advanced

MINNEAPOLISST. PAUL INTERNATIONAL (Minnesota)

Minneapolis-St. Paul International Airport has added 1,200 integrated iPads throughout its Concourse G for your entertainment purposes. You can also use these devices to order food that can be delivered to you in a restaurant or even at your gate. Are your devices also hungry? No at a problem - Minneapolis-St. Paul has plenty of places to power up your devices, including Samsung Power Poles in Terminals 1 and 2, countertop power outlets as well as in-seat power outlets.

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TOP 10

Most reliable

SALT LAKE CITY INTERNATIONAL (Utah)

Salt Lake City International Airport boasted the best record for on-time performance in 2016. More than 87% of the flights at this medium-sized airport arrived or departed on time.

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The airport managed this stellar performance despite the fact that it is growing rather quickly. In fact, from November 2015 to November 2016, 23mn passengers travelled through Salt Lake City International, which was a new record for that airport. As for large airports, Minneapolis-St. Paul was the most reliable in 2016, with more than 85% of its flights arriving or departing on-time.


US AIRPORTS

Best little airport

CINCINNATI/ NORTHERN KENTUCKY INTERNATIONAL (Kentucky)

Cincinnati/Northern Kentucky International Airport is one of the smallest on this list. As of 2017, it has been rated by Skytrax as the 26th best airport in the world, making it the highest rated airport in the United States and second highest rated in North America, behind only Vancouver International Airport. Passengers love

its open design and its collection of industrial murals. In 2014, Cincinnati/Northern Kentucky International Airport had the most expensive flights in the nation. However, according to new numbers, CVG now sits at No. 35, dropping from spot No. 16 this time last year. The airport’s average fare is $386, a percentage decrease nearly three times better than the national average.

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Transforming

Sprint’s

S U P P LY C H A I N Written by John O’Hanlon Produced by Denitra Price


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SPRINT

AS SPRINT’S CHIEF PROCUREMENT OFFICER (CPO), MARIANO LEGAZ SITS IN A VERY HOT SEAT INDEED. There’s no more competitive or cut-throat business than the US telecommunications market, in which familiar names like AT&T, Verizon Wireless and T-Mobile present figures to claim their network is the largest or fastest growing

M

ariano Legaz has inhabited the frenetically evolving world of telecoms since he joined Verizon International in Argentina in 1995, at which time he was still a student. He moved to the United States in 2000, and it’s significant that he remained with Verizon until his appointment at Sprint in April 2016. He brought with him a deep understanding of the business, having served in senior roles in planning and engineering. He eventually became Verizon’s director of capital planning and analysis, managing an annual budget of $17bn. It was not until 2009 that he

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put on a specifically supply-chain hat as vice president of Strategic Sourcing and subsequently VP of global supply chain services. Legaz’s appointment was a key component in Sprint’s turnaround strategy. For 10 years, until 2015, the company had been losing customers and staff, burning cash and watching its margins dwindle. Since Japan’s SoftBank acquired Sprint in 2013 for $21 bn, and despite billions of dollars in investment by its new parent, Sprint continued to struggle and lay off employees.


“We think of 2015 as our

recovery year; last year

we call our comeback year” – Mariano Legaz, Senior Vice President and Chief Procurement Officer

Mariano Legaz Senior Vice President and Chief Procurement Officer

The transformation To achieve this, tightening up the supply chain management function was essential, and Legaz is happy with the company’s progress so far – his organization has contributed substantially to the company’s recovery, but he is the first to recognize a shared effort. “Over the last two years or so we have made great strides and have produced significant results,” Legaz says. “First, we have started growing again. We think of 2015 as our recovery year; last year we call our comeback year because we won back business, showed growth, and became cash positive for the

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Mariano Legaz is senior vice president and chief procurement officer at Sprint Corporation. He is responsible for Sourcing, Procurement, Supply Chain management, and Real Estate operations across the organization. Under his leadership, Sprint is maximizing supplier relationships, driving operational efficiencies, and enabling their winning strategies. Before joining Sprint Corporation, Mr. Legaz was the Verizon Wireless Florida Regional President, where he was responsible for sales, operations, marketing, distribution, customer service, and financial performance. During his 20 years at Verizon, Mr. Legaz also served as Senior Vice President, Supply Chain Services; Vice President, Sourcing; Director, Capital Planning and Analysis, as well as several other roles in the network technology organization, both in domestic and international markets. Legaz holds an engineering degree in Electrical/Electronic Science and a postgraduate degree in Telecommunications from the Catholic University of Cordoba in Argentina. In addition, he received his EMBA in Economics from Cox School of Business at Southern Methodist University.


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Mariano Legaz – the career path to the CPO’s office • Educated at Universidad Católica de Córdoba in Argentina where in 1997 he obtained degrees in Electronics, Engineering and Telecommunications. • Moved on to Southern Methodist University’s Cox Business School to earn an executive MBA in 2003. • Between 1995 and 2015 worked at Verizon, progressing through director of Capital Planning and Analysis; VP Sourcing; senior VP of Supply Chain Services; and President of the Florida Region. • Appointed Chief Procurement Officer at Sprint, responsible for Sourcing, Procurement, Supply Chain Management and Real Estate Operations. Legaz says, “My job involves enabling the business while driving operational efficiencies, reducing costs, and maximizing supplier relationships – and getting better every day!” Lean credentials: Married and a father of three, Legaz is an accomplished distance runner and has participated in several marathons. Among his most recent achievements was a top three finish in his age group at the October 2016 Waddell and Reed Kansas City Marathon.

first time in a decade or more.” Customer churn - the ratio of customers switching away to new customers gained - is the key indicator in this business. In 2014 Sprint lost 1.5mn (net) customers, but in 2016 it got them back and gained 930,000 (net), reversing the negative churn. “The fact is that in two years we have gone from losing more than a million to gaining almost a million,” he adds. “Put another way, that was almost a 2.5mn-customer swing, and that is remarkable in our business.” Sprint’s rating has improved, he

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says, and it is rated the number-one voice network across the country. “Previously we were losing customers at a rate of 2% a month, but in 2016 our churn fell to about 1.5% and it is still coming down.” Just as important, brand perception surveys have raised Sprint to a four-year high, leading all competitors in places as diverse as Colorado Springs, Cincinnati, Portland and St. Louis. So much has been achieved already, and remember this is only year two of a five-year transformation program.


S U P P LY C H A I N

WATCH NOW

Sprint’s Brand, 2017

Already Sprint has shown it can defy the odds and execute one of America’s most iconic turnarounds, not only in reversing its customer decline but in also now being recognized as one of the top places to work, according to The Atlanta Journal Constitution. The value of procurement One of the pillars of the transformation was necessarily cost reduction. Instead of the $30bn the company spent in 2013, it now spends about $22bn. “That means we’ve achieved a better than 20% reduction in our costs

during a time of growth. That is what I mean when I call it a transformation!” Although he is not minimizing the part his organization has played in this achievement, Legaz emphasizes that it has to be a company-wide effort with every individual and every department playing its part. “Throughout my career I was always being asked about how to validate procurement against cost savings value and efficiency. At Sprint the same questions also arise. Naturally we measure our internal productivity in light of negotiating savings and the

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SPRINT

Bottom lines

HIGHLIGHTS FROM SPRINT’S TRANSFORMATION • Fiscal year 2016 net operating revenues of $33.3bn grew for the first time in three years, including fiscal fourth-quarter net operating revenues of $8.5bn, which grew 6% year-over-year. • Fiscal year 2016 operating income of $1.8bn and Adjusted EBITDA of nearly $10bn. o Highest operating income in 10 years and highest Adjusted EBITDA in nine years (22% growth year-over-year). o $2.1bn of year-over-year reductions in cost of service and selling, general, andadministrative expenses in fiscal year 2016. o Fiscal fourth quarter operating income of $470mn and Adjusted EBITDA of $2.7bn. • Fiscal year 2016 net cash provided by operating activities of $4.2bn and adjusted free cash flow of $607mn.

internal processes of procurement, how we drive efficiency and the like. But when it comes to the precise savings, I can just look at our annual report and see operating expenses going down by a billion to $2bn every year, so there is no doubt that the job is being done! Procurement is just one component of this transformation. I do not by any means try to say we are driving all of those savings. Clearly a lot of savings are being

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generated at the company level, and we can happily point to those efforts and say we are a part of that.” Legaz says procurement has become an integral part of the decision-making process, a truly strategic function, embedded in the company to help balance its needs and expenses. That said, and despite his humility, in just over a year he has made identifiable and measurable improvements.


S U P P LY C H A I N

MUST WATCH

#LiveUnlimited | Prince Royce, Lele Pons, Bradley Martyn, Rachel Cook, Gerard Adams “It was a surprise to me that the company didn’t have much in the way of procurement level metrics, so the first thing we did as a team was to develop a series of simple but meaningful high-level metrics to measure our productivity, our efficiency and our contribution.

For the first time in the company’s recent history, we were tracking sourcing savings at the project level and we were also tracking all the cost-reduction initiatives when negotiating new contracts.” This also meant a change in the

“We’ve achieved a better than 20% reduction in our costs at a time of growth. That is what I mean when I call it a transformation!” – Mariano Legaz, Senior Vice President and Chief Procurement Officer

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S U P P LY C H A I N

way Sprint acquired services or products. “We started tracking all of that at the project level,” Legaz adds. “We now have very good metrics. We can measure how much we are saving by organization, by project, and even by individual.” Creating these metrics gave Legaz visibility over the company’s costs. Additionally, he introduced regular meetings with key executives across the business to assess current demand, their forecasts, and the major

projects they had in hand. He strongly believes that his organization should support finance, marketing, HR and so on. Because traditional procurement is no longer a major driver of value, the relationship should be hands-off. “The procurement process doesn’t need to be exclusively led by the procurement team – we stay in touch, but we don’t always need to get deeply involved,” Legaz

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says. He is proud of the team he has formed over the last year, taking the opportunity provided by natural attrition to refresh the talent. It is now as lean and efficient as any. “I can put our team against comparable global teams and we will definitely come in the top quintile,” Legaz says. “With about 200 people handling procurement operations and also inventory management and logistics, we manage over $10bn of annual spend.” Note: This does not include the real estate side of the business,

which he also oversees. It’s a very active space as the company builds new stores across the country and converts the portfolio of former RadioShack stores it acquired from the latter’s restructuring. Much of the acquisition processes involved here are outsourced as Sprint increases its high street presence in under-represented locations. “We’re going after specific target areas to increase penetration in places we think we can do best – the market is responding really well to the quality of service we are now

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For sixteen incredible years, we’ve partnered with Sprint to help their customers make connections and share experiences all across the country.

Congratulations to

Mariano Legaz and the entire Sprint team on their exemplary success!

Please visit our website

Please visit our blog

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THE CPO CONTRIBUTIONS TO SPRINT’S TRANSFORMATION

1

Substantial (multimillion-dollar) savings from the negotiations of Radio Access Network (RAN) equipment. By working with several vendors and internal partners, the Sourcing team was able to produce a detailed cost breakdown of RAN elements. This effort, coupled with group benchmark exercises and bundle renegotiations, allowed the team to secure savings.

3

Issued an RFP to six suppliers for Sprint’s on-site health clinic and pharmacy business. After the RFP was complete, the savings amounted to 9%. To drive further savings Sprint performed an e-Auction. During the live e-Auction vendors bid against each other, as they were able to see what the leading bid was, and decide whether to lower their bid in order to win the bid package. The e-Auction drove an additional 13% saving.

5

2

Utility Rates Optimization – the Sourcing team obtained bids and negotiated agreements with alternate energy providers in 13 states and Washington, D.C., that offer deregulated electricity. The reduced utility rates will result in a 20% multimillion-dollar annual saving with the new suppliers.

4

Recruitment Process Outsourcing (RPO). Sprint issued an RFP to find a third party to assist with sourcing and recruiting efforts related to the aggressive expansion of the Sprint retail store footprint. The RFP was issued to six RPO firms. Negotiated a cost per hire rate, for the RPO, which is 35% lower than the internal cost per hire.

ADM Agreements. Sourcing achieved between annualized rate reductions between 5% and 10% for Sprint’s outsourced applications development and maintenance (ADM) contracts. Savings were achieved by benchmarking the onshore and offshore rates and using the data to negotiate and improve the rates with these outsourcing vendors.


Working Hand in Hand with Sprint to create the world’s fastest and most cost effective network.

airspan.com


S U P P LY C H A I N

Outside view Sprint retail store

offering,” Legaz says. However, real estate that supports network and transmission towers is all managed by a dedicated in-house team. Clarity through analysis Legaz’s team is now turning its attention to analytics as it revamps its spend analysis process, collecting, cleansing, classifying and analyzing expenditure data with an eye to cutting procurement costs further. At the same time, they are improving efficiency and monitoring compliance.

To this end, the team is creating a new ‘spend cube’ to give great insight into the relationship between commodity, cost center and vendor. At the beginning of 2017, Legaz pressed the button on an implementation that will, he is convinced, ensure that the new procurement strategies become firmly rooted. The existing strategic sourcing software suite was neither capable enough nor easy to use, so in June last year Sprint published an RFP to find the best replacement. In August

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“I believe in process excellence

and in data and analytics being a huge

enabler to making smarter decisions” – Mariano Legaz, Senior Vice President and Chief Procurement Officer

2016, having reviewed all the available hands-off auctions,” Legaz says. “We software - considering supplier are currently working on finalizing registration, project management, business requirements for phase two sourcing, contracting, spend analysis (contracting, spend analysis, and and supplier performance from the supplier performance). We couldn’t point of view of usability and monitor supplier performance functionality - Sprint before, so we will made its choice. now have better The solution that visibility into our combined much supplier risk and better usability performance.” than the previous The Ivalua tool with better implementation functionality is is the big Ivalua, a world-class, sourcing story Sprint’s Annual end-to-end suite of of 2017 at Sprint, Revenue procurement modules. but refining the “Our focus during the first procurement processes phase was on simplifying the user and adding analytics functionality interface from our previous tool and is a never-ending quest. As clarity on taking advantage of extra things improves, gaps are identified so it offered like a more robust auction investments are being made and setup functionality to run more people hired to fill those gaps.

$

33.3

BILLION

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S U P P LY C H A I N

CUSTOMER SERVICE EXCELLENCE

“At the same time we are launching a full-curriculum training effort to give our people better tools and to increase their capabilities,” Legaz adds. “We don’t believe in dogmatic positions though. There have to be many ways of achieving goals in a diverse business like ours. Some processes are complex and specific to the business

unit that is dealing with them; some are, well, just commodities.” Diversity in supply Within Sprint there is clearly no bias when it comes to gender or country of origin: Legaz hails from Argentina, and Sprint CEO Marcelo Claure is Bolivian. Equal

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S U P P LY C H A I N

opportunities are at the heart of the company’s ethos, says Legaz, and he hasn’t had much to do to create a diverse sourcing policy. It’s more of a statement of his position: “We love to provide opportunities to small or minority-owned businesses. That is important because they are the engine of the economy. Over my career I have found that such companies tend to be the most innovative – in the way they do business and find efficiencies, they are a huge generator of new employment.” It’s very satisfying, he adds, to find that even the large technology corporations that partner with Sprint tend to be leaders in diversity, business ethics and equal opportunities. “But we at Sprint are leading the way,” Legaz states. “Even in the tough times this company never deviated from its ethical stance or its respect for social and legal responsibility. It is comforting to be a part of such a group.” As a provider of both telecoms hardware and networks, one very practical demonstration of this aspect of the company is the 1Million Project, which aims to provides devices and service to 1mn low-income students.

“We now have

very good metrics. We

can measure how much we are saving by organization, by project, and even by individual” – Mariano Legaz, Senior Vice Presidentand Chief Procurement Officer

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S U P P LY C H A I N

WATCH

1 Million Project A Message from Paul Marcarelli

America’s students are facing a ‘homework gap.’ There are an estimated 5mn families in the United States with students who do not have access to the internet at home. With 70% of teachers now assigning internet-based homework, these students do whatever it takes to get connected. They go to hotels, restaurants and other businesses

to use Wi-Fi, wait in long lines at the library, or stand outside a school at night or early morning trying to get a Wi-Fi signal on their phone. Through the 1Million Project, Sprint and the Sprint Foundation will provide free wireless connectivity and a free device during high school to 1mn lowincome high school students who don’t have home internet access.

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SPRINT

WATCH

1 Million Project A Message from Marcelo Clare

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“Even in the tough times this company never deviated from its ethical stance or its respect for social and legal responsibility” – Mariano Legaz, Senior Vice President and Chief Procurement Officer

Download the 1Million Project brochure to learn more, or go to the website. Asked to summarize his philosophy, Legaz ponders for a moment before replying: “I believe in process excellence and in data and analytics being a huge enabler to making smarter decisions. A capable workforce is critical, but even more important and critical is to drive engagement and participation and the recognition for your talent. As an organization, we are committed to process excellence and customer satisfaction, but also to providing an environment where people are truly engaged and motivated.”

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®

CR ATING LUXURY SY N T HE T IC FURNITURE Written by: Leila Hawkins Produced by: Denitra Price


DEDON

Dedon President and Managing Director Donald Terell talks to Leila Hawkins about the company’s strive to produce luxury furniture from synthetics, backed by renowned designers such as Philippe Starck

D

edon creates outdoor furniture and prides itself on producing everything in-house, while having invented a unique fibre that stands all weathers and has been imitated the world over. Not to mention the small fact that they boast famous designers, among them one Philippe Starck. This company’s collections include everything from stools and parasols to luxury items like hanging loungers: Swingrest and its iconic Nestrest, which President and Managing Director Donald Terell says people call a “hanging candy kiss, “ because of its resemblance to the United States’ favourite Hershey’s sweet. It’s no surprise that their customers include high end restaurants and hotel chains, such as the W South Beach hotel in Miami Beach, Florida. Synthetic furniture Items are all manufactured in-house, and their materials are produced using technology in its headquarters in Lüneberg, Germany and then crafted by hand in the Philippines.

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S U P P LY C H A I N

One of the many things that sets don’t think of outdoor furniture Dedon apart is the synthetic fibre it to last, but ours does.” created, which is extremely hardy Even if the fibre comes into contact and can handle all elements. As with chemicals of some kind, Dedon Terrell explains, “we invented the provides customers with a heat gun synthetic fibre 30 years ago. It’s so they can smooth the fibre out patented, UV-protected and corrosion and it “self-heals”, Terell explains. resistant, it withstands almost It is manufactured at the company’s anything that nature can throw at it. German headquarters, and in fact all “It’s used outdoors, around pools, of Dedon’s products are produced on balconies, in lobbies, in-house, something Terrell and for when people are says differentiates it from wearing wet bathing other companies in suits. Most people the same market. DEDON Tour du Monde - an invitation to leave

DEDON Greensboro Building businessreviewusa.com

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DEDON

“We partner with high-end designers from all over the world to develop our concepts” – Donald Terell, President and Managing Director

DEDON DEAN Armchairs and WA Table


S U P P LY C H A I N

The fibre is unique to them. “It’s only us. We’ve had a lot of people copy it, but it doesn’t have the same properties. It looks similar, especially to those not familiar with it, but it’s not got the same lasting properties. We’ve got products in many places that we’ve had for almost 20 years that are still being used every day in the commercial environment.” Handcrafted technology As well as this unique technology, all the furniture is crafted by hand. “We have a big plant in the Philippines. Our fibre is woven, it’s really a mixture of the technology to design it and the handcraftsmanship of the weaving.” The furniture can also be created specifically to fit client requirements, for instance the customer will give the designers an idea and Dedon will produce it. “We do customise lots of pieces. In particular we will have a lot of hotel chains that may have certain balcony sizes and we can make a product to fit their balcony, and we can change the synthetic fibres to match the colour of their logo. We can actually do

Donald Terell President and Managing Director

Prior to joining Dedon in 2010 Terrell spent time in executive leadership positions at Grass America and U.S. Airways. Terrell is best known for maximising resources and inspiring people to exceed their own expectations.

almost any colour if they give us enough time to test the product.” Because each item is created by hand, it can take up to eight weeks to produce each one. Terell explains the importance of sourcing the best designers, one of them being Phillipe

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DEDON

DEDON Tour du Monde stops in Tulum

DEDON NESTREST Hanging Lounger

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September 2017

Starck. “We usually get really high end designers from all over the world, and we will sit down with them and come up with the concept. “If we want a beach chair, we give them a few bullet points, and they start sketching it out,” he says. “The majority of our designers are sketchers, they will sketch the chair out, and we have a creative team who examines those sketches and start creating what are we after, what’s our objective, who this is this going to appeal to, and what kind of function it is going to work for.” While Dedon sells to a lot of upscale restaurants and hotels, there is no typical customer. “We sell to hospitality channels, to all high end hotel chains, to multifamilies, to corporations. The other channel is to our showrooms where we mostly sell to designers and architects that are going to work on people’s homes such as in New York, where we have a showroom. A lot of designers who are designing things in the Hamptons, say, they’ll come in and look at our products and choose one, and then we sell that, which


S U P P LY C H A I N

“We hire people who love what they do” – Donald Terell, President and Managing Director

DEDON MBRACE Lounge chair

goes into the residences. There’s not a channel we don’t sell to.” While Dedon sells to over 90 different countries, the biggest market is currently the US, particularly California and Florida because of the warm temperature all year round and the growing wealth, with more and

more people purchasing condos. The best-selling items are the beach chairs and the Nestrest, a hanging chair that can be hung from a tree or even a cable. This is bought by a lot of hotel chains but also by consumers who place them in their backyards. “It’s seven

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DEDON

DEDON Tour du Monde stops in Morocco

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S U P P LY C H A I N

feet wide and nine and a half feet tall,” Terell says. “It’s like a basket with pillows and people sit inside it. You can have as many as three people lying in it. Some customers even put a fan and a TV in it.” Weaving through the market Terell explains that Dedon is in a fortunate position to not have much competition in the sector. “There are really not many competitors in the woven market so to speak. They may have a sling chair or other types of materials or products for people to use outdoors, but as far as woven products

there are very few competitors, because we are considered the inventors and the best.” In terms of staff satisfaction, Terell says employees are dedicated and passionate. “Not only the manufacturing and the design, but our culture matches that too. It’s one thing to produce something, but we match that with an open and honest culture. “We hire people who love what they do. Ultimately you’ve got to have the right people to continue to create the right designs, processes and quality to support our growing customer base.”

DEDON ORBIT Loveseat ®

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WERC: Warehousing a nation


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T

he astounding growth in online transactions among consumers and commercial clients is the new normal. More and more exists in a digital space. For all that the cloud can contain, though, the warehousing industry is as vital as ever for the physical realities of commerce. Michael Mikitka is the CEO of the Warehousing Education and Research Council (WERC), the only national association representing warehousing and logistics professionals. As the possibilities for online transactions grow, he says heightened consumer expectations are putting new pressures on warehousing and the supply chain. “Whether it’s business to business or to consumer, available inventory and speed for delivery significantly defines a company’s competitive advantage.” While WERC’s niche in the supply chain has historically been contained within four walls, Mikitka says the scope has widened to make room for new and evolving demands of warehousing. Financial and real estate analysts estimate that e-commerce represents approximately 40% of industrial properties and requires three times more physical space than bricks and mortars retailers. “Obviously, many factors contribute to a business’ success, but we see firsthand how warehousing and logistics is driving competition forward.”

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W A R E H O U S I N G E D U C AT I O N A N D R E S E A R C H C O U N C I L ( W E R C )

Common denominators This year marked WERC’s 40th anniversary. As investments in warehouse facilities grew in the 1970s, so too did the need for a well-defined profession of managers, technicians and laborers. Government, private or public, manufacturing, retail or hazardous materials — all types of ownership across many sectors needed warehouse infrastructure and it soon became a key element of everyone’s marketing and distribution strategies. Leaders in the field recognized the warehouse’s growing importance and sought to create common ground to support the profession. A small but driven group assembled in 1977 to establish a non-profit organization

1,700+ Number of members at WERC

dedicated to education and research about warehousing. In defining WERC’s role, Mikitka points to one definition of benchmarking in particular, from Charles Handy, an Irish organizational behavior and management specialist: the discipline of measuring yourself against best practice in any function or field, often in industries very different from your own; to look beyond oneself in setting standards for oneself. “WERC creates commonalities and best practices across the board, whether it’s an automotive or pharmaceutical warehouse. We’re a bridge that allows all corners of the warehouse world to learn from one another.” WERC’s flagship resources include a distribution center metrics report, benchmarking and best practices guide, and


S U P P LY C H A I N

a salary and wage survey. WERC translates reams of qualitative and quantitative data into meaningful analyses that Mikitka says are central to a company’s ability to be responsive to industry trends and maintain a competitive edge. A warehouse collective In and among the reports, webinars and online courses, WERC creates opportunities for its members to exchange experience and knowledge. More than 1,000 warehousing professionals from across the country convened in Fort Worth, TX in May for WERC’s Annual Conference and Solutions Center. Planning is well underway for the 2018 conference in Charlotte, NC. There are also 20 regional groups, called WERCouncils, that offer more frequent experiences on a local level. “One of the prime benefits of being a WERC member is building a connection with someone who has similar opportunities and challenges, but comes at them with

Michael Mikitka CEO

Michael Mikitka is chief executive officer and is responsible for helping WERC live up to the commitment it has made to their members and the industry. Mikitka and his team work to ensure WERC provides its members with education, research and services to develop them professionally and to improve the performance of logistics within their organizations. WERC is headquartered in Oak Brook, IL. Mikitka joined WERC in 2000 and served as the senior director of the organization’s flagship annual conference and managed WERC’s network of chapters. In 2009, WERC’s board of directors appointed Mikitka as CEO.

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W A R E H O U S I N G E D U C AT I O N A N D R E S E A R C H C O U N C I L ( W E R C )

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S U P P LY C H A I N

an entirely different perspective,” says Mikitka. “WERC brings people out of their facilities and introduces them to innovative approaches and solutions that are working for someone else in that very moment.” One current issue shared among many in the industry these days is labor management. E-commerce is driving the need for more and larger warehouses, but every facility needs staff. Advancements in automation add another dimension. “With demand still growing and automation still evolving, we don’t yet know the extent of the impact on labor,” said Mikitka. “It’s most certainly a complex issue, but that’s why we need to create networks within our industry through which we can channel a healthy variety of ideas.” Mikitka points to the numerous other benefits enjoyed by members, including access to the latest trend reports and research findings, savings on self-study and online education, and a comprehensive national member directory and career center. Beyond the tangibles, there’s also the notion of joining for the greater good. “By being a member of WERC, warehousing and logistics professionals

Tony Ward

President, Board of Directors Managing Director – Retail, Accenture Strategy Tony Ward is a lead managing director within the retail strategy practice for Kurt Salmon, part of Accenture Strategy. Mr. Ward has more than 25 years of experience in supply chain management, global product flow, transportation, sourcing and enabling technologies. Prior to joining Kurt Salmon/Accenture, Mr. Ward was a partner at Cap Gemini Ernst & Young, Verticalnet, and Whitman Hart. During his career, he has served as a trusted advisor to some of the biggest brands in the world, assisting with their global supply chain needs and helping them achieve significant business gains.

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S U P P LY C H A I N

are in turn supporting the success of the industry as whole,” says Mikitka. “WERC is the unifier, the aggregator. It’s the expert contributions from our members that drives our industry forward and sharpens our competitive edge.” New @ WERC WERC is currently soliciting participation for the 2017 edition of the Warehousing Salaries and Wage Report. All participants receive a complimentary copy. The invitation to exhibit at or sponsor WERC’s 2018 Annual Conference will open in September. All the details are at werc.org.

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The value of

DATA CENTRE

INTERCONNECTIVITY

Written by: Dale Benton Produced by: Tom Venturo


COLOGIX INC

Cologix is significantly expanding its data centre construction capabilities, providing a data centre with interconnectivity like no other

W

ith 26 data centre facilities across nine markets in North America housing up to 450 network service providers and more than 250 cloud service providers, Cologix is a data centre and interconnection company that stands at the centre of a rapidly growing industry. “Cologix focuses on the part of the data centre industry that is sensitive to, and finds value in, interconnection and connectivity,” says Grant van Rooyen, the company’s Chief Executive Officer (CEO). “Within most of our markets, we operate either a primary or secondary meet-me-room offering the broadest choice of network and cloud service providers within those markets.” As a network neutral data centre and interconnection company, Cologix prides itself on its “interconnection ecosystem” made up of a range of communities of interest that include: enterprises, media/content companies and financial institutions. “These businesses are attracted to our facilities because they have the option to choose from many different network providers and cloud service

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CONSTRUCTION

These businesses are attracted to our facilities because they have the option

to choose from many different network providers and cloud service providers â&#x20AC;&#x201C; Grant van Rooyen, CEO

w w w. b u s i n e s s re v i e w u s a . c o m

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COLOGIX INC

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The true value in Cologix’s data centre facilities lies in the interconnection and access to that ecosystem, as it enables customers to access substantially lower switching costs and a greater choice of providers. Cologix operates in markets

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that van Rooyen considers as “alternatives” to the largest Tier I markets. Instead of New York City, Chicago and Miami, Cologix hosts facilities in New Jersey, Minneapolis, Columbus and Jacksonville. For example, Columbus is a key, rapidly expanding market for Cologix, as the company has two large existing data centres there and is currently building a third – Columbus 3. At 160,000-SQF, housing four 20,000 sq ft halls with a capability of 20MW, Columbus 3 will be the most significant facility in Cologix’s current portfolio and the largest and most advanced multi-


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tenant data centre in the region. “Columbus is a fibre crossroads, where networks come together,” says van Rooyen. “Columbus 3 will not only be the most connected facility in Ohio, but will also enable the lowest latency onramp to Amazon Web Services (AWS) Direct Connect.” AWS Direct Connect enables customers to connect their infrastructure via a secure and private connection to the AWS Cloud to improve performance and reduce costs compared to onramps via the public Internet. Columbus 3 is earmarked

Cologix Data Center Power New Jersey Data Center

for construction completion by December later this year. The facility sits on the same 8 acre campus as both of Cologix’s existing data centres, Columbus 1 and Columbus 2. Cologix purchased the land next to these facilities in order to create a campus that could provide scalability to the

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Delivering Safe, Reliable and Efficient Medium Voltage Power Solutions for all Data Center Applications The adoption of medium voltage power (5-15kV) within data centers has been driven by the deployment of larger facilities and increased power densities. Until VESTA-AR, data centers had to balance the potential benefits of medium voltage power distribution against the loss of valuable floor space when MV Switchgear was installed. IEM’s VESTA-AR, the industry’s premiere medium voltage distribution and control system solution, delivers the benefits of MV but with the minimum space requirements, saving over 30% verses standard MV switchgear. VESTA’s high build quality, front accessible connections and withdrawable breakers reduce maintenance time and maximize uptime, and its metal-clad, arc-resistant design allows operators to work safely and confidently around energized gear, reducing interruption to daily operations and contributing to the highest levels of power availability. VESTA-AR Switchgear allows data centers to attain the very highest levels of safety and reliability, while saving valuable floor space and maintaining environmental sustainability. Learn more at www.iemfg.com

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company’s existing customer base. “It keeps all the connectivity within the family,” says van Rooyen. “Any carriers and cloud providers in our existing facilities will be immediately available to our customers using the Columbus 3 facility.” A changing market

Columbus 3 was born from the recognition of three major trends across the data centre industry, trends that Cologix needed to take advantage of in order to grow further. Large network service companies such as Google and Netflix are placing servers and switches closer and closer to the end users in edge markets – opting to choose locations such as Columbus as opposed to the larger cities in order to provide lower latency and performance. “This allows them to distribute content more effectively and creates huge demand for us as a business,” says van Rooyen. As these large network providers are moving closer, there has been an increase in cloud service providers and enterprises outsourcing

their data centre operations. Cloud service providers are proving to be the fastest growing segment in the industry, and they turn to Cologix because their data centres allow these companies to tap into the greatest reach in their markets. “Taking space in a data centre is a significant commitment, as the minute you bolt down servers to grow and connect them to networks you are committed to that location,” adds van Rooyen. “But what if something changes in their strategy? Trying to move a data centre is a very hard, painful and expensive process.” By using Cologix’s data centres, customers are exposed to the broadest supply of network and cloud providers. Should they require a new network provider, they do not have to move data centres or rip up those servers. This, van Rooyen believes, adds true value to what Cologix can offer. Spared no expense

Columbus 3 will not only be the

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most connected data centre facility in Columbus and the broader Ohio region, but it will also utilise some of the most innovative technology solutions in the data centre space. One of the biggest challenges for any data centre provider and operator revolves around the issue of energy usage and the cooling systems in place. Cooling and heat has been identified as the largest source of energy usage. For Cologix, Columbus 3 has an answer for that.

“Every location where we build a data centre has a unique cooling application,” says Mike Putnicki, Vice President of Construction. “We have chosen an extremely scalable, efficient cooling application which we can easily increase capacity. We don’t have to operate a huge cooling plant and that provides substantial savings on upfront capital cost and energy usage.” Columbus 3 will feature a cooling system that allows for free cooling several months of the year.

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Grant van Rooyen

President & Chief Executive Officer Prior to forming Cologix, van Rooyen was CEO of IX Investments which was acquired by Cologix in late 2010. He was with Level 3 Communications for 10 years from 1999 until 2009 where he held a number of leadership positions, including President of the Content Markets Group, with responsibility for over $1.5bn of customer and product revenue. In addition to his Cologix responsibilities, van Rooyen is a Partner in vR Equity - a private investment firm. He has lived and worked around the world and holds a bachelorâ&#x20AC;&#x2122;s degree in economics and finance.

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“It’s strictly dependent on the environment, so we pick the right solution for that environment,” says Putnicki. “For Columbus 3 we’ve used new technology that uses air cooled pumped refrigerant systems. It really is the most efficient scalable solution as it enables us to take advantage of the months of free cooling in Columbus. One of the specifications of Columbus 3 that may raise an eyebrow is its ability to withstand

an EF4 tornado. Not the first thought that springs to mind when considering a data centre facility, but it is this exact mindset that van Rooyen believes can make the difference. There is no other EF4 rated data centre in Ohio and in a market where customers place mission critical infrastructure with Cologix, this rating represents much more than simply tornado resistance. “Cologix’s philosophy is to go

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above and beyond to offer that extra degree of confidence for our customers,” says van Rooyen. “We’ve spared no expense because we understand that ultimately, our customers choose use because they trust us to keep their critical business infrastructure safe. That philosophy has transferred right through to Columbus 3.” The future of Cologix

With construction well under way, and users and network providers already lined up to populate Columbus 3, Cologix can turn to the future. With year over year of consistent growth that has seen major expansion across multiple geographies, supporting up to 1,600 customers to date, what’s next for the company? For van Rooyen, turning to

tomorrow starts with looking back. “The best indicator of the future is the past. We are a company which has grown in equal parts by acquisition and organic build, which will only continue into new markets,” he says. “I also expect a robust construction platform to continue whereby in every one of our markets we have completed major projects. Our first responsibility for our customers is ensuring they continue to have capacity to grow into, and that is a huge part of our construction capability. “Our builds are going to be larger in scale than they have in the past and that’s a reflection of the confidence and demand in our markets, and the efficiencies we can gain by building faster.”

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Building for tomorrow Written by: Dale Benton Produced by: Tom Venturo


LOS RIOS COMMUNITY COLLEGE DISTRICT

Following a significant capital investment program,

Los Rios Community College District has fully embraced the facilities construction industry of tomorrow

I

n California, there is an ambitious goal that will see all new residential construction across the state with zero net energy by 2020 and all commercial construction will achieve the same goal by 2030. For Los Rios Community College District, a district in Sacramento which provides administrative services and governance across four accredited colleges and several off campus educational centres, this overriding vision is very much centred in the college’s strategy for future growth. “We are the second largest community college district in the state of California [after LA Community College] and the fifth largest in the country,” says Pablo Manzo, Associate Vice Chancellor,

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Facilities Management at Los Rios Community College District. “We really are a significant community college player in the country.” Bridging the gap Manzo, as head of Facilities Management, is very much engrained within the maintenance of the facilities that fall under the Los Rios umbrella. The Facilities Management Department is composed two subdepartments, Facilities Planning and Construction and Facilities Maintenance and Operations (M&O). M&O includes a number of “journeymen” roles – mechanics, plumbers, groundskeepers, all managed and supported by Manzo and his department. Manzo believes that where Los Rios is unique when compared to other public-sector facilities and


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Los Rios/Sacramento City College Honored for Aeronautics Program

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LOS RIOS COMMUNITY COLLEGE DISTRICT

“I’ve seen districts

hire a third party to build these facilities, handle maintenance and then hand them over to departments that can’t maintain it” – Pablo Manzo, Associate Vice Chancellor, Facilities Management at Los Rios Community College District

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colleges, is in the cross coordination of the two departments. “It’s very key and crucial for them to have that connection because you have to build the facilities that your maintenance team can maintain, and overseeing both these areas allows me to do that,” he says. “We integrate our maintenance team very deeply into the design and development process of the capital projects. I’ve seen districts hire a third party to build these facilities and then hand them over to maintenance departments that can’t maintain it because they were not involved in the design process.” Manzo has been with Los Rios for over 12 years, previously working in the private sector on the construction of education construction projects and one thing that he has noted that within the sector there is often a lack of a fresh perspective. “There’s a tendency to continue doing things the way you’ve always done them,” he says. “The district made a deliberate decision when they brought me in to bring a fresh perspective and fresh eyes – they were on the cusp of a very large

capital improvement program and needed it more than ever.” This investment program has seen a number of significant construction projects, new facilities and technologies integrated into the college over the past 12 years. Ways of working While part of the investment program has been driven by the state required Zero Net Energy ambition, Manzo is keen to stress that the key to the expansion of Los Rios has been a fluid, ongoing discussion and avoiding a “set formula.” “There are a number of elements to consider, it’s not just about modifying buildings to meet the zero-net energy or how we are going to build our facilities of the future,” says Manzo. “There’s also our role in shaping our workforce to meet the requirements of the future.” One of those challenges has been trying to shift employees, contractors and agencies to a new way of working, one that is very much technology driven. “It’s about getting employees to

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Congratulations to Los Rios Community College on an Award-Winning Design-Build Project

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“There are a number of elements to consider, it’s not just about modifying

buildings to meet the zero-net energy or how we are going to build our facilities of the future” – Pablo Manzo, Associate Vice Chancellor, Facilities Management at Los Rios Community College District

break free of a set way of thinking and to become part of the solution to achieve our goals,” he says. “Every person, every employee and those involved in some capacity, each and every one of them is a major part of this goal. It’s challenging, but it’s important.” Win win Winn Through the capital investment project, Manzo has overseen a number of significant construction projects. One of the most significant construction projects, was the Winn Center project, which opened in 2013. This was a major achievement for Manzo and Los Rios, but also for an educational facility, all

because of one unique feature. “The facility houses our architecture and construction management educational programs,” he says. “When designing it we thought, if we are going to be teaching the construction professionals of the future, then we needed a facility that could talk the talk and walk the walk.” And the facility does indeed walk the walk. Not only is it constructed in a way that can be utilised as part of the educational experience, but it also represents a true sustainable and technologically advanced facility. In 2014 the Winn Center earned Platinum Leadership in Energy and Environmental Design (LEED), one of the only a few buildings in the state

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LOS RIOS COMMUNITY COLLEGE DISTRICT

“There are several drivers, not just the facilities people but our users and community push us to remain at the forefront of it all”

– Pablo Manzo, Associate Vice Chancellor, Facilities Management at Los Rios Community College District

Turley & Associates Mechanical Engineering Group has a great understanding of Sustainability and Green Design. Our LEEDTM certified personnel have the capability to design buildings that reduce energy consumption through practices that are economical and readily achievable.

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of California community college system to have this certification. The building in itself also became a teaching tool for Manzo and his department, as it presented an opportunity to learn more the changing technological, and sustainable, landscape in building construction. “There are systems within the building that we’d never used before, such as chilled beams, lighting controls and the way we conserve water,” says Manzo. “These are features that will become more and more prominent in the future of construction and so it helps us stay ahead of the curve and understand what’s coming. This wasn’t our intent, but it has had a dual benefit for both ourselves and our students.” Energy conservation In the bid towards achieving Zero Net Energy (ZNE), Manzo believes there is an immediate turn towards new builds, solar and power generation when facilities management teams should really look at existing building inventory. “We have to be able to produce

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LOS RIOS COMMUNITY COLLEGE DISTRICT

more than we use, so how are we going to do it?” he says. “Solar panels and power generation is not necessarily the answer.” Throughout his 12 years at the college, Manzo has been very much involved in extensive sustainability measures, as engrained with Los Rios’ philosophy and mission statement is to be good stewards of the environment. This commitment has been primarily achieved through the monitoring the performance of facilities and the implementation of monitoring technologies such as Smart Grid. “Smart Grid gave us the ability to dial in every piece of equipment within a facility,” says Manzo. “We can then control them all remotely from a central location to truly conserve energy. That’s the key. We want to get as close as possible to ZNE through conservation and then we look at other options like energy generation.” The role of the student can never be underestimated in the drive for a more sustainable future for

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Los Rios. Manzo goes as far as saying that in some instances, many of the conversations made at senior level surrounding sustainability have come from staff and students alike. “It’s not just us doing it by ourselves. Those people using our facilities are keenly interested in ensuring that those very facilities are environmentally sound and built in the right way,” he says. It is this open dialogue that has allowed Los Rios to remain at the forefront of sustainable construction as it has kept Manzo

and his team on their toes. “As soon as we think we are all caught up, there’s always the next step,” he says. “There are several drivers, not just the facilities people but our users and community push us to remain on the forefront of it all. It’s part of our overall strategic plan for the future.”

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LEADING THE WAY IN DATA


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M+W Group is a leading, global data centre facility provider, different from the rest because the team designs, commissions and constructs all under one roof

Written by: Leila Hawkins Produced by: Tom Venturo

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M+W

M+W

Group is a leading, global data centre provider, different from the rest because the team designs, constructs, and commissions all under one roof. M+W Group focuses on serving the needs of cloud, colocation, enterprise, high performance compute, and edge clients. M+W is dedicated to delivering facilities that meet current and future requirements through a collaborative turn-key approach. This approach reduces M+W clientsâ&#x20AC;&#x2122; costs and schedule risk, increases reliability, and improves resiliency. The bottom line is a fully optimised facility and increased savings throughout the facility life cycle. Since starting operations in 1912 M+W currently has offices in more than 30 countries around the world. The group is one of the largest EPC solar contractors, and it is still expanding. Ron Vokoun, Director of Data Center Construction Management, explains: â&#x20AC;&#x153;Given our global relationships with a variety of clients, the market growth and viability in general, we decided approximately nine months ago to develop our centre of excellence for the

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“The brand value of

sustainability is something you can’t

overlook” – Ron Vokoun, Director of Data Centre Construction

world here in the US. We’re one of the largest, most innovative, and trusted design builders of data centres across the globe.” Sustainable growth Using research done by the Uptime Institute and Green Grid among

others, sustainability is a very big part of the company’s culture. Rob Sty, Director of Data Centre Design, explains: “Data centres are huge energy hogs. We know that from a professional responsibility standpoint we need to design facilities that are energy and water-efficient. “Every time we go in with a client we sit down and discuss what their goals are,” Sty says. “If they don’t mention energy efficiency we bring it up and show them the benefits. Not only for operational expenses, but also that it’s a good thing to do. Rarely have clients pushed back, they usually understand.” The sites use water and outside air for cooling directly into the cabinets, so the compressor can be turned off, saving huge amounts of energy as well as in cost. During the construction process as much waste as possible is recycled, and materials are sourced locally to further enhance the sustainability aspect. It is an issue customers are increasingly considering too. “The brand value of sustainability is something you can’t overlook,”

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Vokoun says. “In the last several years Greenpeace has been doing name and shame campaigns in the data centre market. The biggest names in the industry now use 100% renewable energy. They’re setting the stage for the whole industry, sourcing energy, energy efficiency, and everything that really matters from that standpoint.” One of M+W’s most important partners is Infrastructure Masons, a trade organisation founded in 2016 that focuses on helping and developing individuals in the data centre market. Sty explains how important this aim has become: “Partly because of the recession we had a few years ago, there are fewer and fewer architects and engineers coming out of school and going into the industry. As the baby boomer generation starts to retire we’re losing an extremely valuable knowledge base. “What Infrastructure Masons provides is mentorship and discussion on leading edge best practices, where teams and competitors come in with a group of clients and discuss

“Data centres are huge energy hogs... we need to design facilities that are energy and water-efficient” – Rob Sty, Director of Data Centre Design the ways to enhance our trades and skills, and benefit the industry.” Award-winning M+W has won several awards for its operations around the world, including the British Construction Industry Award for high international standards

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M+W

“The cloud is really the nervous system of the planet” – Jim McCarthy, Director of Preconstruction

of engineering and construction, the Workplace Safety and Health Award in Singapore, and the US Occupational Safety and Health Recognition for National Safety Stand Down. Health and safety recognitions are paramount to the business, and are embedded into the company’s culture, to the point where staff meetings begin with briefings about best health and safety practices as frequent reminders to all employees. The future A major differentiator between M+W

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and its competitors is having design, construction and commissioning all under one roof. Another key factor is how preconstruction is addressed. Jim McCarthy, Director of Preconstruction, explains: “We believe the success of any project is directly related to the amount of effort you put into preconstruction. We’re especially passionate about that.” Sty adds that construction as a whole has not taken advantage of big data, until now. The Internet of Things (IoT) is something the data centre industry should adopt, because of


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Bringing the Future of Technology to life

Lawrence Livermore National Laboratory Livermore CA, USA

the amount of information it makes it possible to collect. It will enable the company’s different departments to communicate seamlessly with each other, collecting data from the various offices, operations, vendors, and subcontractors. Sty explains: “From the design process to the creation of models, to predicting energy usage and efficiency, once the buildings start operating towards moving into occupancy, data is collected to put into the models, and enables us to see whether the predictions were

accurate, particularly in terms of the mission critical 24-7 facilities. “Then we can start noticing trends that would lead to the predictability of failure. It becomes a circle of design, construction and operations, which then influences the next design project.” Essentially the idea behind it is that every action creates data. Sty continues: “In the construction environment it’s about how we’re bringing the project to life, executing its delivery and how it lives and breathes. We will become increasingly

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The Name Says It All Optimal Power Solutions is involved in all aspects of the critical power infrastructure from sales, to service, to the more in-depth design assist with the engineering community and the end users. OPS specializes in static UPS systems (Toshiba), Paralleling/ Medium Voltage/Low Voltage Switchgear (Thomson Power systems), Battery Solutions (DEKA), STS/PDU and RPP (ABB/Cyberex), Busway systems (E&I), Rotary DRUPS (E1 Dynamics), Battery Monitoring systems (Alber).

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CONSTRUCTION

more active about participating in data collection and creating knowledge with the data we create, becoming better and better. “The IoT, the question of data and how it ties into safety on the job is already happening, and we’re going to see it even more. Everything is hugely connected. Virtual construction is here for sure.”

– Jeff Dorf, Director of Mission Critical

SRP USA Modular Data Centre

A short trip from the Past to the Future

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M+W

“The cloud is really the nervous system of the planet,” McCarthy adds. “Helping developing nations develop even faster, that’s a lot of fun. When you describe the nature of the internet, the cloud, in general, you’re talking about infrastructure that’s being developed along with the lines of the electric grid for example. When it’s fully

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Who we are

T-Systems Magdeburg, Germany New Twin-Core Data Center

developed it will be the biggest connected entity ever built. To be a part of that is really cool.” M+W’s thought leaders inspire the industry to look at things differently instead of enabling the status quo. The data centre industry has historically taken an “if it isn’t broke, don’t fix it” approach, resulting in an underimagined solution. M+W aspires to a higher level of thinking to inspire the next generation of data centres.

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Iowa Communications Network TM


We speak with Iowa Communications Network Executive Director Ric Lumbard regarding the companyâ&#x20AC;&#x2122;s transformation process, enacted to provide enhanced broadband services for its customers Written by: Catherine Sturman Produced by: Eric Lenhardt

The Iowa State Capitol in Des Moines, Iowa.


I O WA C O M M U N I C AT I O N S N E T W O R K

A

s the only state-owned broadband carrier in the region, Iowa Communications Network (ICN) consistently works to set itself apart from other broadband providers. As a government entity in a fee-for-service environment, State law permits ICN to deliver broadband services to government, education, public safety, and healthcare sectors. ICN routinely reviews its business operations and broadband services in order to keep costs low and provide exceptional services to its customer sectors. To guarantee the implementation of valuable services, and the delivery of a fast, automated, flexible network, ICN is undergoing a significant technological transformation, with the project estimated to total $15mn. Executive Director Ric Lumbard has been behind the companyâ&#x20AC;&#x2122;s efforts to set forward a specific vision, provide overall direction, and deliver operational guidance within the agencyâ&#x20AC;&#x2122;s carrier operations since 2012. This has involved providing financial and technological insights and ensuring a timeless service delivery, in order to guarantee

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TECHNOLOGY

ICNâ&#x20AC;&#x2122;s new flexible carriergrade testing Lab allows ICN to operate efficiently as a carrier and establish a standards base approach to evaluate future technology.

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Cisco provides simplicity with end-to-end automation Cisco Network Services Orchestrator inserts speed into and takes cost out of managing your network. Network operators can create and change services faster without lengthy custom coding or disruptions. They can automate multivendor devices across their physical and virtual environments, and continually refine network services to meet new customer needs. To find out more about what Cisco Network Services Orchestrator enabled by Tail-f can do for your business, visit www.cisco.com/go/nso.

Š 2017 Cisco and/or its affiliates. All rights reserved.


“We’re utilising this opportunity to release orchestration across the entire organisation, which includes not just the network, but all of our operations” – Ric Lumbard, Executive Director enhanced customer experiences. To take this even further, ICN is now undergoing a significant automation process throughout its entire operation to increasingly add value to its service operations and hence remain competitive. “There are two aspects to our automation - because we’re a broadband carrier, all the technology has to be automated,” Lumbard explains. “We’re also utilising this opportunity to release orchestration across the entire organisation, which means in a sense we’re creating a new automated culture and a new operation that includes not just the

Ric Lumbard Executive Director

As a veteran of over 25 years in the telecommunication sector, Ric Lumbard has served executive leadership in the private sector as Chief Technology Officer and telecom management; and in the non-profit world of International Missions and Aid. Lumbard joined the Iowa Communications Network (ICN) in 2006, served in the Business Services Bureau, then later the Operations and Engineering Bureau as the Director of Network Operations and Engineering. In January 2014, he served as ICN’s Acting Executive Director during the extended absence and eventual resignation of his predecessor. Lumbard led the ICN until the Iowa Telecommunications and Technology Commission (ITTC) completed its public Executive Director search and appointed Lumbard the new Executive Director in September 2014.

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I O WA C O M M U N I C AT I O N S N E T W O R K

The Iowa Communications Network is located at the Grimes State Office Building on the Capitol Complex in Des Moines, IA.

“We’re already seeing in America,

upwards of 70%

of the central office infrastructure is beginning to convert to data centre-type operations” – Ric Lumbard, Executive Director

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September 2017


TECHNOLOGY

network, but all of our operations – so, the orchestration goes across every area of the organisation.” Through this process, ICN has upgraded the hardware within its internal infrastructure to support 200 gigabit links, a hallmark of ICN’s entire network. As the telecommunications industry has begun to adapt in a similar mode to the IT space, Lumbard states that IT has the ability to be increasingly flexible, as “Local Area Networks (LAN) are easier to change”, but the process of changing tens and thousands of miles of fiber and infrastructure is an increasingly complex process. “We’re already seeing in America, upwards of 70% of the central office infrastructure is beginning to convert to data centre-type operations in order to implement virtual services and software-defined networking (SDN) type technologies. It’s very challenging for the telecom industry because we have been doing the same thing for many years.” However, seeing this as a growing trend, ICN began a shift in its internal operations back in 2012, and saw how

Philip Groner ICN Chief Operating Officer

SDN was emerging within the telco space. In order to keep pace with these developments, the organisation reserved resources so it could transform its service with minimum disruption for customers and end-users. “As a result, we’re now able to greenfield a brand new network, handle the upgrade at the same time, and implement SDN technology for the future of Iowa,” Lumbard says. Consequently, 48 current systems at ICN will be replaced with just four once

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I O WA C O M M U N I C AT I O N S NETWORK

“Customers could raise the

bandwidth, change security services, look up features, or

even see analytics”

Jessica Jensen ICN Executive Administrator

– Ric Lumbard, Executive Director

the process is completed, creating a more streamlined, efficient service. Positive feedback Through this automation process, ICN has also looked internally at its staff and its ongoing recruitment needs. With many loyal employees serving over 20 years in the organisation, ICN placed a hiring freeze for the first six months, enabling the agency to maximise

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the intelligent assets it already has in-house. It will also allow staff to become accustomed to these new ways of working, and support them through increased training opportunities, before looking outward to source new talent. “We have a very detailed process of how we are rolling this out,” comments Lumbard. “The first phase is the establishment of an away team, which will be the people who are going to


TECHNOLOGY

go build this new culture for us. The transition team will then transition our people into that. Thirdly, the cleanup team will then turn down all the old operations in the old organisation, so it is, overall, quite an elaborate process.” Customer feedback These developments have been positively received by customers and it will give them increased control and flexibility. “The same way that customers can control a cellphone with an application that allows them to change the features on a cell service, should therefore be the exact same way that we operate a dedicated broadband service,” says Lumbard. “Customers could raise the bandwidth, change security services, look up features, or even see analytics. They will be able to see this from a portal on their phone, instead of having to call in to the helpdesk. We call this the process of going from 12 days to 12 clicks to provision services.” However, one might ask whether costs for such an advanced, flexible service could ultimately increase overall service costs for

Scott Pappan ICN Carrier Services Officer

customers. Lumbard quickly states that this is not the case – and is very much on the contrary. With a predicted decrease in capital expenditure spending, as high as 65% over time, he adds: “We are in a sense a government agency, which therefore runs in a cost recovery model. We can pass these savings directly down to the customers – in fact, we are already provisioning for rate reductions as we speak.” Nonetheless, despite

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EXPERIENCE THE AERITAE EDGE ADVANTAGE. AERITAE helps clients keep moving forward by maximizing performance, improving operations, and developing innovative new service solutions.


TECHNOLOGY

Inside ICN’s Broadband Information Center (BRIC). The BRIC empowers the ICN to collaborate more quickly with users and other agencies.

these successes, Lumbard is quick to add that ICN does not necessarily see these developments as a way of expanding its market, but will solely enable it to provide better services to its customers.

of flexible control over its services, in order to remain competitive. “I want things to happen in a matter of clicks, not a matter of days, and to guarantee that we’re as easy to work with as many mobile broadband providers out there today,” concludes Lumbard. “I think the mantra of telecommunications in general is going to be fast and flexible, and if we can obtain those two mandates in our organisation, we will provide powerful customer experiences.”

Flexible future ICN’s long-term vision remains simple: to provide exceptional services, enable the development of a strong virtual platform, all while ensuring customers have a high level

TM

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eeping ansas

Written by: Nell Walker Produced by: Eric Lenhardt


Nex-Tech employees pause for a photo at the employee meeting held February 15, 2017, at the Russell Dream Theatre in Russell, KS.


NEX-TECH

Jimmy Todd, CEO of Nex-Tech, discusses the company’s dedication to fueling the technological needs of the local community, and what this level of support means for the business

Next-Tech Internet

For Nex-Tech, community is key.

T

he technology and broadband company began life as an off-shoot of Rural Telephone Service Co., a business which specialized in ensuring telecom services were accessible to the most remote parts of Kansas. Nex-Tech has kept those values close to its heart, using its advanced technological capabilities to ensure high-quality services and products are available for its consumers. Nex-Tech has acted aggressively in ensuring that the evolution of technology has matched the needs of the consumer, and this approach is made possible in part due to skilled staff. Chief Executive Officer Jimmy Todd has more than 30 years of experience in technology – at least 20 of which have focused on telecoms – and knows better than most the challenges of working in an ever-changing industry. “I’ve seen businesses move from stepping switches to electronic switches, and now IP-based

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switches which only take up a couple of rack units of space,” Todd explains. “Communications has transitioned so much, whether you started out as a phone company or a cable company. It’s all blending into an IP-based offering and continues to move at a very fast pace in that direction.” Todd attributes the success of keeping up with that fast pace to his team: “We have some brilliant folks on staff that are truly experts in what we do. They are constantly involved in working with our vendors to look at what is going to be available in the near future, how that fits in with the services we currently offer, and how it would be utilized or implemented. It’s a constant effort, not something you can do once and feel good about it for a few years. Today, you don’t buy a switch that lasts 20 years – you forecast for five years hoping that you’ll get three-and-a-half.” Todd also has a very strong executive management team, with whom he holds monthly meetings to ensure communication flows at all times: “I think it’s really important that whether you’re in charge of finance and accounting, regulatory, marketing, sales, or operations, everybody is on the same page.”

Jimmy Todd Chief Executive Officer

Jimmy Todd is the CEO/General Manager of Nex-Tech headquartered in Lenora, Kansas. From a rural cooperative founding, Nex-Tech is one of the largest and most progressive communications and technology companies in Kansas. Nex-Tech provides technology services to businesses across Kansas and the Midwest region. Todd has served the telecommunications industry for more than twenty years and has over thirty years of advanced technology experience. He is an active participant in industry associations, as well as regulatory and legislative efforts at both the state and national level through a variety of Board positions and key committees.

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Corporate citizen Retaining staff may be a challenge inherent in any technology business serving a rural area, but this is where Nex-Tech’s dedication to community pays dividends. While there isn’t as large a talent pool to choose from as there would be in metro areas, the business has been fortunate enough to attract high levels of talent, often due to its close relationship with Fort Hays State University. “They have a good program for computer sciences, and that’s been an opportunity for us to bring some

of their students on in a part-time capacity,” Todd explains. “So they get an income throughout college, and at the same time they’re learning some real life skills. In some cases, that results in us being able to offer them a full-time position once they get their degree, so that’s worked out nicely.” Nex-Tech also involves itself in other community development programs to help local high schools with scholarships and internships, beyond the relationship with Fort Hays State University, by offering young people a stepping stone to

Next-Tech here for you

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“I think it’s really important that whether you’re in charge of finance and accounting, regulatory, marketing, sales, or operations,

everybody is on the same page”

– Jimmy Todd, Chief Executive Officer

get involved with a STEM industry – something that is sorely needed. New generations of talented staff are necessary, and young people want to work for the business because it is a deeply attractive prospect. Why? Because Nex-Tech prides itself on quality of service – and rightly so. “We’ve got a lab and any time there’s new equipment or a new service, we test it on our network long before it goes out to the customers,” Todd states. “We have to know it’s going to work, otherwise you end up with a bad customer experience, which leads to a bad internal experience and negativity with our suppliers.” Suppliers are considered partners for Nex-Tech, and the

business likes to maintain close relationships. The suppliers know that Nex-Tech takes the time to evaluate equipment thoroughly in its lab, and open communication is encouraged to ensure those suppliers are part of the team. “Really that’s paid off hugely and gives us early insight into equipment that might be coming up for general availability,” says Todd. “It also allows us to make suggestions about what we think is going to be most beneficial to our customers. So, I think again, it’s about having good communication and strong relationships, and when new vendors come on board, we put them through the same wringer. If their equipment meets the specifications

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Norton Nex-Tech employees host a Chamber Chat event in Norton, KS.

we’re looking for, we put it in the lab – just like with our current vendors – and see if it makes the grade.” Ahead of the curve The powerhouse that Nex-Tech is constantly evolving into is consolidating its top-quality staff, partners, and dedication to the best technology to surge forward with increased capacity and breadth

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of service. Nex-Tech was an early adopter of fiber optic infrastructure, and has an active fiber network which is scalable based on the electronics at either end. “It costs a little more to build that way, but in the long run you’re not having to go back with the engineer and add fiber further into the network, not to mention additional labor costs down the road,” says


TECHNOLOGY

Pictured is the registration center at Tech Edge. National vendors team up with Nex-Tech to host hands-on labs for the technically savvy, as well as education breakout sessions with live demonstrations.

Todd. “We’ve moved to an active strategy which in the long run sets us up for much greater success.” This success means Nex-Tech is able to further its reach, and it is always looking to advance into underserved areas. “That has been our biggest focus and will probably continue to be, because a fiber optic network is the infrastructure that is going to be in play for the

next 50 years,” says Todd. “Large communities will see more wireless go into play, but that’s still going to have to be connected to a fiber backbone. In rural areas like we predominantly serve, wireless is limited due to population and distance, so you find that the fixed connection is that much more important. We want to be able to facilitate both the wired and wireless utilizing our fiber optic infrastructure.”

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“We’ve moved to an active strategy which in the long run sets us up for

much greater success” – Jimmy Todd, Chief Executive Officer

It is Nex-Tech’s business technology services which will truly differentiate it for customers, as many of the SMEs it serves don’t have the staff expertise to handle a modern IT infrastructure. This enables Nex-Tech to act as an outsourced state-ofthe-art IT department which allows those smaller organizations to operate at maximum efficiency. “Then we’re the ones in the background making sure the equipment is up-to-date, always making the processing better and improving the service,” says Todd. “It’s difficult for a small business that

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doesn’t necessarily focus on technology to be up-tospeed on these changes, so we’re able to leverage that knowledge and experience to help our customers.” This focus also extends to digital ad services provided by Nex-Tech. Since the need for phone directories has begun to die out, Nex-Tech helps businesses find ways to advertise via the Internet and social media. This creates even more partnership value. The combination of these rich offerings undoubtedly cements Nex-Tech’s status as a multifaceted technology business which genuinely cares about its community and its people.


TECHNOLOGY

Brad Wolf, Communications Technician, is pictured checking fiber connections at a NexTech Central Office.

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Number of employees at Nex-Tech

Nex-Tech Access Technician, Donovan Wallgren, checks equipment at a site in Phillipsburg, KS. w w w. n e x - t e c h . c o m

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A traditional family business

revolutionized to succeed in the 21st century Written by: Stuart Hodge Produced by: Tom Venturo


MARTIN PREFERRED FOODS

Martin Preferred Foods is now in its third generation of family ownership,

and over the course of the past seven decades, it has evolved through innovation, ingenuity, and good old fashioned hard work, into a processing powerhouse for customized meat and poultry products

T

he story of Martin Preferred Foods began completely by accident, in wartime America. Melvin and Israel Tapick were delivery boys for their mother’s corner store in Houston, Texas, back in 1944 and their job was to deliver to restaurants downtown and in the surrounding area. One day approaching Thanksgiving that year, they made a delivery to a customer who was a chef at a local eatery, and he asked if they

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could procure some freshly killed turkeys for the upcoming holiday. Although the two young men’s stock-in-trade was very much canned goods, they did not want to let their customer down and promised to find him some turkeys. With no real idea of how they were actually going to do that, they asked around the local neighborhood, and were pointed in the direction of someone who raised turkeys. Melvin and Israel bought the turkeys alive and took them back to the yard behind the store without any idea of what to do next. Under further instruction from a helpful neighbor, the audacious pair set about slaughtering and defeathering the birds. It took an entire day, but when they were done they had some nicely dressed turkeys which they were ready to return to the man at the restaurant. They had no idea how much they should be charging but the chef, exemplifying the spirit of the time, said he’d pay what they were worth. When he did, the pair realized that they made more profit on that one transaction than they had in a week


FOOD AND DRINK

“Our niche is based on the specialization and value-added processes we can bring to customers” – Jeffrey Tapick , COO and President


MARTIN PREFERRED FOODS

Martin Preferred Foods distribution hub of selling canned goods. From that moment on, the Tapick brothers decided to get into the business of sourcing and selling fresh poultry. Within a couple of years, with turkeys and chicken and other poultry items like fresh eggs, the pair were in business and had established a brand new processing plant where they slaughtered chickens and turkeys. What is even more remarkable is that Martin Preferred Foods has continued to grow and be successful, and it remains a Tapick-owned family business to this day, now in its 73rd

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year and under the third generation of family ownership. Melvin’s son, Michael Tapick, remains at the helm as the company’s CEO and Chairman, having worked in the business since his childhood, and having led the company since Melvin’s untimely passing in 1978. Michael’s wife, Betty, also works in the business, in a position she has held since the 1980s. Both of Michael and Betty’s children work in the business, with daughter Lisa positioned in the accounting department, while son Jeffrey serves as the company’s President and


FOOD AND DRINK

Chief Operating Officer. Meanwhile, Melvin’s wife Helen Tapick Lerner, the matriarch of the business, visits the company weekly to keep a watchful eye on the company’s progress. Centerpiece providers Since those humble beginnings, the company has gone from strength to strength, but what exactly is it the company actually does almost three-quarters of a century later? “At our roots we’re a meat, chicken and specialty grocery company,” says current President and COO Jeffrey

Tapick, grandson of Melvin. “We provide center-of-the-plate proteins, and by that I mean beef, chicken, lamb and pork and specialty groceries which can be anything from imported and domestic cheeses, charcuterie, caviar, pate, hors d’oeuvres, desserts – things that are truly unique, special, exquisite and difficult to source. “We provide those items to food service and retail customers in Texas and all over the country. Our niche is based on the customization and value-added processes we can bring to customers.

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“Specialty items are the ones which are too insignificant for the broad line distributors in our industry to bother with, but we have the procurement specialization and the connections around the country and around the world to source the finest of these products and have expert teams whose job it is to do exactly that. “On the custom, center-of-the-plate protein side, we’re doing a range of things which add value to our meat and poultry products and there are a range of services that we provide. Our artisanal craft butchers cut chicken, steak and pork to whatever specifications the customer wants but where we really excel is in our custom-marinated proteins. “Houston is a hotbed of Tex Mex cuisine, and Fajitas in particular are an item that our culinary experts and research and development team have spent a lot of time perfecting. Our R&D department has developed processes for improving the taste, texture, bite, flavor, and cooked yields of our meat and chicken – all of which represent the value-added elements we provide through our

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Meat Plant Overview

products. Further, with our processing capabilities and world-class food safety and quality protocols, we can ensure the highest standards of food safety and product consistency for chains that have multiple locations by eliminating variability from restaurant to restaurant. “We try to make it easier for our customers to run their operations by saying ‘let us focus on the back of the house with your products’ so that you can focus on the front of the house,

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customers and menu. Let us be the ones to take the risk, the labor and inconsistency out of your kitchen.” At the center of Martin Preferred Foods’ operations is a philosophy of respect which is supplemented by a triumvirate of key principles which ensure the company’s employees recognize their order of priorities. “Safety is number one, our most important thing,” insists Tapick. “We go to great lengths to instill safety around our culture in every way.


FOOD AND DRINK

CKN Plant Overview

We want everyone going home at night in the same safe condition they arrived at for work that morning. That’s work safety and also food safety – there’s nothing more important than maintaining that. We want to have the safest possible products and a safe environment so the culture of the company really puts that first and foremost. “The second principle we embrace is that of quality – the idea that we can only provide value to our

customers if we can ensure quality in both the products we provide and the services that we deliver. If there’s inconsistency, anything that becomes questionable about our quality, then the value proposition that we represent is eroded. “We take safety first, then quality and the third thing is efficiency. Efficiency to us means working smarter, not harder, finding new ways to do our jobs by constantly improving and innovating, having

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Operations - Z, Mike, Jeff

“Isequidu citistes nis et rem doluptatem velit mi, utem doluptin nimil es et et audit alit estibus et dellaborum” – Name, Position

“When you think about my grandfather and great uncle, if they’d just said ‘I’m sorry Mr. Customer, we don’t sell turkeys, we just sell canned goods’ then this company would never have been born” – Jeffrey Tapick , COO and President

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Tapick in discussion with members of the inside sales team


FOOD AND DRINK

the humility to recognize that we can always be learning new and improved ways to do things, and I think that’s a fundamental part of our culture.” Also key to that culture Tapick speaks of, is a desire from all of the company’s employees to ensure the company stays ahead of the curve and adapts to stay competitive or gain an advantage on competitors. And that’s not something new, it’s something that has always been part of Martin Preferred Foods’ identity. Tapick says: “When you think about my grandfather and great uncle, they had to think outside the box. If they’d just said ‘I’m sorry Mr Customer, we don’t sell turkeys, we just sell canned goods,’ then this company would never have been born. “To give another example of innovation, in the 1950s, the norm in Texas was to sell whole chickens. My grandfather though, went to New York City, and he walked into a grocery store and lo-and-behold that store was not just selling whole chickens, but also chicken parts that had been cut up into legs, thighs and breasts and sold separately. He thought

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Jeffrey Tapick President and Chief Operating Officer As a third-generation leader and owner of the company, Jeff Tapick is proud and grateful of the business success and legacy he inherited from his parents and grandparents. Jeff approaches his role as president and chief operating officer with openness and enthusiasm; a dose of modesty and humility; and an unwavering commitment to constantly improve the company’s performance and results. He believes strongly that his foremost obligation is to his family, and he is motivated by his mission to cultivate and grow the Tapick family’s business assets so they may be passed on for the benefit of future generations to come. Jeff and his wife Rebecca became the first husband/wife duo to concurrently earn M.B.A.’s in Family Business from the Coles College of Business at Kennesaw State University. Applying the knowledge they gained in that program, Jeff and Rebecca spearheaded the creation of a Tapick family council and the adoption of a family statement of values, a family mission statement, and the newly created Advisory Board.


MARTIN PREFERRED FOODS

“For 73 years

we’ve been doing something right, and we want to keep doing it for at least another 73 years” – Jeffrey Tapick , COO and President

right


FOOD AND DRINK

‘what a brilliant idea, why didn’t I think of that?’ and he went back to Texas and started doing it. “So he became the first and only supplier in Houston who was cutting up and selling chicken parts, and our company soon became the largest chicken supplier to all of the retail stores in the city.” And Tapick says the company’s growth over the last seven or eight years, during which time it has doubled in size into one which turned nearly US$200mm last year, is also due to some ingenuity and clever thinking. Diversifying Before the financial crisis, Martin Preferred Foods was supplying to mainly white tablecloth establishments such as high-end restaurants, hotels and country clubs throughout the state of Texas. But in 2008, when the crisis hit, fewer people were looking to spend high dollars on food, and sales slumped throughout that segment of the industry. Tapick says: “Rather than just staying with the customer segment that we’d always serviced, my father Michael had the ingenuity to say: ‘You know, we’ve developed some great capabilities in processing meat and chicken and selling highquality specialty products to this one customer segment… we could leverage all of that culinary and processing expertise and go offer similar high-quality products to more of the mid-and-lower market type customers that were not as badly impacted by the

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Mike and Jeff Tapick -

financial crisis. People are still eating out, they’re just not spending as much on food’. “He looked at customers who were in that chain business segment or in the fast-casual segment, and they were still doing fine, so my father led the company to develop an entire line of marinated products utilizing our same culinary strengths and our same core capabilities. “When we look back at the last seven or eight years, we’ve doubled the size of the company by essentially expanding

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FOOD AND DRINK

Tapicks - (from left to right) Jeff, Lisa, Helen

our products into these new customer segments, taking those marinated proteins in those new categories. It wasn’t just a small idea, it was revolutionary in terms of the way the company was conducting its business.” And Martin Preferred Foods, rather than looking to just be swallowed up by a multinational as many independent businesses in the food industry have been, is instead looking to continue the success that it’s had since it was founded back in 1944. Tapick concludes: “As a familyowned and operated business,

we’re taking the long-term view. We want to grow and grow responsibly. We’ve enjoyed great quick growth over the last seven years but now we want to make sure that we’re doing it in a way that ensures that we will be here for a long time to come. “The perspective of our company is: for 73 years we’ve been doing something right, and we want to keep doing it right for at least another 73 years.”


19 - 20 October 2017 | Turnberry Isle, Miami sclsummit.com As a follow-up from one of the biggest European supply chain events – Supply Chain and Logistics Summit EMEA 2017 – we are pleased to announce the End-to-End Supply Network Summit 2017 (19-20 October, Turnberry Isle Miami), which is the only event in the United States that is focusing on creating a roadmap for shippers that will help them design and implement an end-to-end supply chain and gain a competitive advantage from areas of potential disruption. Join us at the End-to-End Supply Network Summit 2017, to network within an intimate setting with over 150 senior supply chain professionals for two days of leading content from 30+ speakers that are positioned at the forefront of the industry.

The summit will incorporate networking events, workshop sessions, breakfast briefings, lunches, and product showcases all with very limited sponsorship opportunities. The full conference program and unprecedented speaker line-up is available at: www.supplychain.us.com

The leading speaker faculty include:

Jeanne Reisinger Ex Procter & Gamble SC Director/ Global Value Chain Consultant P&G /Zinata Inc.

Eric Pettersen Director, Facilities, Energy and Supply Chain Procurement Hudson’s Bay Company

Raul Portela da Cunha Chief Operating Officer Helly Hansen

Mehran Ravanpay Vice President, Global Supply Chain Logistics Schneider Electric

Ximena Stawsky Head of Regional Demand Planning Latam Merck

Loyalty Rate

Super Early Bird

Early Bird

Ticket Name

14/07/2017 20/10/2017

25/08/17 15/09/17

15/09/17 20/10/17

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950

1150

1350

1600

Vendor Delegate

#E2ESCNET

14/07/17 25/08/17

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Business Review USA - September 2017