PurchasingB2B September 2014

Canada’s magazine for procurement and supply chain management professionals

SEPTEMBER 2014

BEST PRACTICES FOR INCLUSION Steps towards supplier diversity at the 2014 SCMA Conference in Edmonton

Also inside: Vendor Collaboration Cooperative Purchasing Public Procurement Excellence PM 40069240 $18.00

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Canada’s magazine for procurement and supply chain management professionals

features 80 VALLEYBROOK DRIVE TORONTO, ONTARIO M3B 2S9

www.PurchasingB2B.ca

PUBLISHER

Dorothy Jakovina 416-510-6899, djakovina@bizinfogroup.ca Addressing issues affecting Canada’s public procurement professionals EDITOR

Michael Power 416-442-5600 ext 3259, mpower@bizinfogroup.ca

Contents Vol. 56, No. 6 • SEPTEMBER 2014

11 BEST PRACTICES FOR INCLUSION Highlights from our supplier diversity panel discussion at the 2014 SCMA Conference.

16 CELEBRATING DIVERSITY CAMSC Business Achievement Awards and Inclusive Prosperity Summit.

FLEET MANAGEMENT/CAR EDITOR

Emily Atkins 416-510-5130, eatkins@bizinfogroup.ca ART DIRECTOR

Sandy MacIsaac 416-442-5600 ext 3242, smacisaac@bizinfogroup.ca

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17 CANADIAN ENERGY SUPPLY CHAIN FORUM PRE-CONFERENCE REPORT Special coverage of the CESCF, including the agenda.

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PRODUCTION MANAGER

Karen Samuels 416-510-5190, ksamuels@bizinfogroup.ca CIRCULATION MANAGER

Barbara Adelt 416-442-5600 x 3546, badelt@bizinfogroup.ca BIG MAGAZINES LP

EXECUTIVE PUBLISHER: Tim Dimopoulos VICE-PRESIDENT OF CANADIAN PUBLISHING: Alex Papanou PRESIDENT OF BUSINESS INFORMATION GROUP: Bruce Creighton For over 56 years, PurchasingB2B has been a trusted source of information for Canadian purchasing/supply chain management professionals in the private and public sectors. Special features and supplements include Fleet Management, Canadian Automotive Review (CAR), PurchasingB2G, and Travel Management Canada.

PurchasingB2B is published eight times a year, except for occasional combined, expanded or premium issues which count as two subscription issues, by BIG Magazines LP, a division of Glacier BIG Holdings Company Ltd. © Contents of this publication are protected and may not be reproduced, in whole or in part, without the written consent of the publisher or editor.

NOTICE: PurchasingB2B accepts no responsibility or liability for claims made for any product or service reported or advertised in this issue.

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PurchasingB2B, its affiliates and assignees may use, reproduce, publish, re-publish, distribute, store and archive such unsolicited submissions in whole or in part in any form or medium whatsoever, without compensation of any sort.

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ISSN: 1497-1569 (print); 1929-6479 (digital) Publications Mail Agreement No. 40069240 We acknowledge the financial support of the Government of Canada through the Canada Periodical Fund of the Department of Canadian Heritage

also inside

departments 4 Online News 5 Business Front 6 Ask The Expert

7 Procurement Profile

15

30 The Law

C1

The benefits of diversity

Editorial

O

ver the past few years, PurchasingB2B has made an effort to bolster the case for supplier diversity. To do so, we’ve included diversity among the procurement topics we cover on a regular basis, and have held roundtable and panel discussions on the topic. We’ve also worked closely with the Canadian Aboriginal & Minority Supplier Council, or CAMSC, for the past few years.

This has always struck us as the right thing to do. We’ve supported supplier diversity because it provides the opportunity for businesses that tend to be small or medium sized the opportunity to bid on contracts that they wouldn’t necessarily get the chance to participate in. I should stress that giving those businesses that opportunity doesn’t mean giving any supplier a handout. The intent behind such programs is to afford them an equal chance in the process.

Not only is supplier diversity something entirely different than a charity program, but if done properly can provide benefits to organizations that engage in it. Earlier this year, we published a panel discussion on the benefits of opening the doors to diverse suppliers (see our February issue). One of our intents was to provide examples of the benefits that organizations can realize by engaging with those suppliers.

In this issue, we feature another panel discussion we held at the 2014 Supply Chain Management Association’s (SCMA) national conference in Edmonton last July. That article, which you can read on page 11, seeks to provide some of the steps that procurement—as well as their organizations—can take to start and run a supplier diversity program. Our expert panel gives tips and best practices from their own experiences with supplier diversity programs. I hope you’re able to put some of them into practice at your own organization.

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What’s new on

.ca We encourage you to visit us online to stay in touch with what’s happening in your industry!

Submissions

Features www.PurchasingB2B.ca/features

Canada’s magazine for procurement and supply chain management professionals

Procurement Evolution

OCTOBER 2013

The supply chain practitioner faces challenges as the profession continues to evolve into a more strategic endeavor.

2013

ANNUAL SURVEY OF THE CANADIAN SUPPLY CHAIN PROFESSIONAL

PM 40069240 $18.00

Photo Contest!

Did you snap a lot of pictures during your summer holidays?

We’re looking for your Canadian landscape and city scene photo submissions for our October 2014 issue. Send your high-resolution images by October 6 to Sandy MacIsaac at smacisaac@bizinfogroup.ca.

Sex and salary The University of Manitoba looks at just how much more male supply chain practitioners make over their female counterparts.

www.PurchasingB2B.ca/news Calling all writers!

PurchasingB2B is looking for articles, case studies, blog entries and other contributions from our readers. If you’re looking to connect with colleagues across Canada and flex your creative muscle, email editor Michael Power at mpower@bizinfogroup.ca.

Events

Social Media

www.PurchasingB2B.ca/topic/events SCMAO 2014 Annual Conference October 24-25 Mississauga, ON This conference brings you two days of quality education, networking and up-to-date information on industry trends and best practices. This year’s theme focuses on the necessity and value of collaboration in the supply chain.

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CPPC Forum 2014 October 27-29 Montreal, QC The Canadian Public Procurement Council’s annual forum serves the broad public procurement sector, with the forum attracting delegates and speakers from across Canada. Public procurement practitioners can network, share best practices and collaborate to support the profession.

Canadian Energy Supply Chain Forum October 28-30 Calgary, AB The CESCF provides world-class examples of supply chain management excellence and guidance on how to think, interact and approach the supply chain in new and innovative ways.

Follow us on Twitter for industry events, conference highlights and more. (@PurchasingB2B)

Connect with editor Michael Power and stay up-to-date with what we post online.

PurchasingB2B.ca

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Business Front

The Unemployment Rate Lie

by Michael Hlinka

I

f you go to the Statistics Canada website—the organization in this country responsible for compiling data on a variety of subjects—you’ll see (as of late August) that the unemployment rate in this country is seven percent.

This is what seven percent would mean to most people. If you took 100 people of working age, you would find that 93 are working and seven are unemployed. If only it were that straightforward…and transparent.

In order to calculate the unemployment rate, we have to start with something called the participation rate. This is the percentage of people aged 15 to 65 who are either working (employed) or actively looking for work (the unemployed).

The participation rate excludes two very important groups: discouraged workers and full-time students.

A discouraged worker is someone who has even given up looking for jobs after having faced so much disappointment in the past. I’m not particularly sympathetic to this type of person, but the fact remains that he or she is unemployed. It has been estimated that in the US, there may be as many as 750,000 discouraged workers, which would push up the unemployment rate in that country to 6.7 percent from the reported 6.2 percent.

Then there’s the reality of more and more young people extending their education because of softness in the labour markets. My day job is teaching financial planning at George Brown College. In the past few years, my school has rolled out any variety of one-year certificate programs—a couple of examples are financial planning and marketing financial services management. Many of the students are international, using the education system as a way of doing an end run around the typical immigration process. But there is also a significant cohort of Canadians who have graduated from university programs but don’t have the “skills” to secure employment.

Here’s my problem with that. When I graduated from high school (which was in the mid-1970s), I have distinct memories of at least a couple of young women from my Grade 13 class who immediately went to work as bank tellers, or as they are called today, customer service representatives. The reality is that the job market is so anemic that financial institutions are increasingly in the driver’s seat and can ask for—and get— older, more mature workers with higher credentials than they ever could have in the past.

Then there’s the part-time worker phenomenon. For every four Canadians who have full-time hours, there is one working part-time. And that part-time worker who may be putting in as few as 15 hours a week, is considered as fully employed as someone else toiling from nine to five.

It’s no mystery why the powers that be would like to systemically under-state unemployment. If there is one metric that politicians are judged on—fairly or unfairly—it is the unemployment rate. They (and this pertains to all parties) want to skew PurchasingB2B.ca

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the numbers lower than they really are.

There is a much better way to judge the health of the labour market.

Simply take all the people in Canada who are of working age, which really should be 16 to 65 years old. Establish that a typical workweek is 40 hours. And then multiplicatively work out the theoretical maximum number of hours that could be worked in the measurement period, which is currently a month.

To keep the numbers simple, let’s assume that there are 30 million Canadians who range from 16 to 65. Which means that the potential number of hours worked would be 30 million x 40 hours x 4 weeks for a total of 4.8 billion hours that could be worked.

Now you do the survey. Ask folks how many hours they worked in the past month.

Then you express that as a ratio of the total potential hours that could be worked.

What would this do? It would capture the difference between part-time and fulltime work. It would also capture overtime hours. And it would provide a much better indication of how fully utilized the labour force is at any point in time.

We would find that there is some “correct” level associated with a healthy economy. My guess is that if you conducted this type of survey in a province like Alberta, you’d have a very good idea of what full employment really looks like. On the other hand, you’d look at Ontario and…probably have nightmares. The current numbers suggest that unemployment stands at 7.5 percent, but all the anecdotal evidence I hear—and what I observe—suggests that a truer indication is at least 10 percent and probably higher.

But this isn’t something we should have to guess about. If we started tracking hours worked as a percentage of the total hours that could be worked, we’d have a true picture of employment.

B2B Toronto-based Michael Hlinka provides business commentary to CBC Radio One and a column syndicated across the CBC network.

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Ask The Expert

Vendor Collaboration

The case for involving vendor-partners early in the RFP process

By Hugh Lawson

W

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ith the post-recession reality of single-digit economic growth, reduced head-counts and pressure to improve the bottom line, supply chain professionals and their vendor-partner contacts are under scrutiny to take their organizations to the next level. Although one would think both parties have opposing goals, never before has it been more important for the two to collaborate successfully. Below is a list of reasons to collaborate: Time consuming process: At a recent supply chain conference I attended in Calgary, several attendees agreed that the RFP process is time-consuming and expensive. Typically, vendors spend on average $10,000 in materials, travel and personnel time to participate. Imagine how many payable hours supply chain professionals use to fact-find, gather past usage data, build stakeholder consensus and draft the final RFP document. With each of these tasks, vendor-partners can ethically help to lessen the burden, provide expertise and make the process more efficient and effective.

Vendors are your best source of productservice expertise: Your vendors’ knowledge of the supply chain is substantial, and they’re exposed to a variety of requirements and service-models. The most effective supply chain professionals interview vendor-candidates for trends and product expertise before crafting the RFP and market basket. Your vendor-partners will be open to being a “trusted advisor”, as nothing is more frustrating as an extensive market basket with poor details and direction.

Getting vendors involved early increases engagement: The chances of winning are often low, but may be the only way to compete for new business. Additional signs of lowered chances often lead to participants not putting their best foot forward with the response or not participating at all. Not very encouraging, considering the time and expense taken to create the RFP, assess the results and increase organizational pain/ risk when integrating a new vendor. Although the RFP process is document-driven, it’s essentially a selling experience and a series of moments for both parties. Involv-

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ing vendor-partners early drives vendor engagement as they have more opportunities to work with you, get encouraged and impressed with your organization culture, professionalism and partnership-approach. These moments can lead to influencing vendor’s internal discussions where decisions are often made for special concessions and enhanced offers in their RFP responses.

Examples of ways to drive increased vendor-participant efforts through earlier engagement include: • Pre-RFP vendor-candidate interviews for market basket product/service fact-finding and expertise; • Pre-RFP presentation to vendor-participants highlighting your organization, its origins, culture, business objectives and goals for categories under review; and • Pre-RFP question/answer period to verify vendor-participant queries and help them understand the opportunity.

Engaged RFP participants means improved response quality, enhanced proposals and an audience open to negotiation.

Emotional intelligence in the collaborative experience Although the RFP is a document-driven process, it’s essentially a selling experience and a series of moments for both parties.

Emotional intelligence is often underestimated. According to Mike Poskey, VP of ZeroRisk HR Inc, emotional intelligence quotient (EI) is a set of competencies showing the ability to recognize behaviors, moods, and impulses and to manage them according to the situation. EI is a skill that can be honed. EI skills that drive the collaborative experience include: • Leadership: inspiring and guiding groups of people; • Collaboration and cooperation: working with coworkers and business partners toward shared goals; • Political acumen and social skills: adeptness at inducing desirable responses in others; • Influencing: using effective tactics and techniques for persuasion and desired results; • Communication: sending messages that others understand; • Change catalyst: initiating and managing workplace change; • Building bonds: nurturing relationships for success; and • Team capabilities: creating group synergy in pursuing goals.

With so many parties involved, ineffective RFPs are risky and time-consuming. Your best vendor-partners are willing to act as a trusted advisor. Involving vendor-partners in the RFP development process earlier promotes engagement, improves content quality and, most important, positions you for success in enhancing your supply chain.

B2B Hugh Lawson is Director of Business Development for Staples Promotional Products. He has over 20 years of experience helping clients drive brand engagement and improve business results.

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Procurement Profile

The Supplier Diversity Journey Debra Quade, Manager, Supplier Diversity, Kellogg Company

How did you get into procurement?

After working in local government for several years, I was ready for a new challenge. I accepted procurement role that led to my transition into supplier diversity, which influenced my coming to Kellogg Company four years ago. My procurement background helps me understand challenges a company faces in creating an inclusive supply chain. For example, while we have centralized procurement based at our Battle Creek, Michigan headquarters, I work closely with CAMSC, WEConnect Canada and the CGLCC to ensure that all certified, diverse suppliers nationwide are registered in our database and therefore accessible to our buying team.

Q: Describe a typical workday.

Internally, supplier diversity professionals assist our procurement teams to locate qualified, certified suppliers to participate in quoting opportunities. Overall, we’re responsible for strategic planning and the sustainability of our programs. Externally, we represent our companies at diversity events. Success at these events lies in networking with potential suppliers and educating them on doing business with large corporations. We’re responsible for reporting our diversity expenditures to customers, which is important as it supports the inclusiveness of the entire supply chain. I tell small business owners that I work for them as well.

Q: What do you like most about your job?

I enjoy explaining the business case for supplier diversity and the necessity of creating an inclusive supply base, but most of all I enjoy the wonderful people I meet. I enjoy benchmarking best practices with my peers and have discovered that every small business owner has a unique story. I’m constantly educated and delighted to meet so many courageous people.

Q: What even/highlight of you career stands out the most?

I recently partnered with one of our commodity managers to hold a webinar for a certain segment of our Tier One suppliers and as a

result have two attendees that are considering obtaining diversity certification and others who have volunteered to attend diversity events to locate potential suppliers. I‘m always seeking new ways to engage and involve Kellogg employees and suppliers.

Q: Why is supplier diversity important?

Diverse suppliers can provide insight into developing markets. Inclusion encourages diversity of thought and development, and for new products and procedures. While the business case differs, some basics remain, such as developing a supply base that reflects employees, customers and consumers. Supplier diversity, if done correctly, should contribute to both the top and bottom line.

Q: What are your future plans?

We’re excited to begin testing a new online system for reporting this fall. We’re also rolling out procedures that will help support the sustainability of our program and help integrate supplier diversity into our procurement life. Finally, we’re reviewing what global supplier diversity success will look like.

Q: What advice would you give those new to the field or planning to enter soon?

Learn your corporate culture and how supplier diversity can align with corporate goals.

Reach out with questions or to benchmark with your peers as we’re always ready to share best practices. Don’t feel discouraged if your program isn’t as advanced as some. Supplier diversity is a journey we’re all on. B2B

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StaplesAdvantage.ca

7 | MAY 2014

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Head Professional Development Directory

byline

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thursday, november 27, 2014 – 12:00pm-1:00pm Et Looking for insight into whether you’re being paid fair market value? Want to hear about your future career prospects? Learn more about the results from the

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We invite you to join us on November 27th for a FREE one-hour webinar that will include presentations of the survey results by Michael Power, editor, PurchasingB2B; Julia Kuzeljevich, editor, Canadian Shipper; Emily Atkins, publisher/editor-in-chief, MM&D; and SCMA president and CEO, Cheryl Paradowski, along with commentary from top Canadian HR professionals and recruiters.

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Professional Development Directory Advertorial

Did you know there is an organization dedicated to the support of Canadian public procurement professionals?

Are the ways of procuring goods and services and awarding contracts different in the public sector than they are in the private sector? Most definitely. The challenges you face to ensure that public funds are spent in an efficient and transparent way are common regardless of the size or sector of your public organization. Additionally, your respective organizations must strive to achieve operational excellence and you are therefore being asked to “think outside of the box” and improve your internal processes on a continuous basis. You will get there eventually, there is no doubt. But what if you had access to additional resources and the opportunity to network with other public procurement professionals?

Don’t you think it would help you get there faster and more easily?

The Canadian Public Procurement Council can assist you with getting the resources that you need in order to face your challenges.

Whether you need to have access to training, resources on best practices or just the ability to exchange and/or collaborate with a Canadian community of public procurement professionals, having your organization become a member of the CPPC is something that you should definitely consider. Membership fees are reasonable and are based on the size of your procurement team, about the cost of a single job posting, which as a bonus is included in your

membership package. Benefits are available to your entire team since your organization as a whole will become the member. Got a contract to write for the procurement of a good or service that you’ve never purchased before? Feel like you have to start from scratch and wonder if someone else has already done something similar that they could share? We can help you. Your membership will enable you to ask questions to our public procurement membership community and you will most likely find the answer you are looking for and a colleague with whom to discuss the method or practice in detail. This is one of the value added features we provide our members that is the most appreciated.

The CPPC is proud to be the Canadian sponsor of the Achievement of Excellence in Procurement Award. This distinction recognizes best practices in public procurement and can guide your organization along the journey of continuous improvement by providing a framework that will either get you started or give you new ideas on where you should continue improving.

Our goal is to help you evolve and improve as a procurement function and contribute to your success within your organization. You are convinced that your role is strategic and critical to the success of your agency, so are we!

Visit our website at www.cppc-ccmp.ca to find out more about us, our membership structure and categories and how we can help you.

You can also contact us at admin@cppc-ccmp.ca or 418-619-1951.

The Canadian Public Procurement Council

Our Mission

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The CPPC is the leading voice for professionals involved in public procurement in Canada. Our members are organizations at the federal, provincial/territorial, and municipal levels of government, and in the health care and education sectors and Crown Corporations.

• • • •

Promote dialogue and networking; Facilitate information and knowledge exchange; Develop approaches to common issues; Provide Leadership for the resolution of shared challenge.

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Professional Development Directory

The 17th Annual SCMAO Conference Mississauga Convention Centre | 75 Derry Rd West, Mississauga, ON | October 24 – 25, 2014

JOIN US FOR ONTARIO’S PREMIER EVENT FOR SUPPLY CHAIN PROFESSIONALS! Partner for Performance brings you two full days of quality education, networking, and the most up-to-date information

FEATURED SPEAKERS Jennifer Botterill Three-Time Olympic Gold Medalist

on industry trends and best practices.

Partner for Performance will focus on the necessity and value of collaboration in supply chain.

WHY ATTEND?

Develop Professionally – Network! Reconnect with peers and meet new colleagues. Earn credits towards maintaining your CSCMP designation – up to 20 credits!

Hear from the Experts – Learn from the people who

James Cunningham Host of Food Network Canada’s EAT ST.

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Paul Emanuelli Managing Director, The Procurement Office

implement, support, and develop solutions for your SCM challenges

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Robert C. Worthington Principal, Worthington & Associates Ltd.

ATTEND OUR PRE-CONFERENCE SEMINAR—October 22 – 23

Optimizing Employee Performance through Strategic Leadership Join Instructor Shawn Casemore for this two day workshop to address the employee performance challenges you face on a daily basis. Discover how to improve your business relationships with meaningful and pragmatic approaches to communication.

Register today at www.scmao.ca Join the conversation on twitter #SCPP14

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Head Thought Leadership

Best Practices For Inclusion How to establish a supplier diversity program

by Michael Power

S

Indy Sian

Jamie Crump

Marcia Seymour

Cassandra Dorrington

Director, business strategy development, procurement and supply chain management TELUS

Director of strategic sourcing and supplier diversity United Rentals

Senior manager, procurement and corporate responsibility TD Bank Group

President and CEO CAMSC

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upplier diversity can provide a return on investment to organizations that work to build an inclusive supply chain, while also creating opportunities for businesses owned by Aboriginal peoples and minorities. But for the uninitiated, getting started with a supplier diversity program can be daunting. Procurement practitioners might not know where to look for best practices or may lack an understanding of the steps for engaging diverse suppliers. Implementing supplier diversity requires an understanding of these best practices before customizing them to fit a particular organization.

To discuss the issue, PurchasingB2B held a panel in partnership with The Canadian Aboriginal & Minority Supplier Council (CAMSC) at the SCMA National Conference in Edmonton on June 13. Participating in the panel were: Cassandra Dorrington, president and CEO of CAMSC; Indy Sian, director, business strategy development, procurement and supply chain management at TELUS; Marcia Seymour, senior manager, procurement and corporate responsibility at TD Bank Group; and Jamie Crump, director of strategic sourcing and supplier diversity at United Rentals. Michael Power, PurchasingB2B’s editor, moderated the session.

To set the stage for the discussion, panelists talked about what the term “supplier diversity” actually means. From her perspective, Dorrington said that supplier diversity represented a “proactive program” to ensure inclusion in the supply chain. “You traditionally have major partners that you worked with and within this new definition it’s, ‘let’s try to make sure that you’re being inclusive and provide opportunities for different groups that you might not normally have done business with that can bring solutions to the table,’” she said. “For us, diversity is about broadening that scope.”

Diversity means more than expanding a supplier base, but also includes focusing on a return on investment, said Sian. Small, diverse suppliers can often provide new ways of solving problems. As well, they potentially provide a faster time to market because they’re located across the country and don’t need to be flown in to do the work, he noted.

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Thought Head Leadership

“From a geographical point of view, they understand the landscape a lot better. They would know how to move faster and where to secure more products for you,” he said.

For her part, Crump was quick to point out that supplier diversity didn’t represent a social program or set aside for suppliers that fall into the “diverse” category. Rather, it’s a business initiative that needs to produce results in order to be viable. “I have just as much responsibility showing the return on that value as I do for any other project that’s funded within the organization,” she said. “We want a supplier base that represents our customer base and allows us to better understand and serve our customers and the companies that we deal with.”

Sian agreed, noting that it helps to think from a broad perspective when looking for the ROI of supplier diversity. Diverse suppliers must still win an RFP based on their business merits, he said. But since diverse suppliers can sometimes lack experience working with large corporations, introducing them into the supply chain can represent an investment in the supplier that brings value to the organization. “That ROI is long term—it’s an investment that can come back,” he said. “At the end of the day, it’s thought leadership that’s coming back so it’s a multi-fold return on investment.”

When TD Bank Group launched its supplier diversity program, the organization already did business with several suppliers that were diverse, said Seymour. But the organization lacked a program to identify them. Actually identifying those diverse suppliers showed that they were already reliable and that, in several cases, they had been in business for several years. “We’re looking for suppliers that deliver the service we ask for on time, that are competitive in price but that also bring to the table their own values and cultures that match our organization,” she said.

“That’s another part of the ROI that we can’t underestimate—doing business with suppliers that match our organization in efforts on diversity and inclusion.”

It takes a budget to run a supplier diversity program, added Crump, and each year that budget must be justified just like any other cost. That means the program needs value and an ROI to continue operating. Organizations can measure their program in terms of dollars spent, but also number of suppliers that are engaged across different areas to ensure the customer base is represented well. “If it’s 90-percent women-owned business then we’ve got some work to do,” she said. “It’s great that we have those, but we want to make sure that we’re looking across the supply chain at all of the different types of diversity that there is.”

Getting support

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An important step in creating and maintaining a supplier diversity program includes getting support for supplier diversity policies from within the organization. Again, when it

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comes to funding resources, that support is necessary, Crump noted. From that standpoint, support from the top of an organization is crucial. “You have to gain it from the outset, but then you have to keep it,” she said. “That’s where the accountability and the reporting and the metrics come in, because it’s a business initiative. You have to understand the culture of your company and what’s important to them. You have to understand what you can leverage.”

Sian noted the importance of both market research and learning from supplier diversity in the US. Although not everything will apply to the Canadian market, programs south of the border are often quite mature, Sian noted. He stressed the importance of getting a program framework built to get support from the CEO to the front line, as well as continual education and communication.

“When your CEO and your board are approving it, that means they see value in it as well,” he said. “It’s a change in management culture. Once that framework is instilled it’s like everything else, it grows within the corporation. That culture is motivating and, at the end of the day, it’s change management.”

Dorrington was quick to note that supplier diversity isn’t simply a procurement initiative. And when she approaches organizations to discuss the topic, she targets the C-suite for discussions. Buy-in at that level is crucial, she said.

From there, supplier diversity can become part of the cul-

“From a geographical point of view, (diverse suppliers) understand the landscape a lot better. They would know how to move faster and where to secure more products for you.” ~ Indy Sian PurchasingB2B.ca

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ture of an organization. That way, a supplier diversity program can survive despite personnel changes within the organization. “Once it gets embedded into the organization, into the strategy, then it becomes part of what gets done on a regular basis,” she said. “When it permeates across the organization then you know you’re going to have success and you know it’s going to be ongoing.”

Having confidence in a supplier diversity program is important to ensuring that program gets rolling, Crump told the audience. Don’t be afraid to call on champions for the program once you find them, she advised, and ensure that support comes not only from the C-suite but from colleagues at all levels. “If you don’t believe in it, then you shouldn’t be trying to do it,” she said. “Figure out what your doubts are, address them, and then go with gusto.”

Seymour agreed on the importance of supplier diversity champions, noting that internal sourcing groups are a good place to begin looking for those champions. She recommended inviting people from the sourcing group to events and providing opportunities to participate in dinners, conferences and other events related to supplier diversity initiatives. As well, she suggested working with employee resource groups already involved with diversity to see what initiatives they’re involved in. “The third way is to look for those business owners who have had a really great experi-

ence with diverse suppliers that are ready to share that experience with other business owners who may have doubt,” Seymour said. “Taking those opportunities to tell the story about it are the things that you have to continue to do to build those champions.”

As internal stakeholders deal more frequently with diverse suppliers they see the value in working with them, thereby building those stakeholders as champions, Sian said. Business unit partners can therefore become program supporters. When an RFP or contract is awarded to a supplier, it can be communicated within the entire corporation, he noted. If a conference or event related to supplier diversity takes place, he recommended inviting not only procurement practitioners but also sales staff so they can see supplier diversity first hand. “Champions come in multiple forms,” he said. “It’s not just one champion that’s going to be a supplier or supply base, it’s going to be around you and you’ve got to look for it. But you’re going to have to educate and promote it.”

An easy way to promote supplier diversity within an organization is to deal with another organization that’s already working with diverse suppliers and can present the business case, said Dorrington. The points resonate more clearly if one business tells another what the benefits are. Experienced businesses can lay a roadmap and explain what the challenge of supplier diversity programs, she noted.

Diverse supplier engagement

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There are also several ways to engage diverse suppliers that many people might not know about, Dorrington said.

Organizations like CAMSC can help connect businesses to diverse suppliers, since CAMSC has a database of several hundred such suppliers across Canada, she told the audience. The organization has also recently released a supplier diversity “playbook,” that lays out step-by-step how to get a program started. Most organizations starting down this path will begin with small steps rather than jumping into a full program, Dorrington said.

As well, Seymour described the process that TD Bank Group went through when it became involved in supplier diversity. The organization focused on the minimum requirements needed to put a program in place. From there, they looked at where they wanted the program to be a few years into the future. And while those steps are similar for most organizations, the process will also differ from one company to another based on how they source, what their strategies are and other factors.

The organization also had to decide which organizations to join, such as CAMSC, in order to gain access to diverse supplier databases. The bank also began regular interactions with the sourcing team to stay abreast of what it was doing, Seymour told the audience. “It really was like almost

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Thought Leadership

any other initiative, laying out your plan, reporting against it—are we on track, are we off track? What have we got to change? And then setting the stage to continue to build that next three-year plan,” she said.

When it comes to determining whether a supplier is diverse or not, Dorrington noted that—contrary to common belief—organizations within Canada are able to ask whether a company’s ownership is diverse so long as the question is linked to initiatives like supplier diversity programs. “Most times, you’ll be very surprised that you actually have diversity in your supply base, but you just don’t know it yet,” she said. “That becomes your benchmark that you start to build a base on.”

“One of the things we’re starting to look at a little bit closer is, if diverse suppliers aren’t making it in, why aren’t they making it in? We’re starting to put a little bit more vigor into trying to categorize reasons.” ~ Marcia Seymour

14 | SEPTEMBER 2014

When TELUS launched its program, Sian said, the company laid out a three-year plan looking at its supply base to determine which ones were diverse. The company also does “supplier matching” involving interviewing diverse suppliers as part of the marketing research, which vendor managers can consult when looking at suppliers. Suppliers can also sign up as a new supplier on TELUS’s website and check a box that identifies them as diverse. By working with CAMSC, the company doesn’t have to verify those suppliers are diverse, Sian noted. “As long as they have their certification we know they’re a diverse supplier,” he said.

It’s important to use performance metrics when looking at a supplier diversity program, the panel agreed. That includes basic metrics such as how much gets spent with diverse suppliers, said Crump. Measuring the number

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of suppliers, including across different categories, is also useful.

Since she works closely with the sales department, Crump noted that she has also reported on how many companies she has provided reporting to, among other areas.

Seymour noted that she tracks the number of requests received from the sourcing teams where they’re going to RFP and how many they receive, as well as how many diverse suppliers they’re able to provide to those sourcing teams for consideration. They then track if the RFP went out, how many got included into the RFP, whether they were successful and, if so, how much business they won. “One of the things we’re starting to look at a little bit closer is if diverse suppliers aren’t making it in, why aren’t they making it in? We’re starting to put a little bit of vigour into trying to categorize reasons why they weren’t,” she said.

Sian agreed that understanding why some diverse suppliers weren’t successful when they responded to RFPs was important. Many small vendors might not understand how to participate in an RFP and may even be intimidated by the process, he said. TELUS has partnered with other organizations in a joint mentoring program to educate diverse suppliers. The company held a one-day workshop to teach diverse suppliers how to write an RFP, which in turn resulted in TELUS receiving higher quality RFPs. “It doesn’t guarantee them any new options, it doesn’t guarantee them awarding RFPs, but it tells them how to interact,” he said.

To wrap up the discussion, panelists looked at challenges that organizations face with a supplier diversity program. Crump advised such organizations begin small, with a program that’s easy to control. Trying to do too much, too soon can dilute efforts, which can make the program more difficult to promote internally, she said. “The biggest challenge is just trying not to get crazy with trying to be the be-alland-end-all,” she said. “Do what makes sense for your company and for your culture.”

Another major challenge was figuring out where the gaps are in a supplier diversity program, Seymour noted. It can take a long time to dig into the supply chain to see what products a company is looking to buy that don’t have diverse suppliers available. “And then we need to find a way to feed that to CAMSC and other organizations to say, ‘we have business to give, can you help find the suppliers in this base?’ I think that’s probably the continued evolution of supplier diversity in Canada, really starting to fill those gaps.”

Starting a supplier diversity program isn’t a race, cautioned Sian, and sticking with a plan takes time. It’s also important to continually communicate the program to stakeholders to ensure that efforts continue to grow within the organization. “If you don’t communicate it and you don’t enforce it and you don’t stick to the plan, you will get derailed very quickly,” he said.

While supplier diversity has challenges, there are also advocates and supporters that can help organizations with the process, Dorrington noted in closing. “Whether it’s organizations like mine, whether it’s corporations, there’s always a way to be able to work through that and someone at the other end of the phone or email will help you,” she said.

B2B

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Addressing issues affecting Canada’s public procurement professionals

Public Procurement Excellence How to leverage awards as a tool to increase efficiency

By Francois Emond

I

mproving processes on a continuous basis is something everyone must consider in today’s business reality. Whether the private or the public sector, it’s now part of everybody’s job to think differently in order to gain efficiency and be more productive. These principles easily translate to the private sector, especially in manufacturing. But they also apply to public procurement. Agencies from all levels must question the way some processes operate.

This requires leadership, drive and effort as well as resources whether human, technological or financial.

Even though we know that we are trying to be more efficient in order to increase the overall performance of our organizations, the public procurement professional is often acting behind the scenes and therefore can encounter more challenges in terms of seeing end results of their contribution and seeking recognition when it comes to process improvements and gains in efficiency.

It’s easier to begin the journey of continuous improvement and excellence with a goal. It’s easier when we see how other organizations perform in a similar environment, and if we can benchmark best practices against them or against measurable criteria but that also set a high standard in process performance. Key public procurement processes to be improved should line up with topics like innovation, professionalism, ethics, productivity, leadership, training and the ability to use technologies available (e-procurement).

There is an award that recognizes best procurement practices specifically for public and not-for-profit organizations. The National Procurement Institute is the founding sponsor of the Achievement of Excellence in Procurement Award® (AEP). This award is open to any size of public and not-for-profit organizations from any sector, whether municipal, provincial, federal, crown corporations, education or health. Organizations that win do so if they meet a score based on standardized criteria related to public procurement processes and are in line with goals and objectives when starting a continuous improvement initiative.

The Canadian Public Procurement Council (CPPC) is now the Canadian sponsor of the award, which gave us the opportunity to sit on the evaluation committee as an official evaluator to review submissions from across the US and Canada. The rigorous evaluation process

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made us realize that this recognition shouldn’t be seen just as an award. It’s also a tool to motivate an organization and, more specifically, its procurement function, to achieve those best practices. Just by looking at the criteria provides key information on what their plan should be to improve their internal processes.

Some criteria relate to supplier awareness of the organization. It’s required that a section of the organization’s website be dedicated to suppliers and provide information on how to do business, but also to offer training to suppliers. These criteria contribute to optimizing and opening market conditions, which is a key process in public procurement that helps reduce costs.

Other criteria look at ethics, giving points for having an ethics code or policy that was not just developed by the procurement professional but voted and approved by a council or a senior management or board of directors.

Looking at the progress made by some of the organizations that have submitted their applications and earned the award year after year—with consistently higher scores—and are now way above the minimum score makes it clear they’ve used that award as a tool to improve their processes. The feedback provided by the evaluation committee also gives key information that will influence the priorities and action plan related to continuous improvement initiatives.

It’s easier to start a continuous improvement initiative with goals, objectives and strategic priorities. Instead of starting from scratch, public procurement professionals should look at available tools. The AEP Award is one example specific to Canadian public procurement—a main reason CPPC is now the award’s Canadian sponsor. Look at the evaluation criteria and see how your organization meets or doesn’t meet them.

They are available through the CPPC website (www. cppc-ccmp.ca). This is an excellent base to start your continuous improvement journey and contribute to the efficiency of your organization.

B2B François Emond is the executive director of the Canadian Public Procurement Council (CPPC) and can be reached at femond@cppc-ccmp.ca. The organization is the leading voice for professionals involved in public procurement in Canada. Visit the CPPC website at www.cppc.ccmp.ca.

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CAMSC Business Awards

Celebrating Diversity Night and Day CAMSC combines Inclusive Prosperity Summit and Business Achievement Awards Gala for its 10th anniversary

By Michael Power

W

hile the Canadian Aboriginal & Minority Supplier Council (CAMSC) is looking back at its 10-year history this year, the organization is also using this year’s Business Achievement Awards to highlight new beginnings.

The CAMSC Business Achievement Awards celebrates the organization’s first decade at a new location. The gala event will be held at Toronto’s Liberty Grand, Exhibition Place, on September 24. As well, CAMSC is introducing two new awards at the event this year: the Tier 1 Champion of Supplier Diversity and the Collaboration Award.

“The awards gala celebrates CAMSC’s 10th year while honouring Aboriginal and minority entrepreneurs, as well as the corporate leaders, government officials and community leaders who support them.”—Cassandra Dorrington

16 | SEPTEMBER 2014

The annual ceremony will be held right after CAMSC’s Inclusive Prosperity Summit, which takes place during the day on September 24 at the Fairmont Royal York, 8:30am to 4pm. The conference will bring together Canadian economic development policy makers, government procurement leaders and corporate supply chain diversity leaders to discuss the shared value of supply chain inclusion. The summit will serve to show governments that they can tailor a supplier diversity program to fit the public sector’s specific needs surrounding transparency and accountability, said CAMSC president Cassandra Dorrington.

“The best way to do that is to have [corporations] tell their story and get government in the room so they can start to say, ‘how can we customize this to fit our portfolio but still have some similar outcomes and success?’” she said.

As well, corporations will showcase the business impacts and best practices of supplier diversity initiatives, and collaborate with government policy makers to utilize inclusive procurement practices. The event will feature keynote sessions, concurrent workshops, breakout sessions and more.

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The awards gala not only celebrates CAMSC’s 10th year but also seeks to pay tribute to Aboriginal and minority entrepreneurs, as well as the corporate leaders, government officials and community leaders who support them. The event takes place at the Liberty Grand, Exhibition Place on September 24, with the gala reception beginning at 5:30pm. From there, the dinner and awards ceremony kicks off at 7pm.

Once again this year, the event’s emcee will be Anne-Marie Mediwake, news anchor with CBC television. Mediwake herself was named GTA’s Woman of the Year in 2011 at the Consumer’s Choice Awards. This year’s keynote speaker will be Masai Ujiri, president and general manager of the Toronto Raptors. A native of Nigeria, Ujiri was the 2012-13 NBA Executive of the Year, and in 2013 returned to the Raptors where he had received his first front office position in 2007.

The awards to be presented during the evening’s celebrations are as follows: Supplier of the Year Award: Given to an Aboriginal- or Minority-owned business with impact in sales and export growth or as an industry innovator.

Small Business of the Year Award: This honour is awarded to an Aboriginal- or Minority-owned business with 50 or fewer employees, based on business growth and development, export sales growth and major accomplishments during the previous year.

Corporation of the Year Award: Presented to a leading corporation that demonstrates active inclusion and spend with certified Aboriginal and minority suppliers, assists in the development of Aboriginal and minority suppliers, promotes supplier diversity and business development within their corporation and to their vendors and other businesses organizations.

Tier 1 Champion of Supplier Diversity: New this year, the award is presented to a business-to-business, Tier 1 corporation that supports its clients economic inclusion goals by including certified Aboriginal and minority suppliers in their procurement opportunities, assisting in the development of Aboriginal and minority suppliers, and promoting supplier diversity across their corporation.

Procurement Business Advocate of the Year Award: Presented to an individual who promotes supplier diversity through outreach and activities, and who is respected by their peers for advocating supplier diversity in Canada.

CATA Technology Innovation Award: Awarded for the most innovative new technology-based product or service. The product will have proven itself in operation and its design and market success. It will have also enhanced Canada’s international reputation for innovation and excellence.

Collaboration Award: Also new this year, this award is presented to a company or organization that works collaboratively with CAMSC members, suppliers or other organization.

For a feature report on the summit and awards ceremony, see the October issue of PurchasingB2B. B2B

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Vol. 16 No. 2 September 2014

FALLING for the 2015s

IN THIS ISSUE 4 8 11 14

C01_Cover.indd 1

2015 Car Previews 2015 Truck Previews Roadtest: Promaster BMW i3

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2014 Lancer model shown

2015 MIRAGE

2015 LANCER

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YEAR 160,000 KM

POWERTRAIN

LTD WARRANTY**

Insurance Institute for Highway Safety Excludes Lancer Evolution, Ralliart and Sportback

Winner of the 2013 ecoEnergy Award for “The Most Fuel-Efficient Subcompact Car”

§ AWC standard on RVR SE AWC, Limited Edition and GT/Lancer SE AWC and GT. S-AWC standard on Outlander GT. ‡ Whichever comes first. Regular maintenance not included. New vehicle limited warranty covers most vehicle parts (excluding batteries, with entertainment systems and other items excluded under the warranty’s terms and conditions) under normal use and maintenance. ** Whichever comes first. Regular maintenance not included. See dealer or mitsubishi-motors.ca for warranty terms, restrictions and details. Not all customers will qualify.

FOR FURTHER INFORMATION ON OUR FLEET LINEUP, PLEASE VISIT MITSUBISHIFLEET.CA AND/OR CONTACT OUR CANADIAN FLEET TEAM BY EMAIL AT FLEET@MMCAN.CA. YOU CAN ALSO REACH OUT BY PHONE TO OUR FLEET REPRESENTATIVES LUC GRENIER AT 1-905-214-9068, SHAWN BRYAN AT 1-905-214-9010 OR DAVID MURPHY AT1-905-214-9048.

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Global taxation on tap Used EV batteries can be reclaimed at NAFA Academy With globalization, a fleet manager has to stay on top of the intricacies of the tax policies of every country their company runs vehicles in. It can be a complex web of fuel taxes, Value Added Taxation (VATs), as well as environmental and insurance concerns.

NAFA’s International Fleet Academy was designed specifically to meet the needs of those who manage fleets outside of the United States and Canada, and offers fleet professionals the tools to gain understanding, and the opportunity to discuss the problems and challenges they’re facing with some of the brightest minds in global fleet management.

The fourth annual IFA will take place November 5-7 at Rosen Shingle Creek in Orlando, Florida. On Thursday, November 6, Bart Vanham, Partner, BVH&C Consulting, Namur, Belgium presents What You Need to Know about Fleet and Taxation around the Globe.

80 VALLEYBROOK DR, TORONTO, ONTARIO M3B 2S9

www.PurchasingB2B.ca

Vol. 16, No. 02

SEPTEMBER 2014

EDITOR: Emily Atkins (416) 510-5130, eatkins@bizinfogroup.ca

Although electric and hybrid vehicles are gaining market share, one significant question remains. How can the used lithium-ion batteries be processed post-vehicle application? A new peer-reviewed Mineta National Transit Research Consortium report, Remanufacturing, Repurposing, and Recycling of Post-Vehicle-Application LithiumIon Batteries, offers three possible alternatives. The study, conducted by Charles Standridge and Lindsay Corneal, can be downloaded at http://transweb.sjsu.edu/ project/1137.html “Lithium-ion batteries provide efficient energy storage,” said Standridge. “Their use in vehicles will continue to expand, but we must deal with disposition once they fall below regulatory standards for use in on-road vehicles. To address that challenge, our studies have shown that many of these batteries may still hold a significant charge level and thus have additional economic value

that can be reclaimed in one of three ways.”

• Remanufacturing for intended reuse in vehicles by replacing any damaged cells within the battery shows promise.

• Repurposing could be accomplished by reengineering a battery for a non-vehicle, stationary storage application.

• Recycling would involve disassembling each battery cell and safely extracting the precious metals, chemicals and other byproducts to be sold on the commodities market or re-introduced into a battery manufacturing process.

Results from forecasting models show that by 2035, the number of available postvehicle-application batteries will range from 1.376 million (conservative) to 6.759 million (optimistic), which is sufficient to justify remanufacturing, repurposing, and recycling efforts. Recycling is economical only if supported by post-vehicle remanufacturing and repurposing applications.

Mazda has begun production of the new Mazda2 (known as Demio) in Japan. The car will be rolled out in global markets starting in there this autumn.

In some markets Mazda2 will be available with the SKYACTIV-D 1.5, a new small-displacement clean diesel engine delivering torque comparable to a 2.5-litre gasoline engine. The Mazda2 will come to the Canadian market in 2015, and will get the SKYACTIV-G 1.5-litre gasoline engine.

ART DIRECTOR: Sandy MacIsaac (416) 442-5600 ext. 3242, smacisaac@bizinfogroup.ca PUBLISHER: Dorothy Jakovina (416) 510-6899, djakovina@bizinfogroup.ca PRODUCTION MANAGER: Kimberly Collins (416) 510-6779, kcollins@bizinfogroup.ca CIRCULATION MANAGER: Barbara Adelt (416) 442-5600 x 3546, badelt@bizinfogroup.ca BIG MAGAZINES LP EXECUTIVE PUBLISHER: Tim Dimopoulos VICE-PRESIDENT OF CANADIAN PUBLISHING: Alex Papanou PRESIDENT OF BUSINESS INFORMATION GROUP: Bruce Creighton CAR, established 1991, is published twice annually (June and September), by BIG Magazines LP, a division of Glacier BIG Holdings Company Ltd. © Contents of this publication are protected and may not be reproduced, in whole or in part, without the written consent of the publisher or editor NOTICE: CAR accepts no responsibility or liability for claims made for any product or service reported or advertised in this issue. CAR receives unsolicited materials including letters to the editor, press releases, promotional items and images from time to time. CAR, its affiliates and assignees may use, reproduce, publish, re-publish, distribute, store and archive such unsolicited submissions in whole or in part in any form or medium whatsoever, without compensation of any sort.

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Cover Photo by Rusty J. Joerin, SCMP www.woodsgift.zenfolio.com Title: Coming Home-Qualicum Beach SEPTEMBER 2014 CANADIAN AUTOMOTIVE REVIEW | 3

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2015 Dodge Charger

A refreshing feeling What’s in store for the 2015 model year For the most part, the auto industry has been prospering mightily this past few months, both at the entry-level and luxury ends of the market. This doesn’t mean they’ll all rush into production with new vehicles by way of celebration. Just about all vehicles sold in Canada are on strict cycles—often just four years—and automakers replace key products exactly when they’re ready to and not before.

Bearing this in mind, 2015 can be described as an “exciting”, if not a “banner”, year and we’ve picked some of the highlight vehicles for this feature. There are fair numbers of all-new cars arriving and quite a few with changes enough to justify makers’

claims of bumper-to-bumper upgrades and re-designs, but expect more widespread changes for 2016.

For 2015, Dodge has re-vamped its full-size Charger sedan, popular with commercial fleets and law enforcement agencies. With new 60s-inspired sheet metal and several engineering updates, Charger engines run from a 3.6-litre Pentastar V-6 right up to a 5.7-litre HEMI V-8. All models get a TorqueFlite 8-speed automatic and all-wheel drive is an option.

Chrysler Canada got off to a good start with its 2015 Chrysler 200 mid-size sedan, recording strong early sales and an enthusiastic reception from the automotive

media. Billed as “Canada’s most affordable mid-size sedan” the car is styled and equipped to compete with segment rivals like the Toyota Camry, Honda Accord, Hyundai Sonata and many others. Both four- and six-cylinder engines are available, as is all-wheel drive.

All-wheel drive is increasingly popular these days and a sound choice for allweather business applications. Adding to what’s becoming a long list of AWD sedans is the 2015 Buick Regal, which also gets technical, safety and styling upgrades. Two four-cylinder engines are available for the Regal. Boasting a sub-$10,000 starting price tag, the new Nissan Micra is bound to

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By Tony Whitney

Nissan Micra

Buick Regal Toyota Yaris

Hyundai Sonata

Toyota Camry

“2015 can be described as an exciting year.”

attract attention. It’s a nicely designed subcompact with a decently-responsive 1.6-litre engine to bolster performance. The basic equipment level is generous, given the car’s low sticker price.

It’s not entirely a “ground up” redesign, but it comes close and the 2015 Toyota Camry includes enough upgrades to attract new attention to a sedan that’s been top seller in North America for 12 years now.

Apart from freshened styling and a bold, aggressive, nose job, there’s new lighting and a refined interior. It’s claimed the quietest Camry ever, whether the buyer chooses a four-cylinder, V-6 or hybrid powertrain.

The distinctive new Toyota Yaris owes much of its design to the company’s European operations and in fact, the

subcompact hatchback will be built in France. The engine remains a 1.5-litre 4-cylinder.

Highlights from Mitsubishi for 2015 include the addition of AWD to the Lancer sedan range and a $6,000 price drop for the electric-only i-MiEV. On the horizon is a new plug-in hybrid, but it won’t appear until the end of next year as a 2016 model.

Hyundai has a new seventh-generation Sonata for 2015 with fresh sheet metal and lots of engineering upgrades. The Korean automaker has opted for a more conservative look this time and it’s certainly a handsome automobile. Buyers have a choice of two four-cylinder engines, the top one turbocharged and delivering 245 horsepower. The car is surprisingly refined and quiet for its class.

Ford’s new Focus does feature freshened styling inside and out, but the big news is an available 1.0-litre EcoBoost engine with fuel economy that’s promised to be nothing short of amazing.

The tiny 3-cylinder (introduced this year in the Fiesta) delivers decent performance and refinement in addition to thrifty running costs.

The new model year brings us an all-new Subaru Legacy, which naturally offers all the qualities on which the Japanese automaker has built its reputation—reliability, dependability, value for money and an outstanding all-wheel drive system. Subaru notes that the 2015 Legacy adds more comfort and a more confidence-inspiring driving experience.

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Ford Focus

Subaru Legacy

Mercedes-Benz C-Class

Kia K900 Volkswagen Golf

BMW i3

Subaru is proud of the fact that 96 percent of all Legacys sold over the last ten years are still on the road. Expectedly, Subaru stands by its well-proven horizontally-opposed ‘boxer’ powerplant for this new sedan.

Like the Focus, Volkswagen’s Golf is a ‘world car’ sold everywhere and produced globally. Devoted Golf lovers don’t like radical changes and VW has delivered an all-new model with a wide variety of stylistic and technical upgrades, but nothing too dramatic. It’s a solid, reliable and practical car that’s available in many versions, including the ever-popular GTI ‘hot hatchback.’ The ‘Golf with a trunk’ Jetta is also

new for 2015. Later, VW will launch the all-electric e-Golf and join the increasingly competitive EV market.

Executive car buyers have several interesting new models to consider for 2015, including Kia’s entry into the luxury segment—the K900. It’s a large, refined, powerful car fitting into the Lexus/Mercedes-Benz/BMW/Audi segment but with a lower sticker price.

Both V-8 and V-6 engines are on offer for the K900, which starts at just under $50,000. Mercedes-Benz has completely revised its top selling sedan—the C-Class—for the new model year and it aims to pack more youth appeal into a

model that has sometimes been rather staid. The styling is certainly bolder than we’ve seen before in this model and it promises to be even more popular than the last generation car.

BMW is introducing the i3, an EV with a difference for 2015—there’s an optional on-board gas engine that can be slotted into a rear compartment to provide a range well beyond most competitors. This engine is used to charge the batteries, not drive the wheels. The i3 is a compact hatchback with advanced styling inside and out. Performance is surprising for a small EV and the car features all the luxury and convenience expected from BMW. c.a.r.

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42496_M

EXTRA ROOM FOR YOUR GROWING TEAM. Ford Fleet has the lineup of compact and full-size vans to suit any need. The all-new full-size 2015 Transit offers a selection of configurations. Choose between the full-size cargo van, passenger wagon, cutaway and chassis cab, as well as three length choices and low, medium or high roof versions. For a compact van to handle big jobs, the 2015 Transit Connect offers cargo van or passenger wagon models, and features standard dual sliding rear side doors, with up to 1,710 lb of payload capacity.* With so many options to choose from, these vehicles are a versatile addition to any team. Make Ford Fleet the team behind your team.

Contact us at focfhq@ford.com or 1.800.668.5515

2015 TRANSIT CONNECT

2015 TRANSIT

Vehicles may be shown with optional features. *When properly equipped. Cargo and load capacities limited by weight and weight distribution. Š2014 Ford Motor Company of Canada, Limited. All rights reserved.

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NOTABLE TRUCKS

for the 2015 model year

U

nless you’ve been living an unplugged life in a cave somewhere you know that Ford is bringing the all-aluminum F-150 to market in 2015. And while this first of its kind pickup is making waves (and creating headlines) it really isn’t the big news story for the coming model year.

That distinction falls to the Heavy Duty pickups; primarily because the war of the heavy weights continues to rage. Ford and Ram have routinely taken pot shots at each other in the media; constantly trying to one up the other. Ford has tried to pass off its F450 as a one-ton truck so as to claim the top towing capacity truck, while Ram just recalibrated its 6.7L Cummins diesel to squeeze out 15 more lb-ft of torque—to just edge out Ford’s Power Stroke. GM, while opting out of this King-ofthe-Hill childishness may well come out with top honours anyway—for its new completely integrated electronic system that controls a towed load like never before. Here is a quick hit of what 2015 is bringing down in trucks.

run-up; but then there is a lot to show off.

First, yes the body and box are all aluminum alloy. For those of us living in the rust belt this alone is good news, but the truck also saves 317kg of weight over a steel body— that will equal fuel savings. Aluminum is also (pound for pound) stronger than steel and also less prone to dents; a feature that will be welcomed in the cargo bed. The frame on the new truck is still all-steel, though it too is made lighter than the previous model by utilizing more durable yet thinner highstrength steel (70 percent now).

Under the hood, Ford will continue to offer the veteran 5L V8 and the 3.5L EcoBoost engines. New for 2015 though is a third option; a 2.7L EcoBoost V6. This displacement should have obvious fuel economy benefits. As a curious side note, the new styling on the 2015 F-150 employs two heritage design cues, a headlamp shape and horse collar grille surround that speaks to the first 1948 Ford F-1.

2015 Ford F-150

2015 GMC Sierra 2500 HD & Chevy Silverado 2500 HD

Ford’s PR machine has been churning out pre-launch information on the aluminum body F-150 since last year. That’s a long

For the coming year these twins (both of which are already good HD trucks) finally get an inside update to match their technical

2015 Ford F-150 Photo: Ford

prowess. Borrowing from the interior of the new 2014 1500-series, the HDs get quieter inside and are now very well appointed. In addition all its screens, electronics, buttons and controls are updated.

However the single greatest leap in technology is invisible as it’s found in the software programming of the computer. The best description of this new system is a Fully Integrated Cruise Control. Using the cruise control while towing now takes the safety and stability systems and knits them together with the ABS, traction control, sway control and exhaust brake. The effective outcome is the truck holds its set speed uphill as well as downhill. The driver never need touch the brakes—the computer maintains speed using exhaust, disc brakes and transmission automatically. Very slick and currently one-of-a-kind. Like the 1500s the new HDs also get 6.5- and 8-foot boxes with standard CornerStep bumpers, EZ Lift & Lower tailgates, and in-box lighting.

2015 Ram Truck HD 2500 and 3500 & PowerWagon 2014 saw the HD Ram add upgrades to an already good truck. This comes on the heels

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By Howard J Elmer

of the massive jump to a top tow rating of 30,000lb. This is what ignited the war with Ford. The fishy part of this announcement was the lack of a SAE J2807 certification.

This testing formula for determining tow ratings was accepted by all manufacturers—but then not used. So, who was really telling the truth? Well, that is what 2015 finally brings us; transparent usage of the new SAE testing methods by all the builders. Now this has not ended the swaggering bravado when it comes to who can tow what—it just makes it more believable.

For 2015 Ram (which has been constantly updating and improving year in and out) has added air suspension to 2500 and 3500 models. Also offered are a five-link coil rear suspension on the 2500 and a new integrated fifth-wheel/gooseneck hitch from the factory. Alternators are improved, 18 and 20-inch wheel packages are offered and the Ram PowerWagon is re-released with an all-new 6.4L V8 Hemi under the hood. This gas engine is now also available in the HD trucks.

By the numbers—for 2015—Ram has the best-in-class torque in its diesel engine at 865lb-ft; top towing capacity at 30,000 lb and top payload at 7,390 lb. Trucks are being built now.

2015 Chevy Silverado Photo: GM

2015 Ram Truck HD 2500 Photo: Howard Elmer

2015 Ford SuperDuty F-250—F-450 For 2015 Super Duty is showing off the new second generation of the Power Stroke diesel. What’s changed (and these are more refinements that outright changes) are the placement and size of the turbocharger, and the engine block material. The first is larger and more responsive and the second is lighter and more wear-resistant.

The net results of these changes are new output numbers for the 6.7L turbo-diesel of 440hp and 860lb-ft of torque. (Which of course Ram felt the need to beat by a scant 5lb-ft of torque).

So with more power, Ford has pushed up its payload and towing numbers; the most important of which is a maximum fifth wheel/gooseneck rating of 31,200lb that beats out the current heavyweight leader—Ram. However this is on the F-450—so hardly apples to apples with Ram’s 3500.

2015 Ford SuperDuty Photo: Howard Elmer

What Ford is not saying right now (but is obvious to me) is that many of these changes were made to accommodate the coming F-650 and F-750. This re-entry into the larger commercial market will be happening in the next year and the Power Stroke in these Class 6 & 7 trucks will require (and get) the hp and torque that is now being bestowed on

F-250 through F-450.

Also new for 2015 is a standard gas engine available in the F-250 and F-350, the 6.2L V8. This powerplant makes 385hp and 405lb-ft of torque. Certainly power enough; and a cash savings for low mileage users who can’t justify the extra cost of the diesel. c.a.r.

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A FLEET THAT APPEALS TO YOUR EMPLOYEES AS MUCH AS YOUR BOTTOM LINE.

*

THE ALL-NEW 2014 NISSAN ROGUE

ROGUE

MURANO

PATHFINDER

FRONTIER

TITAN

The 2014 Nissan Rogue, winner of the ALG award for Best-in-Class Residual Value,* is part of an award-winning lineup that’s fun and affordable. So a fleet of Nissan vehicles can keep spirits up and costs down.

*BASED ON 2014 CANADIAN RESIDUAL VALUE AWARD IN PREMIUM MIDSIZE UTILITY VEHICLE- 3 ROW SEGMENT. ALG IS THE INDUSTRY BENCHMARK FOR RESIDUAL VALUES AND DEPRECIATION DATA, WWW.ALG.COM. THE NISSAN NAMES, LOGOS, PRODUCT NAMES, FEATURE NAMES, AND SLOGANS ARE TRADEMARKS OWNED

BY OR LICENSED TO NISSAN CANADA INC. AND/OR ITS NORTH AMERICAN SUBSIDIARIES.

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PROOF #

CLIENT: NISSAN

PRINT PROCESS: WEB OFFSET

PREFLIGHT CHECK

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Photos and story by Peter Bleakney

MOVING WITH STYLE 2014 Dodge Promaster 2500

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he tall body, Euro-themed commercial van arena is heating up with the addition of a new player. Built in Mexico, the Dodge Promaster is essentially a rebadged third-generation Fiat Ducato van—a workhorse that has been a mainstay in Europe for decades.

Unlike its competitors (Mercedes-Benz Sprinter, Nissan NV and new Ford Transit), the Promaster is front-wheel drive, giving it the lowest load floor and step-in height of the bunch. Dodge also claims highest ceiling height. Front suspension is of the strut variety while the back uses a beam axle with Hotchkiss leaf spring system.

The base engine is Dodge’s venerable 3.6L Pentastar V6, here making 280 horsepower and 258lb-ft of torque. Another $6,150 nets a 3.0L four-cylinder turbo-diesel rated for 174hp and 295lb-ft. Both engines are mated to a six-speed automatic transmission, and at each corner we find Brembo brakes.

With a starting price of $31,945 for the Promaster 1500 Low Roof 118-inch wheelbase, this front-drive Dodge handily undercuts the Mercedes, lines up with the Nissan NV and slides in just under the new Ford Transit. The Promaster comes in three wheelbase lengths (118, 136 and 159 inches), two heights and the cargo floor is available in four lengths. The only thing you can’t get is a multi-passenger configuration.

Tested here is the 2500 High Roof 136-inch wheelbase with a base sticker of $35,795. As with all these vehicles, the list of available options is as lengthy as the day is long, and this specimen is spec’d to $42,745 before the $1,695 destination charge.

I had the honour of moving my daughter from one downtown Toronto apartment to another, so this pristine Dodge press vehicle (that looked as though it had yet to see an honest day’s labour) got a serious work out.

Initial impressions from the driver’s seat are good. The dash is pleasing and well laid out with a trio of HVAC knobs and Chrysler’s easy–to-use 5-inch Uconnect touchscreen above—the latter is a $600 option that adds Bluetooth with voice command and steering wheel-mounted controls. GPS is another $500. The fabric seat is comfortable (upgraded here with $350 suspension), and while the steering wheel (75 bucks for leather wrapping) doesn’t tilt, it will extend on its bus-like angle. A plethora of useful cubbies and cup holders are augmented here by the $200 Driver Convenience Group that adds a locking glove box, a shelf above the windshield header and clip for documents on the dashtop.

The standard audio system is surprisingly good too, which can make a day in the saddle much more bearable.

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The dash is well laid out and in this case includes a $600 optional touchscreen display.

directly down at the pavement. The Promaster has a very tight turning circle, and my in-town maneuvering was assisted by the $325 backup camera and $375 rear parking sensors. The V6 powertrain is strong and smooth with brisk throttle tip in.

The overall driving experience is one of a large, heavy duty minivan. It doesn’t show the truck-like solidity or planted feel of the more expensive diesel-only Mercedes Sprinter, but with a payload capacity up to 5,145lb and a tow rating of 11,500lb with the V6 (12,500 with diesel power), this Dodge is certainly up to the task.

For this job, the $500 wood floor made sliding the furniture and boxes around a breeze. We never did open the optional driver’s side sliding door ($750) but the sidewall tie down hooks ($75) came in handy later when moving some smaller items.

The rear doors can be opened to 180 or 260 degrees—a nice feature when loading in tight spots.

Packed to the roof.

The van was stable and had plenty of power.

Within an hour the Promaster 2500 was packed to the roof and on the road. As we were just picking our way through urban neighbourhoods, I don’t have a sense of what this loaded packing crate is like at speed, but there was never an issue with power or stability.

On an extended unladen drive on highways and secondary roads the A/C moved enough air to keep me cool on a sweltering day, and while the ride was pretty bouncy, only the strongest crosswinds pushed me around. Average fuel consumption on this trip was 11.5 L/100 km The Promaster has an interesting snout, sporting a couple of cat-eye headlights and a big plastic proboscis. This tester in Deep Cherry Red Crystal Pearl Coat ($225) looked (dare I say?) kinda cool.

With its competitive pricing and numerous available configurations, the 2014 Dodge Promaster will be a strong entrant in this hardworking segment.

* Ba co

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2672 TCI-14

BUSINESSES LOVE US. ALMOST AS MUCH AS THEY LOVE SAVING MONEY.

Style, safety, fuel efficiency, advanced technology and a spacious, comfortable interior. With all of that and more, the new Toyota Corolla is perfect for your business. Combine all of its features with the fact that it has the lowest cost of ownership in its class* and you’ve got a fleet vehicle you and your business can feel good about – today and tomorrow.

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fleet.toyota.ca * Based upon 2014 independent 3rd party automotive research company study looking at fuel costs, depreciation costs and maintenance costs for base model Corolla and comparative in market compact segment vehicles over a 10-year period (2004-2013). The study includes competitive models that have been available in Canada for 10 years. Actual cost of ownership may vary.

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14-07-16 11:40 AM 14-09-11 10:50 AM

Photo & story by Emily Atkins

New technology: BMW’s i3 is an eyeful Interior photo: BMW

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uilt from the ground up as an electric, eco-friendly car, the BMW i3 is obviously different. It’s styled as a megacity car, designed for people who drive less than 50km a day.

What’s different about the i3 is its range extender. Available as an option—and one that about 60 percent of Canadian customers are choosing—is a 650cc, 2-cylinder gas scooter engine that will charge the EV’s batteries while you are on the go. It does not run the car and is not connected to the drive train—so the car’s not a hybrid.

What it does do is boost the car’s battery powered range of 130 to 160km up to 300km.

The car’s effective range can be tweaked as you are driving it.

Various modes will help save battery power and will return power to the cells using regenerative braking.

On the road the i3 turns heads with its futuristic looks, and is a satisfying car to drive. The batteries keep the centre of gravity low, weight distribution is 50:50 front to back, and it has BMW-style handling combined with the superb, instantaneous power from the electric motor that puts out 170hp and 250lb-ft of torque.

The car’s passenger compartment is completely built of carbon fibre, while the drive module is aluminum. These lightweight components keep the car down to a slim 1,195 kg (1,315 with range extender), while the carbon fibre has a better ability to absorb the shock of a collision than traditional steel passenger compartments.

The i3’s interior is different from any car on the market, with a natural wood dash and minimalistic instrumentation consisting of two computer screens. Sitting inside is more akin to settling into a comfortable sunroom than the usual automotive experience. Access to the rear seats is through what BMW calls “coach” doors, but most of us think of as “suicide” doors. Either way, they offer easy access to roomy accommodation.

Outside, the car has a snub nose and almost negligible rear

overhangs, vast expanses of glass and an interesting belt line that wanders its way up and down the length of the car. From the front the i3 is an instantly recognizable BMW, but from behind it’s a futuristic fantasy.

As expected in a megacity car, there are lots of tech goodies with the i3. The range predictor is quite intelligent, taking topography and traffic into account, so you see a fluid blob on screen with a constantly moving perimeter rather than a steadily decreasing circle.

Still to come for Canadian customers is an “intermodal” route-planning feature that will give you real-time info about connecting with various modes of public transit to get the most from your car. They are in the process of building the database for Canada, and expect to have the service up and running in the next year.

You can get into a new i3 for $36,540. That’s after the $8,500 Ontario EV rebate is applied to the base sticker of $44,950. The entry-level model gives you standard 19-inch wheels, navi, cruise control with distance-keeping technology, A/C and more. The range extender package adds $4,000 to the price.

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Interior photo: BMW

It… is about action not reaction.

ARI is known and trusted by fleet decision-makers throughout Canada to minimize risk control costs. It is about keeping drivers safe. About data. Presenting it through alerts, trends and safety profiles. The result is a world with fewer violations, accidents, costly repairs, downtime—and less exposure. It is about fleet management success.

Moving the needle, and the bottom line.

Learn more about ARI’s professional fleet management services: 1-800-361-5882 www.arifleet.ca

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14-09-11 10:51 AM

STANDARD ALL-WHEEL DRIVE ISN’T SO STANDARD.

An easy way to limit your expenses is to make sure your employees drive quality cars. If you opt for the brand new and redesigned 2015 Subaru Legacy and its legendary All-Wheel Drive system, they will. They’re also going to be able to count on renowned safety features, high residual value, and great fuel efficiency.

To consult our Fleet ordering guide or for more information

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fleet.subaru.ca or call 1-877-293-7272

14-09-11 10:51 AM

Canadian Energy Supply Chain Forum

Energy Across The Supply Chain Event provides world-class insights for Canadian energy companies looking to achieve supply chain excellence

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or the second straight year, PurchasingB2B is pleased to present a special pre-conference section highlighting the Canadian Energy Supply Chain Forum, at Calgary’s BMO Centre, October 28 to 30. We’re especially proud to be involved again in 2014 because—through feedback from the industry and previous attendees—this year’s forum is shaping up to be better than ever.

In 2013, the National Buyer/Seller Forum (NBSF) and the Alberta Institute of the Supply Chain Management Association Annual Conference joined forces to form the National Supply Chain Forum (NSCF). This year’s event, called the Canadian Energy Supply Chain Forum (CESCF), promises to bring together energy companies and their supply chain partners to explore long-term strategies to help energy companies realize the completion of projects on time and as cost-effectively as possible.

Again this year, PurchasingB2B has partnered with fellow Glacier Media publication, Oilsands Review, to bring you advance coverage of the forum. This section features several articles, one of which describes the details of several agreements between Canada’s Oil Sands Innovation Alliance (COSIA) and General Electric to develop and deploy new technologies for water treatment and greenhouse gas reduction. The agreements, worth up to $18 million, will see a water treatment pilot project at Suncor’s MacKay River SAGD project extend into a COSIA joint industry project. Another agreement involves six COSIA member companies pursuing joint industry projects with potential investment of up to about $13 million.

In another article, Oilsands Review sits down with Mike MacSween, Suncor Energy Inc.’s executive vice-president, major projects, for a Q&A to discuss an initiative called the Project Alignment Delivery initiative. Megaprojects can be expensive, and those costs continue to rise in northern Alberta. MacSween, a champion of the initiative, discusses why the initiative is key to keeping the industry competitive.

Yet another article discusses how an international slew of innovators is looking at how to make modularization more affordable and efficient. The article discusses productivity innovations not only in the fabrication shop and then in the field, but also in the early stages before construction begins. Building a better module is one thing—what about building a better plan?

And finally, PurchasingB2B staff takes a look at some of the unique risk management issues faced by Canada’s energy sector.

Risks at any point in the energy supply chain tend to cascade, with a single issue sending ripples into other areas. Whether it’s lack of facilities for fabrication, transportation or health and safety, we investigate risks facing the industry today.

And again this year, we’re pleased to moderate a panel at the forum. This year, our experts share their knowledge of sustainability and the energy sector. You can find more information about the event, including our session, by visiting www.supplychainforum.ca. See you in Calgary!

B2B

PurchasingB2B.ca

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AGENDA 18

A snapshot of the 2014 forum agenda highlights

SUSTAINABLE COLLABORATION 19 Water treatment and GHG reduction investments

MEDIOCRE NO LONGER 20

Suncor’s EVP Mike MacSween on improved productivity and costs

RISKY BUSINESS 24

The risks associated with the energy supply chain

MODULES TECHNOLOGY 26

International innovation in the world of modules

Sustainable Strategies for Canada’s Energy Sector Wednesday, October 29 | 1:30-3pm

In recent years, sustainability has morphed from a nice-tohave to a must-have pursuit for Canadian procurement and supply chain organizations. This is as true in the energy sector as other industries. Sustainability doesn’t simply mean helping the environment—the definition now includes a three-pronged approach, with environmental, financial and social aspects equally important. But what’s the return on investment for pursuing sustainable policies? What’s the business case? How do organizations implement strategies?

This panel conversation will define sustainability as it applies to Canada’s energy sector and its procurement and supply chain functions. The discussion will include sustainability’s ROI, including saving money, improving efficiency, boosting creativity and supporting organizational enhancements. It will explore a step-by-step approach to ingraining sustainability practices, the importance of executive and supplier buy-in and benchmarking sustainability initiatives. Costs of sustainability, barriers to implementation and the importance of a made-in-Canada approach will also be discussed.

For further details, visit www.supplychainforum.ca

A PurchasingB2B thought leadership panel discussion, brought to you in partnership with Staples Advantage.

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Canadian Energy Supply Chain Forum

Energy Innovations

The Canadian Energy Supply Chain Forum takes place at the BMO Centre in Calgary, Alberta from October 28-30. The forum features keynote speakers, education sessions, networking events and more.

Join your supply chain colleagues to take advantage of all that this event has to offer.

Tuesday, October 28 PRE-CONFERENCE SESSION 8:00am-4:30pm Business Development Boot Camp: A road map to sales and marketing success in Alberta’s energy sector ACTIA PARTNER PRE-CONFERENCE WORKSHOP 8:00am-12:00pm Access to capital forum

Canada 3.0 Innovation Features 1:30-3:00pm A Call To Action: Building the technology supply chain for the Canadian Energy Industry 2:30-3:00pm Collaboration Yielding Innovation 3:30-4:30pm The Next Game Changers

4:30-5:30pm Opening Reception in Event Showroom

5:30-7:00pm – Opening Dinner and Keynote Mike MacSween, EVP Major Projects, Suncor Energy SCMA Alberta 25th Anniversary Celebration Wednesday, October 29 8:15-8:45am Market Size and Activity Overview

8:45-10:00am On Time & On Budget: What does it take to be world class?

10:00-10:30am Refreshment break in the event showroom

10:30am-12:00pm BREAKOUT SESSIONS The Keys to Effective Supply Chain Communication

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Building the Right Foundation for Successful Partnerships Though Strong Scope and Specification Development

Competitive Bidding: How strategic is your strategy?

Understanding the role of category management, strategic sourcing and transactional procurement Canada 3.0 Innovation Feature Technology Needs and Solutions Matchmaking

Case Study: SCM Excellence is Supporting Operations 12:00-1:30pm – Lunch in the event showroom 1:30-3:00pm BREAKOUT SESSIONS Building Collaboration Capabilities Across the Supply Chain Integrated Project Delivery Case Studies Contract Performance Management

Sustainable Strategies for Canada’s Energy Sector

Canada 3.0 Innovation Feature The ‘Digital Oilfield’ is here…are we doing it right?

3:00-3:30pm – Refreshment break in the event showroom

3:30-4:30pm – Advanced Work Packaging and Productivity Thursday, October 30 7:30-8:30am – Registration & Breakfast 8:30-10:00am BREAKOUT SESSIONS The Case for Supply Chain

Managing Risk Within the Supply Chain

Case Study: Success in Continuous Improvement

CAPS Research—Benchmarking Metrics and KPIs

10:00-10:30am – Refreshment Break in the Event Showroom

10:30am-12:00pm Canada 3.0 Innovation Feature—How Can Canada’s Technology Innovation ‘Ecosystem’ Better Support Technology Companies (and Vice Versa)?

The Closing Session: Supply Chain as a Value Adder

PurchasingB2B.ca

14-09-15 3:15 PM

Canadian Energy Supply Chain Forum

Collaborating For Sustainability Suncor CEO says GE/COSIA deal shows credible commitment to reducing water use and GHGs

by Deborah Jaremko

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set of agreements between Canada’s Oil Sands Innovation Alliance (COSIA) and General Electric that could see up to $18 million invested in development and deployment of new technologies for water treatment and greenhouse gas reduction is concrete evidence that the oilsands sector is committed to doing better. That’s according to Steve Williams, president and chief executive officer of Suncor Energy Inc., who joined GE chairman and chief executive officer Jeff Immelt, COSIA chief executive Dan Wicklum and GE Canada CEO Elyse Allan in announcing the deal recently.

“Of course often, necessity is the mother of invention. We had a need to make significant improvements,” Williams said. “The good news is that we’ve got collaboration of the supply chain to tackle this to start to get to these objectives…I hope what you can start to see now is a very credible commitment to reducing greenhouse gas emissions and water use as we accelerate the development and implementation of these technologies.”

One agreement will see an existing water treatment pilot project at Suncor’s MacKay River SAGD project, which is currently operated through a partnership between GE, Suncor and Alberta Innovates–Energy and Environment Solutions, become extended into a COSIA joint industry project. This new incarnation of the pilot comes with new support from Devon Canada Corporation and ConocoPhillips Canada Resources Corp.

In a second agreement, six COSIA member companies have signed a memorandum of understanding to pursue other joint industry projects with potential investment of up to roughly $13 million. These projects are expected to develop technologies leading to even further environmental performance improvements, primarily in the areas of GHG reductions and advances in water treatment technology.

“I think this is exactly what people envisioned a healthy, vi-

PurchasingB2B.ca

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brant alliance would produce, and that is some very concrete projects directed at our environmental priority areas [and] directed at our aspirations, especially greenhouse gases and water,” Wicklum says.

Launched in March 2012 by the group of companies that represents approximately 90 percent of oilsands production, COSIA has been slow to make public the progress of its mandate—to improve environmental performance. Wicklum says this is partly due to the complex and unparalleled legal web the 13-member group has had to weave through in order to effectively collaborate.

However, he says the GE deal shows that now the system is working.

“Just the fact that we are up here with General Electric is a great vote of confidence not just in the sector but in COSIA and what COSIA stands for. General Electric, frankly, is widely known as—at the risk of a slight hyperbole—one of the most forward-thinking and one of the most innovative companies not just on the planet but probably in history.”

In tandem with the COSIA agreements GE launched a $1-million open innovation challenge targeting oilsands GHG reductions through new uses for waste heat and improved efficiency of steam generation.

“GE is calling for the best global minds, within and outside the industry, to help develop solutions that can be scaled and commercialized within the industry,” the company says.

Winners of the challenge—which is in two parts, with submissions due in September 2014 and March 2015—can potentially share up to $1 million in seed funding. GE says they will also be eligible to become its suppliers or contractors on future projects.

“For almost ten years now we’ve been a driver of what we call clean technology and we do that across the vast majority of our footprint in industry,” Immelt says, adding that he’s happy to be betting a lot of money on the potential of technological innovation in the oilsands.

B2B

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Canadian Energy Supply Chain Forum

No More Mediocre Suncor EVP Mike MacSween waves the flag for improving productivity and costs as a full value chain

by Deborah Jaremko

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t costs a lot to build a megaproject anywhere, but few regions rival northern Alberta. In the oilsands, project costs continue to rise, and that is putting investment at risk.

Productivity Alberta and its partners want to snap this trend through a project they are calling the Project Alignment and Delivery initiative. Building on previous work from a variety of players, proponents say this project will move the needle because, for the first time, it involves all of the right players.

Mike MacSween, Suncor Energy Inc.’s executive vice-president, major projects, is on Productivity Alberta’s board and has signed on as a public champion of Project Alignment and Delivery.

“Good project management is about being planful and disciplined, and we’re trying to apply those same principles with this project.”

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What is the Project Alignment and Delivery initiative?

It is part of the Productivity Alberta work trying to address the productivity in our most important industry across the province, and you could argue even the country.

Its aim is to, identify across the full value chain, where there are opportunities to improve our competitiveness. We’re in a global economy and we’re in an industry that has competition at a global level, so it is critically important.

There has been a lot of focus and effort on

this already, and there is a whole spectrum of performance across the whole supply chain. Some companies do better than others, but at the end of the day, the industry itself in this region lags what you see globally in terms of capital efficiency and workface productivity.

The natural resource we’re blessed with, and the industry that has been built up, is a national treasure, and we have an opportunity to build upon that, but it is clear that there is a need for change.

We simply can’t perform at a mediocre level. We should be striving for better, but it takes a holistic approach and takes multiple parties. I feel quite passionate about it because it is an important part of our future collectively, and I want to make a difference where I can.

What are the most important next steps in order to be successful?

Good project management is about being planful and disciplined, and we’re trying to apply those same principles with this project. We’re entering into this space that is ambiguous, it’s not always easy to define, and there is a tremendous number of positions and opinions. It’s important for us to be accounting for all of that but also being planful and methodical in our approach.

It’s about involving the multiple parties that have been involved before, talking to groups like the construction owners association, the building trades unions, [and] the turnaround groups that have come together collectively.

We’re in the planning step of engagement currently. Then we’ll move into a second phase that will be all about analysis and then a third phase that will be all about piloting and delivering in the field.

It’s important we are disciplined all the way through that process so that we embody the principles that we are trying to address.

How will you know if/when success has been achieved?

I think there will be lots of measures: the vibrancy of our industry across the entire value chain, increasingly competitive and costeffective projects, operations that run increasingly reliably, how delivery occurs in the field improving [and] even morale in the field.

There is a whole host of factors that go into this. I think we’ll see a number of measures including productivity at the workface but ultimately cost-effective projects and an effect on our economy as well.

B2B

Mike MacSween will be talking more about the Project Alignment and Delivery initiative during his opening dinner keynote address at the Canadian Energy Supply Chain Forum. For more information and to register, visit www.supplychainforum.ca.

PurchasingB2B.ca

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14-09-15 2:19 PM

Canadian Energy Supply Chain Forum

Risk on all sides

Canada’s energy sector faces no shortage of unique risks that can affect several areas of a company’s operations

by Michael Power

C

anada’s energy sector has been resilient enough to not only weather the economic turbulence of the Great Recession, but continues to drive much of the country’s economy. But along the way, the industry must also contend with no shortage of unique risks while ensuring operations run smoothly. Commodity price movements, labour relations and the capital-intensive nature of the business all present potential challenges.

And while the road is beset with stones, not every company plans adequately for the journey. According to a KPMG International study called No Paper Chase: Transforming risk management at energy and natural resource companies, only 14 percent of companies surveyed internationally have developed a formal risk appetite statement.

As well, 22 percent said they had developed such a statement but haven’t communicated or vetted it within their organizations.

Meanwhile, only 25 percent said that they have communicated it among the risk management function but not elsewhere within the organization.

“Supply chain’s job, I believe, is trying to find new alternatives. If you’re used to buying a certain product, maybe there’s a substitute out there, or a new and better way to do things.”

—Mike Lennox So what are the risks for the energy sector, and how can organizations deal with these challenges?

24 | SEPTEMBER 2014

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Manufacturing Recently, one of the biggest risks the industry must contend with is a lack of fabrication and manufacturing facilities, says Jerome Ferber, manager of supply

chain at Veresen Inc, a Calgary-based diversified energy infrastructure company. While the risk to the supply chain may not be immediately obvious, the lack of such facilities can lead to lost time, delayed implementation and other headaches. And what Ferber’s home province lacks in capacity, other provinces can pick up. For Alberta-based energy companies, when looking to get things built, Ferber notes that it helps to look outside the province to jurisdictions like Ontario to get the job done. “We’re stretched to the max here in Alberta,” he says. “But for whatever reason, people in Alberta don’t want to use a boat builder in Ontario to build a tank (for an oil field).”

This can cascade into other risks, Ferber notes. Transportation, training, revenue, extra costs and raw materials—including quality—are all affected. As well, with so much activity in the sector, risk arises not only from safety issues but also environmental concerns, Ferber points out. Risks in these areas impact other areas of an organization’s business and most companies have master service agreements that contractors must sign before starting work. But if those contractors don’t have proper grading, they’re not allowed to go onsite. “That further impacts other things—engineering work, manufacturing, repairs and maintenance, even your day-to-day operations,” Ferber says.

He recommends hiring a contractor management company that can do the work on behalf of other organizations. Such companies are hired to take care of issues like monitoring contracts, checking in with the worker’s compensation boards and other tasks.

Ferber also notes that having a preferred vendors list—with first-refusal contracts—that shows with which contractors an organization has agreements can help cut some risk, as can forecasting, planning and working with your internal risk management department.

Regarding increased regulations arising from greenhouse gas emissions, Ferber again notes the need to look to outside help to deal with environmental measurements, testing, analysis and other tasks. Gone are the days of asking for equipment to be built and shipped to a site—it’s now necessary to have that equipment engineered and checked; contact the government to see what regulations must be adhered to; completing inspections to ensure permits are in order; and so on. “You start to look at the use of consultants who are specialists in certain areas to help you out,” he says. “And there’s aren’t a lot of guys that do certain things so they get pretty busy. Again, this is something that can impact your lead time on your whole project.”

There’s no doubt that executives within the energy sector are aware of the need to deal with risk. But Ferber notes that it helps to ensure that the C-suite understands the importance of

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the role supply chain plays in managing risk for organizations.

“Senior management has to recognize that supply chain management is value add, not an expense department,” he says.

Local issues, local risks Risks that supply chain management practitioners face can also vary depending on the geography that they’re working in. That’s a factor that Lori Hollet, chief buyer at the Newfoundland and Labrador-based North Atlantic Refining Ltd, knows well. Being on an island, Hollet says challenges can include getting materials delivered because of delays in flights or ferry crossings.

This, in turn, results in added cost that come from production delays, expediting, overtime, demurrage and charters. “It’s very difficult to overcome this risk, as it’s highly dependent on weather, which is out of our control,” she says.

To help combat these factors, North Atlantic Refining uses several local suppliers that keep a good inventory of the materials that they use on a regular basis. This, Hollet says, helps mitigate some of the those risks, however, many of the items the organization uses are unique to their facility, leaving them no choice but to source internationally.

Although not specific to the energy supply chain world, geopolitical issues add risk to the sector, says Mike Lennox, head of procurement management at Harvest Energy Corp. Factors like anti-dumping legislation and the international price of steel can raise the costs of products such as oil country tubular goods (OCTG)—a family of seamless, rolled products including drill pipe, casing and tubing that is imported from all over the world.

To mitigate volatile commodity prices, Lennox recommends putting in place longer-term contracts or to pre-buy when possible. Price adjustment clauses are also common in many agreements, he notes.

The energy sector is also distinct in that it’s capital intensive, Lennox notes, which presents risks in terms of controlling costs. It can cost hundreds of millions of dollars to drill a well or build a refinery or gas plant, he says. Still, utility costs likely comprise roughly 20 percent of the industry’s entire budget expense. Labour costs can also be expensive, with skilled and experienced labour tough to find in more remote areas like northern Alberta. “That hurts your return on investment and makes your capital intensive project even more so,” he says.

Procurement and supply chain practitioners must ensure that what’s purchased comes at the most competitive price possible while staying within the provided specs, Lennox notes. An assurance of supply must also be in place so that items arrive on time in order to avoid delays to a project. Still, other factors such as having an effective qualification program needs to be established to ensure any service company hired for a project

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follows safety rules. “It’s not just supply chain, it’s a lot of all the other parts that are involved in that process,” Lennox says.

“Supply chain’s job, I believe, is trying to find new alternatives. If you’re used to buying a certain product, maybe there’s a substitute out there, or a new and better way to do things.”

Lennox also pointed out the importance of mitigating environmental risks associated with the energy industry. While relatively new methods of extracting energy sources such as fracking are innovative, these processes’ sustainability is sometimes called into question. The risk extends to public relations, with the public questioning the environmental safety of the process.

“That’s still being studied as to whether it’s an environmentally friendly process that the energy sector is using, especially in the oil patch,” he notes. “But it’s also creating all sorts of new sourcing of energy, in particular natural gas.”

Fracking—or hydraulic fracturing—involves fracturing rock using a hydraulically pressurized liquid. A high-pressure fluid is injected into a wellbore to create cracks in the deep-rock formations allowing natural gas, petroleum and brine can flow more freely. Lennox notes that public pressure can also force process innovation. Vendors can be a source of innovation, he notes, with supply chain acting as the interface between themselves and the engineering, drilling or completions groups.

“Vendors are a wealth of information and I think we need to utilize them even more,” Lennox says. “And certainly, it needs to be a collaborative affair within your own company. I don’t think supply chain can’t work on it by themselves—it needs to be a holistic approach to solving these issues.”

Risk management within the energy sector supply chain is multifaceted with risk in one area having the ability to cause risk in another. But supply chain taking a collaborative approach can go a long way in helping to mitigate those risks.

B2B

SEPTEMBER 2014 | 25

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Canadian Energy Supply Chain Forum

Winds of Change Innovators from across the globe are working to make modularization more affordable and efficient

by Joseph Caouette

I

t’s a blustery April afternoon in Nisku, Alta., with winds gusting over 60 kilometres per hour—good weather if you’re looking to fly a kite, but less welcome if you have to swing around heavy steel beams.

But the wind doesn’t bother Bob Simmons, chief executive and technical officer of California’s ConXtech Inc. He has come to the province to showcase his ConX modular pipe rack system, which can be found in projects sitting on the San Andreas Fault or in the Gulf of Mexico, where winds can blow at 180 miles per hour. What does a hearty spring breeze and some cool Alberta weather compare to a hurricane or earthquake?

The real challenge for Simmons lies in convincing a skeptical Alberta market of the merits of his technology. Using conventional structural steel, a pipe rack might take three days to assemble. But a crew of six ironworkers and one foreman, aided by a 50-ton crane and two manlifts, put together this module in just 5.5 hours. Anyone who thinks the province’s productivity challenges lie with labour may reconsider after watching the system in action.

26 | SEPTEMBER 2014

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“Workers are getting way too much of the blame of the inefficiencies and the challenges with delivering projects up here,” Simmons says. “It’s really the process that’s at fault, not the workforce.”

He set about to changing that process by bringing a new level of standardization into the module construction process. Working from a set selection of pieces, the ConX system offers beams and connections designed to lock together and bolt in to place with minimal effort. Scaffolding is replaced with walkways built into the structure. Bracing is unnecessary, which removes the need for field welding and opens up design possibilities for engineers juggling the placement of equipment. The simple layout and smooth construction process should reduce costs and save time, but also make for a safer installation, Simmons notes.

“We’ve approached safety by changing the work,” he says. “If you can eliminate the risk instead of adding a rule, that’s much more efficient.”

Originally designed for the commercial and residential markets, the ConX system was adapted to the industrial sector following the 2008 economic downturn. The company has supplied pipe racks for a California water processing plant operated

by Aera Energy LLC, an oil and gas producer owned by the international parents of Shell Canada Limited and Imperial Oil Limited—incidentally, two of the oilsands producers present in Nisku for the demonstration.

Simmons likes to say the system can handle pipes and pumps as

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Canadian Energy Supply Chain Forum

easily as it handles heads and beds—a good reminder that innovations in industrial modularization can often come from other construction sectors. The basic principles remain the same. All that changes are the load sizes.

Gathering design data for hybrid composite frames Consider the hybrid composite frames designed by Won-Kee Hong, a professor of architectural engineering at Kyung Hee University in South Korea. Combining structural steel and concrete, he says the frames could be readily adapted from their use in commercial and residential construction for pipe rack modules.

“This is rather easier than building applications,” Hong says. “That’s why I’m so confident that I can bring this element into the pipe rack business successfully.”

Pre-cast concrete is typically used for fireproofing, but what if it could contribute to the structural integrity of the module as well? By encasing the module beams and columns with concrete, the hybrid frames could use as much as 50 percent less structural steel—without sacrificing strength.

Hong believes the approach could stave off schedule delays during module production.

“When you’re building steel pipe racks, your pipe locations change all the time during the design stage,” he says. “That means you’re changing loadings all the time.”

But the hybrid frames incorporate a certain amount of added structural integrity, allowing for a safety margin while the weights to be held by the module shift during design. Hong expects the approach to lower costs by reducing the amount of materials used and reducing construction time.

Still, more work needs to be done before the hybrid frames make their way into the mod yards of Alberta. After attending the Modular and Off-site Construction Summit in Edmonton early in May, the professor has begun building connections with the University of Alberta engineering faculty and local operators like Saipem Canada Inc. His goal is to gather more design data on the province’s pipe racks as he works to further the project.

28 | SEPTEMBER 2014

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Better planning for improved productivity Productivity innovations can be found not only in the field and fabrication shop, but

also in the earliest stages before construction even begins.

Building a better module is one thing—what about building a better modularization plan? Following 15 years of development, PCL Industrial Management Inc. believes it has found a productivity solution that can shave entire weeks off of a project schedule.

Heavy cranes sometimes require one year of lead-time to book, and a poorly chosen one can leave a timeline in tatters. Yet industry rarely does itself any favours when it comes to this difficult but crucial decision. According to Rick Hermann, manager of construction engineering for PCL, crane selection often occurs in isolation, despite its wide-reaching implications for the project.

“Scheduling and sequencing is normally done independent of the crane selection. There is an interaction between the two, but really not enough to have a huge impact on your schedule,” he says. “You’re missing out on a lot of opportunities.”

In the late 1990s, PCL first began combatting this problem with the creation of a database containing information on crane capacities, as well as the dimensions and weights of the modules being lifted. In recent years, the company has worked with the University of Alberta’s construction and engineering management group to create robotic algorithms to crunch these numbers at a furious pace, and a front-end interface to create 4-D simulations of the job. In just two hours, the program can analyze 156 lifted objects and 228,220 possible crane positions to produce the optimal crane choice and lift sequence.

The results can sometimes force people to entirely rethink their decisions. Hermann recalls one job where the client was struggling to decide between a 500-ton crane or a more expensive 800-ton model, which would cost an extra $30,000 per month over a five-month period. While the client may have preferred the cheaper unit, PCL convinced them to go with the 800ton crane. Why? Because another 85,000sqft of ground preparation and matting would be required due to the extra positions needed by the smaller crane to complete the job. The numbers add up quickly: Add $800,000 to prepare the subgrade in the soggy landscape surrounding Fort McMurray. Tack on another $1 million for the granular sub-base. And then dig into the company bank account one more time—try not to wince—for another $4.5 million in matting. Plus, there are indirect savings tied to camp accommodations and the added labour, Hermann adds.

“I think the math here is pretty simple,” he says. “But if you can’t do the analysis, you can’t get to this answer.”

Further development of the program could push the savings even higher. Cranes prefer moving in straight lines rather than curves, and incorporating this information into the system could lead to even more efficient lift plans. Still, the savings that can be realized are already considerable. In the job using the larger crane, PCL managed to reduce crane relocations by 25 percent—the equivalent of chopping 14 days off the project schedule. It’s a far cry from the old days of engineers poring over spreadsheets of data trying to hunt down the best option out of thousands of possibilities.

“Fourteen days, if it happens to be a critical path, means a lot of money to the owner,” Hermann says.

B2B

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The Law

Cooperative Purchasing Public procurement rules support group purchasing but stay silent on implementation

By Paul Emanuelli

W

ith fiscal cliffs looming, public institutions are increasingly leveraging their group purchasing power through cooperative purchasing initiatives, including federal standing offers, provincial vendor-of-record arrangements, regional and sector-based purchasing co-ops, and external shared services bureaus. This article addresses the challenges of achieving cost savings while navigating a fragmented administrative environment and unclear regulatory landscape.

Unclear regulatory landscape Canadian public procurement rules, which include trade treaties, federal and provincial statutes and regulations, and a multitude of government directives and guidelines, generally support group purchasing. But they tend to be silent on implementation details. Collaborative purchasing, even within institutions, typically requires the use of a prequalification process and the creation of master agreement frameworks permiting multiple assignments and often result in a roster of prequalified suppliers. Public institutions are usually obligated to avoid supplier discrimination based on geographic origin or biased or branded specifications. They must avoid using closed or perpetual source lists that exclude new suppliers.

They must also ensure open and transparent competition for contract awards, including the applicable second-stage selection processes for assignments under master agreements.

These rules have never been extrapolated to provide clarification on how they should be applied to the complexities of multiple-institution group purchasing initiatives.

30 | SEPTEMBER 2014

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Universal challenges of group purchasing Public institutions face reputational risks if they don’t achieve what are often overly optimistic group purchasing targets. In February 2012, Ontario released the Drummond Report claiming the province could see $1 billion in healthcare savings by expanding group purchasing. The report’s failure to address past failures in group purchasing dampens the credibility of cost-saving projections. Highprofile failures include the Ontario Ministry of Finance’s OntarioBuys initiative, criticized by the province’s Auditor General in 2009. The

Auditor General’s report found that OntarioBuys failed to establish business cases that identified potential savings before creating broader public sector shared services organizations. It found that substantiated cost savings only amounted to 13.5 percent of what was spent on administering OntarioBuys initiatives, translating into $20 million in shown savings versus $128 million in program spending. Further, 40 percent of the consulting contracts breached competitive procurement requirements. In a subsequent 2010 report the Ontario Auditor General found widespread procurement infractions in the retention of consulting services across the health sector, including 75 percent non-compliance with sole sourcing rules within the Local Health Integration Networks, the entities recommended in the Drummond Report to expand group purchasing.

These audits show some of the challenges of implementing group purchasing. Recently, in its June 2014 report on the Establishment and Use of Multi-Use Lists (“MULs”), Australia’s Auditor General stated that “the arrangements applying to MULs are not so well understood and, in most cases, greater consideration needs to be given to whether a MUL is most suited to an agency’s particular procurement objectives.” The report noted common breaches of procurement rules including instances where agencies approached too few suppliers for competitions, didn’t provide sufficient time for suppliers to respond to bid request and failed to treat suppliers consistently. The report concluded the MULs didn’t meet the government’s fair competition duties and value for money objectives.

Similarly, in its May 2014 report, a review of collaborative procurement across the public sector, the UK’s Auditor General noted widespread failure to use proper group purchasing practices—attributed to a lack of procurement management information, a lack of understanding of end-user requirements and a lack of knowledge of collaborative purchasing options. That report amplified a report from March 2013 where the same Auditor General found that the central government’s “light touch” with local administration undermined its attempts at procurement cost savings across 43 local police forces. Like Ontario’s reports, the Australia and UK reports found that government bodies weren’t maximizing their group purchasing potential and needed to coordinate efforts.

The devil in no details While senior governments have proclaimed the cost savings of group purchasing, they’ve been slow to support these initiatives.

Realizing group purchasing’s potential means senior governments leadership. As governments gear up for another round of domestic trade treaty negotiations the proper coordination and implementation of group purchasing should be placed at the top of their trade agendas.

B2B Paul Emanuelli is the general counsel of the Procurement Law Office, which recently published a detailed research paper on group purchasing in Canada. Reach him at paul.emanuelli@procurementoffice.ca.

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14-09-15 2:20 PM

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Once he reduced his energy costs by 55% after installing a VFD, savings in other parts of his business went into overdrive.

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