PurchasingB2B April 2018

CANADA’S SUPPLY MANAGEMENT MAGAZINE

SKY’S THE LIMIT

Shelly Lewchuk on the changing face of travel management

APRIL 2018

AI-DRIVEN SUPPLY CHAIN HEALTH PROCUREMENT IMPORT & EXPORT TRENDS

FOCUS ON DISRUPTION B2B_April 2018_cover_final.indd 2

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Join us and celebrate our newest Fellows at the

2018 SCMA National Conference & Awards Gala June 13 - 15, 2018 | St. John’s N.L.

Congratulations to our 2018 SCMA Fellows

Patrick Etokudo, SCMP Director, SCM Transformation Enbridge Inc.

Geoff Frodsham CEO Princess Auto

Douglas Harrison

President and CEO VersaCold Logistics Services

Education Session Topics: • Cyber Security • Artificial Intelligence • Current Political Landscape • Electronic Logging Device Mandate

• Big Data • Driver Shortage • Emerging Technologies • Procurement Maturity Curve

Register now at SCMA.com/2018 PurchasingB2B_April 2018_Apr16.indd 2

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Table of Contents

Vol. 60, No. 2 • APRIL 2018

Features 7

9

11

1 2

14

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1 8

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A TRACEABLE TECHNOLOGY How blockchain is affecting supply management.

DIVERSITY PROCUREMENT FAIR The CAMSC Diversity Procurement Fair is now in its 14th year.

HEALTH PROCUREMENT Here is everything you need to know about health procurement.

PROCUREMENT PROFILE Travel manager Shelly Lewchuk on her career, education and more.

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UNCERTAIN WORLD The precarious state of global trade.

FUTURE-PROOFING THE SUPPLY CHAIN Highlights from the MODEX 2018 Conference in Atlanta.

TRAVEL IMPACT How business travel helps shape the Canadian economy.

Also inside

4 5

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THE AI SUPPLY CHAIN An AI supply chain supercluster is coming to Canada.

UP FRONT BUSINESS FRONT

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2 1 2 2

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IN THE FIELD THE LAW Supplement Inside Cover: Brett Gilmour/Gilmour Photography

Connect With Us Online We encourage you to visit us online to stay in touch with what’s happening in your industry and to view enhanced articles.

Features PRINTER POWER

Tapping into the full capabilities of multi-function devices is crucial for SMBs.

©123rf.com/ Andriy Popov

https://bit.ly/2HborWD

Join the conversation or Tweet us @ purchasingb2b.ca

Facebook.com/PurchasingB2B

RECENT TWEETS @purchasingB2B is calling all readers and partners! Give a SHOUT OUT to Canada’s purchasing professionals with a Twitter contest for #NationalPurchaserDay this June 14th for your chance to win a $250 Visa Gift Card! Visit purchasingb2b.ca for more info.

Supercluster tech groups sharing in up to $950 million in federal funds. The Scale AI Supercluster in Quebec will work on building intelligent supply chains through artificial intelligence and robotics @AISupplyChain @purchasingB2B http://bit.ly/2swCyBZ

PURCHASINGB2B ENEWSLETTER Each week, we send out an eNewsletter that highlights industry news and insights. Sign up today and receive it each Tuesday. www.purchasingB2B.ca/Subscribe DIGITAL EDITION Want to read PurchasingB2B on the go? Whether it’s on a tablet, smart phone or simply on your desktop or laptop, you can check out our digital edition. Simply visit www.purchasingb2b.ca/digital-edition.

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Up Front 302-101 DUNCAN MILL ROAD TORONTO, ONTARIO M3B 1Z3

www.PurchasingB2B.ca

Disruption and Innovation

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ardly a day goes by that we’re not reminded of the ways in which technology is disrupting our industries, our businesses and our personal lives. There seems to be virtually no industry that will be left untouched and unaltered by the coming changes that these advances will herald.

That disruption can be internal to an organization. For example, working from home, flex time, open space offices, process changes and other developments have all altered how we think about work and how we fit into an organization. These changes have their champions and detractors, but many of them would have been impossible a few decades ago. No one was working from home in their PJs before email and the Internet.

External forces—again dominated by developments in technology—are also changing (or will soon) how companies operate, how they do business, the choices they make and how they see themselves fitting into the world of commerce.

Some companies have handled this well, with BlackBerry representing an excellent example. The company has reported profits over the past six months and recently extended the contract of its executive chairman and CEO John Chen through to November 2023. Chen has led the organization through its transformation from a phone-with-keyboard-maker to a cybersecurity software and services firm. In fact, software represents 40 percent of what BlackBerry sells. They also inked a deal earlier this year with Baidu, a Chinese Internet company, to co-develop self-driving vehicle technology.

BlackBerry, once apparently moribund, has made an impressive about-face. Kudos to them, I say.

And while the world has already been through many recent changes, and faces others on the horizon, I suspect some of the most headline-catching change will take longer to materialize than many think. No time soon will we board fully autonomous, flying, connected electric- or hydrogen-powered cars to fly to work as we check our email or doze. That scenario may be on its way, but not next year. Or the next. Or for a while.

But change is coming and procurement and supply chain professionals must prepare for it. How? To answer that question, it’s helpful to think about innovation, which is sort of the flipside of disruption. The definition of innovation that I like the best comes from business and self-help guru Tony Robbins, who says: “Innovation is any way you find a way to do more for a client than anybody else does.” That perspective—procurement working to provide the kind of great service that only procurement does—can help it remain relevant and providing value to their clients.

If procurement can continue to do that, if it can act as the trusted advisor and expert that it is, then the function will have no trouble weathering the sea of disruption that we all face.

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PUBLISHER/ADVERTISING SALES

Dorothy Jakovina 416-441-2085 ext 111, djakovina@PurchasingB2B.ca EDITOR

Michael Power 416-441-2085 ext 110, mpower@PurchasingB2B.ca ART DIRECTOR

Barb Burrows CUSTOMER SERVICE/PRODUCTION

Laura Moffatt 416-441-2085, ext 104, lmoffatt@iqbusinessmedia.com CIRCULATION

circulation@PurchasingB2B.ca

IQ BUSINESS MEDIA INC. VICE-PRESIDENT: Steve Wilson, swilson@iqbusinessmedia.com PRESIDENT: Alex Papanou, apapanou@iqbusinessmedia.com

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Business Front

Too Small, Too Big, Just Right There will always be an argument that government must grow

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

By Michael Hlinka

I

was recently asked to be part of a debate with the resolution being: Government is already too big.

The topic was supposed to pertain, specifically, to its involvement in the economy. It was supposed to be a discussion about what the public sector should provide and what should be left to the private sector. The essence of the debate was supposed to be a careful cost-benefit analysis. It soon became clear to my counterpart and I that not only was this impossible but it was ultimately fruitless. That’s because a debate about the size and scope of government is fundamentally one about values.

My grandfather was born in what was then the Austria-Hungarian Empire in the year 1900. He barely missed World War I, but was then conscripted into the Army for a brief period of time. After being discharged, he returned to the tiny village, Litminova, where he had been born. Life was difficult. The peas-

gardener. And when I ran a small construction company and my grandfather was in his late eighties, he helped out several hours a day, doing light construction work. I looked at a man like that and thought it wildly unjust that there were men literally one-quarter his age sitting around all day producing nothing. Yet at the same time, I had to recognize that our lives were spectacular by any reasonable standard.

When I examine the Canadian economy—and I have talked about this before—I see an economy that has largely stalled over the past 17 years or so. I believe that a major reason for that has been the growth of government at the expense of the private sector. The employment numbers don’t lie. Since 2001, the Canadian population has grown by approximately 20 percent. Employment in the public sector has grown by about 33 percent while there are actually fewer people working in the wealth-producing private sector. It seems to me that anyone who agrees that the economy has stalled over the past generation should consider the importance (or lack thereof) of those employment statistics.

There is a reasonable argument to be made that government isn’t big enough, and those arguments center on inequality. While the lot of the average person is essentially the same as it was a generation ago, the elites seem “Employment in the public sector has to be doing better than ever before.

Government, with its power to exprogrown by about 33 percent while there priate value through the use of force are actually fewer people working in the or implied force (think of those soldiers wealth-producing private sector.” coming into the Czechoslovakian countryside taking the harvested crops) is in a ants—and I use that term without any pejorative sense unique position to equalize outcomes. at all—toiled extremely hard and after harvest, solSo it comes down to a question of competing values: should virtue— diers were routinely sent to take most of what had been manifested through hard work and the ability to produce desired goods grown, and it was given to others. and services of real value—be what is rewarded and protected? Or is This was life as he and all of his forefathers knew it. equality a more important value? Should everyone in Canadian society But then he heard rumours that life was different in enjoy approximately the same fruits, completely isolated from our contriAmerica. He learned that there was a country where bution towards creating that value? And if this is the case, that is, if equalafter you worked, you got to keep all the fruits of your ity is the most important value, then it’s hard to delineate in what way labour. The idea was intoxicating to him, and he government should be limited. made spectacular sacrifices, scrimped and saved, and Society should be understood as a collection of individuals who at times in 1928 made his way to the New World. The United group into collectives when it is in their interest to do so. At times, some States was closed to him so he settled for Canada. His of those collectives believe that their short-term economic interests are family never looked back. All of his children were proserved by taking what others have produced. It’s hard to argue that assessfessionals or had married one, and settled into the ment. If I take my neighbour’s wallet and empty it, clearly I have more upper-middle class. economic resources than I did before doing so. If that’s what I value most, I grew up listening to those stories. I saw how hard then I’ll find a way to justify pickpocketing. This is why there will always he worked: Into his early eighties (and I’m not exagbe an argument that government is too small, and not enough is taken gerating) he operated his own small business. He was a from some in order to give to others. B2B

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THE RISE OF SUPPLY CHAIN

SAVE THE DATE Transformation Workshop (pre-conference seminar) | Thursday, October 18th 21st Annual Conference | Friday, October 19th Join us for our Transformation Workshop and 21st Annual SCMAO Conference, conveniently located at the beautiful Hilton Mississauga/Meadowvale. The theme for this year’s conference is Transformation: The Rise of Supply Chain. Join industry experts and supply chain professionals as they discuss current trends, disruptive technologies, and innovations. Mark Your Calendars! We look forward to seeing you this October.

Visit us online at SCMA.COM/ON or call Sharmann Grad at 416-977-7566 ext. 2142 to learn more!

SUPPLY CHAIN MANAGEMENT Logistics | Procurement | Inventory Management | Operations | Transportation | Distribution Sustainability | Repenishment | Demand Planning

Going

on June 6th!

The 2018 Annual Purchasing and Supply Chain Professional Survey • What are the trends, challenges and opportunities that are affecting the profession?

• How are economic factors shaping the role of procurement within the supply chain?

• What are the average salaries from a regional and industry perspective?

Thank you! Your insights will help shape the results of this survey. Look for the survey results article in the October issue of PurchasingB2B.

Coming to your Inbox on Wednesday, June 6th!

Accessible on www.PurchasingB2B.ca

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THE

Intelligent

SUPPLY CHAIN Leveraging AI in Canada’s supply chains

By Louis Roy

Š123rf.com/ willyam bradberry

O

n February 15, 2018 the Minister of Innovation, Science and Economic Development, Navdeep Bains, announced that SCALE AI, our artificial intelligence-powered supply chain supercluster proposal, would share in the $950 million allocated for the Innovation Superclusters Initiative.

The potential repercussions of our supercluster initiative on supply chains are admittedly not something that the average Canadian will immediately connect back to the quality of their own lives, but they definitely should. Supply chains directly affect all Canadians, at every

moment. Therefore, the work that will be done by the SCALE AI supercluster will benefit all Canadians for many years to come.

Supply chain challenges

All of the environmental and social challenges that we face as a society can be directly traced back to disjointed and inefficient supply chain infrastructures.

By examining the path from raw materials to end-user goods, it becomes clear that greenhouse gas emissions and other environmental pollutants, along with energy and social inequalities, originate

as by-products of the decisions made during the supply chain lifecycle.

A clear example of real problems caused by ineffective supply chains would be the proliferation of counterfeit products on the market, especially the very concerning issue of counterfeit drugs, as they can result in death. Consider the consequences of vaccines for children that do not contain the medications identified or, even worse, counterfeiters often simply substitute the vaccine with plain water. This is a very real quality control concern that has and continues to occur in the global pharmaceutical supply

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THE INTELLIGENT SUPPLY CHAIN, continued from page 7

chain. Given that this is OPTEL’s area of expertise, we have been very successful in applying technological innovation to mitigate and greatly reduce pharmaceutical fraud, to ultimately safeguard human lives.

Fraud in the supply chain robs firms of not only revenue, but also productivity.

Organizations involved in food production and distribution struggle every day to reduce waste, which can stem from inappropriate handling or errors in demand forecasting. Flawed supply chains are also unnecessary contributors of environmental pollutants that can augment other societal costs such as those for healthcare and diminish the quality of life of large portions of the population.

Currently, it is difficult to overcome challenges that result from disjointed and inefficient supply chains because they are not very connected, meaning most organizations have very little visibility over their supply chain processes and networks, which leads to an enormous amount of waste. This is true in every industry and at every step of the end-toend supply chain.

Potential upside

AI and other technologies can greatly enable supply chain visibility, which then creates crucial improvements in efficiency and connectivity. Since supply

WHAT IS SCALE AI? SCALE AI (Supply Chains And Logistics Excellence AI) is a business-led consortium of 119 partners headquartered in Montreal and centered in Quebec and Ontario. Its mission is to shape a new global supply chain platform and bolster Canada’s leadership in artificial intelligence (AI). It has been given support from the federal government through the Ministry of Innovation, Science and Economic Development’s Innovation Supercluster Initiative.

sustainable, ethical and environmentally friendly economic growth.

SCALE AI is a value creator made up of a mix of stakeholders, from very large firms to start-ups, providing the perfect partnership to boost Canada into an applied-AI powerhouse. Our plan is to leverage existing capabilities and create a deep, lasting effect on Canada’s growth and global advantage by enabling the broader adoption of AI by businesses and upskilling our workforce. It is also perfectly in line with OPTEL’s main goal: Using technologies to create a better world.

Emerging technologies will increasingly disrupt the work of supply chain professionals. As innovative leaders adopt existing and developing technologies to

AI and other technologies can greatly enable supply chain visibility, which then creates crucial improvements in efficiency and connectivity. chains impact every business and industry, the potential upside to these improvements is astronomical.

Through product tracking, data acquisition and connectivity a smart AI-enabled supply chain provides much needed visibility and the actionable data required to ensure product safety and authenticity, reduce waste, cut distribution costs, increase productivity, and protect the environment. In turn, all these improvements will directly encourage

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enhance, change, and reinvent strategies and processes, modern supply chain managers must ensure that they are current on new technologies. They also have to anticipate how they might improve their work and, most important, how one can adopt those technologies and leverage them to enhance any organization’s supply chain for strategic advantage.

This initiative could not have been accomplished without the generous contribution of time and effort from our

partners. On behalf of myself and my SCALE AI co-chair Hélène Desmarais, chairman, HEC Montréal and executive chairman, CEIM, I would like to thank all of our consortium partners, particularly the academic research institutions, IVADO and the University of Waterloo, and the project team volunteers from organizations such as BCG, CGI, Norton Rose Fulbright, PwC Canada, and the Supply Chain Management Association (SCMA).

In the coming months, OPTEL and all the other contributors will be concluding the contribution agreement with the Government of Canada and will officially launch the operations of SCALE AI. I am excited for our supercluster to begin tackling transformative projects that will accelerate the development and early integration of next-generation, AI-powered supply chains in Canada.

Our goal for this supercluster is not only to generate extensive business value, but also to increase the wealth and quality of life of all Canadians through technology-driven, sustainable, and inclusive economic growth. I hope you are as excited as I am for what is to come as we embark on this first unprecedented step in Canadian supply chain innovation. B2B

Louis Roy is president, OPTEL GROUP and co-chair of SCALE AI

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By Terry Volpel C.P.M., CPSM, SCMP, LSSBB

BLOCKCHAINS

AND Supply

Management

This unalterable and easily traceable technology is increasingly valuable to business

H

©123rf.com/ Sommai Larkjit

ave you ever wondered what a blockchain is and how it’s relevant to supply management professionals? Here is a primer on the term, where it came from and how it may evolve in the future. First conceptualized in 2008 by Satoshi Nakamoto (it’s unclear if this is one person or a group) as the public transaction ledger for Bitcoin, it is gaining traction with other sectors. Some examples of where blockchains are increasingly valuable to businesses and can be useful in the future: > Think about conflict diamonds. How much do we know about a diamond we are considering for our engagement ring? Size, colour, cut and clarity are all factors but can we make sure we aren’t financing terrorists using slave labour in open pit mines? > There is a story about a Walmart executive who went to a Walmart and bought mangos. He then went to his people and asked them to track the supply chain of those mangos. The result was not very flattering. Six days later, they still could not track the path from grower to market. > The US military found that they had been buying millions of dollars

in “counterfeit” components. A Milspec capacitor (for example) looks very much like a commercial grade capacitor but works with very close tolerances. > In the early part of this century, the EU implemented the Reduction on Hazardous Substances (RoHS) protocol and banned six substances, including lead and cadmium. There is a famous case involving Sony who planned to ship and sell PlayStations in Europe before the Christmas 2001 season. Acting on a tip, Dutch authorities checked PlayStation shipments and found the power cord contained cadmium. A subcontractor had manufactured the power cords for Sony, which was unaware of the issue until notified that they could not sell Playstations.

They missed the Christmas 2001 market and lost millions in sales.

Essentially, blockchains are a record of supply chain transactions that, once made, are non-alterable and easily traceable. Each time something moves along the supply “chain,” a record is made and recorded in a database. The transactions are entered and frozen in the database so, while one can trace them, no one can

alter the record either.

The intent of a blockchain is to be able (at any point) to track the life of that component or item to have confidence that it is what the supplier says it is and it conforms to all regulatory and legal requirements. If a supermarket sells a steak as organic, that supermarket should be able to prove it came from a certified organic farm. If you buy an engagement ring, you should be able to have the jeweller show evidence that it came from a legitimate diamond mine.

The era of blockchains started when data sets began being integrated together.

For decades supply chain software referenced everything from purchase requisitions to purchase orders, from receiving documents to accounts payable. But seldom were these data points linked in one chain from supplier to customer, to customer to customer, and so on. On the front-end, supplier manufacturing data was kept in-house at the supplier and not passed on to the customer. As the goods moved further along, the links were fragmented and tracking the material became difficult. With the arrival of bigdata, software was developed to search and create those links.

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BLOCKCHAINS AND SUPPLY MANAGEMENT, continued from page 9

The growth of trust

The breakthrough came when Bitcoin and other cryptocurrencies were developed and a “chain of blocks” of data could be stitched together in a way that made each block impervious to retroactive changes. Once a block was established, the transaction record became unchangeable and trust began to grow for the reliability of the blockchain. More and more business and government entities began trusting the data streams and when the technology moved into the cloud, the unchangeable quality bolstered end-user confidence in the roadmap of a component supply chain from raw material to finished good.

The future for blockchains will depend on how much pressure legislators put on manufacturers and suppliers to prove their claims. We are starting to see more litigation around claims of quality and origin. The North American Free Trade Agreement (NAFTA) has rules around

claims of compliance and suppliers are being asked to prove this with audits around rules of origin for their products.

The more often a change in ownership takes place, the more valuable a blockchain takes place. From farmer to grocery store, an avocado might go through 10, 15 or more hands. A new laptop may have hundreds of components, each with their own blockchain record. Each hard drive in that computer may have dozens more. Keeping track of these is a monumental task and blockchain databases record the path from raw material to laptop.

To find out more, talk to companies that are setting up blockchain groups internally. Read the literature. Be open to blockchains as a tool that you can use to reduce your risk of supply disruption and help to grow your business. Blockchains may one day follow us throughout our lives, tracking health, career and family. Did your uncle who now suffers from

MAKING THE DEADLINE.

Alzheimer’s get vaccinated as a child?

How accurate is your resume? Did a prospective employee serve time in prison?

Try googling your name now and see how much of your life is available to others outside of social media. How much of that information is complete and accurate? Today, most HR departments vet candidates using Internet searches.

Blockchains are a way to help make sure that no one can change your life history.

In the end, reliable data makes us safer and mitigates the risk of being blindsided by false information. We are safer because of the information, not despite of it. B2B

Terry Volpel is a supply management professional with over 30 years experience in various industries.

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| April 2018 | PurchasingB2B.ca

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April 2018 Vol. 20, No. 1

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2018-04-16 12:45 PM

Shell Lubricants doubles Canadian distribution network Shell Lubricants is expanding its b2b distribution network in Canada, doubling the number of distributors. As part of the expansion, WestPier, Pepco and Boss Lubricants will join Shell’s network in Canada. Customers will still find Shell lubricants through current distributors; Bluewave Energy, Filgo and Lubesource (Original Parts Warehouse). Proper selection and management of lubrication can unlock several benefits, including lower maintenance costs, longer equipment life and reduced energy consumption, the company says. In Canada Shell Lubricants has a blending and packaging facility in Brockville, Ontario that produces a slate of passenger car, motor oils, heavy-duty engine oils and industrial products.

Cover: thelightwriter, 123rf

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Vol. 20, No. 01

April 2018

EDITOR: Michael Power (416) 441-2085, ext. 110, mpower@purchasingb2b.ca ART DIRECTOR: Barbara Burrows PUBLISHER/ADVERTISING SALES: Dorothy Jakovina (416) 441-2085, ext. 111, djakovina@purchasingb2b.ca PRODUCTION: Laura Moffatt (416) 441-2085, ext. 104, lmoffatt@iqbusinessmedia.com CIRCULATION MANAGER: Adrian Holland circulation@purchasingb2b.ca

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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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We’re distracted drivers: most Canadian Millennials A poll from Allstate Insurance Company of Canada reveals 80 percent of Canadians believe drivers under 34 are most likely to drive distracted. The study, conducted by Leger, found that Canadians from that cohort recognize their tendency to drive distracted, with 69 percent conceding that they’re probably the most likely to do so. They’re also less likely to believe their behaviours cause them to lose focus. Eating, drinking and looking at roadside distractions are less likely to be seen as distracting.

Nearly all Canadians agree that using a mobile device and grooming are distracting. Many Canadians also feel that looking at roadside distractions is more distracting than using a navigation system. Ontarians were more likely to agree that using Bluetooth is more distracting, while two-thirds of New Brunswickers feel that talking to passengers is not distracting compared to the national average of 55 percent. In Nova Scotia, 89 percent ranked eating as a key distractor, higher than the national average of 76 percent.

Meanwhile, 98 percent of Albertans said using a mobile device was a distraction, slightly higher than the rest of Canada.

Goodyear announces 35th Highway Heroes A truck driver who helped a motorist who had been pierced through the neck by a broken steering wheel is the 35th recipient of the Goodyear Highway Hero Award. Frank Vieira of Ancaster, Ontario, was driving near Toronto when he heard a crash, noticing that a car had slammed into the back of a stationary roll-off truck.

Vieira ran to the car, whose driver had been pierced through the neck by a piece of steering wheel. Vieira placed one of his hands over the wound while using his other hand to call for help. The driver of the roll-off truck walked over to the car and fainted at the sight of the injuries. While applying pressure, Vieira used his foot to pull the leg of the driver who had fainted away from traffic.

Purchasingb2b.ca | APRIL 2018 CANADIAN AUTOMOTIVE REVIEW | 3

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2018-04-16 12:46 PM

Canadian auto sales soften

Recent research shows that 51 percent of Canadian automotive consumers are likely to purchase a new vehicle over the next 24 months. Those surveyed last year were 11 percent more likely to buy soon, a number highlighted by a record year for Canadian automotive sales.

Canadian Black Book has designed a poll conducted by Ipsos to gauge Canadian car buying habits, knowledge and trends. This year’s edition surveyed 1,255 Canadians. The poll implies that younger consumers are more likely to buy in this timeframe, with respondents aged 18-34 the most likely at 65 percent, those 35-54 at 57 percent and those 55 years or older are least likely at 34 percent.

Male respondents show more eagerness to buy in two years at 58 percent versus females at 44 percent. Over a quarter (27 percent) are likely to consider purchasing a vehicle fully online.

Fleet Complete hires new COO and general counsel

Subaru Outback earns IIHS Superior rating Subaru’s reverse automatic braking (RAB) feature has landed praise in a new rear crash prevention-rating program introduced by the Insurance Institute for Highway Safety (IIHS).

The Outback, when equipped with RAB, was named a top performer, earning a Superior rating from the IIHS, the auto company said. Launched to help buyers identify vehicles with technology that can mitigate or prevent low-speed reverse collisions, the rear crash prevention-rating program evaluates several technologies and functions for their ability to prevent crashes. The Outback was one of six vehicles to have their RAB systems evaluated and one of two to earn a Superior rating.

Fleet Complete has hired Alex Armanious as its chief operating officer and Robyn Scott as executive vice-president and general counsel. As Fleet Complete’s COO, Armanious will head the company’s global operations and services. He was most recently senior vice-president, product & technology at Mosaic and chief information officer at LafargeHolcim. Robyn Scott joins Fleet Complete as a member of the executive team in meeting the company’s strategic business goals. With legal expertise in technology and venture capital, she oversees all legal and regulatory governance. Scott has worked at Rogers Communications, World Gaming, Moneris Solutions and Sigma Systems, where she most recently served as general counsel and corporate secretary. C.A.R.

4 | CANADIAN AUTOMOTIVE REVIEW APRIL 2018 | Purchasingb2b.ca

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4/3/18 2018-04-16 12:503:05 PMPM

By Lesley Wimbush

Subaru WRX Since a brand-new WRX is slated to appear next year, there are only a few minor updates to the WRX’s fascia, and a revised equipment list for 2018. For the first time, Subaru’s EyeSight safety suite (adaptive cruise, pre-collision braking, lane-keeping assist reverse auto braking) is available, but only on CVT-equipped WRXs. Available with 268hp, or 305hp for the even sportier STI, the WRX comes standard with all-wheel-drive.

Image: Ford

Image: Toyota

Mid-February is traditionally a time of hearts and flowers and the wistful celebration of Cupid’s aim. But for those whose veins course with octane rather than romance, it’s also the time when the Canadian International Auto Show rolls into town. While mid-size passenger cars have been the hardest hit by the explosive popularity of crossovers and SUVs, compact car sales also dropped 40 percent between 2014 and 2017. Good news for the consumer, since it forced other automakers to price-match the Nissan Micra’s $9,998 claim to fame as Canada’s least expensive car. Sales grew by 2.9 percent last year, and the healthy crop of new small cars on display at the CIAS suggests that the versatile compact is recovering.

Image: Mazda

Compact cars abound at the Canadian International Auto Show

Available in sedan or hatchback, the Mazda3 was significantly refreshed last year and receives only minor updates for 2018.

Last year marked the first use of Mazda’s SkyActivVehicle Dynamic control technology and improvement to their i-ActiveSense safety suite. There are two engine choices, a 155hp 2.0L four-cylinder, and the 184hp 2.5L four-cylinder, mated to either a six-speed manual, or six-speed automatic transmission. Available are LED head and taillights, electronic parking brake to accommodate a larger, covered centre console, perforated leather upholstery and wrapped, heated steering wheel.

Image: Subaru

A HEALTHY CROP OF COMPACTS

Mazda3

Ford Focus Last refreshed in 2015 the Focus is essentially unchanged for 2018. It comes in a dizzying array of models, from a basic economy box; an all-electric EV to an all-wheel-drive, rallyinspired RS hatchback. Available in sedan or hatch, the Focus comes standard with capless fuel filler, backup camera, MyKey owner controls, Sync voice recognition connectivity with 4.2-in. display. There are plenty of available technology and comfort options moving up through the trim levels. Engine choices are a 123hp three-cylinder, a 160hp four-cylinder, 252hp turbo-four, and a 350hp, 2.3L turbo-four in the RS models.

Toyota Corolla For over 50 years, the Corolla has been a popular choice in the compact segment. In 2018 it adds a new range-topping XLE trim, and there’s a hatchback on the way for 2019. The single engine choice, a 1.8L four-cylinder puts out 132hp; bumped to 140hp in the L Eco trim. What the Corolla lacks in excitement, it makes up for in durability and safety—it’s a multiple IIHS five-star safety pick—and every model comes standard with Toyota Safety Sense. This includes pre-collision warning with pedestrian detection, lane departure with steering assist, auto high beams and dynamic radar cruise control.

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Image: Chevrolet

Chevrolet Cruze The Cruze returns for 2018 unchanged, except that the hatchback joins the sedan in offering a diesel variant. With that powertrain, the Cruze boasts the lowest consumption rate, at 5.0L/100km highway, of any non-hybrid or EV vehicle in Canada. It puts out 137hp and an impressive 240lbs-ft. of torque for instant responsiveness. Standard engine is a 153hp turbo-charged four-cylinder. There are four trims, with standard Bluetooth, seven-in. MyLink infotainment with Apple CarPlay and Android Auto, USB and rear camera.

Additional features moving up through the trims include keyless start, heated steering, sunroof, Bose sound, 4.2-in. multi-information display, heated rear seats, wireless phone charging.

Image: Nissan

Image: Mitsubishi

Volkswagen Golf Changes to the Golf for 2018 are minor but important. All models now get LED daytime running lights or optional LED headlamps, restyled front and rear fascia, new LED tail lamps and new rim designs and paint colours. Interiors are upgraded with larger touchscreen displays and emergency braking systems now feature pedestrian recognition. The same 170hp 1.8L fourcylinder engine returns with either five-speed manual or six-speed automatic. Sporty GTI models get a boost in power to 220hp and the Golf R boasts 292hp and a new seven-speed dual clutch automatic transmission. The R also receives a slick new “Volkswagen Digital Cockpit” similar to Audi.

Image: Volkswagen

Image: Honda

Honda Civic Canada’s best-selling car for nearly two decades underwent a ground-up redesign in 2016. A brand-new hatchback followed the sedan and coupe shortly after. The Civic was the first compact to offer radar-based advanced driving assist technology across the trim lines. There are three engine choices: a 2.0L four cylinder with 158hp; a 1.5L four cylinder with 174hp, which is massaged to 205hp in the Civic Si. With 306hp, the 2.0L turbo-four in the Type R is the most powerful in the lineup.

Standard on base trims are cruise control, Bluetooth, backup camera and USB. Upper trims get Honda’s Lane Watch, keyless start, Apple CarPlay and Android Auto. Also available are LED headlights, heated rear seats, navigation, premium sound, Honda Sensing active safety technology.

Nissan Sentra Nissan’s second bestseller in Canada, the Sentra, receives some slight changes to available features for 2018. Siri, Bluetooth and emergency braking are standard. Available options include Sirius XM, a moon roof, Navigation, Bose stereo and leather upholstering. Apple CarPlay and Android Auto are strangely absent. Engine choices are: 124hp four-cylinder (130hp with the six-speed manual), or a 188hp turbo-charged four-cylinder with a continuously variable transmission.

Mitsubishi Mirage With its bargain-basement price and meager fuel consumption, the Mirage is the epitome of budget commuter with modest power and a no-frills interior. This year sees a new trim level, ES Plus, that builds on the base E with air, keyless entry and 6.5-in. infotainment with Android Auto and Apple CarPlay. There’s one engine, a noisy 78hp three cylinder with either five-speed manual or CVT, but it nevertheless helps the Mirage achieve a 6.0L/100km combined fuel rating.

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By Michael Power

DISRUPTION AHEAD

Auto show panel discusses how technology is changing the industry

N

ow is a turbulent time for a number of industries.

So-called disruptive technology is causing businesses to rethink how they operate. Industry 4.0 is changing how manufacturing and other fields perform. Perhaps no more so is this true than in the automotive industry. Autonomous driving, ridesharing, electric vehicles and the connected car are converging to transform the way people drive and their relationships to vehicles and mobility.

As part of the Automotive Intelligence series, which debuted at Toronto’s Canadian International Automotive Show in February, a group of experts discussed what the future of the automotive industry, as well as the driving experience, will look like. The panel, entitled Driving in the Age of Autonomy, featured the following participants: Don Romano, president and CEO, Hyundai Auto Canada Corp.; Joni Paiva, president, Nissan Canada Inc.; Ted Lancaster, vice-president & COO, Kia Canada Inc.; Brian D. Fulton, president and CEO, Mercedes-Benz Canada; and Edwin Ulak, chief product officer, autoTrader.ca.

The group began by discussing disruption, with Romano commenting that the word is most often used to describe a product. But that’s not the only place disruption is going to come from—disruption also happens in the way in which people acquire products. Amazon sells products just like department stores do, but the company does so in a different way, Romano said. With today’s technology, industries have become displaced because other companies have come up with different ways to engage people. He cited his company’s push to make it simpler and easier to buy its products. “We’ve been selling and servicing cars in the same way for 100 years,” he told the audience. “But with the technology today we’re seeing a lot of companies get displaced by companies that have found better ways to engage with their customers. And I think we as an industry have to move in that same direction.”

Innovation and technology are bright spots in the future of the automotive world, said Lancaster. But while all the major automotive players are investing in these areas, innovation in design is also important. People want to feel and look good in their cars, he noted. At the same time, consumers want to feel that their purchasing choices are environmentally sustainable.

Manufacturers therefore must be able to deliver on several fronts and enhance their experience with the vehicle. “If we continue to do that and get feedback from consumers I think it’s going to be a robust future for the auto industry and I think it’s going to help us be as connected as we can to consumers,” Lancaster said.

The panel from left: Ted Lancaster, Kia Canada Inc.; Don Romano, Hyundai Auto Canada Corp.; Joni Paiva, Nissan Canada Inc.; Brian Fulton, Mercedes-Benz Canada; Edwin Ulak, autoTRADER.ca

AutoTrader.ca’s perspective is unique, said Ulak. The website connects people with the cars they’re looking to purchase so responding to changes in the way people buy those cars is important. For example, the company used to be a printed product but is now a mobile app and website. Without that change, the company wouldn’t have been on the panel, he noted. There have also been changes in the way in which people interact with dealers, Ulak said. These days, about two thirds of people simply show up at a dealership unannounced.

Those consumers are better informed than ever, and some of their pain points in buying include that the process takes too long, is difficult, not transparent and that they don’t have enough control. “The existing value chain, the way it’s constructed, needs to evolve to meet consumer needs,” Ulak said.

The panel agreed that the North American Free Trade Agreement (NAFTA) was important to the industry and economy.

Paiva noted that if NAFTA were radically altered or even cancelled, OEMs would adapt and continue to “play by the rules.” But at this point, what the landscape would look like without NAFTA remains guesswork. While none of the OEMs on the panel build cars in Canada, those companies source parts here while assembling vehicles in Mexico and the US. “There are huge stakes in place, so whatever happens is pure speculation at this stage,” he said. “I feel optimistic that things will end well for all parties. So we will adjust and adapt to the rules.”

Lancaster agreed that if NAFTA cahnged car companies would work within the rules. There are options for free trade

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with other countries, such as existing trade with Mexico and an alliance with Korea. While it would be “sad” if NAFTA disintegrated—that would mean risk to the US and Canada alike—there are ways Canada can have positive trade with its partners. “I’d like to see NAFTA stay, I think trade amongst partners is fantastic and it leads to healthy economies locally and globally, but we’ll find a way to make it work,” he said.

Our electric future The panel touched on vehicle electrification with Ulak noting the increase in interest in electric vehicles has been “phenomenal.” At the same time, some of that interest can be chalked up to hype. As well, barriers remain, he said. Those barriers include not only price but also the availability of charging stations and range anxiety among consumers. But interest will pick up as those barriers fall, Ulak said. For his part, Paiva remarked that the future is no doubt electric. The electric engine has existed for over 100 years, and the auto industry is working hard to make the technology efficient and cost effective. Several factors are spurring the growth of electric vehicles: the price is improving, the range is growing and there are more charging stations available, Paiva said.

While the electric car isn’t comparable or competitive with the gas engine, that gap will close, said Romano. Eventually,

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the combustion engine will “go the way of the horse and buggy,” he said, noting that the automotive industry one day will be able to produce an electric vehicle that charges in the same time it takes to fill a gas tank and travels the same distance as a gas engine. “At that point, game over,” he said.

Among other trends the panel touched on was the future of the traditional sedan, which has declined in popularity recently as demand for the SUV has picked up. The trend appears sustained and long-term, Ulak said, with sedan searches on AutoTrader.ca dropping while those for SUVs have increased in the last few years. But while many people are buying SUVs these days, they are still considering the sedan as an option. “Is the sedan dead? Do people not want them any more? No, they still hold that place in the consumer’s consciousness,” he said.

Fulton agreed sales will likely skew towards SUVs, but passenger cars will remain important. The ubiquity of all-wheel drive in SUVs remains a consideration for consumers, noted Lancaster. Consumers consider comfort and fuel prices when shopping, he added. And while SUVs are synonymous with all-wheel drive, Lancaster said he doesn’t see the sedan disappearing any time soon.

The panel gave an insightful look at what’s ahead for world of cars, trucks and SUVs. It’s sure to be an exciting future for the industry in the years to come. C.A.R.

2018-04-04 1:41 PM Purchasingb2b.ca | APRIL 2018 CANADIAN AUTOMOTIVE REVIEW | 9

2018-04-16 12:50 PM

By David Miller

Modernized

& REFINED mid-size SUVs can be the perfect choice for transporting a number of people with ample cargo space. Newer three-row models have surfaced over the last few

years with added technology and fuel economy in mind. In addition, interiors have been refined for comfort and luxury, while still retaining that toughness with enough

towing capability for most hauling jobs. Here’s a list of some of the top mainstream large and mid-size three-row utility vehicles available in the marketplace.

Image: Honda

Image: Hyundai

Large utility vehicles play a vital role for many businesses.

Fuel prices may have put these large transporters in jeopardy, but when minivans aren’t an option, large and

LARGE

utility vehicles keep technology and fuel economy top of mind

Image: Nissan

Hyundai Santa Fe XL The Hyundai Santa Fe XL is your value-laden choice starting at $32,199. It’s sizable, comfortable and simply a great deal with a six- or seven-seat configuration. Over the past few years, it may have lost some steam to more excitingly designed vehicles, but that will all change with a new 2019 Santa Fe. For now, the 2018 Santa Fe XL delivers most of the necessities minus that eighth seat and a little less room and cargo compared to its competition. It boasts a healthy but not thrilling 290hp 3.3L V6 engine with a six-speed gearbox that’s enough to transport a load of people smoothly without a lot of fuss, but a higher-thanaverage fuel economy rating. To get premium features the Luxury trim is the choice at $42,299. That includes a panoramic sunroof, leather seating and an eight-inch touchscreen with navigation.

Honda Pilot Honda made some extreme changes in 2016 to the style and look of its hot-selling Pilot—up 22.3 percent at the end of 2017 in year-over-year Canadian sales. Gone is its boxy and mundane past and in its place is an in-style, slicked-back silhouette similar to its rivals with plenty of power and fuel efficiency deriving from its 280hp 3.5L V6. The Honda Pilot is considered a mid-size SUV, but is at the top of the heap for interior volume and cargo space, more in-tune with the rest of this list. In the second row, consumers will have the choice of comfort or maximizing occupancy with optional Captain’s chairs or a standard bench (that can sit up to eight). Entry into the third row is aided by push button access that slides and tilts the seats. There’s a bonus with Honda’s standard suite of safety technology.

Nissan Armada The Nissan Armada, now in its second-generation, is built on the same platform as the Infiniti QX80 and Patrol—the global name for this full-size SUV. The Armada maintains that truck-like toughness with a body-on-frame construction that has an impressive towing capacity of 8,500lbs (3,856kg).

Under the hood is a direct injected 5.6-litre V8 that produces 390hp and 394lbs-ft of torque mated to a seven-speed automatic transmission geared for improved fuel economy ratings. Its refined interior featuring leather seats creates a value offering when compared to the QX80. There are similar plush touches and technologies including standard navigation, heated from seats for the first two rows, dual power seats and power lift gate, that only get better as you move up trim levels.

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Mazda CX-9 The Mazda CX-9 adds a design-friendly option to the three-row SUV segment.

Now in its second generation, the CX-9 gets treated to Mazda’s SkyActiv platform and engine. The latter uses a 2.5-litre four-cylinder SkyActiv-G engine to propel the ute up to 250hp and 310lb-ft of torque matched to a sixspeed automatic transmission with available all-wheel drive.

Similar to Mazda’s model range, the CX-9 receives exceptional forward motion styling that makes this three-row SUV appear smaller than it actually is.

Its curves and angles bring a refreshing look to the segment that’s complemented by a simplified yet sophisticated interior that features an infotainment screen that sits front and centre on the dash. At a starting price of $36,400, the Mazda CX-9 is one of the better deals out there.

Image: Ford

Image: Toyota

Image: Chevrolet

Chevrolet Tahoe The Chevrolet Tahoe doubles the GMC Yukon sales in the US, but in one of the auto industries greatest anomalies, it’s currently outsold by the Yukon in Canada. The Tahoe starts at a modest $58,365 for the four-wheel drive version ($3,000 less for 2WD) and can perform just as admirably as the Yukon with a smooth and effortless drive without all the bells and whistles. The Tahoe is a body-on-frame behemoth that can tow up to 8,600lbs (3,900kg) from its 355hp V8. It fits up to eight passengers that can also enjoy the same 4G LTE Wi-Fi pleasures as the Yukon. A plethora of USB ports and power outlets are available to add to its driver safety technologies.

Image: Mazda

Image: Volkswagen

Volkswagen Atlas The Atlas is a big part of Volkswagen’s SUV push with Canadian sales starting as a 2018 model year vehicle. It’s built off of Volkswagen’s new MQB platform with a chiseled and aggressive frame, reminiscent of the Ford Explorer. Powering the Atlas is a smooth and responsive 3.6L V6 that makes 276hp and 266lbs-ft of torque mated to an eight-speed automatic transmission with tiptronic paddle shifters. The size of the Atlas isn’t felt when moving, as it handles the road with precision and balance, much like the rest of the Volkswagen lineup.

Drawbacks are found on the inside with a lacklustre environment and slightly high fuel economy numbers. Captain’s chairs are an option for additional comfort.

Toyota Sequoia Another truck-based full-size SUV is the Toyota Sequoia. This refresh provides a polished front fascia and an additional TRD Sport package that comes off more aggressive. The Sequoia is a capable SUV possessing power, comfort and an adaptive air suspension. Powering the Sequoia is another V8, this one of the 5.7L variety producing 381hp and 40lbs-ft of torque.

Standard features include LED lighting, power moon roof, leather seating and Toyota’s suite of safety technology for a starting price of $60,190. It a maximum towing capacity of 7,100lbs (3,220 kg).

Ford Expedition The new Expedition is based off the F-150 pickup platform with an all-aluminum body on top of its front structure that results in a lighter mass by 300lbs (136kg) and best-in-class fuel economy. There is a twin-turbo V6 that produces up to 400hp mated to a new 10-speed automatic transmission that’s super quiet on the road. The Expedition comes with a spacious interior including three-row seating for up to eight passengers. There is soft touch materials and premium touches including a sliding and reclining second row. The driver can fold the third-row headrest automatically.

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2018-04-16 12:51 PM

By Michael Power

Canadian auto show panel takes on issues surrounding electric vehicles

electric FUTURE T

he automotive industry is a field undergoing a significant transformation, with the rise of electric vehicles one of the main trends of that change. To highlight this, the Automotive Intelligence panel series at the Canadian International Automotive Show in Toronto last February featured a discussion on vehicle electrification. The session, called The Electric Revolution, featured an array of speakers and focused on issues including charging infrastructure, city planning, the current rebate model, as well as the pros and cons of the electrified technology as it exists today.

For its part, Toyota Canada has been working towards electrification for a long time, noted the company’s vice-president, corporate, Stephen Beatty, who sat on the panel. At the same time, the company is just starting its electrification journey. The consumer perception of electrification is now beginning to take hold of the consumer’s attention, he added, with about one percent of the buying public starting to move toward EVs. And while the technology already exists the market needs to catch up, as does the infrastructure needed to support it. “We’re asking people not just to think about new technologies and how they’ll stand up but also to think about the infrastructure requirements and really the changes in driving behaviours,” he said.

Fellow panelist Brett Smith, co-director of the Center for Automotive Research at the University of Michigan, noted the unprecedented change—or at least its potential—that electrification is putting the industry through. It’s a very exciting time for the industry, he said, while also noting that the hype surrounding those changes has also grown. “There’s some really interesting technology,” he told the audience. “I’m not sure if it’s ready for mass market prime time but it’s getting a lot closer. Smith also described a “Trump bump” that had seen not only many Americans saying they would refuse to buy electric vehicles, but also some saying they’d buy one simply to spite the current US president.

Current drivers of electric vehicles are largely those who are already enthusiastic about the technology, said Smith. For most consumers, purchasing an EV represents a big lifestyle change and it’s up to the industry to find the product that goes from the passionate user to the mass market. “We do things because it works for us,” he said. “We don’t do it because it’s cost effective and I can go out and talk about how wonderful it is.”

David Paterson, VP, corporate and environmental affairs, General Motors of Canada, agreed that it had been an exciting year in the industry due to advances in electric vehicle

12 | CANADIAN AUTOMOTIVE REVIEW APRIL 2018 | Purchasingb2b.ca

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“Some companies will be well situated to take advantage and others will not. Of course we want to be in the category of the former.” – JACK SIMPSON, GM technology. From the company’s perspective, electric vehicles are part of a broader change that includes autonomous vehicles and other alternative ways to look at mobility in Canadian cities.

The company has been addressing the range anxiety associated with EVs and has seen sales increase by 83 percent, he noted. While conceding the growth has come from a low base, Paterson noted that growth would continue in alignment with factors like infrastructure, consumer preferences and so on. “If we don’t take that long-term view we won’t get there,” he said. “We’ve been committed to putting a product on the road that a consumer is going to want.”

The industry still has work to do in lowering the costs of EV technology, Paterson noted, and the company is developing a hydrogen fuel cell pick up truck. And what technology suits drivers best is based in part on where they live, he said. In the future, we could see electric pickups with hydrogen fuel cells in rural settings and battery driven cars in cities. Currently, both the government and manufacturers subsidize such technology, Paterson noted. “Overall we have got to bring the cost down and that will produce less burden on the state to be able to be the subsidizer of these vehicles and they will be able to move forward to the mainstream,” he said.

The Scandinavian view For its part, Norway has pulled ahead with regards to EVs for a number of reasons, said Morten Edvardsen, senior political advisor to the Norwegian EV Association (NEVA). Last year, a total of 21 percent of the new cars were pure battery electric cars, Edvardsen said. The country boasts a “huge package” of incentives for consumers to buy EVs over gas cars. The infrastructure, such as charging stations, is also widely available there. As well, around 90 percent of Norwegian EV owners can charge their vehicles at home. At the same time, having a car in the Scandinavian country isn’t as easy as it is in Canada, he noted. Vehicle ownership is expensive, toll roads and ferries abound and many people who live in apartments in cities like Oslo lack parking spaces.

The Nissan LEAF is 100-percent electric and gives consumers plenty of options, said the company’s chief marketing manager, Nissan LEAF, and manager of executive planning Francois Lefevre, who also sat on the panel. The company claims zero emissions as its goal, and is now focused on the launch of the second-generation LEAF with a fourth-generation battery. The car has an average range of 242km without needing to be recharged and customers tend to drive about 41km per day,

Lefevre said. Home charging is key with over 80 percent of customers charging their cars where they live. Currently, two provinces offer funding for home chargers, said Lefevre.

The company’s focus is electric, Lefevre noted, and timing is everything. Every manufacturer is now launching EVs, and the infrastructure is less expensive than it’s ever been. And while there’s a place for hydrogen vehicles, the emphasis for the company will remain on the electric.

“There are multiple options, but diversifying now creates confusion in the market,” he said. “So the focus definitely needs to be on something where it’s tangible.”

Fellow panelist Brookes Shean, who is regional general manager, Central Canada for FLO/AddEnergie, stressed that the range anxiety that many consumers now feel about electric vehicles will diminish as the infrastructure supporting them improves. EV drivers now worry about whether the charger will work when they arrive at work, for example. His company focuses on the customer experience, and he mentioned not waiting until there’s a quarter tank to fill up. FLO/AddEnergie is a private company and there’s lots that goes into ensuring the network is done well.

Electric future Volkswagen Canada was also committed to an electric future, said the company’s product planner, Scott Hollinshead. And while the process towards electrification is like pushing a boulder up a hill, the industry can now see that hill’s crest.

Once that hill is crested—most likely around 2020 or slightly after—the industry will be unable to turn back to the combustion engine, Hollinshead stated. “Some companies will be well situated to take advantage and others will not,” he said. “Of course we want to be in the category of the former.”

Jack Simpson, GM, business development and innovation at Toronto Hydro, said the organization is running scenarios and engaged in pilot projects in an effort to help understand charging behaviours better. There is capacity in the system, which is available overnight. The organization therefore is looking to encourage charging after the supper hour, as well as midnight to 6am. Fair pricing is crucial, Simpson noted, and the organization is regulated so those prices are regularly reviewed. The grid can handle the gradual shift to EVs for at least the next 10 years, Simpson said, provided that EV drivers charge their vehicles overnight. “Today it’s about a two-to-one, three-to-one advantage for people to charge at night versus the day time,” he said. “So the pricing incentive is there and we can keep working on the awareness.”

Overall, the panel of industry experts offered a diverse look at what might be in Canada’s electric vehicle future. As several of the panelists agreed, due to electrification, it’s certainly an interesting time for the automotive industry. C.A.R.

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By Michael Power

A Self-Driving

Image: redlinevector, 123RF

F

WORLD

or many, it’s a seductive image: you sit scrolling emails, reading the news or staring out the window as a driverless pod on wheels whisks you around. This is the image many have of the future of autonomous vehicles, and judging by the media attention, that future appears just around the next turn in the road.

But is fully autonomous driving—socalled level-five autonomy—really that close? As part of its Automotive Intelligence series, which debuted at Toronto’s Canadian International Automotive Show in February, a group of industry experts discussed the topic during a panel entitled Driving in the Age of Autonomy.

Among the panelists was Stratford mayor Dan Mathieson, whose Southwestern Ontario municipality of 31,000 people has become an AV research and testing hub. A demonstration and testing zone has opened there called the Autonomous Vehicle Innovation Network. The centre will see academics and the auto industry working to further AV technology. The response in Stratford has largely been one of excitement, Mathieson said.

The region is an industrial and automotive manufacturing hub and there’s been a lot of effort since 2014 to position it as the demonstration-testing zone.

“The residents are getting excited,” he told the audience. “It means we’re going to have state-of-the-art infrastructure.

We’re going to be on the cutting edge of 5G and dedicated short-range communication. We’re going to be data collecting off the vehicles. We’re going to be able to start better pinpointing those potholes.

We’re going to see our safety standards increase.”

But along with the advantages of becoming an autonomous driving hub

come challenges, Mathieson stressed.

Cities will have to upgrade their infrastructure and mapping capabilities, and much of the associated technology has a lifecycle of just six to eight years. One question will be whether municipalities can monetize some of that infrastructure.

For example, will municipalities be able to earn a royalty on the information that autonomous vehicles are able to collect?

“The rubber hits the road in communities and there is where we’ll have our challenges,” Mathieson said.

front of an autonomous vehicle.

“For autonomous vehicle operation it’s all about not just detecting what’s around you but being able to determine on a highly probable scale, what the likely path for that detected object is,” McKenzie said.

McKenzie saw a few challenges associated with autonomous vehicles. The first challenge, which gets less attention, is the diverse array of technology that’s needed to put autonomous vehicles on the road. A second challenge is dealing

“For autonomous vehicle operation it’s all about not just detecting what’s around you but being able to determine on a highly probable scale, what the likely path for that detected object is.”

– ROSS MCKENZIE The University of Waterloo, near Stratford, houses the Waterloo Centre for Automotive Research, and its managing director Ross McKenzie shared the stage with mayor Mathieson. The centre’s focus has been on “perception analysis,” which involves analyzing data that a vehicle collects in real time to help that vehicle make informed decisions. The centre has done work in object detection and enabling autonomous vehicles to differentiate between people and vehicles, McKenzie said. The centre has perfected detecting and determining passenger vehicles, although trucks pose a larger challenge and the focus is on delineating between buses, tractor-trailers, flatbed trucks and others. Another challenge involves pedestrians, he said. AVs must be able to distinguish between adults and children—or whether someone is pushing a stroller or seated in a wheelchair—as well as other objects that might wind up in

with the random nature of vehicles when people are driving them. Autonomous vehicles will have to share the road with human drivers that, for example, drive erratically because they get distracted or try to make up lost commute time by speeding through a yellow light that then turns red, McKenzie said. Additionally, autonomous cars must know where they are going, and high-definition maps for autonomous driving are a key component of that. And while companies are creating these maps, they’re not widely available yet.

“Vehicles aren’t going to go anywhere unless they have these maps,” McKenzie said. “All of the autonomous vehicles that are on the road today have been previously driven by a human operator down the road to learn the road. They don’t go down the road unless they’ve been driven manually first.”

Augmented reality is also playing a role

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in the AV world, said fellow panelist Chris Candy, vice-president of business development at Seven Media. Augmented reality involves laying something digital over the real world, Candy said. Citing the smartphone game Pokemon Go as an example, Candy noted that several companies were using augmented reality to improve their customers’ experience with the brand. IKEA, for example, allows consumers to visualize a piece of furniture in their house. Candy gave a vehiclerelated example of an augmented reality repair manual. If a vehicle owner is working on a car but can’t locate a part under the hood he or she would be able to look at a smartphone or tablet (eventually they will look through glasses) for repair instructions or to identify parts. In the future, windshields may display instructions, such as maps, that drivers currently rely on their smartphones for.

“And as everything moves over to the

Canadian Aboriginal and Minority Supplier Council

autonomous vehicle side, displaying particular pieces of information (on the windshield) that the vehicle is doing behind their decision process to help people feel a little more comfortable with the autonomous side,” he said.

Fellow panelist Ted Graham, head of open innovation for General Motors, said the evolution of autonomy is happening faster than many think, Graham noted.

By 2019, the company will have on the market in a major city self-driving “robo-taxis”—Graham described these as a shared form of mobility used to get around urban environments. GM recently bought San Francisco-based Cruise Automation, a driverless car company founded in 2013. The company is testing Level 4 autonomous vehicles on that city’s streets, Graham said. The company also recently opened a facility in Markham, Ontario to complement its engineering centre in nearby Oshawa.

Conseil canadien des fournisseurs autochtones et membres de minorités

Dennis DesRosiers, president of DesRosiers Automotive Consultants, reinforced that the three major disruptors of autonomous/connected vehicles, electrification and ride sharing are steadily becoming the reality. But the public gets confused regarding level of autonomy and when each will arrive.

And while much of the technology exists, other areas such as infrastructure must catch up. It’s also true that most vehicles sit idle 95 percent of the time. “With all of these technologies converging, we’re going to have higher utilization and that’s going to create a lot of efficiencies,” DesRosiers said. “But there are a lot of issues to overcome.”

At the same time, elements of autonomy are appearing in vehicles that OEMs are producing now, DesRosiers said. “All roads lead to it, but I think it’s going to be a longer road than people think,” he said. C.A.R.

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16 | CANADIAN AUTOMOTIVE REVIEW APRIL 2018 | Purchasingb2b.ca

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By Howard J. Elmer

The 2019 Ram’s payload has increased to 2,300lbs and the top tow rating is now 12,700lbs.

LARGER

LIGHTER

The new 2019 Ram offers innovative updates that don’t disappoint

Images: Howard J Elmer

T

he 2019 Ram 1500 is just the second generation of this half-ton brand that has been a stand-alone company under the FCA umbrella since 2009. Despite often still being referred to as the Dodge Ram it’s been on its own for a decade now—a very successful decade with sales up by 191 percent since inception and hitting almost 700,000 sales worldwide in 2017. While there was a mild Ram refresh in 2014 (along with the introduction of the 3.0L diesel engine), this new Ram promises innovative updates in line with an incubation period this long. At first glance it doesn’t disappoint.

The look of the new sheet metal is just different enough to announce this new generation with LED adaptive front lighting anchoring a flatter, swept-back hood that now wears the brand badge. Well, that and the new grille. The iconic cross-hair grille, long associated with the Ram, is fully retired. From now on Ram will lead with its name squarely embossed on its nose.

This truck is slightly larger than its predecessor yet its 225lbs lighter. Weight savings are thanks to the use of more highstrength steel and a wider use of aluminum. This stronger frame, larger brakes (14.9-in) and retuned suspension compo-

nents also offers gains in payload and max trailer towing.

Payload has increased to 2,300lbs and the top tow rating is now 12,700lbs; numbers that make it competitive with any of its rivals.

The new aluminum tailgate is now damped and has an integrated lift-assist feature. Inside the cab the rear floor is now flat. Both of these features have been found in other trucks for a few years now—so, while noteworthy, these and a dozen other small things are just examples of Ram catching up to the field. In some cases though, they’ve done that and more. This new Ram also offers: adaptive cruise control with stop; blind-spot monitoring including trailer coverage; forward collision warning with active braking; ready alert braking; trailer-sway control; lane departure warning with lane keep assist; parallel and perpendicular park and hill-start assist which uses ultrasonic sensors to help the driver perform technical manoeuvres.

What is unique though is the four inches added to the frame which results in a huge new crew cab backseat—one in which the seatbacks will even recline eight degrees. This feature was Purchasingb2b.ca | APRIL 2018 CANADIAN AUTOMOTIVE REVIEW | 17

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Ram’s cabin design and decor gets even better with new materials and features like a switch bank with toggle switches, wireless charging dock and up to five USBs.

previously found only in the HD MegaCab. Supporting that frame at all four corners is a new shock system called frequency response damping (FRD shocks). This technology employs a bypass valve in the shock that opens and closes as needed to soften the ride or offer firmer control during cornering.

Other tech innovations include: updated multilink coil spring rear suspension; active-level four corner air suspension, next-gen TorqueFlite eight-speed automatic transmission; auto-retracting front air dam and frame-mounted active tuned mass modules along with active noise cancellation that makes this Ram interior the quietest ever.

On the inside Ram’s cabin design and decor has always been good—but now it gets even better with new materials and features like an all-new switch bank with toggle switches, wireless charging dock and up to five USBs, including four type C/A ports. The new centre console also has 12 different storage configurations above which you’ll see the first 12-in fully configurable touchscreen (optional) that includes tailor-made graphics for various Ram models. It features the fourth-generation Uconnect multimedia system with SiriusXM, in-vehicle connected services including 4G Wi-Fi hotspot and 360-degree surround view camera with bird’s-eye view.

A new powerful Harman/kardon audio system is now available as well, with 19 premium speakers, 900-watt surround sound amplifier, 10-inch subwoofer and active noise cancellation.

Canadians buy twice as many Ram pickups (per capita) as do Americans. This fact went a long way towards the request— and creation of a Canadian exclusive model for 2019—the

Sport. This truck will include all the most commonly ordered appearance features in one package. It includes a monochromatic exterior theme, body-colour door handles, mirrors and grille with all-black badging. Also a sport performance hood, dual black exhaust tips, 22-inch black accent wheels and all-black Sport-themed interior design. This includes cloth/vinyl bucket seats, black satin chrome, black headliner and a seven-in centre cluster with Sport splash screen.

Engines and transmissions in this next generation remain mostly unchanged with the 3.6L V6 Pentastar still being the standard. The 5.7L Hemi V8 is still the most popular choice in Canada, however up to 20 percent of buyers are now ordering the 3.0L EcoDiesel. Pricing for the new Ram starts at $46,095 MSRP for the 4x4 Quad Cab Tradesman and walking up through the trim packages to $74,195 MSRP for the 4x4 Crew Limited edition. New Ram’s are available to order now. C.A.R.

18 | CANADIAN AUTOMOTIVE REVIEW APRIL 2018 | Purchasingb2b.ca

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A friendly tip, don’t be Bill.

A friendly tip, don’t be Bill.

Pinpoint areas of cost escalation and what to do about them—ahead of time.

SeenItComing.ca

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T:8» S:7»

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The 2018 Nissan Titan XD with Cummins® Turbo Diesel Engine* offers superior capability and performance. With over 12,000 lbs of towing capacity** and 555 lb.-ft. of torque, you can trust that a fleet of Titans can handle anything your workers throw at it. Or in it.

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ADD A FEW HARD WORKERS TO YOUR CREW.

Building

Momentum Major corporations and diverse suppliers meet at CAMSC Diversity Procurement Fair

BY DAPHNE SHIH

T

he Canadian Aboriginal and Minority Supplier Council (CAMSC) welcomed 400 attendees April 11 at the 14th Diversity Procurement Fair. Representatives from major North American corporations and Aboriginal and minority-owned suppliers had a chance to network and hear from leaders in supplier diversity during the two-day conference.

“This is the only event of its kind to bring corporations and Aboriginal and minority-owned businesses together to offer opportunities for one-on-one meetings to build business partnerships,” said Cassandra Dorrington, president, CAMSC. “There are also a number of workshops, panel discussions and various networking sessions.”

youth dance troupe from Uganda. The Suubi Fusion Troupe consists of young Cambridge School students that travel around the world to raise funds for girls’ education in Uganda that they themselves would have never been able to afford.

Jeff Leal, Minister of Agriculture, Food and Rural Affairs, attended the networking reception and extended the greetings of Kathleen Wynne, Premier of Ontario, to Dorrington. The minister also announced starting April 1 the fees for suppliers to bid on government contracts have been eliminated.

The highlights of the fair included SD Talks featuring representatives from Walker Law, recruitment agency Topnotch and LA Metal Stamping. The

This is the only event of its kind to bring corporations and Aboriginal and minority-owned businesses together to offer opportunities for one-on-one meetings to build business partnerships.

– CASSANDRA DORRINGTON

The fair kicked off with a networking reception, sponsored by BMO. Its representatives, Agata Gorzelak, head and director, strategy and integration procurement, and Catherine Grosz, manager, supplier diversity and procurement, welcomed guests and spoke about BMO’s developments and achievements in the supplier diversity over the past year.

The reception featured an African

speakers shared the challenges they faced and the lessons learned on the road to success in supplier diversity.

Under the fair’s theme “Building Momentum”, Louis Green, interim president, National Minority Supplier Development Council (NMSDC) in the US, delivered the luncheon keynote address about key NMSDC successes in advancing supplier diversity throughout

All the way from Uganda, Suubi Music and Dance Troupe kicked off the reception at the CAMSC Diversity Procurement Fair 2018.

its nearly 50-year history and highlighted examples with key corporate players.

All levels of Canadian governments participated in this year’s Diversity Procurement Fair. The panel “Navigating the Government Procurement Process” provided information for suppliers willing to learn the ins and outs of doing business with governments. Tracy MacCharles, Minister of Government and Consumer Services, recognized CAMSC’s for advancing economic growth of the Canadian supply chain through the inclusion of Aboriginals and Minority suppliers.

The fair concluded with the Meeting Marketplace, which allowed corporate members to meet and recruit prospective Aboriginal and minority-owned suppliers.

EY, FCA, GM, PepsiCo, TELUS, Toyota, and RBC were among those that suppliers had the opportunity to meet. More than half a billion dollars’ worth of business is contracted annually by CAMSC’s members and the fair is a major forum to start business partnerships. B2B

Daphne Shih is director, business development and partnerships with CAMSC.

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Exciting TIMES

By Sarah Friesen

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ates a unique healthcare culture, which still tends to be relationship based, can be hierarchical and strives to find a balance between risk aversion, with an emphasis on good patient outcomes and the need to always be on the leading edge of new discoveries and technologies that will improve those outcomes.

Not so long ago, the healthcare buying function was mostly transactional.

Processes were not always well defined, and product selection was driven by local demand and preferences. Each HSP had its own purchasing department, whether small or large, and buyers had typically spent their whole career in healthcare.

ume and standardization of products.

Most provinces have now moved to a single supply chain/procurement organization. In Ontario, there are eight shared service organizations (SSO) supporting most hospitals in the province along with an increasing number of non-acute facilities. These organizations also have interSSO relationships, to provide services to peer organizations and to aggregate volumes further when going to market.

Value-based procurement

The other key players in the healthcare procurement space are the group purchasing organizations (GPO). HealthPRO

Over the past 20 years, we have seen a seismic shift in how healthcare procurement is managed in Canada.

Over the past 20 years, we have seen a seismic shift in how healthcare procurement is managed in Canada. This is due in part to the spread of the shared service model as a way to drive efficiencies, optimize resources and realize value for money through the aggregation of vol-

and the St. Joseph’s Health System Group Purchasing Organization are national in scope. They work on behalf of hundreds of hospitals and healthcare organizations across Canada to manage and reduce supply and capital costs by leveraging better pricing from suppliers through

Š123rf.com/ dolgachov

H

ealthcare Procurement in Canada has evolved considerably over the past 20 years. We have progressed from being basement-dwelling order takers to become strategic sourcing specialists. We are an integral and strategic part of health service provider organizations (HSP), enabling the delivery of quality patient care and guiding increasingly complex procurements that deliver value for money.

Consider the scope of healthcare procurement: we buy everything from lightbulbs to MRIs, from snow removal services to architects/contractors/engineers who design and build multi-million dollar sites. Increasingly, our expertise is relied upon to guide the procurement of innovative solutions that may be totally undefined at the time we launch our procurement process.

We work with an equally diverse group of stakeholders, and for all of us our primary customer is the patient. On a day-to-day basis, this group includes physicians, surgeons and other clinical staff, facilities management and a large supplier community. Our stakeholders also include HSP senior leadership and governing bodies, as well as provincial and federal governments. This diversity cre-

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Innovation

The evolution of healthcare procurement in Canada

aggregated volumes.

In addition to the changing landscape, there is a growing emphasis on value-based procurement. This has grown in part out of the work of professor Michael Porter (What is Value in Health Care?) and others, who developed the concept of value-based healthcare as a framework for achieving better outcomes that matter to patients, optimizing the cost of care delivery to the health system. In this context, the product/service that performs best, providing the highest measurable quality outcome relative to need at the lowest cost, is the product/service offering the highest relative value. The Conference Board of Canada defines value-based procurement as a process that creates healthcare value by, among others, placing emphasis on overall system value.

How do we incorporate these theories into our procurement practices, to ensure we are maximizing the use of public funds in Canada? To begin, multiple trade agreements (such as the Canadian Free Trade Agreement) require public procurement processes to be fair, open, transparent, geographically neutral and accessible to qualified vendors. These processes must also be compliant with laws related to competitive bidding and any provincial

Increasingly, innovation is also seen to be a value driver. But what are “innovation” and “innovation procurement”?

Sometimes we are presented with new technologies that are disruptive and in other circumstances, an HSP may have a problem that needs to be resolved, but for which there is no known solution.

Traditional specifications are typically inadequate in describing the requirements. In these circumstances, the HSP may run an innovation procurement initiative, to assess the varied and various potential solutions to the stated problem, focusing on the value the solution can bring. To achieve maximum value, the HSP will describe its specifications in outcome-based terms, and then evaluate submissions based on value-based evaluation criteria.

These approaches require new procurement methodologies and the development of new competencies to manage the complexity.

The next evolutionary phase within healthcare procurement, therefore, is the recognition of innovation procurement as a strategic and innovative approach focused on patient outcomes, increasing efficiency to the system and achieving value for money. At the federal level, the Advisory Panel on Healthcare Innovation was formed in 2014, and in its report UNLEASHING INNOVATION: Excellent Healthcare for Canada, the panel identified better value from procurement, reimbursement and regulation, as a “critical area for healthcare innovation”. In Ontario, the Ontario Health Innovation Council (OHIC) was established in 2013 to accelerate the adoption of new technologies in our healthcare system and to support the growth and competitiveness of Ontario’s health technology sector. The OHIC report, the Catalyst, made six recommendations that included: accelerate the shift to strategic, value-based procure-

ment. There are numerous initiatives in Ontario working to deliver on that recommendation, and they are just part of the many initiatives happening across the country.

To promote knowledge about what is happening in the healthcare supply chain world, professionals in Canada have the benefit of the Healthcare Supply Chain Network (HSCN). Established in 2002 by a few committed individuals, HSCN has since developed into a national, volunteer-based, not-for-profit network of providers and suppliers. HSCN hosts the only annual national healthcare supply chain conference in Canada, and is dedicated to: • Identifying and implementing leading practices; • Enhancing members’ efficiency and effectiveness through professional development programs; and • Providing networking opportunities to share experiences and solutions to common challenges.

The theme of this year’s conference (May 14-16, 2018) is “leadership through adaptation” and a major speaker focus is innovation procurement in healthcare.

For more information, see www.hscn.org.

In conclusion, we do actually live in exciting times. There has been so much transformation in healthcare procurement in recent years that it is absolutely unrecognizable from what it was 20 years ago. As we continue to evolve in an increasingly complex environment, healthcare procurement professionals are well positioned to contribute to the achievement of excellent patient outcomes, efficiencies to the system and value for money, to the benefit of the Canadian healthcare system and patients. B2B

Sarah Friesen is president of Friesen Concepts.

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PUBLIC PROCUREMENT

g

requirements. Compliance with these obligations creates a strong foundation for public procurement and the associated risk mitigation is a key value driver.

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EMBRACING

CHANGE Travel management expert Shelly Lewchuk blends emotional intelligence with data-driven results

A

lthough Shelly Lewchuk took a circuitous route to the role of manager of corporate travel for Canadian Natural Resources Limited, she can’t imagine doing anything else. She graduated from the Southern Alberta Institute of Technology and studied communications at the University of Calgary. She was elected as the first Canadian on the board of directors for the Global Business Travel Association (GBTA) and was recognized as the association’s Direct Member of the Year in 2012. PurchasingB2B spoke with Lewchuk about her career, the importance of education and professional association membership, as well as her plans for the future.

Q

What’s your background and current role?

My current role is manager of corporate travel for Canadian Natural Resources Limited, a senior oil and natural gas production company headquartered in Calgary. Like many in the travel management field, I took a somewhat circuitous route to get here. After graduating from the Southern Alberta Institute of Technology, I began my career as an administrative assistant at a major oil and gas company.

After a few years, I completed a management certificate from the University of Calgary, and then started working toward a bachelor of communications through Athabasca University. Then my career path changed. By that time, I had moved to an executive assistant role at Canadian Natural Resources Limited, where part of my responsibilities included overseeing the

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company’s travel program, which consisted of a full-service agreement with a travel management company and an airline contract. As I became more educated about the value and principles of travel management, I gradually built a more robust program, developing a travel and expense policy, negotiating hotel and rental car agreements, and spearheading the design and implementation of our aviation safety and travel risk management programs.

Eventually, we hired our own agents and moved the travel function in-house, and travel management became my full-time role. As part of that role, I also oversee our charter aircraft aviation program and serve as corporate credit card administrator.

whether through formal post-secondary training or via a professional association, is not only important—it is a necessity.

Q

Q

Why is continuing education important?

I have often wondered what it was like for my grandparents to go from a horse-andbuggy to a Model T. But we’ve experienced even more dramatic change in our generation. When I started my first job, I used an IBM Selectric. I still remember the thrill of getting my first Wang word processor. Now, I sit on my couch and use an iPad to Facetime with my brother in Houston.

Driverless cars and delivering packages by drone are on the horizon, not to mention the introduction of Bitcoin and blockchain.

The speed and magnitude of these changes has huge implications for our industry. Our organizations rely upon us to keep abreast of current trends and technological advances. It is our responsibility to constantly monitor and evaluate our travel programs and make whatever adjustments may be necessary. Continuing education,

Why is involvement with professional organizations so important?

Involvement in a professional organization is important for many reasons. The most obvious is the opportunity for continuing education and profession development.

Since the invention of the computer reservation system in in 1950s, travel has been an industry built upon technology.

Technology has always driven change, and the pace of that change is accelerating.

Societal norms and geopolitical factors bring added complexity to our roles. It is difficult to keep abreast of world events or advances in the industry unless you carve out time to focus on learning. That might mean earning a professional certification, attending a conference or symposium or subscribing to a trade publication.

Involvement in a professional association cultivates networking. Creating a circle of

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Q

Image: Brett Gilmour, Gilmour Photography

Tell us something about yourself that most people wouldn’t know.

I sing in an adult recreational choir. I joined because the repertoire appealed to me, not realizing that the year-end shows would be at Calgary’s performing arts centre and require my memorizing a dozen songs, putting together several different costumes, and learning choreography for some of the numbers. I jokingly refer to our group as “Glee for grownups.” That first year was intimidating and totally outside my comfort zone—but after the year-end show, I was hooked! We have a lot of fun, and the final result is truly amazing.

contacts allows us to interact, to share our knowledge and expertise and to develop best practices. It also provides an opportunity for personal growth. Volunteering to participate on a committee, sit on a panel, speak at an event or mentor someone in a new role not only forces us out of our comfort zone, it also allows us to give back to our profession. My involvement with the Global Business Travel Association (GBTA) has provided me with skills and knowledge that I’ve been able to apply in my role. And, on a personal level, being elected to serve as the first Canadian on the association’s board of directors and being recognized as Direct Member of the Year in 2012 were two of the most fulfilling achievements in my career.

Q

What does a typical day in your job look like?

There is seldom a typical day! That is what makes the profession so interesting.

Every day presents new challenges and, quite often, the need to react quickly to situations that arise. As travel managers, we

facilitate the provision of services that have a huge impact on the wellbeing and productivity of our travellers. While there are definitely deadlines, having a customer focus means that flexibility and the ability to juggle multiple priorities is the norm.

Q

What plans do you have in the field for the future?

The emergence of the sharing economy has created a change in the travel experience that is appealing to many travellers.

Suppliers who formerly focused on the leisure market have risen to the challenge, developing corporate brands with reporting functionality and enhanced vetting processes. Traditional service providers are also challenging the status quo, creating new offerings to appeal to the next generation of business travellers. This has provided a plethora of new options to consider. My next goal is to learn more about what is available to determine whether we should revise our travel policy to allow these types of options and, if so, within what parameters.

Q

What skills, knowledge and education will those entering the field need in the future?

I see two areas of focus for the future.

Traditional soft skills will continue to be important. Travel management is relationship based. There is an ongoing need to interact with travellers, internal business units, external suppliers and senior management. A skilled practitioner will need to be able to adjust his or her style to communicate clearly and effectively in a wide variety of situations. There is a need to learn to listen to and appreciate the needs of others.

A high degree of emotional intelligence correlates with strong leadership and negotiation skills. The second is the evolution of data. Sound decisions have always been based on facts, and never before have we had access to such a volume of data.

Therein lays the challenge. The ability to distill what is important, analyze it and use the results to drive decision-making will continue to grow in importance.

Q

What advice would you give those considering a career in travel management?

Most of us working in the travel management field cannot imagine doing anything else. It is a career that allows us to bring value to our companies, to balance cost containment with the traveller’s need for comfort, safety and quality service. Be flexible. Embrace change. Don’t be afraid to step outside your comfort zone. Never stop learning. The sky’s the limit! B2B

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Uncertainty in international trade

Shaky GROUND F

or international trade and global sourcing initiatives, the world has become very small. The Internet has definitely helped in shrinking that world and has increased our ability to source high-quality, low-cost products or services globally. However, for the rewards (low costs, higher profits), there are also many risks (supply chain disruptions, implementation of unplanned tariffs). If unchecked, these risks can more than offset any potential reward.

Recent news concerning the actions of the US government enacting various protectionist policies regarding international trade is making it difficult to source products or services from low-cost countries.

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Protectionism is a government policy enacted with the purpose of limited perceived unfair competition from foreign companies.

There are four types of protectionist measures a government can enact: • Impose a tariff or duty on imported goods; • Offer local manufacturers a subsidy, thus enabling domestic manufacturers to lower their prices to compete domestically and globally; • Impose quotas, limiting the volume of imports from specific countries; and • Lowering the value of its currency, making exports cheaper globally.

The US government followed type one above by implementing tariffs on a wide range of products, from solar panels to appliances to steel and aluminum-based products. For Canadian industry, we have seen tariffs on softwood lumber and dairy products, with the potential for steel and aluminum-based products if the NAFTA re-negotiation does not conclude favourably for the US. The problem with protectionist policies is that they restrict competition and inhibit local manufacturers from being innovative regarding their products, which impacts product quality and customer satisfaction. Even greater is the threat of retaliatory tariffs being issued

©123rf.com/ Buchachon Petthanya

By Jeff Russell

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by a foreign country, starting a trade war. After the US issued their tariffs on products from China, that country has recently announced similar tariffs on US products entering China. Take for example the recent announcement by a US Master Distributor: “Based on the US Department of Commerce recommendation, from Section 232 of the Fair Trade Act, new tariffs will be imposed on specific metal products that are manufactured outside the United States. These tariffs range from 7.0% on aluminum goods, to 25.0% on steel goods, effective March 23rd. As a result, your multiplier will increase by 25.0% effective on all shipments after March 22, 2018. We will not be able to offer any price protection or pre-buys and current backorders will be canceled.”

No one wins a trade war, and ultimately, the end user or consumer pays with higher prices.

For procurement professionals looking to buy products at cheaper prices, we are caught in the middle of governments flexing their global power, believing they are doing what is right for domestic businesses and manufacturers. For companies that have long-term contracts at fixed pricing, do you try to renegotiate with the suppliers or manufacturers, protecting your customer? Or, do you pass these increases through to the market place, impacting your customer? The potential risk with this action is that your customer may decide to go back to the market to see if they can get a better price from another source. And what about the cancelation of back orders, suggesting lack of support or unwillingness to protect their own customer base? Customer-supplier relationships are going to be tested to the extreme level, as companies will surely do what they can to protect their own bottom line first before their downstream or upstream partners. If your current inventory is already short in supply and you received a partial shipment of material that covers immediate requirements, as a supply chain professional, you are now faced with the prospect of buying from another source at higher prices, impacting profit margins, or buying at extended lead times, which causes material shortages.

Further complicating global sourcing initiatives for procurement professionals in Canada is the unknown conclusion of the renegotiation of the North American Free Trade Agreement (NAFTA) with the US and Mexico. This is critical for one very important reason—how will the renegotiated NAFTA agreement deal with or define a product’s rule of origin. Rules of origin are a necessary component of

pork meat under chapter two and spices under chapter nine. So long as a company knows and understands where their raw material originates and can substantiate a transformation to a finished product, there won’t be an issue.

However, a new problem arises with future shipments going into the US as recent anti-dumping trade cases by the Department of Commerce have not just

No one wins in a trade war, and ultimately, the end user or consumer pays with

higher prices. international trade, as they set the rules for determining the national source of a product and what tariff treatment is to be applied to a product upon importing.

Under NAFTA, Article 401 and its accompanying annex define origin in four ways: • Goods wholly obtained or produced in the NAFTA region; • Goods produced in the NAFTA region wholly from originating materials; • Goods meeting the Annex 401 origin rules; and • Unassembled goods and goods classified with their parts which do not meet Annex 401 rules of origin but contain 60 percent regional value content using the transaction method, or 50 percent regional value content using the net cost method.

Changes to how rules of origin are defined and classified could move a product from being duty free today to having a high tariff tomorrow, making products uncompetitive in the US. Traditionally, products that have been produced in Canada using a small amount of imported products but have gone through a substantial transformation or a tariff change would qualify as Canadian origin and therefore duty free under NAFTA. A tariff change means the final product falls under a completely different tariff chapter than the raw material used to produce that product. For example, pork sausages, under chapter 16, are made from

looked at the finished product, but have also started to look at the origin of the raw material. Under the current rules of origin with NAFTA, raw material would not be used as a means to identify the country of origin—only the finished product was of concern. Currently, Canadian companies are exempt from the steel and aluminum tariffs; but with the Department of Commerce’s new direction of looking at the origins of raw material, Canadian companies may need to re-source their raw material from non-impacted countries to ensure their products are duty free. Otherwise, their products could be assessed tariffs of 25 percent or 27 percent.

The challenge for Canadian procurement professionals who source globally and work for a company that participates in international trade, especially with the US, the changing compliance rules could hamper the ability to buy high-quality products from a low-cost country, impacting profit margins and growth opportunities. The potential threat of anti-dumping duties on imports and exports could literally freeze a buyer from making quick and efficient purchasing decisions. B2B

Jeff Russell is director of procurement at Crane Supply.

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MODEX 2018 took place in April in Atlanta, GA.

A FUTURE-PROOF

supply chain MODEX 2018 looks at how technology is altering the supply chain

comes to successful decision-making, McAfee stressed that the evidence-based decisions made by the geeks have better outcomes. But the studies conducted that show the superiority of evidence-based decisions were done in the world of “small data.” In today’s world of Big Data, machines are now progressing faster than experts had expected. “We’re seeing machines demonstrating excellent judgment in the domains where we thought we needed us,” he said. Due to the sheer number of users, the Internet has access to “billions of brains.” As the business playbook gets rewritten, McAfee suggested remembering that the crowd is often wise. Organizations should bear in mind that the optimal division of labour between human minds and machines is shifting rapidly, and it’s shifting in the direction of machines. People still have lots to contribute, he stressed, but not in the ways in which we thought we would.

MHI industry report

By Michael Power

T

he current speed of business and the massive changes to manufacturing and the supply chain being driven by advancing digital technology dominated much of the agenda at the MODEX 2018 Conference in Atlanta, GA in April. The biennial tradeshow features a range of supply chain solutions and the latest equipment and technology from companies from around the world.

The tagline for the show, “Future-proof your business,” applied to much of the show’s content, as supply chain and logistics professionals walked the show floor and attended education sessions to discover what’s new in the field.

Andrew McAfee, co-director of the MIT Initiative on the Digital Economy, addressed this topic during a keynote presentation entitled Harnessing Our Digital Future. Technology, he told the audience, is now rewriting the business playbook and companies and organizations must adapt to this new reality. “If we continue to follow the old one we’re going to find ourselves in some trouble,” he said.

Process is one area in which technology is rewriting that rulebook, McAfee noted. Until recently, the rule has been

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that computers are better than people at problems involving math and computation. This has supported the notion that organizations should give tasks related to these areas to machines. As well, people excel at decisions involving judgment and the real world. “What we’re supposed to be doing is exercising our judgment,” McAfee said of human involvement in the world of commerce.

Organizations often make decisions by “HIPPO”, an acronym that McAfee said means using the “highest-paid per-

Also during the conference, the US-based Material Handing Institute (MHI) and Deloitte Consulting released the results of their fifth-annual survey report on supply chain innovation, entitled Overcoming Barriers to NextGen Supply Chain Innovation.

The survey and resulting report aim to shed light on the shift towards digital supply chains and the impact of 11 key innovations on supply chain operations and strategies. MHI and Deloitte presented the survey results along with commentary from a panel of industry experts.

Scott Sopher, principal and leader, global supply chain practice at Deloitte, pre-

We’re seeing machines demonstrating excellent judgment in the domains where we thought we needed us.

—ANDREW MCAFEE son’s opinion.” In most organizations, a team assembles to make decisions using a HIPPO approach, with those decisions then passed down to the company’s rankand-file workers to execute. By contrast, the “geek” within an organization makes decisions based on evidence. When it

sented the findings.

Among those findings, the report found that 11 technologies are at play in creating “next-generation” supply chains that are digital and on-demand. Among survey respondents, eight of 10 believe that these supply chains will be the main

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model within five years. The top technologies that respondents say can serve either as a disruption or a competitive advantage to companies include robotics (65 percent); predictive analytics (62 percent); the Internet of Things (59 percent); artificial intelligence (53 percent); and driverless vehicles and drones (52 percent). According to the survey, the top-three barriers to adoption are: making the business case for NextGen supply chain investments; tackling the supply chain skills gap and workforce shortage; and building trust and security in digital, always-on supply chains. Sopher noted that adoption rates are highest for cloud computing and storage, followed by sensors and auto identification. Robotics and automation was next, followed by the Internet of Things (IoT).

The report also touched on cybersecurity within the supply chain. The sophistication of hackers and “threat actors” is seen among survey respondents as the biggest risk (44 percent), followed by the lack of awareness of the threat within orga-

nizations (40 percent) and poor cybersecurity practices among suppliers (37 percent). As cybersecurity concerns grow among supply chain professionals, the survey found that the demand for transparency at every level of the supply chain is also growing as consumers increasingly expect full information about the origin and history of the products they consume.

The Internet of Things

In discussing the report’s results, several panel members agreed that the use of the Internet of Things (IoT) would increase.

Panelist Jay Kim, chief strategy officer at Upskill, said that while big data is growing, the question remained on what to do with the data collected. The IoT isn’t just about connecting to machines, but connecting to human beings. People have to turn that data into action, Kim said. If people aren’t part of a connected operation, then an organization won’t get maximum mileage from that connectivity.

Kevin Condon, director of engineering and network strategy at Kroger, agreed

people are the key to developing competitive advantage. Success not only involves robots but the people who work alongside those robots.

The panel discussed supply chain’s skills gap and workforce shortage. Randy Bradley, assistant professor of information systems and supply chain management at the University of Tennessee, noted that organizations often wait until students get to college before promoting careers in supply chain. Bradley suggested starting earlier. Potential employees don’t necessarily have to be trained in supply chain, he said. Even experience outside of the field can be relevant. Organizations need people who can use both the left and right sides of their brains, he said.

Ultimately, MODEX 2018 provided attendees with a look at not only what supply chain and logistics solutions exist today, but also what the future holds for the field. Supply chain and procurement professionals would do well to ensure they are up to speed on these developments going forward. B2B

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Beyond

BUSINESS B

usiness travel in Canada is a sizable industry, totalling $23.5 billion in related expenditures in 2016. When businesses send workers on the road, it creates jobs and sales while generating taxes.

It also grows the national economy.

During GBTA Conference 2018 – Toronto, the Global Business Travel Association (GBTA) released a study called The Canadian Business Travel Industry: Business Travel’s Impact on Jobs and the Canadian Economy. The focus was to quantify the economic contribution of business travel to the Canadian economy. We estimated total annual spending initiated by business travel in 2016 (the most recent full year data available), and used a standard eco-

Expenditures made to support Canadian business travel totalled $35.8 billion in 2016. This includes $29.4 billion in trip-related spending (82 percent) and $6.4 billion in meetings operations expenditures (18 percent). Trip-related spending includes $24.1 billion in domestic spending, $4 billion in international inbound spending and $1.3 billion in international outbound spending.

The $35.8 billion business travel spending in 2016 resulted in $40.1 billion in value added to the Canadian economy.

For every dollar spent on business travel expenditures or meeting operations, about $1.12 is returned to Canadian GDP. Business travel was a significant contrib-

Business travelers took a total of 35.1 million trips in and around Canada in 2016, up 5.7 percent from 2015. nomic model to translate that into GDP, jobs, wages and taxes. The study sought to profile Canadian business travellers in several areas to understand their behaviour, motivations and spending patterns.

Business travellers took a total of 35.1 million trips in and around Canada in 2016, up 5.7 percent from 2015. This included 31.8 million domestic trips and another 3.3 million trips coming into Canada from foreign markets. As well, 77 percent of domestic Canadian business trips were for transient business purposes, including sales trips, client service trips, government and military travel, and travel for construction or repair.

The other 23 percent were taken for group travel purposes, including travel for conventions, group training and seminars. In total, business travellers spent $29.4 billion dollars on travel goods and services in Canada in 2016, up 7.3 percent over 2015.

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utor to the Canadian economy in 2016, responsible for about 2.6 percent of gross domestic product (GDP). Of the $40.1 billion total, about $18 billion accrued directly to the businesses that served business travellers or meeting attendees. The supply chain of these businesses received an additional contribution of $10 billion.

Business travel supported just shy of 573,000 jobs in 2016, or three percent of the Canadian workforce. Of this, over 350,000 were with hotels, airlines, rental car companies and other direct providers. Nearly 105,000 were with travel supply chain employers and another 115,000 jobs were with firms that supplied consumer goods and services to business travel-supported workers. In 2016, business travel-supported total jobs grew by 6.2 percent over 2015. Direct business travel jobs grew faster, at 6.4 percent in 2016.

Travellers spent $215 on lodging and accommodations; $159 on food and beverages; $342 on transportation; $17 on recreation and entertainment and $105 on retail purchases. Group business travellers spent an average of $1,191 per trip in 2016, compared with $628 per trip by their transient counterparts. Group business travel was a driver in the growth in Canadian business travel in 2016 with gains of 14 percent in spending over 2015.

There was $6.4 billion spent to support meeting and event operations. This equals roughly $780 in meeting operations for each group business trip in 2016. This includes an average of $189 per traveller on food and beverages, $125 on meeting organization fees, $99 on entertainment, speakers and production, $49 on venue rental and $319 on other expenses.

Where business travel is happening

Domestic business travel accounted for nearly 90 percent of volume in 2016 and nearly two-thirds was in Ontario and Quebec. There were 3.2 million international inbound trips into the Canadian market in 2016, accounting for nine percent of Canadian business travel activity.

The US remains the largest business travel feeder market for Canada, accounting for 71 percent of business travel volume in 2016. Growth in US volume was strong in 2016 as the Canadian dollar depreciated against the US dollar. Any barriers to free trade, especially between the US and Canada would deter growth in Canadian international business travel activity.

Canadian business travellers have an average household income of over $104,000 and over two-thirds (68 percent) are men.

Just over one-quarter have a BA, while another 15.6 percent have a graduate or professional degree. The age distribution is normal with 68 percent falling between 35-64 years old. Just over 22 percent were younger than 35 and nearly 10 percent were over 65. This study shows that business travel is the fuel that ignites the engine of many corporations in Canada and is a driver of the nation’s economy. B2B

| April 2018 | PurchasingB2B.ca | TRAVEL MANAGEMENT CANADA

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In the Field

New On The Scene

Rodrigo Altaf (Rodrigo.altaf@gmail.com) is a procurement professional with 11 years’ experience.

Lessons in the job search for New Canadians

By Rodrigo Altaf

W

hen I was invited to write an article for PurchasingB2B magazine about the challenges of finding a first job in Canada in supply chain, I thought to myself “Where do I start?”

There are many difficulties and challenges in the job search process for newcomers and anyone would be hard pressed to condense their thoughts in just one article. However, for those willing to get out of their comfort zone, there are creative ways to approach those difficulties.

I arrived in Toronto from Brazil in April 2017, at which point I started to apply for jobs straight away.

With experience in construction, mining and oil and gas in countries including Australia, Brazil and Norway, I was confident that my resume would speak for itself. Where I came from, your resume is what it is, whether people like it or not. It never occurred to

Canada. This helped me leave behind other concepts from back home that didn’t necessarily work in the Canadian context.

Networking and volunteering proved to be effective tools to boost my chances of employment. I had several chances to interact with immigrants like me who struggled in the beginning but who eventually caught a break and are now shining in their fields. I feel that this is particularly important in supply chain, which is the business of connecting: bringing goods from point A to point B and getting businesses and suppliers to reach agreements. The interactions I made provided several tips and leads into open positions, many of which weren´t even advertised.

Another aspect that became evident in my search is the emphasis given in the Canadian workplace on soft skills. A good first impression can boost your chances of moving ahead in the recruitment process, while a bad one can undermine the achievements on your resume. Simple things like a proper handshake and eye contact support the perception that you will fit in well in the workplace.

Last, but most certainly not least, I discovered the importance of preparing to be asked behavioural questions.

After losing an entry-level job due to being “weak on the behavioural side of A good first impression can boost your chances of questioning” (the exact words I received moving ahead in the recruitment process, while a bad as feedback), I realized I had to find ways to convey my experience in a more capone can undermine the achievements on your resume. tivating manner. While the experience and job technicalities may be there, it´s me that I needed to adapt it to the Canadian environimportant to capture the interviewer´s attention. There is no shortage of ment. For example, targeting my resume to the posigood candidates in Toronto and if you want a job you have to learn to tions I applied for seemed rather strange—it is actually stand out. frowned upon in Brazil. But one month without any I am still looking for a role in my field, but I can conclude that looking in calls whatsoever quickly changed my mind. I realized I Canada is a completely different game than anywhere in the world. There needed to adapt. are many other aspects to be addressed, but if I was to summarize my tips A few more months passed and, while I received a to newcomers, this is how I would put it: call here and there, nothing substantial came in terms • Adapt your resume to the Canadian market and target it to the roles you of employment. I decided that I would work as a volapply for; unteer—something I had always wanted to do but had • Volunteering is a good way to interact with peers and people in the never prioritized. In parallel, I decided that I would industry, regardless of the organization you volunteer for; take a survival job while remembering that it had to • Use whatever chance you get to increase your network. You never know be temporary until I found a position that better suited where help will come from! my skills.

• Enhance your soft skills and learn the proper business etiquette in a Another key element for newcomers to bear in mind Canadian context; Prepare to respond to behavioural questions in a way is the importance of finding common ground. I conthat captivates interviewers; and nected with professionals who came from my coun• Do not think less of yourself. There are thousands of people going tryand I contacted Canadian companies that had through the same issues, as you right now and your hard work in the job assets there and Brazilian companies with branches in search will eventually pay off! B2B

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The Law

Clear Course Ahead Prevailing trade winds steering towards expanding global standards in open public procurement

Paul Emanuelli is the general counsel of the Procurement Law Office.

By Paul Emanuelli

W

ith the US threatening to build a wall, tear down the NAFTA and start trade wars with China, the UK heading into a postBrexit treaty tailspin, and the rest of Europe seeing a rise in anti-global protectionist politics, it would be easy to assume that our open public procurement system is heading into serious turbulence in the next few years. However, the prevailing trade winds continue to stay a course towards an expanding international procurement system based on common global standards. The World Trade Organization’s Government Procurement Agreement serves as the global standard for government procurement treaties. Established in 1994, this treaty has 47 members from predominantly developed economies, including the EU, Canada, the US and Japan, with another ten nations, including Australia, in the process of formally joining the trading block. The treaty, updated in 2014, provides a series of global benchmarks for the further implementation of numerous other regional and bilateral trade treaties.

Partnership Agreement with Europe.

The Caribbean Community (CARICOM) members are also expanding the open public procurement system within the region, with the 2017 CARICOM Model Procurement Bill establishing rules consistent with WTO standards for the expanding Caribbean trading block. This new model law complements a series of concurrent national reforms, which have seen the adoption of new open procurement statutes in Guyana, Jamaica, Trinidad and Tobago, and the Cayman Islands. As other jurisdictions, including Barbados, which introduced a new government bill in late 2017, move towards greater open procurement, the CARICOM bill provides common benchmarks for future reforms.

The Organization for Economic Co-operation and Development (OECD), with 35 members drawn largely from advanced economies, also helps promote global trade and investment through the development of common global standards. In its 2016 Preventing Corruption in Public Procurement report, the OECD noted that 57 percent of all foreign bribery cases involve public procurement. To address this ongoing problem, it previously established the 2011 Convention on Combatting Bribery of Foreign Public Officials, which complements its 2009 Principles for Integrity in Public Procurement, both of which contain global standards for promoting transparent procurement at the national level. As discussed below, these OECD standards help inform the pracThe EU has achieved unprecedented tices of international development banks. procurement integration.

The World Bank provides funding and procurement expertise for large public procurement projects in developing countries.

In 2011 the United Nations updated its Model Project funding requires borrower nations to comply with the open procureProcurement Law from the 1994 version. With open ment standards established by the World Bank, which updated its procureprocurement rules consistent with WTO standards, this ment manual in 2016. In recent years, the World Bank has also conducted model law has influenced the development of national a series of global benchmarking studies. Its 2017 annual report assessed the procurement systems across dozens of predominantly public procurement practices of 180 nations, scoring how those countries non-WTO countries in multiple regions. These UN measured up to global standards. Similarly, in 2013, the Inter-American standards continue to influence the development of Development Bank established a series of guidelines, based on OECD standomestic public procurement regimes and were most dards, for measuring government procurement practices across the Americas. recently implemented in 2017 by Bermuda in a new This program encourages the use of national systems for bank-financed proproject management code, and by the Cayman Island curement projects if those domestic systems measure up to global standards. in 2017 in a new procurement statute and in 2018 in Similar initiatives are also conducted in other regions by development banks, new procurement regulations. including the African Development Bank and Asian Development Bank.

The EU has achieved unprecedented procurement While the reversal by the US government served as a setback to ratiintegration, with a system of open public procurefying the Trans-Pacific Partnership, in March 2018 the remaining memment reaching all levels of government. Canada joined bers of the Asia-Pacific trading block (Canada, Mexico, Peru, Chile, Japan, this trading block in 2017 with the ratification of the Singapore, Brunei, Vietnam, Malaysia, Australia and New Zealand) signed Canada-Europe Comprehensive Economic and Trade a revised agreement with public procurement rules consistent with WTO Agreement. The Caribbean’s CARICOM members standards. As these developments illustrate, notwithstanding some patches have also moved towards greater procurement inteof turbulence, the prevailing trade winds continue to steer a course towards gration with the EU since signing the 2008 Economic expanding global standards in open public procurement. B2B 22

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shout-out

Give a to Canada’s purchasing professionals!

#NationalPurchaserDay th

Send a tweet and be entered into the

#NationalPurchaserDay Twitter Contest May 1 to June 14, 2018 for your chance to win a $250

June 14

Visa Gift Card!

In celebration of our 60th Anniversary, PurchasingB2B is designating June 14th as #NationalPurchaserDay.

Let’s give purchasers, procurement and supply chain management professionals the recognition you all deserve for the tremendous value you bring to your organizations!

Be sure to tag your tweets with #NationalPurchaserDay and @purchasingb2b!

For details on the contest, visit www.PurchasingB2B.ca

Businesses, Manufacturing and Government: Recognize your own purchaser(s), procurement team, or supply chain management professionals, or just bring attention to this day, by sending out a tweet like the following:

“

This June 14th we say thank you to our #purchasing team for all the value they bring to our organization #NationalPurchaserDay @purchasingb2b

”

Attending the SCMA National Conference, June 13-15, in St. John’s?

Drop by the PurchasingB2B booth on June 14th to take part in our anniversary celebrations!

Purchasers, procurement and supply chain management professionals, give a shout-out through tweets such as:

“

If you need it, we’re here to source it! @purchasers celebrate #NationalPurchaserDay this June 14th @purchasingb2b

”

www.PurchasingB2B.ca PurchasingB2B.ca | August 2017 |

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