Supply Professional August 2020

AUGUST 2020

THRIVING IN UNCERTAINTY Katrina Daaca on forging your own supply chain path

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VOL.62 No.4 AUGUST 2020 SUPPLYPRO.CA COVERING CANADA’S SUPPLY CHAIN

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FEATURES

ALSO INSIDE

7 CANADA’S PORTS As the pandemic roils, the country’s ports are operating smoothly.

13 SUPPLY CHAIN OPTIMIZATION Getting the most from supply chains during challenging times.

4 UP FRONT

8 EVOLVING ROBOTICS Robots change to keep pace with supply chain and manufacturing trends.

14 BRING IT ON HOME The pandemic may help to bring production back to North America.

6 IN THE FIELD

10 ENTREPRENEURIAL EDGE Katrina Daaca forges her own supply chain path during pandemic.

28 PAYMENT SOLUTIONS Companies seek security, ease of use in payment solutions.

5 BUSINESS FRONT

30 THE LAW

21

Fleet Management

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UP FRONT

THE CHANCE FOR CHANGE It’s hard to look at events throughout 2020 and not conclude that supply chains, at least in some ways, have been altered permanently. Global supply chains have transformed and will continue to change in the coming years, due to the coronavirus pandemic and COVID-19. That statement now seems fairly obvious.

But while the pandemic has changed the way supply chains must operate, it’s not the only recent event to do so. Businesses faced other challenges this year even before the pandemic began.

Rail blockades protesting the building of the Coastal GasLink Pipeline through Wet’suwet’en First Nation territory in British Columbia shut down CNR’s Eastern Canadian network, halting freight traffic from Halifax to Toronto. The US’s trade tensions not only with China, but also with Canada and the EU, continue to disrupt supply chains while affecting business continuity.

Developments in technology, the need to address the climate crisis and other issues also create pressure to transform supply chains. It’s a constantly evolving endeavour. In many respects, the pandemic has simply accelerated trends that were already underway.

Resiliency in supply chain, for example, while always important, has moved front and centre. Just-in-time inventories have also appeared more vulnerable during the pandemic.

At the same time, reshoring has become a hot topic – it remains to be seen, however, the extent to which it’s possible. Many supply chains are entrenched after decades in China and simply packing up and moving elsewhere may not always be possible. For an in-depth discussion of nearshoring, see our article on page 14.

For some practitioners, a career in the field as we know it may also transform along with actual, physical supply chains. Many professionals who have been working from home during the past few months will continue to do so as organizations and employees realize that they can perform their jobs just as well, if not better in some cases, from home.

Not everyone can, but many will continue to work remotely.

Others will use the pandemic to reshape their entire supply chain careers. That’s what this issue’s profile subject, Katrina Daaca of Winnipeg, has done. Daaca used the lockdown to rethink and reshape her career, taking an entrepreneurial approach – a view that she says is often lacking in the supply chain management world. You can read about Daaca’s supply chain and career journey on page 10.

Pandemics and other major disruptions may not always be easy to predict, but such events may carry with them hidden advantages. They can be opportunities to reassess how things are done, or the direction that your organization, or even your career, is headed. They can allow you to build resiliency so that next time something happens you and your supply chains are that much better prepared.

EDITOR MICHAEL POWER 416-441-2085 ext 110, michael@supplypro.ca PUBLISHER ALEX PAPANOU 416-441-2085 ext 101, alex@supplypro.ca DESIGN Art Direction ROY GAIOT Design Consultation BLVD AGENCY CUSTOMER SERVICE/PRODUCTION LAURA MOFFATT 416-441-2085, ext 104, lmoffatt@iqbusinessmedia.com ASSOCIATE PUBLISHER FARIA AHMED 416-441-2085 ext 106, faria@supplypro.ca EDITORIAL ADVISORY BOARD LORI BENSON Procurement Compliance, L&D, Engagement and Knowledge Lead | Business Enablement, Ernst & Young LLP THOMAS HUDEL Manager, Purchasing and AP, Esri Canada Ltd. WAEL SAFWAT Procurement Director, Black & McDonald SHERRY MARSHALL Senior Manager, Meetings, Travel & Card Service, PwC Management Services KIRUBA SANKAR Director, Corporate Social Responsibility—RBC Global Procurement JEFF RUSSELL Purchasing Manager, ABS Machining iQ BUSINESS MEDIA INC. Vice President STEVE WILSON 416-441-2085 x105 swilson@iqbusinessmedia.com President ALEX PAPANOU

PUBLICATION MAIL AGREEMENT NO. 43096012 ISSN 1497-1569 (print); 1929-6479 (digital) CIRCULATION Mail: 302-101 Duncan Mill Road, Toronto, Ontario M3B 1Z3 SUBSCRIPTION RATES Published six times per year Canada: 1 Year $ 99.95 CDN Outside Canada: 1 Year $ 172.95 USD Opinions expressed in this magazine are not necessarily those of the editor or the publisher. No liability is assumed for errors or omissions. All advertising is subject to the publisher’s approval. Such approval does not imply any endorsement of the products or services advertised.

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MICHAEL POWER, Editor 4 AUGUST 2020

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SUPPLY PROFESSIONAL

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BUSINESS FRONT—BY MICHAEL HLINKA

INFLECTION POINT WILL A DEMOCRATIC WIN IN THE US MEAN REORDERING SOCIETY? The death of John Fitzgerald Kennedy changed the arc of American history, which means that it changed the arc of world history. I acknowledge that I can’t prove any of the following assertions, but here it goes. US involvement in Vietnam would have been fundamentally different had JFK served out his first term of office and then been re-elected in 1964.

The Great Society programs of Lyndon Johnson would not have gone forward in the same way.

And the conspiracy theories around the real story behind his assassination altered the way that many citizens looked at their institutions, undermining trust and belief in American-style democracy.

WATERSHED MOMENT Yes, JFK’s assassination was a historical watershed. My gut tells me that 20 years from now, after the dust from today’s current and tumultuous events has settled, we will understand that the death of George Floyd while in the custody of four Minneapolis police officers had a similar effect. This could strike some of you as a gross overstatement. Except when you consider that the reach of Black Lives Matter (BLM) spread from the US to Canada and into western Europe with lightning speed, it’s not quite that far-fetched. Before you judge, hear me out.

Let’s be precise about why so many people took to the streets in late May and into June. The protests originally focused on police brutality and the unequal treatment that white Americans and black Americans receive from the police and the criminal justice system.

BLM cited several well-publicized incidents as proof: Ahmaud Arbery, Freddie Gray, Eric Garner,

Walter Scott and Breonna Taylor.

There was a broad consensus among most North Americans that something was wrong. And while the problem was serious, it seemed manageable – better screening of recruits, followed by more effective training and finally, more robust oversight.

But that’s not what this movement is about right now. BLM used “police reform” as a launching pad. Its goals are far more ambitious. Since 2016, BLM has advocated for universal basic income (UBI) for all Americans, with a higher benefit for black Americans as reparations for slavery. Many of you will recall that Andrew Yang (whose ethnicity is Asian, not black) ran for the Democratic Presidential nominee on the UBI platform. In Yang’s plan, all Americans would be treated the same: $1,000 per month for every American adult. Yang did not address reparations in his plan.

There will be a Presidential election several months from now, and Joe Biden has a significant lead over incumbent Donald Trump. There’s still time and Trump pulled off a huge upset four years ago. However, when you look back at 2016, it wasn’t that Trump won, it was that Hillary Clinton lost because of her incompetent campaign. The Democrats won’t make the same mistakes again.

I believe that Joe Biden will win an overwhelming majority in the electoral college, the Dems will widen their lead in the House of Representatives, and they could take the Senate as well.

CARTE BLANCHE If this happens, the Democrats will be able to do anything they want.

Then the question will be, what

will their priorities be? The Trump tax cuts, in particular the slashing of taxes on corporate profits from 35 to 21 per cent, will be reversed.

Income taxes will go up sharply for high income earners. Joe Biden has promised as much, and he can’t go back on this one. It would destroy his presidency. The Trump administration has been very good about reducing the regulatory burden for a wide variety of businesses, and much of that will be rolled back as well.

But that is small beer. There are powerful forces in the Democratic Party who see 2020 as their opportunity to fundamentally remake American society, levelling the wealth gap between the races. It could be through UBI or other types of transfer payments. The bottom line is, government spending will go through the roof. Simultaneously, I’m certain that aggressive affirmative action practices will be forced down the throat of big business.

It would not surprise me to see out-and-out racial and gender quotas, and vast bureaucracies established to administer this Brave New World.

We’ve seen this before – and not that long ago. From 1960 to 1966, the US deficit averaged $4 billion. Then in the following seven years, the deficit averaged $13.5 billion as domestic spending programs ramped up. At the same time, there was massive government intervention in the economic sphere. Let’s look at stock market performance over that era. On December 31, 1964, the Dow Jones Industrial Average closed at 874.13. Then, 17 years later, it closed at 875.00. History never repeats itself perfectly, but the similarities between the two

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

“I believe that Joe Biden will win an overwhelming majority in the electoral college, the Dems will widen their lead in the House of Representatives, and they could take the Senate as well.”

eras are obvious and ominous.

I’m expecting that the stock market, like the economy, won’t be going anywhere fast over the next decade, and only a massive technological breakthrough will change that dim and depressing future. SP SUPPLYPRO.CA 5

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IN THE FIELD—BY DENIS SANCHEZ

COVID-19 AND SUPPLY CHAINS FROM RESHORING AND RESILIENCE TO VIABILITY. Without a doubt, COVID-19 has become a life altering event. The short-term impact is already more severe than that of all previous recent outbreaks, including SARS, H1N1 and Ebola.

All the world’s largest 1,000 companies have been impacted either directly or through their supply chains. The virus’s spread across North America and Europe has affected the movement of goods worldwide and reduced the effectiveness of interconnected supply chains. Global economic growth is expected to trim by threeto-six per cent this year. The medium- to long-term impacts are expected to be more severe. Global investors have withdrawn $26 billion from developing Asian economies plus $16 billion out of India, which threatens a massive economic recession in the region. In Latin America, an estimated 29 million people will likely fall into poverty.

On the supply chain side, the impact varies. Manufacturers of essential products have seen high demand that production capacity cannot meet, whereas non-essentials see a simultaneous drop of supply and demand that can lead to stopping production, risk of bankruptcy and the need for government support.

As companies face dual disruptions, it’s important to execute dual strategies like stronger collaboration with suppliers and emergency sourcing to increase production capacity and raw material supply.

PANDEMICS – A DIRE SUPPLY CHAIN RISK Pandemics cause long-term disruption. Their impact is unpredictable and simultaneous across supply, demand and logistics which makes it harder because supply chain recovery plans depend on the 6 AUGUST 2020

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severity of the disruption. Not all the 1,438 epidemics that affected supply chains over the past 10 years did so similarly.

Traditional disruption management strategies include contingency planning (for black swan events), monitoring and maintenance (for operational and IT risks), stronger supplier collaboration, flexibility and supply chain restructuring. The challenge with pandemics is that they do not affect single supply chains, but interconnected networks. As companies are forced to manage supply shortages and increased demand, having combined dynamic strategies is key.

Digital technologies play a role in the execution of these strategies.

Supply chain collaboration requires on-time data sharing. Data analytics and blockchain help increase visibility as well as accumulating data required to manage production and supplier capacity, and contingent suppliers.

RESHORING NOT A UNIVERSAL FIX COVID-19 has sparked discussion about the risks of reliance on traditional management practices, global sourcing, single sources and lean inventories. Reshoring production has received much attention and buy-local movements have followed.

However, after decades of globalization, bringing back production is not always easy. Many raw materials still need to be sourced globally.

A good example is the N95 mask.

The filter on N95 masks require a plastic called melt-blown. China produces half of the world’s stock and Asian factories have supplied it globally for 30 years.

Replacing long-standing global supply chains requires

not only investing in scaling up local production but acquiring and building the local technical capabilities to support it and developing new quality management systems. While localization may be easier for less complex products, it will take time for countries to develop the technical proficiency to rely on local production.

RESILIENCE, PROSILIENCE AND VIABILITY Since the early 2000s, supply chain resilience has been accepted as an important element of business continuity and competitiveness.

With the impact of pandemics and threat of major disruptions, the focus has evolved beyond it.

While resilience centres around withstanding disruption and recovering performance, it’s clear that businesses need to also anticipate disruption – to be prosilient.

Supply chain viability is the next level of preparedness. It deals with changing structural supply chain designs to adapt and survive longterm disruptions. A manufacturer can have a supply chain design for times of economic stability and growth, for example global sourcing, lean manufacturing or agility; a second design to manage disruptions, like fires, strikes, focusing on being proactive and reactive, managing risk inventories, having backup suppliers. They can have a third design to manage the long-term impacts of disruptions like COVID-19. This can include production changeovers, including moving from production of cars to ventilators or from vodka to sanitizer, as well as resourcing and reshoring. The strength of viable supply chains lies in their ability to anticipate, plan and design a

Denis Sanchez, MSc, MA is vice-president of operational excellence at Cognibox.

While resilience centres around withstanding disruption and recovering performance, it’s clear that businesses need to also anticipate disruption.

framework allowing them to switch between structural designs based on the environment.

Supplier vetting and selection are key in this process because of the risks introduced by supply chain partners. It is critical to select suppliers that guarantee the reliable flow of goods from one supply chain node to another. Collaborative risks due to lack of cooperation or information between the parties can be avoided through proper selection, information sharing and ongoing performance management.

As businesses prepare for an additional wave or new disruptions, they must focus on creating flexibility in supply chains; frameworks that allow agile switching of structural designs and viability to not only withstand, but capitalize on, the strength of supply chains. SP SUPPLY PROFESSIONAL

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BY CHRISTIAN SIVIÈRE

WEATHERING DISRUPTION CANADA’S PORTS GEAR UP FOR POSTPANDEMIC RECOVERY. Disruptions this spring and their impact on Canada did not begin with COVID-19. Several trade disputes initiated by the US, primarily against China, but also Europe, Canada and other countries, resulted in merchandise trade volume falling by 0.1 per cent in 2019, according to World Trade Organization statistics. Rail blockades disrupted Canada’s supply chain, culminating in February and ending on March 5, about a week before COVID-19 struck, resulting in the lockdown.

Although there is substantial domestic and US trade moving by vessel, this article will focus on overseas trade handled at Canadian ports. Let’s first look at Statistics Canada trade figures with countries other than the US. The March figures show a 4.1 per cent decrease of our exports and a marginal 0.5 per cent decrease of our imports.

Reality bit in April, when our exports dropped 11.7 per cent and imports 6.3 per cent. In May, our imports were down 10.1 per cent while our exports registered a

surprising rebound, increasing by 2.4 per cent. This was mainly due to commodities. These month-tomonth fluctuations illustrate the evolution of the pandemic, as most of the world locked down in midMarch. To get the overall picture, we need to compare the January to May 2020 figures to the same period of 2019: then we see that our exports are down 34 per cent and our imports 31 per cent.

This has impacted our ports, though less dramatically than our airports. Airports around the world saw a 95 per cent reduction of passenger traffic practically overnight.

Canadian ports active in cruise activity experienced a similar, abrupt reduction. When it comes to cargo, the pandemic’s impact has been slower, as the lead-time on ocean freight business can be several months. Some ports didn’t see much decline in volume until May. THE EAST COAST We’ve reached out to our main ports to see how they had been affected and how they were getting ready for the post-COVID-19 recovery. Like others, Halifax has been operating as usual, with lower volumes on some lanes (for example, general cargo was down 20 per cent from April to May) but with fluid operations. The rebranded Halterm Container Terminal, now called PSA Halifax, got a new Super-Post Panamax ship-to-shore gantry crane on June 30. On March 21, the port welcomed its largest containership ever, CMA-CGM’s 14,414 TEU capacity T. Jefferson, operating between South Asia and North America’s East Coast. The port also installed a new vessel forecasting tool called eeSea. The port of Saint John, NB has been holding its own, with ups and downs depending on cargo type. Comparing January to June 2020 to 2019, liquid bulk was up four per cent, dry bulk up 52 per cent, breakbulk down 61 per cent and containers up three per cent. The port is carrying out a $205-million infrastructure project to lengthen and strengthen the west side container terminal and deepen the main channel. This will

“When it comes to cargo, the pandemic’s impact has been slower, as the lead-time on ocean freight business can be several months.”

allow Saint John to handle 10,000 TEU containerships, compared to 6,500 TEU ships today. A piece of welcome news was of CP Rail returning to Saint John, via their acquisition of the Central Maine & Québec Railroad.

In Montréal, the port has been operating smoothly through the pandemic, with overall volumes January to June down nine per cent. Container traffic dropped marginally (-one per cent) thanks to a strong first quarter and imports-exports are well balanced, an important feature in intermodal transportation. Dry bulk has been more affected (-22 per cent) and liquid bulk a little less (-eight per cent). The port has introduced several new tools: the Epicenter project, led by the Port of Antwerp, to improve fluidity and performance; TradeLens, an interface dedicated to freight developed by IBM and Maersk; and Scale AI, a tool developed by CargoM to improve the handling of critical cargo, to name a few. In June, the port was named a Marine Industry Trusted Partner for COVID-19 by the Chamber of Marine Commerce.

THE WEST COAST The latest data from the port of Prince Rupert reveals that overall cargo volumes were up nine per cent in May, led by strong dry bulk volumes, both for the month and year-to-date. The addition of propane volume from the AltaGas Ridley Island Export Terminal, operating just over a year and

Christian Sivière is president at Solimpex.

strong demand for wood pellets have contributed to the port’s performance. The intermodal sector has been the one impacted most by the pandemic, with May showing a 37-per cent decline from May 2019, leading to a 12-per cent year-to-date reduction in container volumes.

Nevertheless, several infrastructure projects are advancing: construction of the Fairview-Ridley Connector Corridor, the Ridley Island Export Logistics Platform and the Metlakatla Import Logistics Park on South Kaien Island.

The Port of Vancouver’s overall container movements from January to June were down 6.1 per cent, with imports down 2.1 per cent and exports down 10.2 per cent.

Technology is highlighted by the Port Dashboard, which provides real-time monitoring tools for port users and stakeholders, plus supply chain performance metrics. The new G3 Terminal Vancouver, a grain transloading facility, opened July 9, providing improved tools for Prairie exporters.

Although the pandemic has impacted ports with lower volumes resulting in reduced revenue, they have been operating smoothly and preparing for a post-COVID recovery. World Bank data highlights the importance of Canada’s international trade: exports of goods and services represent 32.13 per cent of Canada’s GDP, while imports represent 34.09 per cent. Canada’s ports must continue to play a crucial part in supporting our international trade activities. SP SUPPLYPRO.CA 7

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BY MICHAEL SHELTON

ROBOT ROUNDUP

THE EVOLUTION OF SUPPLY CHAINS HAS LED TO CHANGES IN ROBOTICS. Growing up, I was very interested in watching television shows that focused on science fiction.

I especially enjoyed films featuring robots in their plot. Watching those films, my first perception was that the robot had a particular purpose to assist in supporting the crew on a spacecraft. However, to add a spin to the film, the robot often seems to have a sinister motive.

This certainly made watching the films entertaining and kept viewers on the edge of their seats. Eventually, several TV series, such as Lost in Space and Dr. Who, featured robots in their weekly broadcasts.

The reality of robots, of course, is much more down to earth. The application of robots that have been deployed in distribution centres and warehousing are also utilized in other sectors such as manufacturing. These robots can include robotic welders, police services such as bomb disposal robots, military use for surveillance such as drone aircraft, which are referred to as aerial robots, and robots used in path finding in highly dangerous and tense conditions.

Of course, robots are no strangers to the facility maintenance sector, for example industrial cleaning robots in airports and shopping malls.

Many organizations that utilize robots do so to eliminate humans from undesirable job activities like so-called grunt work, dangerous tasks, unfavorable environmental conditions where personal protective equipment (PPE) is considered cumbersome and in some cases – especially prior to the coronavirus pandemic – 8 AUGUST 2020

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to deal with labour shortages. The underlying theme is to move humans away from these functions and focus on expanding their potential for other functions and roles.

The benefits of using robots in distribution and warehousing include allowing organizations to reduce their operating costs. This provides more labour stability due to less employee turnover, enhancement of employee productivity, reduction in error rates which impacts both internal and external customers and optimiza-

Michael Shelton is an executive supply chain consultant.

tion in achieving successful inventory accuracy, storing and picking functions.

EVOLUTION Just like many other vocations, supply chain management has evolved considerably, especially over the last decade. This has included more focus on technology enablers, which is the marriage of software and hardware.

Online shopping has been growing by leaps and bounds over the past five years. Coupled with the coronavirus pandemic, the demands on distribution centres have been heavy, including the increased load on logistical providers.

There are various types of robots used in distribution centres, including the automated guided vehicle (AGV) which either follows tracks, marked lines or wires along the floor.

It is used in settings in which goods are heavy and bulky and raw materials are transported from the receiving dock to the warehouse, then ultimately to the production line.

Another type is the autonomous robot, which is sometimes referred to as an autobot.

This robot performs automatic tasks in any environment with little or no human intervention required. The tasks done by this type of robot could be regular household cleaning for floors and carpets. This type of robot utilizes sensors and cameras for navigation in the area in which they are working.

An automated storage and retrieval system (ASRS) is another type of robotic used in supply chain. These systems consist of a variety of software programs designed for automatically placing and retrieving loads from predefined storage bin locations.

Gantry robots usually operate in a manufacturing environment and are used to pick and place. These industrial robots are also called Cartesian or linear robots. They are usually large SUPPLY PROFESSIONAL

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systems, but they can also be used in welding and other applications. Gantry robot systems provide an advantage in large work areas and can help with ensuring accuracy.

Some of the material handling devices that are used on robots are forks, clamps, grippers, vacuums or some hybrid solutions; it depends on the items being handled.

Advancements in robotics have been enabled with new, enhanced technologies in both hardware and software, coupled with the Internet of Things (IoT) and artificial intelligence (AI).

Warehouse management software (WMS) is the backbone of the distribution centre information flow. Data flows for order entry right through to fulfillment.

Before such an investment in adopting robots is considered, it pays to study your distribution centre’s operations, which includes a review of the key performance indicators (KPIs) and identification of areas that need improvement. Those improvement areas will need to be addressed since adding automation will not mitigate the problem but just add frustration. You have to think of the investment as if it were a full-blown ERP system evaluation, which includes process mapping,

“The benefits of using robots in distribution and warehousing include allowing organizations to reduce their operating costs.” data scrubbing, clearly defining the end result and so on. If you still have stock outs then the cause could be poor vendor performance, inadequate planning parameters or location control accuracy.

Robots will not solve a delivery performance issue. Such issues can include what interface is required with your current ERP platform to WMS for data flow to the robots, how many ‘spare’ robots you should have in case one goes out of circulation, the cost of additional labour to maintain and so on.

One persistent myth is that robots are expensive. However, like any other product lifecycle, the costs have decreased over time.

A good example is the flatscreen monitor. When

they were first introduced the price point was high, but today their pricing is much lower and includes more features. There are many robotic manufacturers and there are now options to either purchase, lease or rent.

If you look at the evolution of continuous improvement in supply chain management, robots are just one element. Supply chains never settle on the status quo. The other elements in supply chain have been various systems and the evolution of data systems including MRP, MRP II and now ERP, coupled with other enablers such as WMS. Technology has played an important part, such as barcoding for inventory control, inventory compliance and tracking. Logistics firms have web portals where you can track your goods and get notifications on their status.

However, with all the data and email notifications there has been an increased need for supply chain analysts relative to data analytics.

Data integrity is the nucleus of an effective supply chain model, such as the data elements in the Item Master of an ERP system, including ATP (Available to Promise). At the same time, data integrity must be in place before implementing more automation, including robots. SP

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BY MICHAEL POWER

KATRINA DAACA SETS HER SIGHTS ON ENTREPRENEURIAL SUCCESS. Now more than ever, supply chains must pivot quickly to adjust to changing times and circumstances. In the midst of the coronavirus pandemic, that ability to be nimble has become even more important. Supply chain practitioners must be able to make rapid changes to operations when the need arises. It’s fitting then, that what Katrina Daaca, SCMP, is most proud of during her time in the profession is her ability to not only recognize new opportunities for professional growth but also to pivot her career to pursue those chances.

“In my eight years of experience in supply chain, I’ve made significant leaps in my career, each one bringing new challenges and skills,” says Daaca, the owner of Kanekta Consulting, a supply chain consulting company.

And yet like many in the profession, supply chain management was not her first career choice while a university student contemplating her future. But a growing fascination at the time with the ways in which goods move from one point to another fuelled her move into the field.

“I went to business school with aspirations of being an accountant but quickly learned that was not the career path for me,” says the 10 AUGUST 2020

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Winnipeg-based Daaca. “By my second year of university, I had met enough professionals in the field to know supply chain management was the area of business I wanted to specialize in.”

Since that realization, her interest in supply chain has only grown. A self-confessed “supply chain nerd,” Dacca also describes herself as obsessed with all things related to procurement.

She finished her Bachelor of Commerce (Honours) degree at the University of Manitoba in 2014 and Supply Chain Canada awarded her the Supply Chain Management Professional (SCMP) designation in 2017.

She began her career as a lean program analyst at transportation and logistics solutions company TransX shortly after graduating from university. She then made the switch to public procurement, working as a procurement specialist at the University of Winnipeg – primarily a medical-doctoral school. She worked there until 2016, then became a procurement specialist at the Manitoba Housing Authority, which provides subsidized housing across the province. After nearly two years there she made the jump back to the private sector, taking a role as an intermediate buyer at Price Industries, a supplier of air

A DIFFERENT ROUTE Her recently established consulting company, Kanekta Consulting, is the first FilipinoCanadian owned supply chain management consulting company, Daaca notes. The company specializes in RFx preparation, contract creation, management and negotiation, as well as supply chain management training. Daaca considers starting the business as an example of what’s possible outside of the confines of traditional supply chain management career paths.

“There seems to be a narrow view of what job opportunities are available to supply chain management professionals,” Daaca says.

“This is especially true in Manitoba, where the opportunities exist only in a few industries, and those opportunities are heavily concentrated in manufacturing, agriculture and government.”

Her decision to start her own business reflects not only Daaca’s morphing career interests but also the changing world of work and ongoing trends that have accelerated due to the pandemic.

The spread of the virus and the subsequent shutdown of businesses across the country gave Daaca time away from a conventional work setting to reflect on her career and reprioritize what’s important, she says. Self-isolation was a unique and rare opportunity to reflect on new projects without many of the usual distractions of regular, daily life. She is now proud to be the first Filipino-Canadian to own and operate a consulting business of this kind, she says.

“I thought, 10 years from now, when I reflect back on this time, I want to be able to say I did something meaningful,” she says. “I always believed I had the capacity and experience to take the leap into entrepreneurship, but I never afforded myself the time to invest in myself that way. When I look back at the last few months, it’s SUPPLY PROFESSIONAL

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PHOTO: IAN MCCAUSLAND PHOTOGRAPHY

THRIVING IN UNCERTAINTY

distribution, critical controls and noise control products. She currently works as a sessional instructor for the post-graduate supply chain management program at the Manitoba Institute of Trades and Technology, which is run in partnership with Supply Chain Canada’s SCMP program.

“When I look back at the last few months, it’s the first time in my career where I truly invested in and bet on myself. I can’t wait to see how the business grows and evolves from here.”

Post pandemic, supply chain management professionals will help to lead business strategy and risk mitigation. The pandemic has highlighted the importance of these areas, a trend that is only set to grow. Now is an ideal opportunity to redefine what “normal” means for the profession while simultaneously tearing down the image of supply chain professionals as mainly administrative workers.

Going forward, Daaca says she wants to push the boundaries of what supply chain management professionals can do. Currently, there are only a few entrepreneurs in the field and starting a business as a solo proprietor is an uncommon career path for most. She hopes that her work helps to broaden the scope of career opportunities for others in supply chain, inspiring them not only to seek new opportunities but also to advance the industry as a whole. Even more important, Daaca hopes to pave the way for other women and people of colour working in supply chain management to take on more leadership roles.

“There’s a saying, ‘if you’re lucky enough to do well, you have a responsibility to send the

PHOTO: IAN MCCAUSLAND PHOTOGRAPHY

the first time in my career where I truly invested in and bet on myself. I can’t wait to see how the business grows and evolves from here.”

Kanekta Consulting has only recently begun its first year of operation so there is much foundational work that needs to be done, but Daaca says she’s happy to put in the time and effort to build something over which she can truly claim ownership. Every day presents new challenges – the toughest hurdles include keeping herself accountable while realizing when to shut down for the day. As a business owner and entrepreneur, it’s easy to stay in work mode all the time, so Daaca is looking to find a manageable work-life balance.

The process also made her realize that what she craves in her career is to challenge not only herself, but also the boundaries of what supply chain professionals can do. She is now carving a path in which freelancing in the field is a viable option. In the coming years, an increasing number of industries will integrate supply chain management more deeply into their overall company strategy, Daaca says.

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elevator back down,’” Daaca says. “I truly believe I have a duty to send the elevator back down through volunteerism and mentorship.”

MORE THAN COST SAVINGS When discussing supply chain management as a profession, Daaca is also careful not to overinflate cost savings as the main benefit that supply chain brings to an organization. For those not involved in the process, there can sometimes be misunderstanding about the importance of cost savings, with many viewing it as the only true value that supply chain brings to a company. But those working in the field realize that is hardly the entire picture.

“Over the last two years, I’ve worked on resourcing projects that resulted in over $250,000 in cost savings,” Daaca says. “The projects where I created the most value include redesigning supplier rating programs and supplier evaluations in places where structure was non-existent or lacking. The result was stronger supplier relations and more opportunities to forge meaningful dialogue with suppliers, leading to other improvement and cost saving initiatives.”

Building relationships is a fundamental part of supply chain management, and Daaca has worked to forge ties for herself as well as helping others in the field do the same. One project that she feels especially proud of involves her time with the University of Manitoba Supply Chain Organization (UMSCO). In 2012, while president of the organization, Daaca’s team hosted UMSCO’s inaugural meet and greet, which has since become an annual event. Representatives from companies attend, and students get the opportunity to network with them. Organizations with a presence at past meet and greets include HyLife, Manitoba Hydro, Boeing and TransX. Organizations such as Supply Chain Canada, APICS, Public Services and Procurement Canada and Bison Transport are among previous corporate partners.

Back in 2012, the meet and greet was the only networking event for supply chain management students at the University of Manitoba, Daaca notes. Now in its ninth year, it remains the premier networking event of its kind. “I’ve heard countless stories of students meeting their future employers at this event and I’m so proud of how the event has grown since it started in 2012,” she says.

Daaca also works to build relationships with communities outside of the supply chain management world. She is chairperson for Kultivation Festival F.A.M.D. The organization, which was established over the past year, is a grassroots volunteer-driven group that promotes the modern cultural scene in Manitoba’s Filipino community. Before the pandemic began, the 12 AUGUST 2020

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“In supply chain management, everything we do is some form of negotiation. We negotiate with our internal customers when we need buy-in for a project and we negotiate when problem solving with our suppliers and customers.” organization was planning a two-day summer festival. The vision was to mesh traditional and modern Filipino culture by focusing on food, art, music and dance. The festival has now been postponed until June 2021 due to the pandemic.

SOFT SKILLS As the future of supply chain management continues to steer away from its administrative, paper-pushing past, many of the skills that Daaca recommends that new practitioners develop are on the soft side. These so-called soft skills are critical in supply chain management, especially when it comes to negotiations, communication and building relationships, she says.

These all contribute to effective negotiations, which are paramount for practitioners. Strategic negotiations happen during every interaction with suppliers and help to decide the leverage and power that supply chain professionals have during the process. If practitioners plan for negotiations only when they involve large contracts or jobs, those practitioners are already several steps behind, Daaca says. Supply chain management professionals should be aware of this and work daily to build those relationships.

Offering a personal touch and providing a genuine understanding of what motivates others are powerful negotiation tools.

“In supply chain management, everything we do is some form of negotiation,” she says.

“We negotiate with our internal customers when we need buy-in for a project and we negotiate when problem solving with our suppliers and customers.”

Analytical skills are a second area of expertise that supply chain professionals should develop, Daaca notes. This involves understanding not only the business and its unique supply chain issues, but also an organization’s concerns outside of the supply chain realm.

“I challenge supply chain management professionals to really step outside of supply

chain in their organizations to understand the issues of the business,” she says. “If we want to truly provide value to our organizations and customers, we need to solve business issues, not supply chain management issues.”

The example of Daaca’s career path is instructive for those just starting their supply chain management journey. In the nearly a decade that she has worked in the field, she has been recognized by industry peers both provincially and nationally. For example, she was the first recipient of the Supply Chain Canada Ascendant award at Supply Chain Canada’s national conference in Winnipeg in 2017. And while she considers it an honour to receive such industry accolades, what Daaca is most proud of in her career have been the times that she recognized a new opportunity to grow, then pivoted to pursue those opportunities.

“In my eight years of experience in supply chain, I’ve made significant leaps in my career, each one bringing new challenges and skills,” she says.

Despite uncertainty in the field brought about by the pandemic, now is an “incredible time” to work in supply chain, Daaca says. The challenges have always been complex, but they have become even more so now, she notes. The pandemic has taught supply chain professionals that automated systems cannot always react appropriately to a crisis and that organizations need skilled professionals to solve complex problems.

Companies will seek supply chain talent for both risk mitigation and recovery, and those in the field should take advantage of the opportunities that present themselves.

“To those new in the field, be bold and forge those network connections,” Daaca counsels.

“Most of the job opportunities I’ve had are thanks to personal connections or referrals. I would not be where I am in my career without strong mentorship along the way, so I encourage those new in the field to use their network connections to find mentorship. For those currently in the field, it’s important to continue to set a high level of professionalism so those outside of our industry recognize supply chain management professionals as leaders in business.” SP

SUPPLY PROFESSIONAL

2020-08-18 12:00 PM

BY MICHAEL POWER

“Once we understand that supply chains are not linear, but rather interconnected, it becomes increasingly clear the need to assess risk across all tiers.”

SUPPLY CHAIN OPTIMIZATION DISRUPTION MEANS REEVALUATING THE EFFECTIVENESS OF SUPPLY CHAINS Before the coronavirus pandemic, ‘supply chain optimization’ was already a buzzword. The term involves operating supply chains as efficiently as possible, with processes and tools aiding optimal operations. But how has the pandemic affected these efforts?

And what competitive advantages come from pursuing them?

For Bill Michels, VP of operations Americas at the Chartered Institute of Procurement and Supply (CIPS), anything that increases supply chain agility and flexibility represents optimization.

Organizations benefit from supply chains that pivot on demand, as well as meet the demands of innovation and change, Michels says.

“Some companies are stuck with one location that they’re sourcing from and they really don’t have a lot of agility,” he says. “Best practice companies have been looking at risk management and changing their supply chain and building smaller orga-

nizations, smaller manufacturing, close to the markets they serve.”

While some companies have considered reshoring operations for years, the pandemic has accelerated that choice for some, causing them to restructure and recapitalize supply chains.

“We don’t know how the links are, where the weaknesses are now and who’s going to be there and who’s not when we come back to full speed,” Michels says. “We’re going to have to find a way of actually financing that supply chain.”

Organizations must also look at their planning systems, supplier relationships, risk exposure and start to integrate, he adds.

DIFFERENT APPROACHES Supply chains are responsible for getting the right goods to the right place at the right time, says Roberta McPhail, owner of McPhail Enterprises. But which approach is best? Should it be the traditional, forecast-centric process? There are also other approaches, like Lean methodology or Demand Driven Material Requirements Planning (DDMRP), which involves stocking what’s needed more quickly and adapting in real-time.

Many technology tools exist to help, McPhail notes. But choosing the right one is connected to the methodology you decide on. How much inventory to keep must also be considered.

“You’ve got to pick a number.

This is where DDMRP comes into its prime,” McPhail says. “Picking a number is a lot easier with DDMRP. It’s a simple system. It has visual colour coding. There

are many software packages that directly support it now.”

McPhail also notes that adaptability is important when choosing a model. The risk of COVID-19 offers a good example of this importance, she says.

“Companies that have been relatively successful have minimized the risk issues,” McPhail says.

“They’ve got leaner tools and they’ve got real-time data.”

McPhail encourages procurement specialists to expand their knowledge of demand management and inventory optimization while considering the end-to-end supply chain process.

“I still see companies that have not really aligned around the concept of supply chain,” she says.

“They have an individual, siloed department around procurement, for operations, and inventory, and demand management forecasting. It should be an integrated department.”

STRENGTHENING THE CHAIN For Denis Sanchez, vice president of organizational excellence at Cognibox, supply chain optimization involves removing the weaker links and monitoring the rest to maintain maximum strength.

Since the pandemic has affected most commercial supply chains, optimization is more important than ever, Sanchez notes.

Organizations must now decide how to mitigate impact, as well as respond and create opportunities within the limitations of the crisis.

Visibility is essential, while strong supplier collaboration and information sharing are also key, Sanchez says. Many companies

have created emergency response teams focusing on processing information and making strategic and tactical decisions. Data sharing is critical to this process.

“Much of the optimization efforts will be centred around six major issues: adaptation; digitalization; preparedness; recovery; ripple effect management and sustainability,” he says.

Technology allows for information transfer across supply chains, Sanchez says. Organizations can use technology to understand the pandemic’s impacts across their supply chains, identify risks, revise and update forecasts and evaluate delivery channels.

Cognibox, for example, has seen clients use technology to communicate with supplier segments, track supplier preparedness and, with contractors, screen for COVID-19 symptoms before employees arrive on site.

Sanchez agrees that agility and flexibility are key areas to focus optimization efforts in response to major disruptions like the pandemic. Data allows for modelling and simulation of such events.

“Once we understand that supply chains are not linear, but rather interconnected, it becomes increasingly clear the need to assess risk across all tiers,” he says. “Data exchange and processing technology allows businesses to gather this intelligence to drive more holistic business decisions in support of their optimization efforts.”

The pandemic has caused many to re-evaluate the effectiveness of their supply chains, their level of optimization and reliance on traditional manufacturing models, just-in-time, lean inventory models and global sourcing, Sanchez says. Data and technology will be increasingly important in understanding supply chain sustainability and resilience, facilitating recovery efforts, simulating responses and creating competitive advantage through production changeovers and new distribution channels, he notes.

“Supply chain optimization efforts are the backbone that enables this transformation to happen,” he says. SP SUPPLYPRO.CA 13

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again Canada

BY JACOB STOLLER

made in

again Canada

THE BIG WAKEUP CALL SHORTAGES The case for reshoring has been building for at least a decade.

V I R T U A L I N T E R A C T I V E LINKED TO Rising labour rates in developing M U LT I P L E ST R E A M S 5 0 + S E S S I O N S countries combined with THE COVID-19 a decreased labour component NETWORKING due to automation have eroded OCTOBER 5–9, 2020 PANDEMIC HAVE offshoring’s labour cost advantage.

Furthermore, the reasoning behind HEIGHTENED offshoring decisions made years ago may not have been as sound CONCERNS as people believed.

“Organizations are good at calABOUT culating the unit cost reduction from offshoring to a low-cost country,” OFFSHORING. says Robert Martichenko, CEO of US-based LeanCor Supply Chain IT MAY BE A Group. “But they’re typically speaking not very good at calculating TIPPING DataPOINT Analytics, Artificial Intelligence and Cognitive Technologies I Consumer Behaviortotal In cost TheofNew World(TCO).” ownership The key of driver of offshoring-reGeo-political Disruption I Role of Government I Leading With Strategic Foresight I The Future Workforce FOR BRINGING lated TCO, says Martichenko, Procurement Beyond The Pandemic I Building a Sustainability Roadmap isI the More long lead times, typically PRODUCTION six to 12 months, that come with offshoring. This necessitates BACK TO high inventories, increasing the “hidden” costs of storage, CANADA. obsolescence, shrinkage and |

|

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damage. Offshoring also, as recent pandemic experience has shown, amplifies supply chain risk – if the In May, nearly two-thirds of GEORGE TSOGAS LESLIE NICHOLSON DARCY MACCLAREN DANIEL STANTON shipment you waited months for is companies responding to a Thomas CEO, Senior Vice President Senior Vice President of Digital Supply Chain, Mr. Supply Chain deficient, or if have an emerIndustrial they Kit you and Ace Supply Chain Survey Operationsreported and Digitalthat Business SAP, North America LinkedIn Learning Author and Instructor Transformation Lead, Nestlé Canada gency, you have a big problem. are likely to bring production and Most reshoring efforts, theresourcing back to North America, up Founder and President Harry Moser. enough?’” says Alan Middleton, fore, will likely be the result of executive director, Schulich 10GOLD per SPONSORS cent from March.

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To learn more about the best fit for your organization, contact: Kim Sforza, Director, Member and Corporate Engagement at ksforza@supplychaincanada.com or +1 416.977.7566 x2134

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ARE YOU A CSCMP DESIGNATION HOLDER? Stay Current With Continued Education And/Or Encourage Your Teams to Join.

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“Organizations are good at calculating the unit cost reduction from offshoring to a low-cost country.

But they’re typically speaking not very good * at calculating total The First Hybrid Experience of Virtual and (Planned) In-Person cost of ownership.”

ANNOUNCING THE LEADERSHIPSERIES 2.0

reports that some are using his orgaprograms, this is an excellent time companies, therefore, are likely resources.

“I can January help a to invest in skills for the long term. to reshore production that serves DIGITAL TRANSFORMATIONnization’s OF SUPPLY CHAIN: 28, 2021 Canadian company find companies “As we encourage the recovery, local markets but continue to importing into the US, but not into how much does it take to move on develop offshore capabilities to SUPPLY February Canada,” he says. 25, 2021 and add to those grant processes meetSUSTAINABLE demand in faraway regions. CHAIN: Moser has also been consulted that there’s an expectation for It’s the mold makers and the recently government training and upgrading skills?” foundries that will benefit the CHAIN: most WOMEN IN SUPPLY March by 25, 2021 organizations in Quebec and Ontario. says Middleton. from reshoring,” says Moser. “So, *Subject to City By-laws and Safety The TCO tool and a library of data A strategic approach might be the enthusiasm is greatest theRegulations. furto identify specific areas where ther you are down the supply chain.” resources are available at www. reshorenow.org. our supply chains are most vulEARLY BIRD PRICING WITH A BUNDLING OPTION (OF ALL 3 A related trend is a growing nerable, and then target the skills MAKING A BUSINESS CASE UNTIL OCTOBER 31, 2020.

SAVE interest in nearshoring, which typ- ALMOST $450 gaps that are preventing Canadian The INSTALLMENTS) Reshoring Initiative, through ically involves bringing production companies from moving in to its Import Substitution Program, from China to Mexico. “A signifaddress these areas. Healthcare helps local manufacturers and icant portion is going to Mexico and pharmaceuticals would be at suppliers the homegrown TITLEpitch PARTNERS: because the Mexican wages are the top of the list, and Middleton alternative to businesses that are about the same as the Chinese, feels there are some significant currently buying overseas. Key MASTER OF but they’re about as far away as opportunities. weapons at their disposal are the SUPPLY CHAIN MANAGEMENT Texas,” says Moser.

Another prime area for reshorfree online TCO Estimator tool ing is the tech support sector, and a mountain of detailed data PLANNING FOR THE FUTURE on company imports. where large organizations such As organizations step up their “A shop comes to us and says as Canadian banks have recently reshoring efforts, automation will ‘we’re the best maker of widgets,’” reshored jobs. With working from be aPAST: major factor in justifying saysSPEAKERS Moser. “So,AND we tell them who OF THE home now widely recognized as ATTENDEES the made-in-Canada business the biggest importers of those the “new normal”, companies case. However, while automation widgets are, where they’re getting may be able to accomplish this reduces headcount requirements, the widgets from, and roughly how in training, according to World without investing in bricks-andit also ups the ante for job related Economic Forum statistics, markmuch they’re paying.” mortar facilities.

Armed with this information, the skillsets. Companies that have ing a significant decline from 20 The pandemic, while painful, outsourced for some time, concompany can use the TCO tool to years ago. “When you get organiis providing a rare opportunity for sequently, may find that a large estimate shipping, duties and other zations that say ‘we can’t find the companies in all sectors to reboot costs in order to calculate an apples- segment of their workforces are people, therefore we have to bring their long-term strategies. years behind in their technoloto-apples cost comparison. “They them in,’ my response is ‘how “This isn’t just about now,” says gy-related skills. use the information to persuade the much retraining are you doing?’”

Middleton, “but looking at the “To use a horrible word, you’ve importer that when you consider says Middleton. impact of technology such as AI got to upskill your people,” says all the costs, it would be more profGovernments can also play and robotics in five-year’s time.

Middleton. “In Canada, we’re genitable to buy from them, even at a a more proactive role. “We’ve got That’s a force that’s being looked erally recognized as having a pretty slightly higher price,” says Moser. lots of bits and pieces, but no sysat more than ever right now.” SP REGISTRATION ENQUIRIES: FORapproach,” SPONSORSHIP ENQUIRIES: good education system up through InFOR 2018, Moser points out, 1,389 temic says Middleton, the colleges and Danny universities. companies returned a total of Visit www.supplychaincanada.com/events or contact Zhong:But noting that Canadax2134 has much to +1 416.977.7566 I ksforza@supplychaincanada.com then we assume that’s all you need 145,000 jobs to the US. learn from world leaders such as +1 416.977.7566 x2145 I dzhong@supplychaincanada.com to do for the rest of your life.”

The Reshoring Initiative uses Finland and Sweden.

Canada now ranks 22nd US data, but Moser says he is happy With governments already worldwide in employer investment to help Canadian companies, and investing significantly in stimulus Excellence in Supply Chain Education & Professional Development SUPPLY CHAIN CANADA, ONTARIO INSTITUTE

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Fleet Management

22

24

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Mid-sized roundup All-new mid-sized vehicles for 2020.

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Fleet Management is a special section of Supply Professional magazine. It is an important resource for Canadian supply professionals who recommend, select and manage fleet vendors and service providers.

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Fleet Management

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Toyota Camry Toyota’s venerable family sedan has had a rebirth of late and returns with sharp new styling, an attractive and comfortable interior and a choice of three powertrains; four-cylinder, hybrid or V6. Base models come with cloth upholstery and seven-inch touchscreen, a step up in trim gets you leather and a nine-inch display.

Every Toyota now comes standard with their safety suite of driving assist technology, which includes adaptive cruise control, lane keeping assist with lane departure warning and forward collision warning with automatic emergency braking assist.

Mercedes Benz C300 It’s the entry level vehicle for the German luxury carmaker, but the C300 boasts a well-crafted cabin with a long list of features and technology. Available in sedan, coupe and convertible configurations, the C-Class offers a choice of three engines.

While the C300 with standard turbo-four cylinder is the choice for most buyers, sports car enthusiasts can opt for AMG variants offering a turbo V8 or V6. All models come with LED headlights, power tilt and telescoping steering wheel, sunroof and power trunk lid; 4Matic all-wheel drive is available on some models.

Standard technology includes a 10.3-inch display screen with Apple CarPlay and Android Auto, blind spot monitor, forward collision warning with emergency brake assist and rear cross traffic alert.

New summer styles Mid-sized vehicles for 2020 Summer’s here, and so far 2020 has been hot, hot, hot. For most of us, it’s been a year of change and adaptation. Fortunately, from behind the wheel, the road ahead looks unchanged and familiar. And 2020 has got you covered, with a selection of new mid-size vehicles.

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Nissan Rogue Sport The Rogue Sport is a scaled-down version of Nissan’s popular Rogue and slots in above the compact Kicks.

All Rogues come with a 2.0L, fourcylinder engine with continuously variable transmission. All wheel drive is optional. Updated for 2020, the Rogue receives a more stylish front end with new grille and LED running lights. Safety Shield 360, Nissan’s suite of driver assistance technology, is now standard on every Rogue and includes blind-spot monitoring, rearcross traffic alert and automated emergency braking. Adaptive cruise control and lane-keeping assist are available as options. The interior is well-executed and roomy, with plenty of cargo space. Standard is a seven-inch touchscreen with Apple CarPlay and Android Auto.

Mazda 6 The Mazda6 sharp handling has made it the enthusiast’s choice, but it also offers great style and an upscale interior. Standard is a 187hp, 2.5L, four-cylinder engine or an optional 250hp turbo-charged four-cylinder with fuel-saving cylinder deactivation available on upper trim levels. The sleek interior resembles that of a premium luxury car, yet its cargo space and practicality are on par with the best in class. All models come standard with an eight-inch touchscreen, leather wrapped steering wheel and such driver’s assist features as auto emergency braking, blind-spot monitoring, rear cross traffic alert and forward collision warning.

FM/SP SUPPLY PROFESSIONAL

2020-08-18 12:01 PM

Hyundai Sonata The Sonata has been completely redesigned for 2020 and offers some of the most compelling design and technology features in its segment.

Three engines are offered; standard 2.5L four-cylinder, 1.6L turbo-four and a hybrid powertrain. The stylish cabin borders on luxurious, with sleek design and premium materials. An eight-inch centre touchscreen is standard and there’s an optional 12.3inch digital gauge cluster. The

2020 Sonata is a top safety pick for making standard its SmartSense suite of driver’s assistance tech, including adaptive cruise control, driver attention warning, forward collision avoidance, auto high-beams and lane-keeping assist. Available tech includes digital key, allowing owners to lock and unlock, and pull into and out of a parking space using their smartphone app.

Subaru Legacy Completely redesigned for 2020, the Legacy eschews its former outdoorsy-ness for a more polished image. Standard all-wheel drive should help it stand out against tough competitors in the mid-size segment.

Buyers have a choice of two four-cylinder engines: a 2.5L, or the turbo-charged 2.4L available on the top two trim levels. Interiors are well-designed with cloth or leather, and offer standard dual seven-inch infotainment displays, or a premium 11.6-inch vertical tabloid-style centre display. All Legacy models come standard with Subaru’s EyeSight safety suite, including adaptive cruise control with lane centering, automated emergency braking and lane keeping assist with departure warning.

Chevrolet Malibu Updated in 2019, the Malibu returns this year virtually unchanged.

A handsome if somewhat generic sedan, the Malibu offers a choice of three powertrains, including a hybrid option. Standard is a 163hp, fourcylinder and continuously variable transmission, while the Malibu Premier is equipped with a 250hp turbo-four cylinder and nine-speed automatic. The cabin is spacious and comfortable, with standard eight-inch touchscreen system with Apple CarPlay and Android Auto, and onboard WiFi hotspot. Safety technology includes adaptive cruise control, emergency braking with pedestrian detection and lane-keeping assist – but they’re only standard on upper trim levels.

Mitsubishi Eclipse Cross The Eclipse Cross is a small crossover that offers space and practicality with decent cabin quality. Upgrades for 2020 include standard (except base models) automatic high beams, lane-departure warning, forward collision warning with pedestrian detection, new rear seats, driver’s seat power lumbar support, updated infotainment screen and an additional USB port. Apple CarPlay and Android

Auto are optional, and Navigation isn’t offered. Adaptive cruise control, lane departure warning and automated emergency braking are available as options. All Eclipse Cross models come with a turbo charged fourcylinder engine paired with a continuously variable transmission.

All-wheel drive is optional.

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2020-08-18 12:01 PM

Fleet Management

By Stephanie Wallcraft

The Ford Escape Hybrid A new entry gets a redesign for 2020 At last, the compact SUV segment has competition in conventional hybrid powertrains. The newest entry is the Ford Escape Hybrid, which returns as part of the 2020 model’s redesign after spending a generation on hiatus. Generally speaking, hybrids have come a long way since the expensive and uninspiring offerings of just a few years ago. That said, pitting this new Escape Hybrid against its closest rival, the Toyota RAV4 Hybrid, generates a compelling discussion.

On paper, the Escape Hybrid’s powertrain is very similar: it offers a 2.5L four-cylinder internal combustion engine, which on its own generates 155lbs-ft of torque from 4,500rpm and combines with 24 AUGUST 2020

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an 88kW electric motor for a combined total system output of 200hp. These figures are slightly lower than in the RAV4, but so are the fuel efficiency numbers. The Escape Hybrid promises 5.4L per 100km in city driving, 6.2 on the highway, and 5.8 combined according to Natural Resources Canada, in contrast to the 6.0 combined rating in the RAV4. This writer’s real-world reading over the course of a week was a slightly higher at 6.4L per 100km – still significantly better than most products in this segment.

This makes sense in a few ways, most notably in the Escape Hybrid’s slightly lower overall curb weight of 1,612kg as opposed to

the RAV4’s 1,703kg – due in part to its briefcase-sized 1.4kW/hr battery – and in its slightly smaller dimensions. Although both its length and its height are lower – at 4,585mm and 1,679mm respectively, versus the RAV4’s 4,596mm and 1,702mm – the wheelbase is longer at 2,710mm versus the RAV4’s 2,690mm, which creates a planted drive feel to go with the energetic throttle response that stays in EV mode more often than not at low speeds.

The trade off is that much of that lower interior space is reflected in the Escape’s cargo capacity, which holds a total of 974L with the rear seats upright and 1,851.9L with them folded. This leaves no space

to spare when a large object such as a stroller is loaded, which is not the case in the RAV4 or some other non-hybrid competition.

While the success of the exterior redesign is a matter left to taste, the interior design and build quality are less open to debate. Faux wood inserts are not uncommon in this lower-budget segment, but other manufacturers have successfully made them more visually convincing, and the notched pattern etched into the plastic door paneling draws attention to an area that it perhaps ought not. The cabin is fairly quiet apart from some road noise that transfers through the large 19-inch wheels, and it does have the added benefit of natural light through a panoramic sunroof, which is part of a $2,300 package in the Escape Hybrid but is not available in the RAV4 Hybrid at all.

Tech highlights

Technology features in the Escape are impressive. Ford’s SYNC 3 system is sometimes slow to respond shortly after start-up but is otherwise a user-friendly and functional system, and both Apple CarPlay and Android Auto are included along with on-board navigation and SiriusXM Traffic and Travel Link.

The gauge cluster is a fully digital, 12.3-inch display, and a head-up display is included in the panoramic sunroof package. Heated front seats and side mirrors are included along with a heated steering wheel and wiper park, and a wireless charging pad positioned ahead of the rotary gear shifter under the HVAC controls.

For safety and convenience, Ford’s CoPilot 360 package is standard, with pre-collision assist with automatic emergency braking, a lane-keeping system, and blind spot information with cross-traffic alert and automatic high beams.

The deciding purchase factor for many, however, will be price.

In the Toyota RAV4 Hybrid line-up, a slimmed-down LE trim is available at $34,321 including delivery fees. The Escape’s only conventional hybrid trim is the topof-the-line Titanium, with a starting price of $38,649 including delivery fees and a total cost of $43,149 as tested. FM/SP FM/SP SUPPLY PROFESSIONAL

2020-08-18 12:01 PM

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2020-08-18 12:01 PM

Fleet Management

By Katherine Vigneau

Eyes front

It’s time for a reminder on distracted driving.

After a lengthy hiatus, people are returning to the roads. Work and vacation places are opening and people tired of being locked down are hitting the highway. COVID19 has made public transportation less desirable as people prefer the cleanliness and safety of their personal or work vehicles. At the same time, a survey from Artificial Intelligence (AI) leader, Netradyne, reports that “there is a growing perception that driving is becoming less safe” and that distractions are increasing. These distractions include advanced driver assistance systems, like lane assist, which are accessed by drivers 80 per cent more than drivers who did not have access to these automated features.

This is therefore the perfect time for some reminders on the dangers of distracted driving and some tips to eradicate it in your fleet.

Some concerning facts and stats from CAA include: Mobile phone use while driving leads to 1.6-million crashes annually. (National Safety Council, 2019) Over three quarters of 26 AUGUST 2020

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Canadians (78 per cent) frequently change the radio station while driving. (CAA polling, 2020) Almost half of Canadians (47 per cent) have programmed a destination on their GPS or mobile device while driving.

(CAA polling, 2020) A quarter of Canadians have changed a song on their phone while driving. (CAA polling, 2020) Police across Canada say that distracted driving has caused more collisions than impaired drivers. (ICBC, 2016) The economic and social consequence of road crashes in Canada is estimated to be $25 billion per year, including direct and indirect cost, as well as pain and suffering. (Traffic Injury Research Foundation) On the list of distractors, the use of handheld communication and entertainment devices ranks high. As a result, most Canadian provinces and territories have legislation restricting or barring their use. To the right is a synopsis of hand-held cell phone legislation in Canada, as of July 2020.

Province

Fine

Demerits

Suspension

British Columbia $543

4

2 or more infractions in 12 months

Alberta

$287

3

No

Saskatchewan

$580

4

Incremental increase in penalties

Manitoba

$672

5

3 days

Ontario

$615 $3000

3/6/6

3/7/30 days

Quebec

$300$600

5

3 days

New Brunswick $280

5

No

PEI

$500$1200

5

No

Nova Scotia

$234$569

4

No

Newfoundland

$300$1000

4

No

Yukon

$500

3

No

NWT

$322$644

3

After first offence

Nunavut

$5000

-

No

FM/SP SUPPLY PROFESSIONAL

2020-08-18 12:01 PM

On the list of distractors, the use of handheld communication and entertainment devices ranks high.”

In a liability-charged landscape of high-profile distracted driving cases, what should fleets be doing to preserve their drivers and resources and make our roads safe?

Over the past decades, fleets in North America have been largely reactive in responding to changes in local and provincial laws. As laws became stricter, so did internal distracted driving policies. Policies trended to hands-free use only, then only when a vehicle is legally parked to only outside a vehicle for more progressive companies. Ultimately, organizations have struggled with the need to encourage efficiency and productivity and the requirement to do so in a safe manner.

At the request of its members, NAFA Fleet Management Association created a Distracted Driving Position Statement.

To demonstrate leadership in this area, NAFA’s internal policy, applying to employees, contractors and volunteers alike, prohibits: a) the use of NAFA-owned or provided personal electronic devices while driving any vehicle; (b) the use of any personal electronic device while operating a vehicle leased or provided by, or the cost of which is being reimbursed by NAFA; and (c) the use of any personal electronic device to conduct or discuss NAFA business while operating any motor vehicle.

NAFA has not only established the policy but given it teeth. NAFA regards violation of the policy as a serious matter that will result in disciplinary action against an employee, up to and including dismissal. NAFA has led the way with their forward-looking stance on this very serious issue and provided fleet managers with the road to follow.

In addition to this type of broad policy statement, employers need to provide practical guidance by creating policies that employees can live with. While most fleet drivers easily recognize the inherent risks of texting or hand-held communication devices, few appreciate the full range of behaviours that take their attention away from the road. Having a distracted driving policy can help them identify at-risk behaviours and make small changes to improve overall safety.

Here are five specific guidelines to include in your policy:

2.

Name prohibited behaviours.

Not only should you have a broad definition of distractions, you should list specific distractions which should be avoided. The most common distractions are changing a CD or radio station, eating or drinking, applying makeup, using telematics devices (GPS), talking on the phone, texting and talking with other passengers. Name each behaviour and describe the level of restriction that applies.

Recommend small behavioural changes. It is important to get people’s attention with practical tips to avoid distractions. Some ideas are: Have all employees pre-set radio stations instead of fumbling with the controls.

Invest in satellite radio for drivers covering long distances to minimize the number of changes necessary.

Build time into schedules to stop for food and beverages and consume them outside of the vehicle.

Katherine Vigneau, CAFM, is director of professional development, NAFA Fleet Management Association.

Program GPS prior to departure.

Turn off phones and all alerts prior to departure.

Apply to contractors. To demonstrate commitment to a strictly defined distracted driving policy, organizations should inform all contractors of the policy and that it applies equally to them.

Be realistic. Most organizations have recognized that they need policy to restrict phone calls and texting. Policies seem to range from only hands-free to none at all.

The realities of Canadian winters, employee safety and convenience make the stricter options unlikely to be followed.

Enforce sanctions. I normally lean towards incentives rather than punishment to influence people but this area is so serious that I think tougher sanctions are merited.

Fines, particularly for phone calls and texting, really do not seem to be effective. The loss of vehicle and/or phone privileges for a prescribed period might make fleet drivers take the issue more seriously.

Making small changes through policy and education can lead to what we really want – the creation of a mindset where behaviours that cause distracted driving are recognized and avoided. As we take to the roads post COVID-19, putting these practical tips into effect will save lives. FM/SP FLEET MANAGEMENT SUPPLYPRO.CA 27

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2020-08-18 12:01 PM

BY MICHAEL POWER

PAYING IT FORWARD

COVID-19 HAS INCREASED THE NEED FOR SECURITY, EASE AND SPEED IN MAKING PAYMENTS When it comes to corporate payment solutions like cards, companies have long viewed characteristics such as security, ease of payments and speed as important. At the same time, the coronavirus pandemic has both heightened the need and desire for these characteristics while accelerating the adoption of payment solutions.

And the market for these solutions shows few signs of slowing down. For example, the global payment processing market is set to rise to an estimated $78.24 billion by 2026, according to Data Bridge Market Research. Reasons for this increase include convenience and ease of transaction, and the surge in smartphone use in recent years, among other reasons.

The coronavirus pandemic has made certainty of payment more valuable to companies than ever, says Paul Cargnelli, head of commercial sales, Canada, at Visa Canada.

Companies have experienced a great deal of difficulties recently with issuing cheques, with many physically signing their cheques before issuing them. However, more modern, electronic payables solutions alleviate such inconveniences, Cargnelli notes.

GOING DIGITAL There’s a big migration among companies towards digital payments, since there are significant business benefits around working capital they offer and, with commercial cards, rebate revenues, says Cameron McPhail, vice president and director, commercial card, at the Bank of Nova Scotia. He agrees that with the pandemic still ongoing, many companies that had been moving more slowly on digital payments have sped up the process since, for operational reasons, cheque payments are more difficult.

“The other thing we’re seeing is that people are then embracing digital just as another prudent measure to mitigate fraud,” McPhail says. “Moving to things like commercial card payments is much more secure for companies.”

The increasing need for such heightened security is backed up by research. Currently, the global economy loses US$4.1 trillion annually to fraud, according to the Switzerland-based International Security Ligue. Criminals may see increased opportunity as more people and organizations rely on technology for payments, the organization says.

The pandemic may also have accelerated the rise of the gig economy, something that has meant a greater need for effective payment solutions. Visa Canada has addressed this through Visa Direct, says Cargnelli, a service that pushes payments to constituents. For example, an insurance company looking to make a payment can avoid issuing a cheque by having that payment pushed to an individual’s account, with the receiver’s debit card used as the identifier. Companies such as Uber, Lyft and other gig-economy players can also use the technology to push payments to drivers.

“It’s just another technology that’s becoming more prominent in the marketplace from a business perspective,” Cargnelli says. “But not so much from a business-to-business perspective. It’s more from a business-to-consumer or businessto-small-business where there’s a lot of cheque issuance. This is displacing cheque issuance.”

Visa Canada is also using technology such as artificial intelligence (AI) to combat areas like application fraud. Due to the pandemic, more consumers are adopting cards as their preferred payment method, Cargnelli notes. As banks receive a large number of card requests, they must ensure that the applications are legitimate.

So, AI can help to not only combat fraud in that process but also monitor the quality of data coming through on commercial cards.

Cargnelli recommends that companies challenge their banks as payment consultants to develop strategy and keep current on the market, which evolves constantly. The core business of most companies is not payments, and organizations must use their banks as consultants and leverage their expertise regarding the solutions that are available. “It’s all about having a payments strategy and executing on it,” he notes.

For his part, The Bank of Nova Scotia’s McPhail recommends that companies broaden their approach to payments by looking at a more complete overall payment strategy. A more comprehensive approach can provide benefits to the company while also offering multiple payment options for their suppliers, rather than

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2020-08-18 12:01 PM

“People are embracing digital just as another prudent measure to mitigate fraud. Moving to things like commercial card payments is much more secure for companies.”

relying on making all payments through electronic funds transfer (ETF).

“That’s great, but why do you want to pay everyone by EFT?” McPhail says. “Why not pay some of them through other methodologies that benefit the company? There are groups of suppliers who will readily defer to accept card payments. And when you do that, you benefit from extended working capital as well as rebates that the banks typically provide back to the company.”

Moving away from cheques as a payment method has been a goal of many companies for years, McPhail adds. Some organizations have been more successful than others, a situation

owing largely to how good a company’s strategy is and how well that strategy is executed. Such an approach needs to include traditional elements of any successful project, including strong senior endorsement from company leadership, along with partners that will help accomplish the strategy’s goals. Documented policies and procedures on how supplier invoices are received and how payments are made is also crucial.

“You need to have all these things written down and well-known throughout the company if you’re going to engage in these discussions with suppliers and hope to get beyond, ‘just send me a cheque,’” McPhail says.

While card-based payments won’t be the only way in which most companies execute payments, there remains a huge opportunity for businesses to refine their payment strategies and benefit from card-based payments, McPhail says. Overall, the industry is experiencing relatively slow adoption of technologies such as e-payables, which he attributes in part to a lack of knowledge on the topic.

“But the message out there from us, anyway, is that there are huge opportunities, there are benefits to be had, there are wins for both the supplier and the company – this isn’t all about beating up your suppliers,” McPhail says.

“People in procurement and finance, let’s cast the net wider and have a look at all the ways our company can benefit in paying suppliers.”

MORE CARRIERS Payment trends have evolved in the supply chain and logistics world as much as anywhere else. Increasingly, shippers are looking to offload writing cheques to carriers, says Tyler Buskard, director, sales in Canada, for BluJay Solutions. The company provides supply chain technology that automates all of the payment processes associated with transportation across a company’s critical modes. This trend is driven by a few factors, Buskard says, including that many of the organization’s customers are using more carriers due to capacity constraints or changes in certain areas. As well, outsourcing payments in this way typically regulates cash flow and payables certainty, making the business more regular.

The pandemic has also reinforced the business case for automated process with a ‘no-touch’ culture, Buskard says. The speed at which business takes place has increased and, more important, the acceptance of electronic communication and visibility is also increasing in many who were late adopters of technology and digital processes. “They went from critical adoption barriers to must-have accepted requirements in a matter of weeks,” he says.

Buskard advises to look for partners that not only take care of payments but support the entire process. For example, BluJay has partnered with TriumphPay to perform actual payments. “The assurance of paying the right thing is as important as making the payment,” he says. “Getting it right helps ensure your suppliers are partners in the process and not adversaries at war with your AP department.”

The appearance of COVID-19 has accelerated trends across business, including within the payments sphere. Ease of use, security and speed of payments have become even more important as the pandemic continues. Rethinking cheques, diversifying payment options and formulating a strategy can all help to enable a more robust payments plan. SP SUPPLYPRO.CA 29

SP Aug 2020.indd 29

2020-08-18 12:01 PM

THE LAW—BY PAUL EMANUELLI

GOVERNANCE GAPS ARE YOU A SOFT TARGET FOR PURCHASING SCAMS? Recent Canadian legal decisions and public audits have uncovered multiple misappropriation schemes showing systemic weaknesses in public procurement. Rather than dismissing these cases as isolated incidents, public institutions should be asking themselves whether internal governance gaps are making them soft targets for similar spending scams.

For example, in its September 2019 decision in R. v. Ross and Dawson, the Nova Scotia Supreme Court found that two government employees, along with a supplier operating under different companies, defrauded the government of $2 million through a contract-splitting and bid-rigging scheme that awarded 640 small contracts to the supplier at significantly inflated prices. As a kickback, the supplier provided one of the government employees a company bank card to make recurring withdrawals from the cash machine at a local tavern.

QUOTED WITHOUT COMPETITION The scam involved the purchase of equipment parts at the Shearwater military base in Nova Scotia. The purchasing clerk repeatedly split the required equipment parts into small orders so that the procurements never reached the contract value for open tendering through the government’s central procurement system.

This allowed the clerk to direct all quote requests to companies controlled by the same supplier, who quoted without competition to win the contracts at inflated prices.

As this case illustrates, internal contract-splitters can bypass open tendering and collect kickbacks by colluding with external suppliers who are willing to defraud the government with rigged bids.

Similarly, in its March 2020 report entitled Investigation, the 30 AUGUST 2020

SP Aug 2020.indd 30

Edmonton City Auditor found that two City employees colluded with an external contractor to submit $1.8 million in false invoices, $1.6 million of which was paid and not recovered, for the rental of construction-related traffic signs that were never provided to the City. As the report detailed, the perpetrators took advantage of weak internal controls to facilitate the false billing scam since the City had no effective systems in place to check invoices for contracts that did not follow proper tendering procedures.

Furthermore, there were no checkand-balances between the individuals who accepted delivery for goods and those who approved invoices for payment. This allowed the two employees to short-circuit oversight controls by bypassing the tendering process and authorizing their own invoices to the accounts payable department.

Since the payment department was not expected to review invoices for appropriate expenditures before making payment, no red flags were raised in the processing of multiple small fake invoices that totalled $1.6 million over a four-year period.

While the City Auditor confirmed that the Edmonton Police Service had “opened a file” and assigned detectives to investigate the matter, this case illustrates how weak oversight exposes public institutions to fraudulent practices and exposes taxpayers to the misappropriation of public funds.

Finally, in its May 2020 decision in R. v. Charpentier, the Ontario Superior Court of Justice found the defendant not guilty of fraud in his role in a bid-rigging kickback scheme that involved government projects. The defendant admitted that he colluded with his employer, who owned a construction company, in an ongoing bid-rigging and pricefixing scheme involving other

bidders vying for work on Ontario Ministry of Transportation construction projects. The defendant also admitted that he then colluded with a subcontractor on 43 of those projects to receive inflated subtenders, awarding $6.5 million in work to that subcontractor at inflated prices, and then received kickbacks exceeding $3.2 million from that same subcontractor.

PROVING DEPRIVATION However, the defendant beat the fraud charges because the Crown failed to prove that the defendant’s employer suffered “deprivation”, as required to prove the offence.

The Court ruled that the evidence did not clearly establish whether the employer was a victim and suffered financially from the kickback scheme, or whether the employer was an accomplice who benefited from the kickbacks by sharing in the illegal proceeds. Since there was reasonable doubt over the ultimate destination of the kickbacks, the “deprivation” element of the offence was not proven, and the charges were dismissed.

While the defendant beat the charges of fraud against his employer, the case raises serious concerns over the duration of the price-inflation kickback scheme, why it was able to persist undetected for so long and how much that scheme and similar schemes have cost Ontario taxpayers.

These cases represent a small selection from a long list of similar examples that have uncovered fraudulent activities connected to the public procurement process within Canada and worldwide.

To avoid becoming another case study, public institutions should be reviewing their procurement practices to identify any governance gaps that make them a soft target for the next purchasing scam. SP

Paul Emanuelli is the general counsel of The Procurement Office and can be reached at paul.emanuelli@ procurementoffice. com.

“Internal contract-splitters can bypass open tendering and collect kickbacks by colluding with external suppliers who are willing to defraud the government with rigged bids.”

SUPPLY PROFESSIONAL

2020-08-18 12:01 PM

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2020-08-18 12:01 PM