JUNE 2020
KEEP MOVING FORWARD Michael Van Keulen on controlling your destiny Cybersecurity
Risk management Rugged devices Cannabis supply chain The Toyota RAV4 Hybrid
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THANK YOU FOR GETTING THE JOB DONE. WE'RE SUPPORTING YOU ALL THE WAY. Stay safe on the journey ahead.
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VOL.62 No.3 JUNE 2020 SUPPLYPRO.CA COVERING CANADA’S SUPPLY CHAIN
@SupplyProMag
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COVER: ERICH SAIDE PHOTOGRAPHY
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FEATURES
ALSO INSIDE
7 MANAGED PRINT SERVICES Tips for keeping your print and paper services rolling.
13 RUGGED DEVICES The evolution of tough devices used in the field.
4 UP FRONT
8 BIG DATA Trends in managing today’s information onslaught.
19 THE WEAKEST LINK Global supply chains bring potential cybersecurity breaches.
6 IN THE FIELD
10 LEARN AND ADAPT Coupa’s Michael van Keulen’s procurement journey.
20 PANDEMIC PLANNING Managing risk in the age of Covid-19.
5 BUSINESS FRONT
30 THE LAW
22 WEED TRACKING Blockchain plays a growing role in the cannabis supply chain.
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UP FRONT
INVEST IN YOURSELF At the moment, the world seems a disrupted and tumultuous place. While currently occupying fewer headlines, the global pandemic remains a major issue. Civil unrest in the US, Canada’s neighbour and largest trading partner, continues and has now usurped much of that media attention. Throughout everything, looming behind everything else and ready to reappear, is the world’s climate crisis that governments, businesses and other organizations will be compelled to turn some attention to at some point in the future. The world is complex, and challenges never cease entirely. It’s perhaps easy to succumb to anxiety at such a fractured global order. It’s also easy to fret over the future viability of industries, jobs and supply chains. And while anxiety is never particularly pleasant, it can help to get one moving and to make changes. This time of uncertainty may also be an ideal opportunity for reinvention. In his In The Field column on page 6, columnist Tim Moore calls it “sharpening the saw.” The article focuses on ways supply chain professionals can handle the disruption of the pandemic and Moore counsels us to invest in ourselves and our professional direction. He advises us, for example, to take online courses and read to improve our professional prospects. This is a good idea. The initial shock of the pandemic is over, and the slight pause is a good time to reassess skills and areas of knowledge. Supply chains will rebound as economies come back online. Supply chain professionals must be prepared for that. In the meantime, here are a few areas in which to hone skills and develop knowledge. Risk management may seem obvious under today’s conditions but still bears mentioning. Check out resources to help you build your skills in handling risk. Doing so will make you more employable as well as helping to build resiliency in your supply chain. A McKinsey report even found there may be a dedicated risk management function within many supply chains going forward. Automation should also be on your list. The recent disruption has shown how fragile today’s complex supply chains can be. Automation can help to mitigate this by helping to create intelligent workflows. Disruption often leads to innovation and new approaches to existing situations. Now is a good time to learn different approaches and read up on how others handle challenges. Perhaps there are innovative ways to build resiliency into the supply chain that recent events bring to light? The above are simply a few areas of potential focus. Improving one’s skills and knowledge in these and other areas will help supply chain professionals to deal with whatever lies ahead.
MICHAEL POWER, Editor
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. Publisher reserves the right to refuse advertising that does not meet the standards of the publication. No part of the editorial content of this publication may be reprinted without the publisher’s written permission. © 2020 iQ Business Media Inc. All rights reserved. Printed in Canada.
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BUSINESS FRONT—BY MICHAEL HLINKA
AS REAL AS IT GETS HAS OUR ECONOMIC CRISIS DWARFED THE PANDEMIC THAT CAUSED IT? This is the second column I have written since COVID-19 struck. Two months ago (it was late March), I predicted that we would have “turned the corner” on the pandemic in a few weeks. By that, I meant that the strict lockdown would have lasted as long as it took to flatten the curve, and we would have been back to something akin to a “new normal” by late April. Boy, was I wrong! As I write, it’s June and for all intents and purposes, North America remains shut down. The schools aren’t back and won’t be until September at the earliest – and that’s the best bellwether for “normalcy” I can come up with. Two months ago, I was reasonably hopeful that things would turn out well, at least in the long run. I believed that North America would have recognized the folly of its “globalization” ways, and understood that we have something unique, something special, on this continent. There would be serious discussions about how to bring the supply chain back home, leading to real economic growth and full employment. However, if those discussions are taking place, they are taking place behind very firmly closed doors. It seems to me that the political classes on both sides of the 49th parallel are floundering, unable to formulate policy past next week. It wasn’t long into the health crisis that I started to fear that the economic crisis would dwarf the pandemic. This seems to have come to pass. North American GDP could contract by 33 per cent. Unemployment is skyrocketing. So far, we’ve seen the job losses mostly in the cohorts we would describe as “lower” and “lower-middle” class. You may be familiar with the phrase “trick-
le-down economics”. What we’ll see in the months to come is “trickle-up unemployment” as businesses look to slash costs. Middle and senior managers are skating on the thinnest of ice. Things will get far worse on the employment front before they get better. REAL BUSINESS CYCLE There is an economic theory you may not have heard of called real business cycle (RBC) theory. It goes like this: expansions and contractions result from “real” causes, such as changes in technology or, as in this case, a pandemic that led to a government-imposed lockdown. RBC theory suggests that if left to its own devices, the economy adjusts relatively quickly, getting back to something close to full employment, sooner rather than later. DEADENING THE PAIN However, one of the central tenets of RBC theory is that government should not intervene with discretionary monetary and fiscal policy. There is a compelling argument that because government fiat caused this economic disaster, it should try to buffer its citizens from the shock. In other words, if there would ever be a justification for government intervention, this was it. This made and still makes sense to me. But there’s a pretty good comparison for government intervention and the use of a powerful drug like morphine: it deadens the pain right now, but it’s easy to get hooked. Interest rates in the developed world are basically zero. Great Britain for the first time issued debt with negative yields. The US government has already committed trillions of dollars to fiscal stimulus and, trust me, in an election year
this is only the tip of the iceberg. On a weekly basis the Canadian government announces new ways to give away money. Put this together and you see that the plan seems to be to inflate our way out of this mess. Those schooled in economics may have noted the internal contradiction in the preceding paragraph. Negative interest rates imply deflation. Printing an endless amount of money should be inflationary. What I fear is that we will experience the worst of both worlds: Wage deflation given the excess supply in the labour market, coupled with asset inflation. This is what we saw in the aftermath of the 2008-09 financial crisis. The stock market soared, bonds and real estate rallied, and the average working man and woman was left behind. That’s not good. And I fear it will be even worse than that this time around. There was a global pandemic that had to be dealt with, no question about that. When Donald Trump referred to it as “war”, I didn’t hear any disagreement. But instead of fighting, the developed world turtled. We shut everything down without adequately considering what the longer-term consequences would be and then the lockdown was kept in place far longer than necessary. Our bankers and politicians screwed up. Instead of clearly articulating that temporary measures were necessary, they went into panic mode, dealing with each situation on an ad hoc basis. What is coming down the road are real economic problems – inflation and stagnation that will take a generation to address. SP
Toronto-based Michael Hlinka provides business commentary to CBC Radio One and a column syndicated across the CBC network.
“What we’ll see in the months to come is “trickle-up unemployment” as businesses look to slash costs.”
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IN THE FIELD—BY TIM MOORE
BUILDING RESILIENCY THE DO’S AND DON’TS OF SUPPLY CHAIN MANAGEMENT DURING PANDEMICS Not since the Second World War has there been such a need for resilient and dynamic supply chains. We’re in a battle with a common enemy – the COVID-19 outbreak – and its effects will be felt for years to come. Here are some do’s and don’ts that supply chain professionals should consider now. FIRST THE DO’S … Identify how your production capability and equipment can be retooled to produce hand sanitizers, gloves, gowns, face masks, medical supplies or other vital equipment. There is still a need and will be for some time. Who knows, you’ll fight the pandemic, but you could also get your firm re-classified as an essential service, kick starting idle production lines and helping fellow employees get called back to work. Identify where your firm may have spare capacity to assist in national or regional relief efforts. Think outside the box and beyond PPE to also include transportation or distribution services, warehousing space or activities to move vital supplies and equipment around. Review your supply chain from top to bottom to evaluate where problems are arising and you’re vulnerable, opportunities which may be presenting themselves and develop a status report and action plan for management. Revisit your disaster contingency plan and develop a new one, specifically including virus and pandemic related situations. This wasn’t our first, and certainly won’t be our last, pandemic. Review your firm’s exposure and resiliency to recover from natural disasters and pandemics, and the preventative measures that you can design and implement now, to cope with swings in stock 6 JUNE 2020
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availability, transportation and security issues and evaluate potential recovery times. Review your existing contracts for force majeure clauses and determine which suppliers may be in a position to try to enforce them, leaving you vulnerable to disruption and stockouts. Develop solutions. Check if your firm has insurance protection covering losses should your suppliers be unable to fulfill their contractual obligations. Reassess your supply chains in China, India and global hotspots. Consider other regional opportunities for the future (such as Vietnam, Bangladesh, et cetera), as contingencies. These countries have been working to improve working and business environments recently. Increase your level of communication and collaboration with overseas suppliers to understand not only their challenges, but also ongoing labour, discriminatory wage practices and health and safety regulations. These have led to manufacturing, transportation and other protests and strikes. Political protests that disrupted business recently were not just Hong Kong and China, but also in Latin America, The Middle East, Brazil, India and Mexico. Ask vendors about their plans to deal with demands and changing capacity and how swings may impact their stock availability, quality, increased production and delivery times, as well as their labour force. Sharpen the saw. Invest in yourself and take online courses in supply chain, offered by Supply Chain Canada (www.supplychaincanada. com). The organization can help with strategies and solutions to supply disruptions and have new
offerings concerning the COVID19 outbreak. Catch up with issues of Supply Professional for insights and interviews with Canada’s top supply practitioners. Why reinvent the wheel when you can learn practical information from titans of industry? There are whitepapers available too. … AND NOW THE DON’TS Don’t wait to be asked for your supply chain expertise, your firm’s production abilities and it’s logistical capacity, to keep critical supplies and support services flowing to frontline workers and healthcare providers. Don’t take a wait-and-see attitude and hope it won’t occur again in the future … it will. Learn from today, plan and prepare for tomorrow. Don’t lessen your due diligence when sourcing supplies via new sources away from China, Asia or other parts of the globe experiencing problems. Beware that counterfeit markets thrive in times of crisis, and quality and social responsibility risks should also be considered in addition to cost and immediate availability. Now is the time to increase efforts to protect your firm and supply chain; not lessen or weaken it with quick or cheaper sounding alternatives. Don’t forget the potential to involve your firm accidently in forced and/or child labour, poor working conditions and other human rights abuses when prequalifying new and potential vendors. Don’t immediately threaten legal action against suppliers in a bad situation and who try to enforce force majeure clauses. Work on a reasonable course of action instead. Cooler heads should prevail and honest transparency
Tim Moore is president and owner of Tim Moore Associates, a search firm focused exclusively on supply chain professionals.
“Review your firm’s exposure and resiliency to recover from natural disasters and pandemics, and the preventative measures that you can design and implement.”
about the situation and capabilities should be shared with you – as partners and lenders – if you’re going to get through the storm. Don’t participate in the hoarding, resale or profiteering from food, cleaning and medical supplies, protective equipment and other essential items which could be redirected and used in the production of medical supplies for frontline workers in your community. It’s just not right. Don’t wait for authorities to enforce new sweeping regulations controlling the supply chain. Lend your expertise and see how you might participate in local supply chain coordination units to ensure the public’s safety and a strong and resilient supply chain of much needed goods and services. SP SUPPLY PROFESSIONAL
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BY JEFF RUSSELL
MANAGED PRINT SERVICES MPS PROGRAMS ARE NO LONGER ABOUT COST PER PAPER ALONE We use them every day but don’t often think about the total costs associated with managing multifunctional devices (MFDs). MFDs are not typical desktop printers, as they are more tied to a network system with multiple users and encompass printers, photocopiers, fax machines and scanners in one device. Historically, these were separate devices taking up various spaces throughout an office. By combining multiple devices into one, MFDs have become more complex and represent excellent cost savings opportunities if managed correctly. They are also no longer big and bulky, having become streamlined, state-of-theart pieces of equipment. AN ACTIVE ASSESSMENT Managing MFDs is known as managed print services (MPS). In the past, print services was limited to outsourcing print work to a third party. Today, an evolved managed print services program is about organizations assessing their printing program and technology, streamlining to the most cost-effective setup while maintaining high
service levels. Lengthy downtime with printing devices is an issue. MPS programs are no longer focused on the cost per paper, as they involve the selection of the most effective multi-function device based on volume and output criteria, as well as the proper selection of toner technology. The improper selection of a multi-function device could be costly. Like all business processes, the MPS is a stand-alone process that should be reviewed regularly. Most companies already have a sourcing solution for buying paper. When assessing the print manage process, start with understanding how much paper is printed daily. MFDs are designed according to volume. The higher the print output, the costlier the MFD. If your monthly volume is 20,000 sheets, assuming a 20-day work-month, that’s 1,000 sheets per day, or about 2.08 sheets per minute (in an eight-hour day). In selecting an MFD, you must know your print output per minute. There is no sense in selecting a device that can print over 100 pages per minute if your output is only two-to-three pages per minute, as this is wasteful and can become costly. There are MFDs that can print 25 pages per minute, which would be more suited for low-volume applications, as there are MFDs for mid-range volume. Next, determine the print output: black and white (B/W) only, or B/W and colour. Low volume (under 30ppm) MFDs are typically B/W only, whereas mid-range to high volume MFDs (greater than 30ppms) come in both outputs. This is critical for two reasons. First, there is a higher cost associated with colour prints. If you outsource the MPS program to a third-party MPS provider, they will want to know the breakdown in volume according to B/W and colour. If you do not have this information, you will be at a disadvantage during the negotiation. More important, during your monthly analysis, you should be analyzing your volumes according to each output and make the necessary corrections if costs are an
“An evolved managed print services program is about organizations taking an active assessment of their printing program and technology, streamlining to the most cost-effective setup while maintaining high service levels.” issue: if volume is higher in colour, have your IT department restrict output to B/W only. Secondly, if choosing a colour MFD, there is an additional cost of toner. With B/W, only one toner is required; whereas with colour you must have four different toner cartridges. The replacement cost of each toner must be considered. A third-party MPS provider will factor the additional toner cartridges into their monthly service fees and bill you accordingly. This leads us into the third area of review when choosing a multifunctional printing device – the type of toner. Toner technology has evolved. The traditional cartridge style is the big, bulky cartridges with the toner roller as part of the cartridge. Due to the mechanical design they are expensive. With a built-in toner roller in the cartridge, these toners tend to jam, causing down time. SOLID INK Another style of toner is the solid ink design. With this design, a nontoxic, resin-based polymer of solid blocks of ink are melted and then sprayed on the paper in liquid form. Advantages of the solid ink design are that there are fewer moving
Jeff Russell is corporate purchasing manager at Miller Waste Systems Inc.
parts, it uses a print head, making it one of the simplest and most efficient systems to use and because there is no cartridge, it’s environmentally friendly with no waste or material to recycle. A problem with the solid ink design is the output may feel like crayon texture. A third is the bottle style cartridge system. With this toner, the cartridge looks like a bottle that feeds toner to the roller and drum units, as the toner roller is a separate device. Over time, the toner roller may need replacing, but due to the operational design, costs are significantly lower than the above styles as you are only paying for the consumable material. It is important to understand the style of toner cartridge as it impacts volume and cost. Higher volume MFDs use the bottle style toner cartridge and have a high upfront cost, but the long-term operational costs are much lower. The low-volume MFDs use the traditional style cartridge, have a low-to-medium upfront cost and the operational costs are higher. Whether deciding to keep a MPS in-house or outsource, understanding all aspects of your print services helps to reduce costs. SP SUPPLYPRO.CA 7
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BY MICHAEL POWER
INFORMATION FLOW
TIPS FOR NAVIGATING THE DATA ERA As business has become more global, technology has advanced at an ever-increasing rate. This has put a vast amount of data at the fingertips of supply chain professionals, leading to the rise of so-called big data. The digital era’s increase in data generation and availability is a boon to the supply chain field, as it provides insights not previously available. But rapid data production also raises challenges, such as how to use all the information, what technology must be leveraged to do so, what roadblocks exist to data collection and analysis and where to seek the information needed to get started? According to Jon Trask, CEO and founder of Blockchain Guru, big data is a combination of data (structured, semi-structured and unstructured) that an organization collects, which can then be mined for useable information. Organizations can employ the data in machine learning projects, predictive modelling and other advanced analytics applications. Systems that process and store big data have become a common feature of many organizations’ data management architectures, Trask says. Big data is also often characterized by the “3Vs,” he notes: the wide variety of data types, the volume and velocity at which it’s generated, collected and processed. Other “Vs” have been added recently, including veracity, value and variability. “Although big data doesn’t equate to any specific volume of data, big data deployments often involve terabytes (TB), petabytes (PB) 8 JUNE 2020
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and even exabytes (EB) of data captured over time,” he says. Companies and their supply chains gain an advantage by properly using advancements in technology that capture big data, as well as developments in data science (AI and machine learning, for example) that analyze big data, Trask says. For example, he notes, data science and advanced analytics can help uncover correlations and trends, potentially ahead of the competition. It can also give insights into opportunities, improve planning, forecasting and decision-making, help supply chain professionals secure the most critical competi tive growth strategies, as well as automate data analysis to save time, resources and effort. Trask notes that the advanced analytics of big data can also: • minimize ETD and ETA prediction errors, enable smart inventory management and category planning; • increase end-to-end coordination of the purchasing value chain and route optimization; • improve supplier selection and distribution channel efficiency; • optimize price points and results in end-to-end cost reduction; and • help detect fraud and counterfeiting while improving risk management and quality. “Understand the power of emerging technology – IoT as a data creation tool, blockchain as a data storage and sharing tool and AI or BI software to aid in transitioning data to improve pre-
dictions and forecasts,” Trask advises those looking to leverage big data analytics. “The supply chain world has changed significantly in the past few years. It’s harder for a supply chain professional to keep abreast of these changes and understand how to use emerging technology.” THE ROLE OF DATA Data is a key ingredient to supply chain success for several reasons, says Josh Levin, senior director, supply chain at Synovos. Strong data allows practitioners to negotiate better with suppliers, optimize opportunities for cost savings while focusing on standardization exercises and areas with impact potential to an organization. “The more reliable the data set, the more we understand where the spend is going and how it’s being used,” Levin says. “It creates much larger cost-savings opportunities.” Data collection and analytics means better planning, forecasting and even automation of procurement, Levin notes. This frees up time for forecasting, helping to search out cost savings opportunities. For example, data analytics can lead to discovering the underperformance of a part’s life expectancy, Levin says. It’s possible to then make recommendations surrounding changing the source of the part or recommending an alternative. “The client can also consider changing its processes or equipment,” Levin says. “But it all starts with data integrity.” SUPPLY PROFESSIONAL
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The bigger the data set, the better the understanding of actual inventory usage, Levin adds. Accurate data can help establish minimum and maximum inventory levels and track usage. In turn, this allows supply chain professionals to have the right materials on hand at the right time, therefore planning the procurement lifecycle with far more confidence. Levin recommends maintaining data integrity through best practices. It’s possible to have three years’ worth of data in a system but no useful information like manufacturer names, part numbers or proper units of measure, he says. Making sure that fundamental inform ation is available is key, he says. Also important is to think strategically about data, Levin says. With proper informaiton, a purchase at one site that seems insignificant can impact the entire organization. “That includes being able to manage materials across different locations from the same data set,” he says. “It leads to stronger supply chain strategy and better inventory strategy.”
“The supply chain world has changed significantly in the past few years. It’s harder for a supply chain professional to keep abreast of these changes and understand how to use emerging technology.” Big data’s importance to supply chain has grown as the number of different parts (SKUs) grows and operations spread globally, says Rodrigo Altaf, procurement analyst and category manager at Vale, a mining and metals company. Through analyzing the consumption of each SKU per location over time, it’s possible to estimate demand more accurately and therefore to plan deliveries, Altaf says. At the same time, big data can help to paint a picture of clients’ consumption patterns, therefore aiding supply profes sionals in planning production, shipping and
warehousing activities accordingly, helping to avoid shortages or surpluses. “This improves the cashflow and generates savings,” he says. “Outbound logistics can also be optimized by providing more accurate information to the product carriers, which will help them plan their activities to better serve their customers.” Altaf recommends investing in the quality and relevance of information that’s gathered before making any decisions. It’s also important to validate and align with end users and vendors, he adds. “Have someone treating data who doesn’t necessarily perform the sourcing activity but is 100-per cent dedicated to analyzing data and to verifying the software is functioning well,” Altaf says. “Make sure the experience is shared between several category managers – the inform ation may not be treated the same way across all categories, but the routine of analyzing the data can be rolled out across most categories.” SP
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BY MICHAEL POWER
DISRUPTIVE TIMES ALLOW PROCUREMENT TO SHINE, SAYS COUPA’S MICHAEL VAN KEULEN. On the first day at his new position as CPO at Coupa Software, Michael van Keulen got a call from the head of HR. The call told him to cancel a flight for the next day. Shortly after, the organization announced a company-wide, work-fromhome policy to deal with the novel coronavirus that causes COVID-19. At the time, the notion of working from his home in Vancouver was new to the procurement and finance veteran, who had spent his career going to the office. “So, I got in the car, drove to Best Buy and bought my laptop,” says van Keulen. “Besides that, I had to change my onboarding. I had a whole week planned. I was going to meet all these people and now, all of a sudden, everybody was confronted with a new reality. So very quickly I had to shift. That’s what procurement can do – we’re agile, we’re nimble, we have the ability to immediately own our new destiny.” So began van Keulen’s career not only at Coupa but as a professional working fulltime from home during the largest pandemic in a century. It’s been both an exciting and challenging time in his career, says van Keulen, who is originally from Holland but most recently worked in Greensboro, North Carolina before relocating to Vancouver. 10 JUNE 2020
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His early days at Coupa also saw van Keulen set up several meetings with stakeholders and log numerous hours on Zoom, the online video conferencing platform. All that time spent video conferencing is fine, van Keulen notes, as face-to-face meetings (even virtual ones) are the best way to understand how procurement is perceived, what stakeholder’s strategic priorities are and how to best support them. “Ultimately, my most important customer as a procurement professional is my internal customer,” van Keulen notes. “I need to understand what drives them, what issues do they see, any suppliers that may or may not be performing – whatever might trigger them. I need to have the ability to understand that very, very quickly so I can immediately start focusing on supporting them and driving results internally.” He attended the University of Amsterdam, graduating in 1997 with a bachelor’s degree in business economics. He worked in various finance-related roles before landing a job in 2002 as the European controller for Foot Locker, where he worked until 2006. In 2007 he moved to VF Corporation, the parent company of 35 well-known global
GETTING TO KNOW COUPA But it was after leaving Europe for Greensboro to lead VF Corporation’s global procurement transformation that van Keulen was first introduced to Coupa, the company he would eventually work for. VF selected Coupa as its platform and van Keulen says he has been a “Coupa loyalist” for the past 10 years or so. He was headhunted to work for lululemon, another company that ultimately implemented Coupa as part of a broader procurement transformation. He began working for Coupa in Vancouver. SUPPLY PROFESSIONAL
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PHOTO: ERICH SAIDE PHOTOGRAPHY
KEEP MOVING FORWARD
apparel brands such as The North Face, Vans, Timberland, Dickies and more. His role was initially finance for three years before he was tasked with setting up procurement for Europe in 2010. In 2013, van Keulen moved to Greensboro after being asked to lead a global procurement transformation for the company, which began in early 2014. In 2015, another opportunity arose to set up the procurement function at lululemon. That led him to Vancouver, where he currently lives. After four-and-a-half years at lululemon, van Keulen joined Coupa this past March as head of procurement. He describes himself as a finance professional who transitioned into procurement, and his passion for the field sparked during his early days at Foot Locker. That was 15 years ago, and at the time, processes at the organization were largely manual. The company was a well-known global retailer with robust expense control, but Excel was still a common tool and there was very little automation. But that changed when Foot Locker became the first customer of an e-sourcing platform that does reverse auctions in Europe. Adopting the platform helped the company to utilize its spending better while gaining competitive pressure within its supply chain. “That’s when I recognized procurement is going to be able to drive a lot of value and I really started to get super passionate about procurement,” he says.
PHOTO: ERICH SAIDE PHOTOGRAPHY
“I’m even more excited to see where supply chain is going, where our profession is going and how we can drive innovation through supplier collaboration and community intelligence.” “It was a pretty interesting time with everything that’s transpired,” he says. “We all thought this was going to be a couple of weeks and we’ll be back to normal, hopefully.” Like many in the field, van Keulen describes his routine as “varied.” The day can begin, for example, with supplier negotiations – either a tough, competitive process to achieve contract goals or a discussion with a strategic partner about performance. Team brainstorming sessions can focus on hashing out priorities like better utilization of a contract, better management of business spending, the future direction of commodities or raw materials and so on. Later in the day van Keulen might focus on conversations with internal strategic partners like senior executives or a department leader around strategy, objectives for the next year, the stakeholder’s three-year strategic plan, supplier challenges and so on. He also acts as an internal consultant, especially for Coupa’s sales force. He provides insights into where he sees opportunities, how to engage with prospects and outside procurement leaders and other areas. “The key thing that you need in all of that is what we call EIQ, or EQ, and having the emotional intelligence, if you will, to resonate with different people at different times of the day and still have the ability to ultimately drive value,” van Keulen says. He describes himself as a “finance guy at heart,” for whom data, numbers, debit and credit and similar metrics remain important. At the same time, what excites him about procurement is that the field allows him to take data and turn it into measurable value for the business. That happens by bringing together suppliers and internal stakeholders through a competitive cycle, van Keulen says.
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“You do that in a way that could be by competitive negotiation, it could be by collaboration with your supplier, it could be driving innovation upstream with stakeholders internally,” he says. Procurement practitioners must be at the centre of that creative process, van Keulen says. Procurement can have a broad view but at the same time be tactical and in the moment. He’s been fortunate due to the leaders that have influenced him, the support he has received and the opportunities that have presented themselves. Career highlights include implementing Coupa at lululemon, an event he describes as the “crown” on a four-year journey to transform the company’s procurement function. Procurement at lululemon was underdeveloped when he joined, although the company boasted roughly $2 billion in sales, Van Keulen said. There was lots of purchasing, tactical and operational work, but little thought behind who suppliers were, how much the company paid or its business spend management. So, the company began its procurement transformation, applying real best practices to managing its business spending. That involved digitizing the process, and Coupa was brought in to help go from sourcing to contracting, and with the downstream procure-to-pay process. “Implementing Coupa as the Cadillac of business spend management was a massive moment of accomplishment, not just for me but also for the company and for the team that really supported that,” van Keulen says. Another of van Keulen’s career highlights involves setting up the procurement function at VF Corporation in Europe. That process allowed him to produce value for the company while simultaneously taking his career to a new, higher level. His experiences transforming procurement at both lululemon and VF Corporation also highlight the importance of being bold and seizing opportunities, he notes. Last year, van Keulen received a Spend Setters Award at Coupa’s Inspire19 conference in Las Vegas. The recognition, which took place before he became an employee at the company, is especially meaningful since it was bestowed by his peers. “That’s why I’m extremely proud, grateful and honoured to be in the role that I’m in today,” he says. “To be given a Spend Setters Award, in front of a couple thousand peers in procurement, that was a pretty big deal.” DISRUPTION Procurement has no shortage of challenges, with the disruption caused by the novel coronavirus seeming to highlight that fact. For van Keulen, 12 JUNE 2020
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“Learn and adapt and that’s how you elevate yourself. Be bold and go grab it, go after it, because nobody is going to give it to you.” who is a father of three, it’s a completely new dynamic to work from home with multiple young children. But Coupa is a mobile-friendly technology company with employees accustomed to working in the cloud, and with an ethic and culture that allows employees to get on with business as usual. But the current crisis has put procurement in a unique situation. “Procurement has been waiting for a highly disruptive situation to start leading companies through a storm,” van Keulen says. “Nobody wanted this to happen, obviously. But now that it has, and it’s so disruptive for supply chain, for companies, for the globe, life will never be the same. And it’s for procurement to lead. Procurement has just now turned a corner and we’ve been waiting for something like this for years. We’ve been training for this for years. It’s our time to lead and it’s our time to shine.” Completing an MBA has long been a potential goal for van Keulen, who says he’s also excited about the direction that Coupa is taking. It’s as though the past 10 or 15 years of his career were designed to culminate in his current position. “I’m extremely fortunate to be in the golden seat of procurement,” he says. It’s also an exciting time for procurement generally, van Keulen notes. The field has an opportunity to raise its profile, to go from “the basement to the boardroom.” That move requires practitioners to claim a seat at the executive table, rather than waiting to be asked. “I’m even more excited to see where supply chain is going, where our profession is going and how we can drive innovation through supplier collaboration and through real community intelligence,” he says. Coupa, for instance, has a community intelligence-based platform that brings together suppliers and buyers, van Keulen notes. The disruption brought about by Covid-19 has set the stage for innovation and highlighted how essential collaboration is. Companies are accelerating payment terms, for example, to help suppliers weather the storm. Organizations are also flexing service level agreements or buying slightly more from those suppliers, if possible, to offset volume drops elsewhere. “There’s a silver lining to all of this. From a practitioner’s standpoint, I think being in
procurement right now, I couldn’t be more excited,” he says. As van Keulen is Dutch and his wife comes from Brazil, he counts himself as a “huge” fan of soccer. He also loves skiing and describes living in Vancouver as “a dream.” He also has a love of speed – he’s done 200 miles an hour on a motorbike and 180 miles an hour in a Tesla S Car. His appreciation of all things fast comes through in his work style, as well. “I love speed, I love getting stuff done,” he says. “It comes back in the way I work. It comes back in the way I operate. I’m always looking for the next thing.” The family has three children – a daughter, age 11, a nine-year-old son and a three-year-old daughter. The family dynamics are interesting, he says, as he’s Dutch with a Brazilian wife, the first two of the children are Belgian and the youngest is Canadian. “We’re the United Nations,” he says of the family. He counts great managers – as well as some with room to improve – among his former colleagues. But working with both types offers learning opportunities, he says. When he was about 24, van Keulen had a manager that told him he stood to make more money between his 40th and 50th birthdays than he would between his 20th and 40th birthdays. At the time, van Keulen was unclear what the manager meant. But now, he says, he realizes the meaning: early in a career, it’s more important to make the right choices, take the right roles and learn than it is to make a lot of money. In other words, don’t be impatient, van Keulen stresses. Many people switch to a job in which they will earn five or 10 per cent more. Of course, money is important. But ensure it’s the right role with the right responsibilities, he advises. “Make sure you’re ready for the role, that you’re done learning in the role that you’re in,” van Keulen says. “Be patient, take your time and be mindful of the choices that you make along the way.” At the same time, it’s important to be bold and remain in control of your own destiny, he adds. It’s common for professionals to start a role and question whether they’re truly ready to take it on. But van Keulen stresses the benefit of figuring out such a situation along the way. “Learn and adapt, that’s how you elevate yourself,” he says. “Be bold and go grab it, go after it, because nobody is going to give it to you.” SP
SUPPLY PROFESSIONAL
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BY MARIETE F. PACHECO
Mariete F. Pacheco, MBA, PMP is managing director at FRW Services Ltd.
TOUGH ENOUGH? RUGGED DEVICES IN SUPPLY CHAIN Technology has permeated the supply chain across the globe. Once limited to IT organizations, military applications and corporate office support teams, technology has become a critical element of many organizations’ core operations. One of the most commonly used technologies in the supply chain are rugged devices. These robust tools have come a long way since their first significant appearance in the 1990s as hand-held devices used by courier companies and their drivers during deliveries. These early pieces of equipment were basic in nature and often were no more than consumer-grade mobile devices with a re-enforced case exterior and were limited to basic data entry functions. In 2020, rugged devices have become mini powerhouses with extensive capabilities that can rival those of many laptops and mobile phones. DEVICE TYPES Rugged devices differ across platforms and functionality based on configurations needed to meet an organization’s prerequisites. There is one common element shared by all rugged devices, which is the stringent requirements that need to be met to be classified as rugged devices. These requirements vary by country, industry and application as it relates
what products are on a wrapped pallet or shipping container. Rugged laptops are commonplace in remote locations associated with construction sites, oil and gas or forestry industries. These robust tools offer the ability to withstand the severe environments their users work in: dust, chemicals, rough terrains and extreme temperatures, especially Canadian winters.
to a product’s ability to remain operable in harsh conditions including being dropped, exposure to dust, extreme temperatures (either too hot or too cold), vibrations or liquids. Recognized standards in North America include IP6X for water and dust resistance and MIL-STD 810 certification for shock proofing during product drops. In supply chain, there are three main types of rugged devices used: portable scanners, laptops and tablets. Each of these formats has their unique functions as it relates to communications, quality control, asset management and inventory management. Communication can
be as simple as emails between employees to more complex functionality as communicating material requirements to suppliers based on min/max systems utilized in vendor managed inventory systems (VMI) or just-in-time (JIT) manufacturing operations, which is often found in automotive manufacturing. These communications can be transferred via a tablet the user employs to transmit orders to the supplier. Inventory management through RFID functionality can be overseen through the utilization of a handheld scanner to not only locate a product but identify
PURCHASING BEST PRACTICES Partnering with the right supplier is paramount to selecting the best device to meet a business’s needs and future requirements. There are several notable global brands such as Honeywell, Getac, Panasonic and many others which offer a full spectrum of rugged devices. Mean while, others prefer to specialize either in a device or an industry as Amrel does, by focusing on military applications. There are several considerations when investigating the potential of incorporating rugged devices into an organization’s supply chain, of which the four main ones are: change management, system integration, device lifecycle and after-sales service. First, as with any major purchase or organizational change, it is vital to consider the change management aspect of launching SUPPLYPRO.CA 13
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“Partnering with the right supplier is paramount to selecting the best device to meet a business’s needs and future requirements.”
rugged devices. Engaging the and technical support. Is the user end users of this equipment is able to service the equipment important to ensure not only the themselves or must an authorized acceptance of the technology repair centre handle maintenance? but also the alignment between If a repair centre is required, is business needs and the available a replacement offered during the technology. There’s nothing worse repair time period to eliminate than purchasing new equipment downtime? If not, it is important and then having it sit unused to be aware that you may need or underutilized because devices to buy duplicate equipment from were purchased based on a price the organization to bridge the tag, rather than what an organigap while repairs are conducted. zation needed to be successful or, Is technical support readily availsimilarly, simply due to them not able to provide trouble-shooting being easy to use. help when the device isn’t workIn conjunction with the ease ing? If not, does a third-party of use, it’s critical to review the supplier need to be sourced to ease of which a new rugged device provide this service? can be integrated into existing sysVIRTUAL | INTERACTIVE tems. Some considerations include: THE CURRENT STATE LT I P Lthis E ST REAMS | NETWORKING will the new devices communicate At the timeMofUwriting article; with existing systems or will a sep- the world is experiencing an OCTOBER 2020 arate, standalone system or a patch unparalleled event with the between systems be required? COVID -19 pandemic impacting Will an additional supplier be nations’ healthcare systems, required to assist with system economies and supply chains integration or is the device on a daily, ever evolving basis. plug-in-play and simple for an The staff reduction in manufacturorganization’s IT team to launch? ing and job sites, combined with the risks associated with the close A successful integration is critical quarters staffing in some facilito ensuring the security of the ties, affords an opportunity data and systems are maintained. to leverage rugged devices. For in the shipping industry. It is now A device’s lifecycle is an employees who work remotely common practice for a courier important factor to consider, espeor to enable physical distancing to have the shipment recipient cially as it relates to the speed at practices, these devices can comelectronically acknowledge on which technological advances | Trade Agreements | Role of Government | ‘Nextshoring’ Changing Consumer Pattern municate data between teams eas- a touchscreen compared to offeroccur. Can the equipment be | Climate ily andStructures wirelessly. ing aChange paper confirmation to sign. updated? Can the update be Business comand Sustainability Rugged devices have evolved pleted in-house or is it an addiTHE FUTURE STATE tremendously since their appeartional cost via a third party? How A Nwill NOU N C I N GbeOsupported UR CO-CHAIR S: Technology continues to advance ance in the 1990s with their tiny long a device and change as industry needs screens that were unreadable by the manufacturer? What does change. Rugged devices have revin direct sunlight, limited battery the manufacturer identify as the olutionized manufacturing by life and temporal operating lifecycle? Some manufacturers making it possible for research in temperature extremes or when offer limited support once newer and development to access product wet. These devices can be excelmodels are available. Is the device schematics quickly on the produc- lent tools to stay connected futureproof and can it be easily tion line with the development across an organization as well converted to be used with future GEORGE TSOGAS LESLIEThese NICHOLSON THALBAUER of tablets featuring large, touchas withHANS suppliers and customers. technologies? questions are DANIEL STANTON screen tablets compared to Supply the From inventory management to critical to years consider as new technolCEO at Kit and Ace and With 25 of experience across A supply chain veteran, Hans Thalbauer Recognized as an “IBM Watson Leadership Speaker with previous multiple Leslie Nicholson is globally responsible Industrial practice of meeting a boardcommunications and for many other ogies are industries, on the horizon, such Chain Futurist” and as ain“Pro To Know” experience of scaling Lululemon the and SVP the - Supply Chain Operations Transformation by Supply & Demand paper Chain Executive room or reviewing schemat- functions, ruggedInitiatives devicessuch canas asis5G evolution of the from 4 to 300 locations as the & Digital Business Transformation Industry 4.0 and Sustainability. Magazine, Daniel Stanton is known ics, risking safety and possible play a role in keeping the supply internet of things (IOT). VP – Global Logistics. Nestlé Canada. around the world as “Mr. Supply Chain. to the schematics with chain running smoothly across BeforeLead, completing the purchase, damage machinery, chemicals or lubricants the globe, now more than ever, it is critical to understand what MEMBERS: NON-MEMBERS: $200/subscription CORPORATE: seats and $1,000/50 seats in near proximity. Tablets and as globalization continues$500/15 to the device’s supplier$50/subscription offers in scanners have also changed as accelerate albeit more remotely after-sales support. This includes their early beginnings due to the pandemic. SP warranty, repairs, maintenance For sponsorship enquiries, pleasecompared reach outtoto Kate Swick at
kswick@supplychaincanada.com or +1 416.542.3862
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BRING EXCELLENCE IN SUPPLY CHAIN TRAINING AND EDUCATION, TO YOUR ORGANIZATION (VIRTUALLY) Do you or your team of supply chain professionals have a passion to lead innovation, global competitiveness and economic success, especially in this ever-changing supply chain environment?
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TRAIN AND ENGAGE YOUR TEAMS (VIRTUALLY) FOR THE UNPREDICTABLE TIMES AHEAD
Supporting You By Becoming Your Business Recovery Partner Supply Chain Canada, Ontario Institute offers corporate online training initiatives with a fresh approach delineating a more consultative and customized methodology. We make it easy and convenient for you to offer professional development training to your team.
CORPORATE TRAINING WHAT CAN WE HELP YOUR ORGANIZATION WITH?
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PRACTICAL CURRICULUM Leveraging modern-day casestudies and learnings pertinent to the organization and its employees
EXAMPLES OF TRAINING THAT HAS ADDRESSED CLIENTS’ CHALLENGES Challenged with the risks of procuring software licenses? Get training on – IT Procurement and Licensing
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Client: Challenge: With approximately 250 stores across Canada, and workforce with different levels of education, positioned across the nation, this organization needed to level-set the knowledge of its supply chain teams across the country so that they could better serve the stores and ultimately deliver a consistent customer experience. Solution: Online offering which entailed self-directed learning, supported by scheduled interactions with the instructors online. The client purchased 26 licenses, and the team completed the curriculum at their own pace. Result: The positive feedback from the team lead to the client subsequently scheduling a follow up in-person training, in order to further the learning and enhance the team building for continuous improvement.
What Our Client Is Saying:
“In 2019, a few cross functional areas of Giant Tiger underwent a realignment of roles and responsibilities to improve overall business performance and increase efficiency. As part of this effort we were committed to ensuring team members had the right skills to succeed in their new mandates, and the SMT – Logistics course was the perfect common foundation for all members on the Replenishment team. The weekly agenda allowed each participant to work at their own pace but they also leveraged each other in rich conversations throughout, drawing from each other’s unique experience and perspectives.” - JESSICA GODIN, P.ENG, SVP, SUPPLY CHAIN, GIANT TIGER STORES LIMITED
To learn more about the best fit for your organization, contact: Kim Sforza, Director – Membership & Marketing at ksforza@supplychaincanada.com or +1 416.977.7566 x2134
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ENABLE YOUR TEAMS TO EMERGE STRONGER WITH BUSINESS RECOVERY, CONTINUITY AND PREPAREDNESS MEASURES Stay Current With Relevant and Continued Education PROFESSIONAL DEVELOPMENT We have developed a roster of (Virtual) Professional Development Sessions on topics especially relevant during this time, as organizations discover new risks & challenges, as more manufacturing moves onshore, and as teams continue to work remotely.
IDENTIFYING AND MANAGING PROCUREMENT RISKS - PUBLIC AND PRIVATE SECTOR July 16, 17 & July 23, 24 2020 I 9:00am – 12:30pm
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IT CONTRACTING AND LICENSING July 28 – 29, 2020 I 9:00am – 12:30pm
UMESH KALIA, CPPO, CPPB, SCMP, C.P.M
20 years of procurement experience with roles in City of Vaughan, Ontario, Ministry of Government and Consumer Services, Ontario Ministry of Health and Long-Term Care, Ontario Ministry of Natural Resources and Forestry, City of Brampton and University of Toronto, Suzuki Japan & Linamar Corporation.
DEBBY SHAPERO PROPP, LL.B., CSCMP
Debby Shapero Propp is a commercial lawyer with a focus on supply chain, technology and health law and has provided legal services in the private, public and broader public sectors for over 25 years.
PAUL SAUNDERS
CANADIAN CONSTRUCTION PROCUREMENT BEST PRACTICES August 19 – 20, 2020 I 9:00am – 12:30pm
With experience in City of Calgary, Manitoba Hydro, Brookfield Group of Companies, Infrastructure Ontario and the Federal Government, Paul Sanders is a leader in Public and Private procurement who works to find opportunities that promote the use of technology to make procurement more efficient, transparent and effective for organizations.
NATASCHA SCHIJVEN
PROJECT MANAGEMENT September 22 – 23 & 28 – 29, 2020 9:00am – 12:30pm
Natascha Schijven is the CEO and Managing Director of Pinwheel. An Ex- Vice President at A.T. Kearney and an Ex-Partner at Deloitte, Natascha has about 20 years of experience in leading sustainable cost take-out and turn-around projects for some of the world’s largest food & beverage, pharmaceuticals and chemicals companies in Europe, North America and Asia.
ASK US ABOUT OUR BUNDLED PRICING OR GROUP PRICING. For related questions, visit www.supplychaincanada.com/events Alternatively, contact Danny Zhong at dzhong@supplychaincanada.com or +1 416.977.7566 x2145
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VIRTUAL | INTERACTIVE M U LT I P L E ST R E A M S | N E T W O R K I N G OCTOBER 2020
Changing Consumer Pattern | Trade Agreements | Role of Government Business Structures | Climate Change and Sustainability
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‘Nextshoring’
ANNOUNCING OUR CO-CHAIRS:
LESLIE NICHOLSON
DANIEL STANTON
HANS THALBAUER
GEORGE TSOGAS
With 25 years of experience across multiple industries, Leslie Nicholson is the SVP - Supply Chain Operations & Digital Business Transformation Lead, Nestlé Canada.
Recognized as an “IBM Watson Supply Chain Futurist” and as a “Pro To Know” by Supply & Demand Chain Executive Magazine, Daniel Stanton is known around the world as “Mr. Supply Chain.
A supply chain veteran, Hans Thalbauer is globally responsible for Industrial Transformation Initiatives such as Industry 4.0 and Sustainability.
CEO at Kit and Ace and Leadership Speaker with previous experience of scaling Lululemon from 4 to 300 locations as the VP – Global Logistics.
MEMBERS: $50/subscription
NON-MEMBERS: $200/subscription
For sponsorship enquiries, please reach out to Kate Swick at kswick@supplychaincanada.com or +1 416.542.3862
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BY JON HANSEN
“As supply chains become more global and therefore extended, the number of potential breach points IN will also increase.”
their organization had “experienced a software supply chain incident in the last 12 months.” As much as the frequency and cost of such invasions, it is the “increasing exploitation of trusted relationships” between an organization and its outsourced providers that is most disconcerting. While the paper talks specifically about software providers who are smaller companies with weaker cybersecurity practices, it is clear that these vulnerabilities potentially exist with all suppliers. In short, the level of security in your supply chain is only as strong as its weakest link.
BRING EXCELLENCE SUPPLY CHAIN TRAINING AND EDUCATION, TO YOUR CYBERSECURITY RISKS ORGANIZATION (VIRTUALLY)
A FRIENDLY INTRUSION Even though it is a reasonable bet that an unwanted intrusion is usually the work of malevolent unknown individuals, it is not always the case. Consider this example from Richard Pennington, public procurement author and teacher at the National Institute of Governmental Purchasing. As Pennington tells it, after two Whenever the topic of cybersecurity employees who met and spent time gets raised regarding supply chains, at a conference went their separate an article by Garry Hawkings ways, one of them discovered that immediately comes to mind. The his new acquaintance had inadarticle (entitled When it comes to vertently left his flash drive in the security in the digital age, you have conference room. The flash drive to play the man, not the puck) is had highly confidential information applicable to identifying your supon it, including trade secrets. ply chain’s weakest security link. Given the nature of the data, Besides being a hockey fan, there was urgency to get it back. what does Hawkings mean when he Unfortunately, and because they talks about playing the man instead lived in separate cities, mailing of the puck? In referencing another would not suffice. So they posted cybersecurity thought leader, it on an unsecured webpage so the Richard Stiennon, Hawkings notes owner could download the files. the organizations that are “the most This could have been a catastrophic vulnerable” as those whose sole compromise of trade secret inforfocus is trying to determine what mation. There was a happy ending data should be “protected” versus in that an investigation revealed a identifying “the actors” interested breach of information by way of in stealing it. Organizations must unknown “visits” to the webpage protect themselves against the did not happen. It could easily have “who” and not just the “what.” gone the other way. First, let’s understand the Besides answering how a secunature of our supply chains’ risk. rity breach can happen, the above According to an August 2019 paper story identifies the potential “who.” from the Canadian Global Affairs It was a well-meaning employee Institute (CGAI), of the 1,300 IT making an honest mistake. security professionals that particiHaving been in the security pated in a survey on “the risks and industry for many years, Hawkings impacts of software supply chain even the “best proSUPPLY CHAIN CANADA, emphasizes ONTARIOthat INSTITUTE attacks,” 66 per cent reported that tective measures be it with people
WHERE Do youIS or THE your team of supply chain WEAKEST LINK professionals have a passion to lead INinnovation, YOUR SUPPLY global competitiveness and economic success, especially CHAIN? in this ever-changing supply chain environment?
Jon Hansen is editor and lead writer for the Procurement Insights Blog and was host of the PI Window on The World Show on Blog Radio.
or technology, will not protect you unless you understand the makeup of your security ecosystem.” According to Hawkings, it consists of the people, the environment and the technology, including the external, industry-specific actors who are likely to pose the greatest threat. “Building out” from the above model, a supply chain ecosystem is a network of organizations, people, activities, information and resources involved in the movement of products or services from suppliers to customers. As supply chains become more global and extended, the potential breach points will also increase. Being able to identify said breaches is critical to securing your network proactively.
Even though buying organizations can limit their risk exposure, many don’t take appropriate measures to do so. Following a panel discussion on supply chain risk for which I was a moderator, I spoke with Global Risk Management Solutions’ Gerard Smith. During our talk, Smith informed me that organizations would spend more time on researching and assessing potential new employee hires than they would on assessing supplier risk. While he was talking in the broadest terms, it is reasonable to include security auditing – or the lack thereof in his statement. So why do organizations fail to invest the necessary time and effort into verifying the security policies and practices of suppliers? THE WEAKEST LINK As with addressing problems A July 2019 Supply Chain Digital regarding the lack of clean data article reported that 56 per cent of for analytics, most procurement organizations reported a breach organizations don’t have the time “caused by one of their third-party nor resources to invest in auditing vendors.” At the heart of the probtheir suppliers’ security practices. lem is the fact that 32 per cent of It is a question of living with the buying organizations do not know consequences of an unknown risk where all of their third-party supand managing limited resources. pliers store data. Of those, 25 per With increasing demands on cent believed suppliers would take strained supply chains due to the appropriate measures to protect pandemic, procurement departments are already overextended. against or respond to an attack. Not only does this limit the ability Based on the above, organizations need to take the lead in assess- to respond to existing risks, it prevents organizations from identiing said vulnerabilities including fying and responding to new ones doing proactive security auditing as well. It is a no-win scenario that to “understand what data suppliers organizations must address sooner hold on file, where it is stored and Excellence in Supply Chain Education & Professional Development rather than later. SP who has access to it.”
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BY PAUL D. LARSON, PH.D.
PANDEMIC PLANNING
SUPPLY CHAIN RISK EVALUATION AND MANAGEMENT IN THE AGE OF COVID-19 In 1997, the first known human cases of H5N1 were reported in Hong Kong. Six of the first 18 cases were fatal. There were concerns that the “avian influenza” would evolve into a pandemic. By the end of it in 2015, there had been 694 cases – and 402 fatalities. In other words, 58 percent of H5N1 cases were fatal. Canada saw one case, in 2013. That single case was fatal. The bird flu was very deadly but barely contagious. Canadians, particularly Torontonians, likely remember the 2003 Severe Acute Respiratory Syndrome (SARS) outbreak. From February 23 to July that year, 251 Canadians contracted SARS and 43 died – a 17 per cent fatality rate. In March 2008, the University of Manitoba Transport Institute produced a report entitled Manitoba Nutrition Supply in Event of a Pandemic. It focused on the following question: How would Manitoba feed its people a balanced diet if provincial and international borders were closed due to a pandemic? In April 2009, the first H1N1 cases were reported in Mexico and the US. By that November, H1N1 was declining. There had been over 622,000 confirmed cases, in nearly 200 countries and territories – and at least 7,800 deaths. 20 JUNE 2020
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Between one and two per cent of H1N1 cases were fatal. While this condition was highly contagious, it was not particularly deadly. North American supply chain managers may have said: “these events are very rare and usually happen far away” or “H1N1 was no worse than the seasonal flu” and “we’re too busy to prepare.” But what if the next big strain is as contagious as H1N1 – and as deadly as H5N1? Well, the next big strain is here. Starting last year in Wuhan, China, it appears considerably more communicable than H1N1. It is also more deadly. On March 11, the WHO declared COVID-19 a pandemic. By May 22, Canada had 82,413 cases of coronavirus and 6,245 deaths, or a fatality rate of 7.5 per cent. Globally, there have been over five million confirmed cases and over 338,000 fatalities. Most supply chains face demand and lead time variability. Traditional ways to handle this include carrying safety stock, expediting shipments and managing customer expectations. There is also volatility in oil prices and Canadian dollar rates vis-à-vis the US dollar. Hedging strategies can help protect supply chains from such uncertainty.
There are two approaches to handling major interruptions. One approach, risk management, is proactive and the admonition is “be prepared.” The other approach, crisis management, is reactive. Here, supply chain managers consider the peril and say, “bring it on!” RISK MANAGEMENT VERSUS CRISIS MANAGEMENT There are pros and cons to each approach. By selecting an approach for dealing with uncertain events, the supply chain manager is placing a bet. The table depicts four possible scenarios in managing supply chain interruptions. An organization can assume a proactive or a reactive position in facing the disruptive event. While a reactive stance implies a lack of planning, a proactive position includes developing an action plan.
Approach Interruption Occurs Proactive Risk (“be prepared”) Management Reactive Crisis (“bring it on”) Management
Fails to Occur Resources Squandered? Resources Conserved
Using the reactive approach, an organization will be unprepared. The event triggers crisis management. Time will likely be lost figuring out what to do. Customers and suppliers may be lost to better prepared competitors. However, if the event doesn’t happen, the organization has conserved resources. It takes time, money and talent to create action plans. By foregoing planning, an organization can devote scarce resources to competing, serving customers, developing suppliers, training employees, interacting with constituents and so on. Alternatively, the proactive approach helps organizations be prepared. This is the essence of risk management. If we cannot prevent bad things from happening at least we can prepare for them. A plan is developed to mitigate an interruption’s impact. If the disruptive event SUPPLY PROFESSIONAL
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occurs, the organization can respond and recover better. If the event doesn’t happen, the organization has potentially squandered scarce resources. Warnings from the WHO about a coming pandemic seem to have largely been ignored. Thus, organizations have been in crisis management mode, having adopted a reactive approach. PLACE YOUR BETS! How to decide which approach to take? Two words: likelihood and impact. For an event with low likelihood and low severity of impact, the answer is clear: be reactive. The answer should be equally clear for those events with high likelihood of occurrence and high severity of impact: be prepared. What about low likelihood/major impact and high likelihood/minor impact? These are judgment calls. How do you feel about a one per cent chance of losing a million dollars?
Likelihood Impact Minor Major High Be proactive Low Be reactive How can we determine whether a proactive or reactive approach is sensible in response to a possible pandemic. With COVID-19, the pandemic is here. That’s 100 per cent on the likelihood scale. Many organizations and governments probably under-estimated both likelihood and impact. Indeed, some organizations likely did not consider it at all. Thus far, its severity has been high. In its 2009 Global Risks Report, the World Economic Forum (WEF) predicted a five- to 10-per cent risk a pandemic disease would emerge and jump from other animals to humans, with high mortality and transmission. This combination of notable likelihood and
“While a reactive stance implies a lack of planning, a proactive position includes developing an action plan.” catastrophic impact should have made pandemic planning and preparedness a worthy endeavor. Ten years after, in its 2019 Global Risks Report, the forum included the “spread of infectious disease” rather than pandemic influenza among the risks. This risk was rated below average on likelihood and slightly above average (10th position) on impact. The WEF may have under-estimated both likelihood and impact of a pandemic. SUPPLY CHAIN STRATEGY So, you’ve decided to be prepared, at least for next time. What should you do? Consider the following strategic issues. Three long-term trends in supply chain management – single sourcing, low-cost country sourcing and lean logistics – all assume stability in the operating environment. These days it is critical to have a back-up plan. Supply chain managers must understand the vulnerabilities of their suppliers (and perhaps their suppliers’ suppliers) and their own vulnerabilities. Single sourcing assumes reliability and continuity of the sole supplier. While close relationships with suppliers can be beneficial, dependence on one is risky. Canada hasn’t had a trade surplus with China since 1991. Many companies have found “great deals” in China. However, environmental and social issues aside, in economic terms this is
Paul D. Larson, Ph.D. is CN Professor of Supply Chain Management at the University of Manitoba and former Director of the Transport Institute and Head of the Supply Chain Management department.
also risky. Such dependence on a source nation assumes stability of the political relationship and ignores possible disruptions from far away. Another long-term trend is the shift toward lean supply chains, which focuses on eliminating waste. There are seven forms of waste in supply chains, but inventory is the headliner. The lean approach recognizes that inventory is needed to serve customers. To meet customer demand with lower inventory levels, reliability is essential. Shipments must arrive on time. Goods must be fit for use. Demand must be reasonably level and predictable. Similar to single sourcing and low-cost country sourcing, lean supply chain methods need stability. Any disruption in supply quickly results in stock-outs – and unhappy customers waiting for goods. Any sudden spike in demand also quickly results in stock-outs. The pandemic has hit supply chains with simultaneous supply disruptions and demand spikes. The response, though largely reactive, has been impressive. Next time, things can be better. One outcome of the 2008 Transport Institute report, Manitoba Nutrition Supply in Event of a Pandemic, was a tool called the Supply Chain Risk Evaluation and Management (SCREAM) framework. It urges supply chain managers to think beyond cost and service in all strategic deliberations. It urges them to consider likelihood and impact of a wide range of possible disruptions. What if our Chinese supplier is unavailable for several months? What if the US border closes? What if 33 per cent of our workforce is out sick? What if we suddenly lose our CEO? What if the federal government takes control of our operations? What if the price of oil rises to $150/barrel (or falls to $15/barrel)? Whatever your business, it’s time to at least consider worst-case scenarios. SP SUPPLYPRO.CA 21
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BY JACOB STOLLER
BUILDING THE CANNABIS SUPPLY CHAIN AN EVOLVING LEGAL FRAMEWORK HAS KEPT CANNABIS SUPPLY CHAINS ON A STEEP LEARNING CURVE Few Canadians at a drug store or a liquor outlet would question the legitimacy of their purchase. Experience tells us that our expectations will be met. As those drug and alcohol providers establish their roles in the fledgling cannabis market, however, consumer confidence can no longer be taken for granted. Medical and recreational cannabis have different histories. The former began in 2001 with the legalization of cannabis as a prescription drug. That changed when it was re-classified in 2014. Today, patients can buy cannabis online after submitting a government form signed by a health practitioner. “There are rules under the Food and Drug Act about how drugs will flow between suppliers and manufacturers of pharmaceuticals,” says Ken Weisbrod, Shoppers Drug
Mart’s vice-president of pharmacy business development and cannabis strategy. “Cannabis follows none of those particular practices because it’s got its own set of rules.” The new legislation has put medical cannabis in its own category. “We have a very unique supply chain within the cannabis regulations,” says Weisbrod, “so we’re applying pharmaceutical principles to try to improve the standards in the industry.” While there are thousands of legally registered strains in Canada, the medical effects of cannabis are not widely established. “The government’s focus is on THC and CBD, but there are lots of other components in cannabis,” says Weisbrod. Cannabis’s chemical qualities are not replicated through a controlled process in a factory. Instead, a “mother plant” is cloned by taking cuttings and letting them take root. Product provenance, therefore, is determined by “clone lines” which establish genealogy of the plant products. This has been difficult to track in an industry that customarily trades product as dried flowers in plastic bags. “While there’s a lot of rigor about what the outside of the package looks like and the barcode on it, what goes inside it is interchangeable,” says Weisbrod. “One of the complaints that you’ll find from consumers and patients is that cannabis doesn’t always have the same effect, and that’s because it’s being substituted.” TECHNOLOGY TO THE RESCUE Weisbrod’s team at Shoppers Drug Mart are deploying technology to ensure product provenance. This includes nuclear magnetic resonance testing, which profiles plant matter down to the cellular level, and a blockchain-powered online platform to link the supply chain’s many players – cultivators, secondary processors, labs, shippers, regulators, distributors and customers. Blockchain has a unique and growing role in supply chains. A blockchain database provides an immutable record of events, such as a test result on a sample from a shipment, an inspection record of
“The supply chain is similar in many respects to that of alcohol, allowing the provinces to leverage much of that expertise and infrastructure.”
a grow facility, or the verification of the environmental conditions under which a sealed and barcoded package was shipped. The fact that the records are tamper proof helps create a high level of trust between the various stakeholders. The blockchain-based software used at Shoppers is the brainchild of Tommy Stephenson, co-founder of Venice, California-based TruTrace Technologies, who began working with cannabis testing labs five years ago. The product gives a control-tower view of the supply chain with unusual depth. Buyers can look at a shipment and trace its contents back to the plant level, view testing results of a particular clone line, or survey the capacity of various shipping points. “We started with the testing labs, because we knew that product provenance at the strain level and the plant level would allow us to provide visibility for the rest of the channels,” says Stephenson. The key was creating a common language for all supply chain stakeholders. “We said, ‘how can we work with all the players in the industry to create standards that will better suit the supply chain from a management perspective?’” says Stephenson. “And that’s what we’ve accomplished.” Each province has its own approach. The supply chain is similar to alcohol, letting provinces leverage existing expertise and infrastructure. Nova Scotia, using a “store-in-store” approach within their liquor outlets and an e-com-
merce channel, could ramp up in six months. “We’ve fully integrated cannabis into our brand and our framework for alcoholic beverages,” says Laura MacLachlan, director – cannabis and corporate strategy for the Province of Nova Scotia, “so we had a great jumping off point, and a great reference to build from.” BC also sells through its liquor stores and has set up a wholesaling operation that has expanded to 183 store customers in 18 months. In both provinces, upgrades to the existing supply chain infrastructure were minor. “Aside from size and weight of product, processing cannabis orders is not all that different from processing liquor orders,” says Viviana Zanocco, manager, corporate communications & stakeholder relations, corporate strategic services, BC Liquor distribution branch. Both businesses, Zanocco notes, share the same warehouse management system (WMS). Growing pains have involved finding what consumers want and delivering consistently. “There was very little hard data about consumer preferences, product sales, and pricing available prior to legalization,” says Zanocco. “We had to research to find whatever useful information was available from Canada or other countries like the US.” “The biggest challenge overall has been the consistency of supply,” says MacLachlan, “so we’re working collaboratively with our vendors to get a sight line into their production schedule.” As consumers become more discerning, could recreational vendors start using blockchain? “Of the licensed producers, almost everyone is in our platform in some capacity,” says Stephenson. “They’re focused on using our system for medical for the time being, but the system is fully functional for recreational.” “Blockchain will become very dominant for track and trace for all consumer goods,” says Weisbrod. “If you can demonstrate success with a product like cannabis, where there was a huge black market, that can translate to many different industries including pharmaceuticals in the future.” SP
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Fleet Management
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Staying healthy on the road Driver safety during a pandemic.
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Toyota RAV4 Hybrid This hybrid SUV combines driving enjoyment and value.
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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Electric trucks Spotlight on the Bollinger B2.
EDITORIAL INQUIRIES: Michael Power, 416-441-2085 x110, michael@supplypro.ca
ADVERTISING INQUIRIES: Alex Papanou, 416-441-2085 x101, apapanou@iqbusinessmedia.com
2020-06-05 3:35 PM
Fleet Management By Katherine Vigneau
Defensive driving
Tips for ensuring fleet employee safety in a pandemic Employee safety is at the heart of all great organizations and has never been more important than now as we face off against COVID -19. Normally, the fleet organization is concerned about safety behind the wheel and mitigating preventable crashes. These days, however, the focus turns to avoiding exposure to an invisible enemy – a virus that can cause serious illness and even death. The NAFA Fleet Management Association has been communicating with members and collecting and sharing their stories for months now in order to ensure widespread knowledge of the dangers, and mitigation strategies that work. The fleet department is not usually considered frontline in most organizations. After all, they support the frontline workers by acquiring, managing and repairing the vehicles and equipment used by those workers in emergency response, delivery, transit, snow clearance, sales, utility repair and so on. The nature of the threat caused by this pandemic, though, has changed our definition of frontline worker as employees working ‘behind the scenes’ risk significant exposure to the virus. Consider mechanics in a City 24 JUNE 2020
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garage repairing fire trucks, commercial drivers delivering food supplies, or transit drivers in our bigger cities. All are essential workers with high levels of exposure who need as much protection as their employers can provide. While we still need to promote safe driving, there are many other things we need to do to keep employees from getting sick. The challenges are significant, but different, for fleet employees working outside their homes and those told to shelter in place. Risks faced in the workplace include: Contamination on surfaces – This includes vehicles, tools, shop and common areas. This might be the most obvious source of risk and the most easily dealt with. One of our fleet managers described his approach to vehicle cleanliness prior to allowing them to enter the shop. “They all get wiped down and cleaned with bleach … steering wheel, shifter, keys, everything that might have been touched,” the manager said. “We also clean the whole shop twice per shift with bleach. That includes doorknobs, bathrooms, breakrooms, wherever exposure might be.”
While we still need to promote safe driving, there are many other things we need to do to keep employees from getting sick.
Contamination from other people – This includes co-workers, customers and supervisors. Some people may be more conscientious than others when it comes to practicing social distancing, but the protection of all employees must be paramount and, in this case, it is definitely better to be safe than sorry. Availability of PPE – Wearing masks, gloves or other protective clothing should be enforced where the situation warrants it. Availability of parts, tools and another set of hands – Spending freezes may mean the proper part or tool is not available. Social distancing may mean a mechanic must work alone. Neither should compromise the safety of your employees. Ability of supervisors to be present – Supervising from an acceptable social distance may not be the most effective in specific situations and could impact safety. Access to basic necessities – Meeting basic needs for food and bio-breaks can be a challenge with canteens and other facilities locked down. This can have serious FM/SP SUPPLY PROFESSIONAL
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impacts on employee safety, whether it’s an onsite mechanic or a cross-country truck driver. The employees who are at home, working or not, face many of the above challenges as they navigate their personal lives. They may also bear financial and emotional hardships from loss of work and fewer human interactions. In a recent article, Corey Woinarowicz of NOCELL observes that a new level of empathy has emerged in dealing with such a blurred boundary between everyone’s work-life balance. “Having people ask for help and letting them know it’s okay to ask is crucial,” he says. With all of this in mind, the following tips, collected over the past two months, could help your fleet organization ensure the safety of employees. Alter operating hours of shops, deliveries or other fleet operations to minimize interaction among employees and between employees and customers as well as to provide extra time for cleaning and addressing basic needs. You may only be able to use every second bay in a maintenance shop, so use two shifts with half your normal number of mechanics. Your commercial drivers may not have access to restaurants so plan extra time for him or her to make meals on the road.
exposures. This may result in minimizing the number of drivers accessing a single vehicle or requiring customers to call ahead to schedule maintenance at a time when both the necessary parts and labour are available. Provide personal protective equipment (PPE) and cleaning materials with detailed instructions for their use. Wear single-use disposable gloves when handling common-use items such as fuel pumps or tools and dispose of gloves properly. Collect data on your operations for future analysis. How do extra cleaning time, less interaction and changes in processes impact productivity? Are there some positives here to retain in the future?
sential travel that you learned can be done through a conference call. Be a little more careful and a little less rushed. Take time for virtual or in-person happy hours. Fleet professionals are proving to be resilient, innovative and resourceful in this crisis and are to be applauded in the essential work they are performing. Keeping fleet employees safe has a new meaning these days as it goes well beyond driver behaviour behind the wheel and impacts every aspect of that employee’s life. You can find more stories and examples of how organizations are accomplishing this at NAFA Fleet Management Association’s COVID -19 Resource Center at https://bit.ly/2YYNM hk.
Katherine Vigneau, CAFM, is director of professional development, NAFA Fleet Management Association.
Reinforce positive behaviours that emerged during the pandemic. Do not reinstate non-es-
Be open and frank and communicate more than you ever thought possible. Do not assume that everyone knows how to wash their hands or cleanse their work area. Post signs, write policies and procedures and confirm that they are read, understood and followed. Conduct a formal risk analysis of your specific operations and the risks to employees. Identify risk exposures and evaluate them based on probability and impact. Avoid frequent, severe risks and choose appropriate reduction or transfer tactics for less frequent or serious FLEET MANAGEMENT SUPPLYPRO.CA 25
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Fleet Management By Stephanie Wallcraft
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Value in all the right places The Toyota RAV4 Hybrid
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variant. The electric motor’s 88lbs-ft of torque is available from a 0rpm, giving an energetic feel to the throttle, even from a standstill. Does the amount of fuel saved over the life of a vehicle make up for the higher up-front cost? According to Natural Resources Canada’s fuel consumption guide, the gas-powered all-wheel-drive RAV4 averages 8.2L/100km combined and costs $2,132 per year to fuel under their parameters of driving 20,000km per year at a cost of $1.30 per litre. (It should be noted that fuel costs are much lower at the date of publishing, but this is expected to be temporary.)
Under the same parameters, the RAV4 Hybrid all-wheel-drive averages $1,560 per year. That’s a cost savings of $572 per 20,000km, or $2,860 per 100,000km. With a price difference between the two of $4,260 at the base model, the answer depends on how far you drive your fleet vehicles and how long you keep them. That said, the RAV4 Hybrid is a better choice for city environments, where it averages 5.7L/100km versus 9.2L/100km in the gas-powered version. My result of 7.6L/100km came after a week of winter weather and extensive highway driving, both of which put any hybrid at a disadvantage.
Another indication that the RAV4 Hybrid is a strong contender for lon-
gevity is the eight-year, 160,000km warranty on hybrid components and 10-year, 240,000km warranty for batteries that Toyota has put forward on its 2020 hybrid models. The vehicle tested here, which is the sport-oriented XSE model, sits on the premium end of the line-up and is available exclusively as a hybrid. Priced at $43,516 with freight and PDI, this model includes all-wheel drive and a sport suspension. With its top-notch build quality and materials, the RAV4 is one of the more attractive products in its segment and feels well-fitted for its
PHOTO: STEPHANIE WALLCRAFT
For fleet operators, fuel costs are an ongoing concern. Plugging in a vehicle for fuel savings through electrification may be impractical or unreliable in some contexts, and in these situations a conventional hybrid is often a better solution. But if you haven’t driven a hybrid since testing an early-generation Prius, you may be under the impression that adding a battery requires significant sacrifices in driving enjoyment. The Toyota RAV4 Hybrid is proof positive that it’s time to let go of these presumptions. Since its redesign for the 2019 model year, the RAV4 Hybrid has an even better drive feel than the gas-powered
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1. By nearly all counts, the Toyota RAV4 Hybrid can be considered one of the best options in the compact SUV segment. 2. For the XSE model, a birds-eye view monitor is added, along with an eight-inch touchscreen with satellite radio functionality and on-board navigation. 3. All RAV4s have 1,059 litres of space behind the second row and 1,977 litres behind the first row.
2.
Since its redesign for the 2019 model year, the RAV4 Hybrid has an even better drive feel than the gas-powered variant.
PHOTO: STEPHANIE WALLCRAFT
3. price point. Despite the need to incorporate a battery, there’s no sacrifice in cargo space: all RAV4s have a segment-competitive 1,059 litres of space behind the second row and 1,977 litres behind the first row. One potential drawback, however, is that the second-row seats don’t fold fully flat, making the full use of cabin storage less practical than some competitors. Feature offerings and pricing, for the most part, are competitive. The Toyota Safety Sense 2.0 suite of technologies is standard equipment on all models, which includes lane tracing assist, lane departure alert with steering assist and road edge detection, pre-collision system with
pedestrian and bicycle detection, dynamic radar cruise control and automatic high beams. Blind spot monitoring with rear cross-traffic alert is packaged separately but is also included on every model. Android Auto and Apple CarPlay are also standard equipment, as are heated front seats and heated and power-adjustable exterior mirrors. A heated steering wheel becomes available at one grade level above the base model. For heated rear seats, it’s necessary to upgrade to the Limited model, though this is not unusual within the segment. For the XSE, a bird’s-eye view monitor is added, along with an eight-inch touchscreen with satellite
radio functionality and on-board navigation, the latter being either unavailable or at an extra cost at lower grades. Wireless phone charging, ventilated front seats and a hands-free power liftgate are part of the XSE feature set. There is one unavailable feature that buyers could regret going without: the RAV4 is built at Toyota’s manu facturing facility in Cambridge, Ontario, which is not equipped to install a panoramic sunroof. By nearly all counts, the Toyota RAV4 Hybrid offers driving enjoyment and value in all the right places and can be considered one of the best options in the compact SUV segment. FM/SP
As Tested Price (incl. freight and PDI): Starts at $34,321; tested at $43,516 Engine: 2.5L four-cylinder plus electric motor Power: 176hp (I4) plus 149hp (electric motor); 163lbs-ft plus 88lbs-ft Transmission: CVT Rated Fuel Economy (L/100km): City 5.7/Hwy 6.3 Observed Combined Fuel Economy (L/100km): 7.6 FLEET MANAGEMENT SUPPLYPRO.CA 27
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Fleet Management By Howard J Elmer
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Electrification, particularly in the truck market, has been in the headlines this past year. And, while you still can’t buy one of these electric trucks yet – they are getting closer. For instance, Rivian announced last year that Ford Motor Company invested $500 million and that the companies would collaborate on a project utilizing Rivian’s skateboard platform. This should materialize as an all-electric F-150 sometime in 2022. Lincoln is also looking at an all-electric model, but it is on hold at the moment as the market 28 JUNE 2020
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has been severely impacted by the worldwide COVID-19 pandemic. What actually may be closer to production are all-electric cargo vans. Again, Rivian, has announced a deal with Amazon for the develop ment of an electric delivery van utilizing Rivian’s platform; 100,000 of these vans had been ordered with deliveries set to start in 2021. Still, for an available-at-thelocal-dealer van it looks like Ford will be first out of the gate with an all-electric Transit van set to arrive in late 2021 as a 2022 model. Ford says this Transit will be smart and
connected, giving fleet owners technology solutions like in-vehicle high-speed data architecture and cloud-based services. But, past these future announcements, I wondered what’s available now. Well, in Detroit there is an electric pickup truck that is almost ready to go into production – one that’s built. I had a chance to actually lay hands on it recently. The company building it is Bollinger Motors, and yes, there is a Mr. Bollinger – a man who put up his own money to bring a new kind of pickup to market.
BOX-LIKE SHAPE Looking at the B2 I was struck with its box-like build which to me is reminiscent of a Mercedes G-Wagon or old-school Land Rover Defender. Good company to be in. However, this is not a steel shell; as weight is the enemy of any electric vehicle the B2 features an all-aluminum body. It has four standard doors, seats four passengers and has a six-foot cargo bed. However, it has a few smart features that will add to that space, including a lifting rear glass and a fold-flat mid-gate panel that opens up the bed to the interior. The rear passenger seats are also FM/SP SUPPLY PROFESSIONAL
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IMAGE: TOYOTA CANADA
Spotlight on the Bollinger B2
PHOTO: HOWARD J ELMER
Electric trucks and vans
At Bollinger’s headquarters a rolling B2 pickup chassis is on display. What I saw there was a truck design that can be described as the boiled down essence of practicality. Its square body is built for service and its frame, suspension and drivetrain will haul people, payload and go just about anywhere. In fact, once you get past the whole electric thing, this appears to be one tough utility truck.
1. The Bollinger B2 features an allaluminum body, has four standard doors, seats four passengers and has a six-foot cargo bed.
“In Detroit there is an electric pickup truck that is almost ready to go into production – one that’s built.”
IMAGE: TOYOTA CANADA
PHOTO: HOWARD J ELMER
2. For an available-at-the-localdealer van, Ford looks to be first with an all-electric Transit van set to arrive in late 2021.
removeable to create even more cargo room. Oh, but there is more. Because the hood does not cover a traditional engine it lifts to reveal another storage space (a 14-cu-ft “frunk”). This space also has a rear access door through the firewall which, when open, creates a 16-foot-long pass-through right to the rear of the cargo bed. Inside the IKEA-simple, clean design continues. Everything is flat or square. Controls are knobs and toggles, all well placed and easily used. Bollinger engineers seemed to find simple, elegant solutions for all the accessory needs. The feature that struck me was the window defroster. Rather than using a larger in-dash vent selector and complicated, powered duct diverter, the B2 employs a perforated cylinder that runs the length of the dashboard that spins by hand. If you need defrost you turn the holes in the one-half of the cylinder upwards, towards the glass. If you want it off, simply spin back, till it’s closed. Still, it’s not all low-tech. Above your head is a four-panel, removeable, fullglass roof – they have invested in some very eye-catching features. What was hard to see on the floor model was the drivetrain. Most of the components are run through a raised tunnel that runs the length of the truck. In fact, looking under the truck revealed a clean that is virtually flat, which explains the extra ground clearance. For the B2 that is 15.5in at the wheels (individual wheel travel is also 10in) because these electric
drive components eliminate low hanging axle supports and prop shafts. So, with that kind of clearance you’d expect some decent off-road performance. It doesn’t hurt that the B2 has four-corner air suspension, less underside hardware and the ability to raise and lower itself. Consider that driving those wheels are two electric motors, one driving the front wheels, the other the rear set. Each electric motor has an output of 300hp and 668lbs-ft of torque and spins at up to 15,000rpm. It has a typical two-speed transfer case and 2/4WD selector. With that much power pushing through wheels it should be a serious off-roader. So, while the default drive mode is a slip-n-grip, all-wheel drive setup on-road or off, both front and rear axles come with lockers. This elevates the truck to Jeep-like ability. In fact, I noted that the B2 is actively taking a page out of Jeep’s marketing book by offering an unbuttoned driving experience – its doors, windshield and glass roof panels are all removeable. So, while its crawl ratio will be substantial it’s no dog on the highway. Speed-wise the truck will be governed to a top speed of 160km/h but its ability to get up to speed is brisk. Its 0-to-100km/h time is said to be 4.5 seconds. RANGE ANXIETY According to Bollinger engineers, the B2 is equipped with a 120kwh battery pack which will have an
2. effective battery range of 320km on a full charge. Once depleted, the truck will recharge at various rates depending on what kind of charger it’s plugged into. The more common one (Level 2) will utilize 220V power and restore the battery in eight to 10 hours. If a Level 3 (called a DC Fast) charger is available this time can be cut to around two hours. Bollinger says that the B2 will have a payload rating of 5,000lbs and a tow rating of 7,500lbs – Bollinger also says that they will submit the B2 for the required SAE J2807 load testing that will verify and certify its payload and towing capacities – just like the big boys. So, while I couldn’t drive the prototype I was crawling through – Bollinger says that day is getting closer. There stated goal is to have a full production-built unit ready for the 2021 model year – so, a B2 available for purchase late this year? Maybe.
The key piece to the rollout puzzle is finding the right facility to put the trucks together. That is what they are doing right now – searching for an established partner with an existing production facility to assemble the B2. I wish them luck. FM/SP
B2 Specifications 139in Wheelbase 207.5in Length 77.2in Width (no mirrors) 89.0in Width (with mirrors) 72.7in Height 66.2in Front Track 66.2in Rear Track 52° Approach Angle 25° Break Over Angle 28° Departure Angle 5,000lbs curb weight 10,001lbs GVWR FLEET MANAGEMENT SUPPLYPRO.CA 29
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THE LAW—BY PAUL EMANUELLI
THE VALUE OF PLANNING PANDEMIC CRISIS A FAILURE IN STRATEGIC EXECUTION The impact of the pandemic could have been better mitigated had senior governments engaged in proper emergency readiness and leveraged strategic procurement planning. This article proposes a three-point plan for containing the impact of the next pandemic. THE FAILURE TO PLAN BECAME AN EMERGENCY Seeing long-term care homes spiral into death zones, shutting down schools and regular healthcare services, driving countless businesses into bankruptcy, leaving millions out of work, and forcing an unprecedented mass quarantine was not a strategy. It was a reaction, arguably even a necessary reaction in the circumstances, to a foreseeable crisis that mutated into an emergency due to a failure to plan. While some might defend this failure by arguing that governments worldwide were caught off guard, this collective inaction did not produce herd immunity. Rather, it produced catastrophic global consequences. Next time, we need to do better. Senior governments need to prepare national pandemic readiness plans and put aside their jurisdictional squabbling since pandemics are, by definition, matters of national importance. Ironically, New York State, and Canada’s two largest provinces, Ontario and Quebec, were quick to declare states of emergency and call on their national governments after failing to manage the crisis themselves. While a US Navy hospital ship sailing into New York City and deploying soldiers in long-term care homes in Canada became our reality, it is far from a well-planned strategy. Our governments should develop a real strategy to contain the next pandemic to mitigate another mass shutdown. 30 JUNE 2020
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RAISING THE BAR THROUGH STRATEGIC PROCUREMENT To avoid overwhelming our healthcare system, our governments imposed a mass lockdown to contain infections and flatten the curve. Curiously, many jurisdictions mobilized field hospitals to deal with the surge, only to see those temporary facilities shut down due to underuse while still imposing mass lockdowns. Why did this happen? It was a failure in timing. Had that surge capacity been ready when needed, we could have avoided shutting down our regular health system and imposing mass quarantine. We need to raise the bar. In the future, we need a plan to quarantine the quarantines through a three-part national response strategy: Establish rapid action field hospitals Field hospitals and related supplies should be procured well in advance to enable real-time mobilization. This would allow us to contain the spread and treat the sick without exposing our regular health system to contagion or imposing mass lockdowns. Existing local military reserves should be trained to quickly mobilize these facilities. Like military reserves, we should also train an army of medical reserves who are ready to be redeployed from our regular health system to those emergency facilities to contain the spread. These operations should be subject to regular training exercises to test system readiness. Build self-sufficiency in critical supplies We need to identify mission-critical supplies in advance and ensure that our domestic supply chains are ready to deliver those supplies during the next pandemic. This
means establishing a national plan to fund the sourcing of mission critical supplies domestically. During normal times, those supplies can be supplemented with globally sourced supplies for our regular health system. However, pandemic readiness supplies need to be produced domestically by domestically owned companies so that in the next pandemic we are not dependent on precarious global supply chains. Mobilizing mass testing Governments are scrambling to conduct proper widescale testing. Without that testing, there is little reliable real-time data on actual infection rates, no way to quickly calculate actual fatality rates among those infected, and no proactive means of preventing asymptomatic infections from contributing to community spread. This compromises the ability of governments to assess actual risk and react proportionally. Forcing everyone to shelter in place may have been the reaction to this problem, but it was not a strategy and it is not a long-term solution. As with elections, senior governments should be ready to mobilize our local community infrastructure to enable the timely mass local testing needed to contain the spread. A proactive and co-ordinated strategy would be necessary to procure testing supplies in advance to enable that type of rapid local testing. While implementing this national strategy would be expensive, we already have an idea of the far higher costs associated with the failure to plan – we are currently living it and will be paying that bill for years. With the 20/20 vision of hindsight, we can plan better for the future. SP
Paul Emanuelli is the general counsel of The Procurement Office and can be reached at paul.emanuelli@ procurementoffice. com.
“Seeing longterm care homes spiral into death zones, shutting down schools and regular healthcare services, driving countless businesses into bankruptcy, leaving millions out of work, and forcing an unprecedented mass quarantine was not a strategy.”
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2020 ASCENT
2020 FORESTER
IIHS TOP SAFETY PICK
2020 OUTBACK
IIHS TOP SAFETY PICK+
On models with specific headlights
IIHS TOP SAFETY PICK+
On models built after October 2019
Built for performance and security
This innovative active safety system is like a second pair of eyes watching out for you, warning and even aiding your ability to avoid potential danger.
Predictable handling, superior drivability and outstanding control. The full-time all-wheel drive is engineered to deliver confidence in motion.
An in-vehicle technology system that connects your Subaru to the world around you, bringing added safety and convenience to every drive.
We’ve always felt that working from the road should be pleasant, but most of all, safe. Our long-standing commitment to safety has given Subaru vehicles an impenetrable reputation for superior protection. Add to that a high resale value, impressive fuel efficiency and an exceptional total cost of ownership, and you get a fleet that’s ready to conquer new markets.
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1. ALG is the benchmark for residual value projections in North America, publishing residual values for all vehicles in the United States and Canada. For more information, visit www.alg.com. 2. Safety ratings are awarded by the Insurance Institute for Highway Safety (IIHS). Please visit www.iihs.org for testing methods.
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A Fleet That Works Overtime. We’re entering a new workday, but some things haven’t changed. That goes for your willingness to take on a challenge, and our commitment to keep driving you forward. Lower cost of ownership. The latest safety technology. Unparalleled durability. Mercedes-Benz Vans will put you on course for a stronger workday. Discover longer-lasting performance at MBVans.ca/Fleet.
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