OCTOBER 2021
NORTHERN CALLING
Bonita Nowell on her passion for procurement and love of the North Supply chain job market
Cleaning services Multimodal logistics 2021 Hyundai Santa Fe Air compressors
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IT CAN HAPPEN TO ANY FLEET’S SUPPLY CHAIN. AND IT’S PROBABLY HAPPENING TO YOURS. IT’S COSTING YOU TIME, EFFICIENCY, PEACE OF MIND AND, MOST OF ALL, MONEY. SEE IT BEFORE IT’S TOO LATE.
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VOL.63 No.5 OCTOBER 2021 SUPPLYPRO.CA COVERING CANADA’S SUPPLY CHAIN
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COVER: ANGELA GZOWSKI PHOTOGRAPHY
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FEATURES
ALSO INSIDE
7 THE HYBRID OFFICE Supply chains and working from home.
13 KEEPING IT CLEAN Partnering with cleaning services.
8 SUPPLY CHAIN EMPLOYMENT How to navigate today’s job market.
14 RFID’S TURNING POINT Pandemic boosts RFID technology in retail.
10 TWIN PASSIONS Bonita Nowell on procurement and Canada’s North.
16 UNDER PRESSURE Tips for purchasing industrial air compressors.
4 UP FRONT 5 BUSINESS FRONT 6 IN THE FIELD 30 THE LAW
18 MULTIMODAL RENEWAL The shift in logistics is anything but subtle.
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UP FRONT
CHAOTIC CHAINS Now is a chaotic and challenging time for global supply chains. So much so, it’s hard to decide where to begin a description of the situation. Yet I’ll attempt to catalogue a few of them. As I write this, a bottleneck in California means 62 container ships are waiting in the waters near the Port of Los Angeles to unload cargo. As with supply chain problems generally, several factors have conspired to create the situation. For example, the Suez Canal blockage in late March and the partial shutdowns of the Yantian and Ningbo ports in China have all contributed to the backlog. Gas shortages in the UK have caused panic buying there. The haulage industry notes that the UK has lost tens of thousands of truckers due to the pandemic, an aging workforce and foreign workers departing Britain following Brexit. Other countries, including the US and Germany, are seeing a serious shortage of truck drivers as well. The semiconductor shortage has hit manufacturers of everything from smartphones to cars. The crisis has no end in sight and will likely cost the auto industry alone $210 billion in revenue this year. Another example of supply chain turmoil involves plastic resins – tiny plastic pellets used in products including bread bags and milk containers. These have been hit by high demand, tight supply and soaring prices. The shortage has its roots begininng early last year with the spike in PPE sales, often using single-use plastic, combined with demand for plastics from consumers stockpiling products like toilet paper (wrapped in plastic) and other factors. Erratic weather has also hit supply chains. Cold weather in Texas in February exacerbated supply chain woes, for instance. Meanwhile, drought conditions have meant that Canada’s two largest railways may run out of grain to move, which in turn hits their revenue. Of course, supply chain professionals are used to dealing with unforeseen issues. Indeed, there have been many other events that have thrown supply chains off balance in the past. The 2008 global financial crisis, the eruption of Iceland’s Eyjafjallajökull volcano and the 2011 nuclear accident at the Fukushima Daiichi Nuclear Power Plant in Japan had, within a few years, ripple effects that slowed the flow of goods globally. This shows that the interconnected nature of modern supply chains, while advantageous in many ways, can also cause problems. When we’re wrapped up in such turmoil, it may seem like the volatility will never end. In a sense, that’s true; just like life, supply chains will never be completely problem free. But that’s part of the game, and something supply chain leaders are equipped to deal with. Supply chains will find equilibrium eventually as some of the challenges I’ve noted fade. That may take some time, but it’s going to happen. Until then, supply chains are guaranteed rarely to be boring.
EDITOR MICHAEL POWER 416-441-2085 x7 michael@supplypro.ca PUBLISHER ALEX PAPANOU 416-441-2085 x1 alex@supplypro.ca DESIGN Art Direction ROY GAIOT Design Consultation BLVD AGENCY CUSTOMER SERVICE/PRODUCTION LAURA MOFFATT 416-441-2085 x2 lmoffatt@iqbusinessmedia.com ASSOCIATE PUBLISHER FARIA AHMED 416-919-8338 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, Program Support, Purchasing and Materials Management— City of Toronto JEFF RUSSELL Corporate Purchasing Manager & Inventory Manager, Miller Waste Systems Inc. iQ BUSINESS MEDIA INC. Vice President STEVE WILSON 416-441-2085 x3 swilson@iqbusinessmedia.com President ALEX PAPANOU
PUBLICATION MAIL AGREEMENT NO. 43096012 ISSN 1497-1569 (print); 1929-6479 (digital) CIRCULATION Mail: 126 Old Sheppard Ave, Toronto ON M2J 3L9 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. © 2021 iQ Business Media Inc. All rights reserved. Printed in Canada.
MICHAEL POWER, Editor 4 OCTOBER 2021
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BUSINESS FRONT—BY MICHAEL HLINKA
INFLECTION POINT PANDEMIC RESPONSE AND AFGHANISTAN RETREAT WILL SHAPE HISTORY Canada has been the luckiest country in the history of Western civilization. We separated peacefully from Great Britain when it was the world’s most powerful and influential nation. Geography placed us beside the United States of America. From the end of the Second World War onwards, it was indisputable that America was the globe’s foremost economic and military superpower. Canada has been a “free rider” when it comes to protecting itself, which makes all thinking Canadians very grateful, allowing us an almost unimaginably good standard of living and quality of life. That said, my guess is that historians will look back at 20202021 and realize that it was an inflection point in world history. A combination of the West’s response to COVID-19 and America’s retreat from Afghanistan has signalled something important: The US is in decline, both economically and militarily. And because nature abhors a vacuum, it is likely that China will assume the role of world leader and will project its power and interests in a more robust manner. That will have myriad impacts on us, including economic ones. I want to start with the response to COVID-19. In 30 years from now, North Americans will look back and realize that what we termed a “pandemic” was just a slightly more virulent strain of the flu. We will have learned to live with it. If we’re smart, we’ll focus our efforts on living healthier lives which means eating better, moderate exercise and more sleep. But in our panicked response we shut down the economy and burdened
ourselves and future generations with a mountain of debt. If history tells us anything, it is that great empires generally collapse in on themselves because of their inability to restrain their spending. Then there’s Afghanistan. When the US went into that country 20 years ago, it was with a clear mission, which was to bring Osama Bin Laden to justice. That effort failed and then the reason for being there changed. It became about nation building. America poured a tremendous amount of resources into Afghanistan and immediately upon withdrawing, its puppet government collapsed. The US appeared both weak, ineffectual and, more important, the rest of the world looked at it and realized that it could not be trusted in a way that say, China can be. CHINA’S INTERESTS There’s an important reason for this. Western democracies largely fashion their foreign policy to serve their domestic political ends. In the aftermath of the pullout from Afghanistan, I heard the current US administration urge the Taliban to be “inclusive” when it formed its coalition. It sounded ridiculous to any thinking person but it is instructive. This is what the base of the Democratic Party cares about. It is the core of the coalition that propelled Joe Biden to victory in the recent presidential election. But in its foreign policy, China is not similarly encumbered. It will happily work with any government if China’s national interests are served. Then what will define China’s vital national interests? I’m an outsider, of course, but it seems
to me that their leadership doesn’t even pay lip service to “values” like inclusiveness or equal rights for minorities. This makes it a much more reliable partner. China will ask other countries to keep their borders open for trade and the quid pro quo will be that you will not criticize what we do internally, and we will not criticize what you’re doing. And that’s a very popular proposition for authoritarian regimes which remains the dominant global governance model. Here’s what this means for Canadians and the way we’re going to live in the future. There are certain freedoms we’ve taken for granted in my lifetime: freedom of speech, freedom of association, and control over your own body. Those freedoms will increasingly be threatened as the elites look at the Chinese model and see its success. I found it telling that rapper Nikki Minaj was suspended from Twitter because one of her tweets ran contrary to the “party line” around COVID-19 vaccinations. I mean this unironically, if Nikki Minaj can be silenced, all of us can. But here’s the trade-off. We will continue to be supplied with cheap manufactured goods which means we will continue to be reliant on China in a way we used to rely on the US. I don’t see Canada addressing its national debt in any serious way, which means that we’ll look to inflate our way out of it. Property is going to become increasingly expensive. This is a secular trend that will mean that home ownership will become increasingly difficult. It will effec-
Toronto-based Michael Hlinka provides business commentary to CBC Radio One and a column syndicated across the CBC network.
“Because nature abhors a vacuum, it is likely that China will assume the role of world leader and will project its power and interests.”
tively be the end of what was once understood as the North American dream. This is not a particularly optimistic vision of the future. But history isn’t always pleasant. SP SUPPLYPRO.CA 5
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IN THE FIELD—BY MAHMUD KHAMIS
ONLINE WORKFORCE MANAGING TEAMS IN A POSTPANDEMIC WORLD Utilizing teams is a necessary component of conducting daily operations and addressing changes in the business environment. Globalization has forced companies to respond, change and adapt to ever-increasing competition in the marketplace. Virtual teams integrate the human element with technology. This article looks at how international virtual teams deal with cross-cultural relationships, share knowledge and integrate and adopt technology – all while facing the challenges of communication and end-user satisfaction. Before the pandemic, these teams lacked training in operating virtually. This has no doubt hampered many interactions, as they struggle to embrace the reality of the situation. This journey actually began at the turn of the century, with the number of employees working remotely from 2005 to 2012 increasing by 79.7 per cent. The prevalence of remote work also grew by 91 per cent between 2010 and 2020. Before the pandemic, the appeal of remote work was that the model provided employees with a convenient change while accommodating personal scheduling, health, and work-life balance while reducing commuting frustration. GLOBAL EXPERIMENT A recent report by the Boston Consulting Group states that the COVID-19 pandemic has led to economic, health and social devastation while creating pockets of unprecedented opportunity, all as the world ran its biggest-ever workplace experiment. The results of 6 OCTOBER 2021
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this experiment have yielded some fascinating insights as to how organizations work. While some respondents did report a drop in productivity and employee satisfaction, a surprisingly large number stated that they have been able to maintain or even improve both productivity and satisfaction. This study also revealed a significant shift in employee expectations regarding the future of work, an appetite for flexible workplaces and an increased openness and adaptive attitude among managers in meeting organizational challenges and goals. Additionally, the study reports that 75 per cent of employees stated that during the pandemic’s first few months, they were able to maintain or improve productivity (on individual tasks), however homebound fatigue eventually impacted these tasks. The study explained that for employees engaged in collaborative tasks (including exchanges with coworkers, working in teams and interacting with clients), their contributions were maintained. In organizations where managers were engaged in the new remote-hybrid workplace and in developing collaborative models with their teams (anticipate and manage) most concerns amongst employees were resolved. This led to sustained higher productivity. An impressive 79 per cent of respondents indicated they were satisfied or doing better while able to maintain or improve productivity on collaborative tasks. This highlights the need for social connectivity within teams, which correlates to reported satisfaction. Meanwhile, social disengagement shows decreased productivity –
also correlated to dissatisfaction with an employee’s performance. The year 2020 was pivotal. Virtual work was the modus operandi in keeping many businesses running rather than face annihilation. Virtual teams were often the only choice organizations had when dealing with novel global challenges. LEARNING IS KEY Learning is vital for cross-functional teams in situations where businesses must react fast to provide the best results within tight deadlines. Collaboration across boundaries prevents non-productivity, preserves competitive pressure and unleashes ideas to manage unchartered waters. Many managers in various countries had to define and develop creative strategies to communicate across functions by forming ad hoc virtual business teams and to try to understand the different sociocultural challenges. They had to do this while addressing the individual contexts present in each employees’ circumstances. This ability, or inability, of the manager to communicate and understand the different dimensions of the business and personal needs of their team members would decide the success of the organization. Having the opportunity to work in a virtual environment can go a long way in preparing an organization to have the open-mindedness and flexibility necessary to be successful on the fast-paced highway to the virtual world. Virtual communication training may prove to be a valuable managerial toolset to help people develop the skills they
Mahmud Khamis is a supply chain professional in Mississauga.
“Virtual communication training may prove to be a valuable managerial toolset to help people develop the skills that they need.”
need to communicate effectively and promote the out-of-the-box thinking that is so vital to any organization’s success. As we set forth on new ways of living and working, managers in particular must understand that a workplace is more than just where an employee gets a paycheque. It is a social web, a beehive of activity, a place to escape loneliness, sometimes a safe place from abuse, a place to feel creative and many times a place where we come to contribute. Whether working remotely or onsite, those are the needs of our valued employees. As part of the team, we must meet those needs in a creative and stellar working environment. SP SUPPLY PROFESSIONAL
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BY LISA FENTON
HYBRID WORK MODEL HOW TO BEST HANDLE WORKING FROM HOME With so much uncertainty and no previous case studies to consult, many supply chain leaders have more questions than answers regarding work-from-home arrangements. If we don’t want mistakes or frustrations from internal collaborations to spill into our external collaborations with suppliers and partners, we must find ways to lead with compassion while looking after our staff and culture in a hybrid work environment. Questions include, what does a hybrid work environment mean to your business? What might be the impact on strategic deliverables and workplace policies? What practical considerations can be made for hybrid arrangements to work? It’s challenging to take a holistic view of innovative technology and weave it into operations to improve networks, processes and services while making a sustainable impact. Steps to a working solution to avoid hidden inefficiencies include
embracing innovation; a data driven approach; empowering employees; promoting transparency; and preparing for the unexpected. As well, providing equitable solutions for circumstances that may hinder an individual’s ability to return, such as public transit, child and senior care, and health concerns need to be considered. Seven areas to explore include unconscious bias; risk of dilution of culture; seamless connectivity; transparency; deep engagement; employee wellbeing; and physical office space. Unconscious bias – How can we treat our remote employees the same as those in the office? Risk – How can we nurture and protect our employees while ensuring we don’t dilute our culture? Seamless connectivity – How can we invest in technology and digital tools to support a hybrid model? Transparency – What processes and procedures can be put in place to ensure actions and outcomes are shared with others while avoiding silos? Deep engagement – How can we put in place ways to promote “away days” and create bonding? Employee wellbeing – How can we support mental and physical health and provide our managers with skills to identify and support individuals who may be struggling with mental health? Physical office space – How can we create spaces and promote quiet zones? How can we ensure safe and efficient facilities? How do we navigate this volatile, uncertain, complex and ambiguous world? CORE PRINCIPLES A process-based approach with a focus on core principles to include a planned re-evaluation and reassessment will help to balance
“Supply chain employees have shown they can collaborate and share information with stakeholders across functions to achieve the organizations goals.”
our employees’, customers’ and organizations’ needs. Five keys to success include limited virtual meetings and purposeful, cross boundary collaboration; communities of practice (cross functional); employees with knowledge of how to use the apps; employees with clear guidelines of how to decide between different options and channels; and employee awareness of how to collaborate and ask questions and how to process requests. Organizations can benefit from hybrid arrangements by realizing increased motivation; higher productivity; access to a wider talent market; decreased infrastructure costs; reduced turnover; revived workforce; and more autonomy. From a productivity perspective, they can see an increase in productivity due to individuals having more flexibility to get the work done when they are most productive. As well, they benefit from the ability to work cohesively with teams and get more to the point, enabling work to be done quicker and more efficiently with fewer interruptions. Supply chain employees have shown they can collaborate and share information with stakeholders across functions to achieve an organization’s goals. Supply chain employees are focused on creating value, mitigating risk and delivering competitive advantages. Offering a hybrid model will let them realize some commuting savings, increased fam-
Lisa Fenton is supply chain manager at Rapala VMC Corporation.
ily time, fewer interruptions and distractions, freedom and increased employee experience and possibly more work-life balance. When research firm APQC asked about the biggest benefits of virtual collaboration in the workplace, 65 per cent of respondents said they appreciate the time they save commuting and travelling. The next question is how to come up with an integrated solution and bundle potentially competing elements into alternatives that have the same value to the group. It will come down to different cultures having different focuses. Productivity focused cultures will focus on what you produce. People-focused cultures will home in on having the right people and the belief that they can tackle any issue. Culture-focused organizations will target how you work. Once you get into collecting problem-solving tasks, realize the differences and recognize the values in each position, collect and make sense of the data with a focus on tensions. Next comes negotiating trade-offs within your organization. There is increased consumer awareness for organizations to be more human and invest in their employees’ wellbeing while limiting environmental impacts. Whatever choice your organization makes, it must be regularly revisited and priorities or options changed based on the market, labour pool and culture. SP SUPPLYPRO.CA 7
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BY MICHAEL POWER
to be in the office five days a week,” Naidu says. “They’re in a position where they have the flexibility. So, if they’re not getting the flexibility, they’re very less likely to move.”
SHIFTING CURRENTS
KEEPING UP WITH TODAY’S SUPPLY CHAIN JOB MARKET Both the way people work and the job market have changed over the past year and a half. Work-fromhome arrangements to Zoom-based job interviews have altered how we look at our careers. While these trends are undeniable, what the future will bring remains less clear. Many employers are still considering whether employees should return to work this fall or early next year, says Sean Naidu, business manager, procurement/purchasing at Hays Canada, a recruitment firm. While some employers still want employees to be at the office Monday to Friday, many companies have accepted working from home, at least some days, Naidu adds. Many companies have seen an increase in productivity with staff at home. But the decision depends on the sector. While candidates are still applying, and there are ample positions available, it’s more difficult to find people in the market switching jobs right now, he says. Candidates are considering more factors before jumping into the job market. Rather than only thinking about salary and location, they now look at flexibility as well. “There’s still sort of the looming uncertainty,” Naidu says. “From 8 OCTOBER 2021
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a candidate’s side, the past year and a bit has created comfort for people to look at working from home and needing the flexibility of being able to work from home as well as from the office. There are most definitely candidates that are preferring to have that hybrid model as opposed to being in the office five days a week.” Companies with employees returning to offices are taking social distancing seriously while
ensuring their employees are protected, Naidu says. There’s uncertainty surrounding returning to work, wearing masks at the office and how that affects interactions. For many job seekers, the option of working from home, either every day or a few days a week, can mean the difference between accepting a new position or staying put. “There are candidates that have rejected companies that need people
CANDIDATE HUNT Neil Drew, director at Winchesters, a recruitment consultancy, agrees that a desire to work from home has had a “massive” effect on the job hunt for procurement and purchasing professionals. Organizations insisting their employees return to the office full time are seeing challenges in finding candidates, Drew says. Many people have adapted to a hybrid work arrangement, with a few days in the office and a few working from home. “But even then, lots of candidates that would have been available to your role a year ago aren’t now,” he says. “We’ve definitely had roles that would have candidates that have been offered a job and then, with a slight change in the physical office situation, the candidates withdraw. The more flexible you are from a location point of view the easier it will be to recruit.” Overall, the job market is short on candidates, meaning more opportunities for those seeking a new position, Drew says. Now represents the calm before the storm, and Drew expects a large increase in available jobs in the fourth quarter. Children returning to school means hiring managers and candidates alike have more time. Barriers to job hunting have fallen with many professionals working at home, Drew notes. People have more private time in front of their computers to not only job hunt but to conduct uninterrupted Zoom interviews. But while opportunities abound, the situation hasn’t led to as many people job hopping as might be expected. “What we’re actually seeing is people are looking, but when push comes to shove, they don’t necessarily go through with it,” Drew notes. “There’s still some uncertainty out there and people kind of realize the grass isn’t always greener and maybe the issue you had four weeks ago when you applied to the job, you actually don’t have now, and actually it’s not so bad.” Drew points out that many organizations are looking for candidates SUPPLY PROFESSIONAL
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who are adaptable. In a changing environment, the pandemic still represents a challenge – those who adapt well to change have an advantage. Many organizations are also looking for candidates who can prove that they’re interested in taking the position, rather than just testing the waters. “If you are a candidate looking for a job, show keenness and awareness, get back to people quicky, book your interviews quickly, do follow up, email thank you, all that sort of stuff – it might put you at a strong advantage,” Drew says. “Even if you’re not the best candidate for the job you might still get it because you’re the more reliable candidate versus the maverick who you can’t rely on.” CONTINUOUS LEARNING For the job seeker and the happily employed alike, Tim Moore, director at Supply Chain Jobs Canada, stresses that supply chain professionals should focus on their careers and keep skills sharp. That applies to
“The world is changing, and lately it seems at a much faster rate, and you’ve got to protect yourself and your career in order to be in demand for years to come.” those who have earned their Supply Chain Management Professional (SCMP) designation from Supply Chain Canada, Moore notes. “The world is changing, and lately it seems at a much faster rate, and you’ve got to protect yourself and your career in order to be in demand for years to come,” he says. That changing world can mean once-common practices can
go wrong quickly, Moore says. An example is single sourcing – once considered the path to deeper, more collaborative supplier relations is now seen as risky due to the pandemic. Specialized coursework offers advanced strategies and tools to guide supply chain professionals through such changes. Those with a supply chain designation like the SCMP can command a higher salary and better benefits, Moore says. But additional courses and education can keep employees and candidates relevant. “Today, employers demand faster results and proven strategies be put in place and may not wish to wait years for a return on their investment,” he says. Certification also acknowledges a commitment to professionalism, Moore notes. Whether a candidate was recently laid off due to the pandemic, is transitioning to another opportunity or establishing a consultancy, having the extra edge that
certification provides can make a big difference. “Often, certification enables a faster way to move up the corporate ladder of success,” Moore says. “In the past, it may have taken years to gain the appropriate experience and learn the requisite skills.” Certification helps not only supply chain professionals but also the firms that hire them, Moore notes. Supply Chain Canada, as the certifying body, acts as an independent, third-party authority that can attest that a practitioner meets high standards and has a base set of skills. “For the candidate, holding the designation and sending in a resume for a job, it becomes a matter of ‘hey, don’t take my word for it that I’m good. Look at my educational achievement and deeper commitment to my profession,’” Moore says. “For the firm, it can be a matter of additional peace of mind, knowing that the candidate has one more advantage.” SP
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BY MICHAEL POWER
NORTHERN CALLING
BONITA NOWELL COMBINES A LOVE FOR CANADA’S NORTH AND A PASSION FOR PROCUREMENT The North has long called to Bonita Nowell. Although the Yellowknife, Northwest Territories resident and Indigenous Northerner has felt the pull of the North for many years, and even represents the region as president, Northern Territories Institute of Supply Chain Canada, she began her decades-long procurement and supply chain career further south. Nowell began that career working in the 1980s at the Grand Prairie General Hospital in Grand Prairie, Alberta, about a four-and-half hour drive from Edmonton. Her first position at the hospital was part time, as an operating room unit clerk who scheduled surgeries. While she was an employee there, one of the ongoing issues that the department faced was a need to improve the delivery of medical and surgical supplies for the operating room. “We would get a patient, and that patient would come in and all the paperwork had been done. They’d get them on the stretcher, get them in the operating room and realize they didn’t have a piece of equipment, a supply that 10 OCTOBER 2021
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we needed for it. And this was never ending,” says Nowell, a sixth-generation Northerner and member of the Northwest Territories Métis Nation. Part of the hospital’s strategy to ensure ample supplies included adding a new, part-time buyer position to the materials management department. The staff recommended Nowell for the job due to her hands-on understanding of the needs of the operating room. She landed the job and, before long, was promoted to a full-time senior buyer position. She felt the importance of the role on a deeply personal level. “What if one of my family members came in on an emergency and there wasn’t the required piece of equipment or supply?” Nowell says. “I carried that throughout my career – how important medical and surgical supplies are to life. At any time, it could be my family member. What could I do to mitigate that?” In various ways, Nowell’s time at the hospital proved instrumental in helping her to develop her procurement career. When the hospital estab-
DUE NORTH In 1987, Nowell returned to Yellowknife, intent on continuing her work in procurement. From there, her career flourished over the next three decades while she was employed mostly at the Government of the Northwest Territories (GNWT). She has since become an awardwinning collaborator, public policy and post-secondary program manager, a Northern expert on public procurement and an advocate of procurement and supply chain management education. Among her first positions after arriving home was as an inventory controller with the City of Yellowknife. About a year later she left to begin working for the territorial government. She worked in three departments during that time: public works and services, government services, along with the department of industry, trade and investment. Nowell was the acting regional manager of material management before moving into the role of manager of the government of the Northwest Territories business incentive policy, which is a procurement preference policy. From there, she was promoted to manager, GNWT procurement policy reporting and standards. Her final position before leaving the public sector was eight years with Aurora College, managing a program called Northern Adult Basic Education (NADE). In that role, Nowell’s responsibilities involved managing the priorities for the multi-million-dollar program and working with various stakeholders like contractors, consultants and others. Her work involved participating in meetings, developing and testing new curriculum and piloting that curriculum in targeted communities. She also collaborated with two other major Northern colleges. During her time at the college, Nowell delivered 147 projects, co-authored 54 post-secondary publications and introduced approaches that the college adopted in project management, supply chain management and procurement management. SUPPLY PROFESSIONAL
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ANGELA GZOWSKI PHOTOGRAPHY
lished a product evaluation committee, Nowell became its secretary. The committee’s work included working to keep supplier visits to doctors’ offices and surgery units more coordinated. It was a role that Nowell found fulfilling. Nowell also worked to develop and implement an inventory system for the facility and to establish a new product evaluation committee. She cooperated with the project management team on the building of a new hospital, the Queen Elizabeth II, for which Nowell purchased all of the commissioning equipment and supplies.
ANGELA GZOWSKI PHOTOGRAPHY
She retired after 33 years in June of 2021, and Nowell has since established her own procurement consultancy. Her first contract involved completing a procurement gap analysis. Coming from the public sector world, Nowell says that she had to ensure that she geared her recommendations to the private sector. Even the client for that first contract, when Nowell asked what the project’s biggest challenge was, noted that she should avoid focusing those recommendations to government. Yet when she submitted her work, the client accepted it without changes. The client even mentioned the ease with which she had transitioned to the private sector. CONTINUOUS LEARNING Education has always been important to Nowell and she considers herself a life-long learner. In 1994, she became the first person in the Northwest Territories to earn the SCMP professional designation from Supply Chain Canada (at the
time, it was known as the Certified Purchasing Professional, or CPP designation, bestowed by the Purchasing Management Association of Canada, or PMAC). Along with that designation, Nowell has earned the Executive Manager’s Leadership Certificate from the University of Alberta’s School of Business; a Leadership Certificate from Vancouver Community College; a certificate from the Government of the Northwest Territories in IT project management and a creative writing certificate from the University of Calgary. She also advocates for education among her procurement and supply chain peers. This advocacy has led to 21 members earning their SCMP designations and over 40 members getting a diploma in supply management training in Northern Canada, Nowell says. Nowell has received several awards during her decades in the field. In 2000, she won the Northern Manufacturer’s Association Appreciation Award, followed in 2002 by the GNWT
Deputy Minister’s Special Recognition Award for collaboration and public consultation on the GNWT Business Incentive Policy. In 2016 she took home the NWT Premier’s Award of Excellence for Collaboration as well as the Aurora College Board of Governors Service Quality Award for Program Governance, and in 2018 received the Most Thoughtful Humanitarian Award from the staff at Aurora College Yellowknife Campus. “Of these awards, the 2016 NWT Premier’s Award of Excellence for Collaboration and my participation on the NWT ASETS-Aurora College Partnerships were especially meaningful, as I was the first ever SCMP to receive this award in the Northwest Territories,” she says.
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The pandemic has affected every aspect of business over the past year and a half, and procurement and supply chain management are no exceptions. For Nowell, the pandemic has given her the opportunity to reflect on what is important to her, both personally and professionally. So often, people spend their time with busy work, running around like hamsters on a treadmill, she says. It’s difficult to stop and focus on which direction you would like your life and career to take. The pandemic, and the downtime from being so busy, has allowed her to refocus. She has since focused her energy on her consultancy, which works to support private sector companies as they work through their post-pandemic rebuilding efforts. “‘The Great Global Pause’ has really helped me to make that decision,” Nowell says. “That reflection over this past one-and-a-half years really contributed. I’m recognizing private sector really needs some expertise. I haven’t even gotten my banner out and I’ve already got three contracts under my belt, and I just retired officially in June. I’ve been doing procurement gap analysis, helping clients with planning, looking at their possibilities, and pursuing funding. “I’m an award-winning collaborator and an education advocate, but I also draw on my creative strength, which is planning, planning, planning.” The place of technology in today’s world, including for networking, is hard to deny. But for Nowell, nothing has been able to beat word of mouth for letting people know about her business. These days, while people may spend a lot of time on social media, more direct communication remains superior, she says. That’s especially true in Canada’s North and in Yellowknife, which Nowell describes as a “mini-Toronto.” The city hosts people from around the world, and those people boast a broad range of expertise, knowledge and experience, she says. Pretty much any lifestyle one could imagine is attainable there, whether it’s to live on a houseboat, in a house, a condominium, or even a cabin along the highway. Yet, there are differences between working in procurement and supply chain in Canada’s Southern regions compared to its North, Nowell says. In the South, tasks tend to be siloed, and someone in a specific role may perform duties only related to that position. In the North, however, many roles don’t have access to the personnel needed to delegate tasks in that way. Rather than focusing on one or a limited number of products and services, Northern procurement professionals often work across many 12 OCTOBER 2021
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“I can promise you that you will establish life-long connections with colleagues, because they are part of one of the fastest growing professions in the world.” categories. It can also be challenging to get certain goods or services in the North. Or, if certain goods are available, the challenge may arise in getting them to where they need to be, Nowell says. “I truly am about the North and for the North. If I can help Northerners in the private sector I look forward to that opportunity,” she says. “I look forward to continuing to represent the North at a national level with Supply Chain Canada and continuing to collaborate with my colleagues at other institutes.” Nowell is a sixth-generation Northerner, a member of the Northwest Territories Métis Nation, and the eldest of 10 siblings. She is also a family historian. She is currently working on her first creative non-fiction manuscript in the form of a family history. The project had long been something she had wanted to take on. Returning to Yellowknife provided the context she needed to get going on the manuscript. Yet, in doing research for the project, she noticed that the writing on the subject, going back a full six generations, was written primarily from a patriarchal perspective. Nowell wanted to write a history of the family from the perspective of women, illustrating the role they played in society and that of the North, across those generations. Along with creative nonfiction writing, Nowell has long taken an interest in flying. She has held a private airplane pilot’s license since 1990. She recalls that the song Flying On Your Own, by Canadian singer Rita MacNeil, served as a theme song of sorts during her training. While she maintains the license, Nowell hasn’t flown in quite some time. “We have a cabin and my husband (said) it would be nice if you could resurrect that. I said, ‘yeah well, maybe if you could buy me a plane, because renting one would be very expensive!’” she jokes. Nowell and her husband, Howard, built the cabin together 14 years ago, she says. Like all cabins, that project needs ongoing maintenance
and new structures built. The couple has discovered a shared talent in doing so, Nowell says. “Our latest project was building a cedar sauna,” she says. “It took us months and months of planning and involved very complex logistics to get the supplies out to the cabin. Today, one of our favourite things to do is have an evening sauna under our Northern Lights.” Nowell’s husband also works in supply chain, as does the couple’s daughter, Angela. Both family members are superintendents in different mines. “My husband is a former fire fighter,” she says. “We’re part of civil air search and rescue and have been for over 20 years. Our daughter is a member of the emergency response team and is pursuing that skill.” CAREER ADVICE For those looking to enter the procurement and supply chain management fields, Nowell has a series of promises for what the field has to offer: “I can promise you that you will never be bored,” she says of the profession. “I can promise you that you will grow exponentially, personally and professionally. I can promise you that education in supply chain management will benefit you and your family. I can promise you that you will establish lifelong connections with colleagues, because they are part of one of the fastest growing professions in the world and share the same values.” Nowell counts herself lucky that she has spent most of her career working with excellent colleagues who share her outlook on the profession. There’s a quote from American writer Maya Angelou, stating that while most people won’t remember what you said or did, they remember how you made them feel. This quote stands out for Nowell as among her favourite. Those working in supply chain do well to feel good about what they’re doing, as well as to realize that the possibilities in the field are extensive. “And to be a good person along that way,” she says. “Be the best that you are. Always put your best foot forward, no matter what’s going on – it will always steer you right.” SP
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BY ISVAR PRASHAD
CLEANING SERVICE PROVIDERS AS FACILITIES PARTNERS STEPS IN PROCURING CLEANING SERVICES Over the past year and a half, we have all had to adapt. People have settled into routines of Zoom calls on the sofa and lunches at their kitchen table. It has been a time of introspection and reckoning – solutions that worked yesterday will not work today; and now you have been given the task of welcoming employees back to the office, ensuring they feel safe and supporting them. Hiring the right cleaning service provider is your first step to ensuring you do it right. Although cleaning may not be your business, it matters. A good cleaning company is an essential partner for your building. How do you choose the right cleaning services provider? The first step is to ask yourself some questions and consider what you have now.
Why are you looking to make the cleaning change? Is it costsavings? Is the contract up for renewal? Is it because of the quality of work? Or do you want to explore options? The likely answer is all of the above, and maybe you have no relationship with your cleaning company. The foundation for all great partnerships is respect and connectedness. How much do you know about your cleaners? Do you refer to them by name or as the “cleaners”? What time do they arrive? How long do they stay? How much do they know about your needs? A good cleaning company is interested in serving you, listening and glad to clean. Their engagement will show if they move from a problem to a solution quickly, be proactive in managing expectations, and care that they help you win. To see if they care, peek inside the janitors’ closet. It is not only where they store their tools; it’s their office. A clean, well-organized closet shows you if they care about the work and take pride in the profession. A disorganized, dirty room not only is unsafe and unhygienic, but demonstrates lack of interest. ASK THE END USER Now that you have decided that change is needed, now what? Ask the customer. One of your best resources is the people who interact with the space daily. A survey of your people will tell you what didn’t work, what worked and what they would like to see added. Creating a cleaning committee – an employee-led group that provides feedback on cleaning – is another excellent tool to help understand what’s most important to your people. It also allows them to feel like they are part of the process. Professional janitors train to handle cleaning chemicals, supply professional-grade equipment and are certified in all safety requirements. This training also includes knowing how to perform ergonomic cleaning – the skills needed to tackle the
most challenging jobs effectively and efficiently. The right company for you has skilled and well-supported people. THE RIGHT FIT A great website, reports of millions of square feet cleaned and years in business mean something, yet it doesn’t tell the whole story. It is important to ask critical questions to test your prospective cleaning partner’s reliability and ensure they have the right cultural fit. What is their staff turnover rate? What is their account retention rate? What is their process for hiring? What are their thoughts on environmental stewardship? Do they have a safety and health program? How about a diversity strategy? The pandemic has changed the way people work and what they expect. Organizations now look to facilities managers to address concerns about hygiene and cleanliness in the workplace. To help set clear expectations, a service level agreement is a must. An SLA is a shared understanding between the building manager and the cleaning team of what will be delivered. It provides a standard for evaluating results by detailing components such as areas to clean, tasks involved and the frequency of the work. A professional cleaning company will ask you for your SLA and offer to build one for you if you don’t have one. Next, ask your cleaning company for their transition plan. A smooth transition is essential to onboarding. The aim is to minimize stress in the workplace and allow you to keep your business focus. A plan should include a pre-walk with the site manager, a review of requirements such as times to start, keys/code access and the delivery of supplies. It also will include introductions to the new cleaning teams, designating a contact per-
Isvar Prashad is founder of The Carter Benette Group, a commercial cleaning service.
son and scheduling facility walk-throughs. Check in with progress and ask for adjustments. Part of good onboarding is establishing weekly and monthly reviews and using your SLA will give you a roadmap to measure performance. Typically, a new team will take from one week to a month to settle into their new routines. A good launch plan has a solid people process, including hiring effectively, pre-training thoroughly and supplying equipment. You should see improvements reasonably quickly. Your new cleaning team should accept feedback and make changes quickly. If there is ongoing inconsistency in tasks performed, frequent changes in staffing, or slow communication, it might be time to request a meeting with the account manager. Lastly, if attempts fail to find a remedy, it’s good to keep in contact with the other companies you considered. If a change is needed, do it quickly and as smoothly as possible. Procurement, facilities and purchasing managers are all on the front lines of this return-towork phenomenon. You do not have to be there alone if you choose the right cleaning service provider. SP SUPPLYPRO.CA 13
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BY JACOB STOLLER
A TURNING POINT FOR RFID? THE PANDEMIC HAS ACCELERATED RFID ADOPTION IN RETAIL SECTOR The radio frequency identification (RFID) tag meets all the criteria of a mature technology – it’s a commodity item that has changed little in recent years, and it’s a half century old. “RFID is pretty straightforward, so it hasn’t really changed,” says Mike Daly, vice-president of sales at Montreal-based automation solution provider Rotalec. “The only things that have changed are the speed and the competition. Ten years ago there were three or four main competitors, and now there are hundreds.” As the technology has matured over the past 20 years, infrastructure costs have plummeted, multiplying the opportunities for profitable deployment. “RFID is a fairly old technology, however, it seems to be making a comeback,” says Kristi Montgomery, vice-president, innovation, research & development at Chattanooga-based Kenco Logistics. “When RFID first came out, you had very rigorous infrastructure requirements for being able to read those tags. I think what’s changed is that it’s become much more flexible.” Unlike bar codes, which are scanned visually, RFID tags or labels contain tiny programmable microchips that relay identifying information to a scanner or reader. Passive RFID tags, the predominant category in supply chains, utilize the energy from the scanning signal to send 14 OCTOBER 2021
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their identifying information back to the code reader. While range is limited to ten centimetres, the device doesn’t have to line up with the code precisely, making it easier to automate the scanning process. Price points for printing and reading devices are now equivalent to common desktop computing devices, making them affordable for most businesses. Tags and labels, which are available in a variety of materials, cost as little as 10 cents apiece. Active RFID is the other category. With this technology, the tag contains its own power source and transmitter. Costs per tag are roughly a hundred times higher, but the range is much greater, making active RFID suitable for automated tracking of large assets such as railway cars. What makes passive RFID particularly attractive for supply chain operators is that it can deliver substantially more information than bar coding. For example, a bar code on a clothing item can only relay generic product information, while an RFID label can provide unique identifier that distinguishes the item from similar items on the shelf. Retail appears to be taking the lead in a resurgence of interest in RFID. In a global survey of retail executives that was released in December 2020, Accenture Research found that in North
America, 47 per cent reported full adoption of RFID, up from 28 per cent in 2018. The results, the study says, corelate with a strong increase in omnichannel capabilities such as buy online pickup in store (BOPIS), mobile apps, and home delivery – capabilities that saw a dramatic upswing during 2020 on account of the pandemic. The study also found that 82 per cent somewhat or strongly agree that RFID is essential for implementing emerging technologies. “Radio frequency identification technology is a key to achieving real-time inventory visibility and thus to optimizing omni-channel fulfillment,” notes Jordan K. Speer, research manager, global supply chain for technology research firm IDC. If RFID is a lynchpin for deploying cutting edge supply chain technology, blockchain-enabled traceability throughout the entire supply chain might be described as the ultimate goal. “The biggest issue today, and this is where blockchain may help in the future, is visibility,” says Montgomery. “Even if I have an RFID tag, how do I force the ability to read that tag and capture the information all along the supply chain? I think blockchain has a long way to go, but I certainly see the implications of blockchain, giving us much more real-time traceability for product end to end from point of manufacture to point of delivery to the consumer.” SUPPLY PROFESSIONAL
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Another piece of the puzzle may be improvement of the tags themselves, particularly active tags, which are currently cost-prohibitive for most applications. “We’re getting better because the infrastructure is better,” says Montgomery, “but we still have a way to go on the RFID tags themselves. How do we lower the price point for active tags so that we now have full visibility all the time to where everything is?”
“The key, ultimately, is establishing a collaborative approach that improves the end-to-end efficiency of the entire supply chain by leveraging RFID technology.”
BARRIERS TO ADOPTION Many expected RFID adoption to explode when Walmart mandated it in the early 2000s, but despite the reduced costs, ease of implementation and dramatically increased benefits, adoption is not what its proponents had hoped for. “It’s relatively low cost, the infrastructure to capture it is not that expensive any longer, and there are so many benefits,” says John McKenna, CEO of McKenna Logistics Centres and professor in Humber College’s Supply Chain Management Program. “So, I really don’t understand why it is not being adopted sooner or faster.” One of the challenges is determining which supply chain stakeholder should install the tags. For a retail supply chain that attaches a price tag to each item, the step is not difficult to justify. For a 3PL like McKenna Logistics, manually attaching tags to incoming products would be cost prohibitive and of little benefit because it is so far downstream when shipping to the retailers. “If the tag was placed when the product was manufactured, far upstream, then all the links of the supply chain would benefit with faster shipping and receiving as well as more real-time data sharing opportunities,” says McKenna. Presently, many consumer goods have RFID tags attached or embedded in the finished goods when produced. Unfortunately, those RFID tags have the single purpose of controlling loss prevention by triggering alarms at retail stores’ exits, he points out. The key, ultimately, is establishing a collaborative approach that improves the end-to-end efficiency of the entire supply chain by leveraging RFID technology. “Whether you’re talking about RFID, smart warehousing, vision enabled, if you can’t put together the package from end to end, then the value is single service,” says Montgomery. “These things may serve me really well as a 3PL inside the four walls of the warehouse, and the customer will definitely benefit. But if they can’t make that happen across their whole supply chain, they can’t get the ultimate value, which is why there’s been such a push for the last 20 years for end-to-end supply chain visibility.” SP
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BY MARIETE F. PACHECO
UNDER PRESSURE
Mariete F. Pacheco, MBA, PMP is managing director at FRW Services Ltd.
TIPS FOR PURCHASING INDUSTRIAL AIR COMPRESSORS Air compressors are a common piece of equipment found in a variety of industries and operations; from portable handheld units found in many fleet vehicles for emergency tire top ups to portable diesel units used on construction job sites and full-size centrifugal compressors commonly used in blow molding manufacturing. There are four main types of air compressors used in industrial applications: centrifugal, rotary screw, reciprocating or piston and process gas. There are other types available as well which are employed in specialized applications such as rotary vane and scroll air compressors. Centrifugal air compressors are used in process applications such as air separation and blow molding tasks. This equipment creates compressed air by compressing that air through increasing and decreasing the air speed. This is done by drawing air into the centre of a rotating impeller and leveraging centrifugal force. Centrifugal air compressors are widely used in industries such as chemical plants, oil refineries and in applications involving gas and liquids like natural gas pipelines and gas turbines. Centrifugal compressors are also used in air separation 16 OCTOBER 2021
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applications, where the equipment separates the oxygen and nitrogen from the compressed air. Rotary screw air compressors can be further segmented into oil-flooded and oil-free as well as single-stage and two-stage. Oilflooded rotary screw compressors are common in industrial applications such as general industry and automotive applications. This equipment is available with variable speed drives, generally operates quieter and are more long lasting than their oil-free counterparts. Oilfree air compressors are common in manufacturing applications such as the production of electronics, food and textiles. Single-stage compressors are often smaller than twostage units and produce sufficient air to power pneumatic tools in light industrial applications (up to 130psi). For more demanding applications up to 170psi, a two-stage air compressor is a more efficient unit to operate. Rotary screw air compressors use a series of interlocking screws to create the compressed air. Reciprocating air compressors are commonly used in smaller applications such as workshops, auto body shops, small businesses and home do-it-yourself projects. This equipment uses pistons to compress
the air in preparation for its use. Reciprocating compressors are generally smaller air compressors that are limited to up to 10hp. These units come in single-stage and twostage configurations in addition to portable and lubricated system options. Reciprocating air compressors offer easy maintenance and servicing of replacement parts. Process gas air compressors pressurize and circulate gas through a process that enhances conditions for chemical reactions. Process gas air compressors also provide inert gas for safety and control systems. This equipment is found in operations that require pressure boosting and vapor recovery process. Process gas air compressors are frequently used in natural gas gathering, natural gas liquids (NGL) fractionation and liquefied natural gas (LNG) liquefaction. This equipment is generally used in the oil and gas industry. PURCHASING TIPS To determine the right air compressor, two key factors should be considered: how it will be used and what is the required pressure. Other considerations may include extra options like dryers and filters, ener-
gy consumption and maintenance requirements. How an air compressor will be used involves understanding the duration it will run; continuously for long periods as compared to intermittently as needed. Rotary screw air compressors are ideal for large demand users which need air continuously. For applications where the air compressor remains idle for a great deal of time, a reciprocating or piston air compressor is a good fit. Another consideration may also include if your operation requires a high level of air purity such as in electronics, food processing or pharmaceutical applications. Oil-free air compressors are ideal when compared to the most common oil-flooded types. Oil-flooded air compressors use the oil to both lubricate the equipment’s parts and seal in air while the oil-free models prevent contamination of the compressed air by stopping the oil from encountering the air. For higher pressure applications, (above 1500psi), a reciprocating compressor is the best solution. While lower pressure applications are best suited for screw air compressors that can handle up to 150psi. Oil-flooded machines offer higher PSI as comSUPPLY PROFESSIONAL
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pared to oil-free compressors. The horsepower (HP) rating on an air compressor indicates the power output for its engine or motor. Higher horsepower creates higher air pressure. With higher PSI ratings the air compressor can store more air in its tank, allowing the user to operate air tools continuously for longer periods of time. Additional features may also be available depending on the model and manufacturer being reviewed. Some features include ball valve drain, a roll cage, multiple couplers, thermal protection and an air-cooling system. The need for these features will depend greatly on the use of the air compressor, the environment the equipment is kept in as well as the organization’s budget. Every air compressor comes with a drain valve in the tank to reduce excess condensation and ultimately rusting. However, a ball valve drain offers an easier-to-use drain. This offers greater convenience and comfort for increased usability. A roll cage protects the air compressor from severe damage. They are used frequently on construction sites or other portable applications. The roll cage offers protection against accidental crushing. An air compressor with multiple couplers can be a great timesaver, allowing multiple tasks to operate at the same time without having to connect and disconnect the tools either with multiple or a single user. This is especially valuable when multiple tools are used during a short period of time in quick succession, such as construction or automotive assembly. Thermal protection prevents the air compressor from getting overloaded and shuts down the unit when it overheats, safeguarding the equipment from damage and ultimately extending the lifespan of the air compressor. An air-cooling system ensures the pumping machinery remains cool through the equipment’s operation and contributes to extending the useful life of the motor. SUPPLIER CHOICE In addition to the air compressor’s specifications, another critical ele-
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ment to consider is the choice of supplier. The seller can offer tremendous value to the purchasing process, including helping to determine the right air compressor to the application, installation and setup, product training, maintenance and repairs. Aligning with an air compressor expert is vital to the longevity of the equipment and the ongoing return-on-investment (ROI) it provides to the organization. The right supplier will provide support not only at the beginning stages of the installation and setup of the equipment, including product training to ensure proper usage to avoid injuries and damage, but also offer ongoing support such as preventative maintenance and repairs when required. This will go a long way to minimizing downtime and maximizing the equipment’s useful life. A strong supplier will also offer additional support such as product performance reporting and service level agreements (SLA). These differentiate a quality supplier by providing real-time reporting to ensure the most efficient operation of the equipment. This, coupled with a consistent level of ongoing support for any unexpected breakdowns with an SLA, can offer greater piece of mind and security. It can also reduce operating costs as some programs offer short-term rental options, remanufactured equipment alternatives and maintenance plans. There are a variety of air compressors available on the market depending on a user’s needs within each organization. Although common across many industries, air compressors are as diverse in their specifications and models as they are in their uses. An air compressor can be the hub of many operations, from powering pneumatic air tools on an assembly line to powering gas turbines in an offshore refinery. With the array of air compressors available it is critical to understand their applications to ensure alignment between business needs and the equipment’s capabilities to maximize efficiency and longevity. SP
2021-10-05 3:45 PM
BY MATTHEW ZARZYCKI
SHIFTING LOGISTICS
Matthew Zarzycki is chief operating officer at Amplify Logistics.
E-COMMERCE AND JIT DELIVERY SHINES SPOTLIGHT ON MULTIMODAL There has been a paradigm shift in logistics, and it isn’t a subtle one. The logistics of things has been propelled into the spotlight. The how, who, what and where, didn’t impact the day-to-day decision of purchasing in years past. The thinking was, “it’ll get there when it gets there” or “we’re out of stock, here’s a rain check.” Multiple converging events have changed our worldview regarding how our products are moved. Boats, trains, planes and trucks have come together to provide a solution. Enter the star of the show: the multimodal movement of freight. The forces driving this shift are e-commerce and just-in-time delivery. More important, the desire for right-to-door delivery or final mile is warping supply chains to develop solutions once thought impossible. Competition in global markets has meant the adoption of strategies such as total quality management, flexible manufacturing systems, agile manufacturing, lean production and quick response manufacturing, among others. These forces call for on-time, door-to-door delivery and minimizing waste of time and money. Customers do not focus on the different modes of transport. Rather, they focus on performance, such as door-to-door service, from multimodal transportation operators. Door-to-door service is achieved through using multimodal transportation. That’s what makes it strategically important.
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Globalization’s rapid growth has pushed the demand for freight transportation, which increases year by year. To meet that demand in more viable ways, different service providers must combine different modes of transportation. The multimodal freight transportation developed as the most sustainable form of transportation between origin and destination. The best way to achieve better logistical integration is through increasing cooperation and integration within a supply chain distribution network. Those involved in the supply chain, including shippers, logistics service providers, or governments that make policies, have different objectives. They pressure transportation providers to achieve more sustainable freight transportation and to reduce other transportation waste like congestion, CO2 emissions and accidents. They also promote better vehicle utilization. The quality of multimodal logistics, together with what products are offered, helps define the competitiveness of products. The transportation network includes a centralized source warehouse (hub and spoke methods), a set of destination warehouses (RDC), and intermediate transshipment terminals. The design of the intermodal transport network is about having options. Customers focus on optimal control of performance and cost in selecting their modes of transportation. That’s why multimodal solutions make the most sense to global customers. TECHNOLOGY The catalyst for multimodal systems is the integration of information and communication. Information and communication technology acts like a nexus and offers multiple benefits to organizations. For example, it provides realtime visibility, efficient data exchange and better flexibility to react to unexpected changes during shipments. Cloud software has driven traditional static software out and provided a dynamic means to provide solutions. It also gives real-time updates and allows for different work locations. Cloud computing, social networking and wireless communication have changed how information is shared and supply chains are structured. The antique cue card system of dispatching could not achieve this depth. The concept of cross solutions is what drove intermodal networks to emerge from truck and rail providers as they both saw an opportunity to provide a competitive edge. Trucking companies had the flexibility of being able to dray to customer to bring the rail closer to hubs that lack infrastructure while being connected to the rail network for visibility and cost savings. Companies that can now flex between rail and 20 OCTOBER 2021
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“The desire for right-to-door delivery or final mile is warping supply chains to develop solutions once thought impossible.”
road can mostly bypass any “acts of God” that occur that impact one mode or another. The rail companies capitalized on the opportunity to drive demand for their mode by expanding their network beyond their rail lines or by eliminating unprofitable lines and supplementing them with a trucking solution. Ocean freight intermediaries, the middlemen of ocean freight, are critical to the profitability of container carriers. Non-vessel-operating common carriers (NVOCC) are the most common intermediary in the maritime industry. NVOCC buy space from ocean carriers to provide a solution that is more inclusive of modes across the supply chain, usually pairing with warehousing to gain competitive edge. Think, Kuehne + Nagel or DB Schenker. The demand for NVOCC filled a niche in global commerce for the smaller shippers and SMEs that can’t operate their own logistics departments. Multimodal’s aim is to transfer goods in a continuous flow through the supply chain to make that flow more efficient from a financial, environmental and time perspective. With the growth in container demand and the shift in thinking from a single modal to a system concept multimodal approach, it is the main method in the international transportation process. It organizes all transport modes into an integrated, single system for the efficient and cost-effective delivery of goods. A combination of characteristics of each transport mode could place more constraints on goods during transportation in areas like packaging, transportation conditions and storage. As well, multimodal combines the advantages of each mode in a single solution – the flexibility of road transportation, the large capacity of rail and the lower costs of ocean transport in a combined, best-way-possible scenario. Having each mode working in unison complicates the management of the whole multimodal transportation process. It is complex and involves different actors. These include freight forwarders, 3PLs, logistics service providers, couriers, different road carriers, rail, sea carriers, along with port and intermodal terminal
operators. There isn’t a “true” multimodal provider. Rather, there’s a network of actors working together through a partner network, utilizing other niche abilities. MANAGING THE CHAIN Communication between multimodal parties must be accurate, timely and efficient for a flaw less and visible delivery process. This could be challenging due to varying technologies deployed by those involved. Managing the multimodal transport chain is supported by several activities where each phase must be optimized and integrated with other activities: transportation order handling node: delivery schedule, and forecasting; the logistics node: selecting contract services and customs; warehousing node: preparing transportation, the loading and unloading and terminal; operations, including managing stock operations; and K PI node: reports on unloading, loading, damage, monitoring transportation; tracking vehicles and driver behaviour. Comprehensive and dynamic information sharing is key to the success of the multimodal operation. As everyone does their part of the activity, it triggers an action for others to do their part. The multimodal network amalgamates different actors for a comprehensive solution. It is especially important in the age of increasing e-commerce flows and last-mile transport problems that generate too high external transport costs. Just-intime logistics provided the groundwork for supply chains to share information to know what product will be needed. E-commerce needed just-in-time solutions to provide the foundation to service customers. E-commerce’s gravity is accelerating the pull of multi-modal solutions on logistical networks. When a consumer purchases goods online, the forces that move that item for next-day delivery utilize all aspects of the supply chain. That product went through most of the nodes of the supply chain to land at the consumer’s door. Logistics is transforming. For a long time, transportation was seen as a waste, a means to an end that should be minimized. That view is changing and at the forefront of the change is the multimodal system. SP
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Fleet Management
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Premium wheels A round up of executive fleet vehicles.
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Connected cards Which one is right for your fleet?
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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Driver behaviour Dealing with risky driver conduct.
EDITORIAL INQUIRIES: Michael Power, 416-441-2085 x110, michael@supplypro.ca
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Electric revolution Test driving the 2021 Santa Fe SUV.
ADVERTISING INQUIRIES: Alex Papanou, 416-441-2085 x101, apapanou@iqbusinessmedia.com
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Fleet Management By Jil McIntosh
Genesis G80
Chrysler 300
Lexus NX
Built in Ontario and available in three trim levels, this full-size sedan comes with a 3.6L V6, available in rear-wheel or all-wheel drive. The top 300S trim can be optioned with a 5.7L Hemi V8 making 363hp, in rear-wheel only. The all-wheel system has an active transfer case with front-axle disconnect for better fuel economy when power to all wheels isn’t necessary. Standard or available features across the lineup include adaptive cruise control, rain-sensing wipers, dual-pane sunroof, heated and ventilated seats, navigation and safety assist technologies including blind-spot monitoring and lane-keeping assist.
For 2021, Lexus’s compact crossover comes with a 2L gasoline engine in the NX 300, or as the NX 300H hybrid, with a combined city/ highway fuel consumption rating of 7.5L/100km. Both models include all-wheel drive. The redesigned 2022
model will offer four engine choices, including turbo and non-turbo 2.5L gas engines. The 2022 NX 350h hybrid will be rated at 6.5L/100km in combined driving, while the fourth choice will be Lexus’s first plug-in hybrid. When charged, it can drive approximately 58km on electric-only. When that depletes, it automatically reverts to conventional gas-electric hybrid operation, providing fuel-free driving without “range anxiety.”
Genesis is the luxury brand offered by Hyundai, and the G80 is the mid-range of its three sedans. It’s available as the 2.5T Advanced, with 300-horsepower, 2.5L turbocharged four-cylinder; or as the 3.5T Prestige, with a twin-turbo 3.5L V6 making 37hp. Both are standard with all-wheel drive and offer a balanced combination of sporty handling with a smooth ride and roomy interior. The trim levels are all-in, and include navigation, wireless charging, scheduled maintenance, and in applicable areas, a concierge service with pick up and delivery for service visits, including leaving a courtesy loaner.
Toyota Venza
Premium wheels Executive vehicles for your fleet Many drivers think of “executive vehicles” as strictly being big, premiumbrand sedans, but that’s no longer the case. These can now also include SUVs, crossovers, and three-row vehicles, and come welloutfitted from mainstream manufacturers as well as the upscale brands. We’ve rounded up a selection of eight possibilities for your fleet.
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The Venza name returns on a handsome, all-new SUV. It comes in three trim levels, and all are powered by a fuel-saving, gas-electric hybrid system that makes a combined 219hp. All include an on-demand all-wheel-drive system with electric motors for the rear wheels, providing fuel-free instant traction when needed. The hybrid system self-recharges and doesn’t get plugged in. The Venza features a lovely interior with premium materials, and all trims include blind-spot monitoring, wireless charging, and power liftgate. Upper levels include a split-screen infotainment system, ventilated seats, and a panoramic sunroof that electronically switches between clear and frosted glass.
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Infiniti QX55 An all-new model for 2022, the five-seater QX55 compact crossover shares its platform with the QX50, but with a flowing rear roofline. It uses a turbocharged 2.0L fourcylinder with an unusual variable-compression technology that maximizes fuel efficiency or performance, depending on how you’re driving it. All three trim levels include all-wheel drive. The sloped rear
styling cuts down slightly on rear-seat headroom, but the cargo space is generous and there’s a hidden cubby under the cargo floor. Available features include a twin-screen infotainment system with navigation, ProPilot Assist highway-driving assistant, cooled seats, rain-sensing wipers, Wi-Fi hotspot and tri-zone climate control.
Lincoln Nautilus The midsize, five-seater Nautilus is built in Ontario, and comes in a single “Reserve” trim level but can be upgraded with options. These include switching the standard 2.0L turbocharged engine for a twin-turbo V6, which makes 335hp and adds an adaptive suspension. Both engines come with all-wheel drive and an eight-speed automatic transmission. Standard or available features include a heated steering wheel, wireless charging, rear-seat entertainment system, heated and ventilated seats, panoramic sunroof, and the Lincoln Way App, which includes valet service for maintenance appointments, and the ability to use your phone as the vehicle’s key fob.
Subaru Ascent Subaru’s largest SUV includes a premium interior and seating for seven or eight people. It uses a 2.4L horizontally opposed four-cylinder engine with automatic continuously variable transmission (CVT) and allwheel drive with settings for snow or mud. All trims include EyeSight, Subaru’s camera-based suite of safety-assist technologies, including adaptive cruise control, lane-keep assist and emergency front braking. The third row is tight and best for children, as most are, but access to those seats is easier than in many rivals. At its highest trim, just below $52,000, the Ascent includes ventilated leather-clad front seats, heated second-row seats, interior wood trim and rain-sensing wipers.
Mercedes-Benz E-Class The midsize E-Class wears a lot of hats, available as a sedan, station wagon, coupe or convertible. All are also available as higher-performance AMG models. The sedan starts as the E 350, with a 2.0L turbocharged four-cylinder, and can be optioned to the E 450 with turbo 3.0L inlinesix engine. All other vehicle configurations start as the E 450. All can be ordered as the AMG E 53 with 429hp;
while sports-minded execs can get the sedan and wagon as the 603hp E 63 S. No matter the vehicle or engine, 4Motion all-wheel drive is standard across the board.
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Fleet Management By Mario Gionet
Connected cards Which option is right for you? Are you wondering how to pay for gasoline, fuel or electric recharge for your fleet? Are you looking to control costs, avoid misuse or worse, fraud? The market offers solutions and, with technology, more control. Not long ago, fleet managers used credit cards or fuel cards from petroleum distributors to pay for expenses, with little paper slips as control. Control was manual and it took time to figure out what was going on. Credit card providers recognized the need for more sophisticated controls and expense reports. Fleet management providers reacted to this need. So, here’s an overview of products out there and the technology available. Fleet needs vary so you can choose to take one card option, two or even more. Your fleet management card provider is the best source to help you choose what fits your needs. All these options are great and utilize recent technology. Suppliers can provide card services related to their products. They offer reports, analysis and so on. They can limit the number of transactions placed on cards. You can also benefit from fuel rebates depending on the volume of your transactions. Some suppliers work with fleet management providers to give customers one contact point for fuel and repairs. Using cards at public electric recharging stations is a bit different, but options are catching up with rising demand. The major difference is the connection between stations and fleet management providers, or with the reporting for 24 OCTOBER 2021
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your fleet. The stations have their own cards for transactions and accept credit cards with open MCC (merchant category codes). The advantage of a dedicated card to a unique supplier is flexibility, depending on usage. Electric recharging providers are resolving this issue, and many have fixed it. Consider this product carefully if your operating route is established with no day-to-day modifications. If you don’t know where your vehicle will travel, look at other options. Some fleet providers offer their own card dedicated to a vehicle. The provider is the one collectng the information for reports. You can add garage repairs and get a global view of your fleet. It’s part of a series of services they provide. It is also adapted to the combined technology of GPS, which I’ll address later. Fleet management providers can also offer credit cards such as Mastercard or Visa. The card is attached to a specific vehicle using its asset number or fleet number (printed on the card). Also, you can block MCC. For example, you can choose with your provider only the codes related to service stations. Then, if someone tries to pay for an expensive lunch, the card will be rejected. You can also set limits per transaction and the number of transactions per day and adapt it to each type of vehicle. These transactions are built into the report of your choice and have tap and chip technology. Credit cards also offer fraud protection in collaboration with fleet manage-
2.
ment providers. You pay your service provider while they own the credit card. They collect the rebate from the card supplier. This is a great option, again with a bonus if you use GPS.
Procurement cards
Mastercard and Visa are the leaders in procurement cards. The difference if you use your own P-Card is that, for the reporting of the MCC codes management, you deal directly with your supplier. You can assign a card to a vehicle with the same restrictions on MCC transaction limits. The advantage is, if you combine your P-Card and fleet card, you benefit from the volume return from your provider. These days fleet providers, collaborating with credit card providers, give you lots of information. It’s quick, accurate and attached to specific vehicles. But GPS is changing the way you monitor, control and reduce costs. A GPS system can track down a vehicle. But today’s providers take things one step further. In those vehicles, the GPS can connect to the onboard diagnostics and the vehicle computer figures out the amount of information available. Users have information about speed, stop-and-go patterns, driver behaviour and the use of fuel. This information is nice, but where do credit cards fit in? Fleet management companies and GPS providers have access to lots of information and can connect it. Fleet providers have the credit card information like how many litres charged, the cost and the location of each transaction.
Mario Gionet is a fleet professional and consultant who recently retired as CBC-Radio-Canada’s fleet manager. Reach him at marioginet19@ gmail.com.
Your fleet management card provider is the best source to help you choose the best product to fit your needs.
GPS providers have each vehicles’ location information. With both organizations connected to each other, you can produce a report showing that your vehicle was at the service station shown on the credit card report. Such reports can monitor for discrepancies – for example, if the card is used in Kingston, Ontario but the vehicle was in Belleville. Or, if litres don’t match tank capacity, you get an alarm. You can select service station that drivers to go to, which ones to avoid, and control that through geofencing. Various products now exist that you can adapt to your needs. Speak with suppliers, because they’re your best bet in finding a solution that suits you. FM/SP FM/SP SUPPLY PROFESSIONAL
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Jim Pattison Lease is powered by our robust proactive and predictive data analytics which helps you analyze and implement the transition to zero-emission vehicles. We offer support on all aspects of electric vehicle adoption, including operational feasibility, vehicle selection, lifecycle cost analysis - all the way through to charger installation and electric vehicle program management. For all your fleet sustainability plans, Jim Pattison Lease has you covered.
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Fleet Management By Kate Vigneau
Three little things
Kate Vigneau, CAFM, is director of fleet, MCG Consulting Solutions.
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A framework for identifying risky driver behaviours and enforcing safety An alarming headline caught my eye recently. Apparently, traffic volumes on American roads decreased in 2020 but fatalities increased. In fact, the increase was a 24 per cent spike for a total of 42,060 fatalities, the highest number in 13 years. The statistics themselves are cause for alarm, but what caught my attention was the reason attributed to this tragic increase. That reason was that angst over the COVID-19 pandemic had caused drivers to be aggressive and take greater risks on the road. In comparison, Canada experiences approximately 2,800 traffic fatalities annually. Better, but still unacceptable. The role of the driver in collisions is paramount. The driver’s preparation, mindset, level of fatigue, experience and skill combine to determine how that individual will respond in any given situation. In fact, The Traffic Injury Research Foundation says that more than 90 per cent of road crashes are the result of human error or condition. What three things separate good drivers from high-risk drivers? What three things do you 26 OCTOBER 2021
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want all your fleet drivers to do? What three things can you do to ensure good drivers get better and bad drivers find a more suitable career? The answers to these questions provide a framework for identifying risky driver behaviours and enforcing safe driving.
Three things drivers should stop
I informally asked a dozen of my fleet manager colleagues: “What do you want your drivers to stop doing immediately?” The answers were very consistent: stop distracted driving; stop breaking rules; and stop crashing. Distractions include far more than cell phones and distracted driving can involve reading a map or speaking with passengers. According to data from Transport Canada’s National Collision Database, distracted driving contributed to an estimated 21 per cent of fatal collisions and 27 per cent of serious injury collisions in 2016. It is estimated that distraction is a factor in 80 per cent of collisions.
Good drivers follow the rules of the road because they understand they are in place for the protection of everyone. One of those rules is to obey posted speed limits, yet speeding is the cause of 27 per cent of all traffic fatalities on Canadian roads. And although many drivers do not feel that operating a vehicle 10km over the posted limit to be dangerous, statistics say otherwise. Crashes have causes, they do not happen on their own. The cause almost always involves driver behaviour, whether it’s something the driver did, or something they failed to do.
Three things drivers should start (or keep) doing While there are three things that drivers need to stop doing, fleets can also benefit if drivers start, or keep doing three other things: Start eco-driving; start defensive driving; and start setting up for success.
Eco-driving has evolved from being a nice thought to essential in managing fuel spend. At $1.40 a
litre, fleets can really benefit from the 10-to-15 per cent savings that are achievable when drivers eliminate idling, reduce speed and plan their routes carefully. There is a reason that insurance companies offer 4-to-10 per cent rebates for drivers who have taken a defensive driving course. Defensive driving is a mindset shift that encourages drivers to follow all rules of the road and be proactive in identifying and responding to threats. Drivers should set themselves up for success by having the proper training on the equipment they are operating, being well rested and planning the route they will take. Small things contribute to success – adjust all controls (radio, GPS, seats and mirrors) before starting a trip.
Three things management can do
Knowing that the driver really is the key in improving fleet operations, management needs to: Emphasize education; Enforce policies; and engage and encourage. FM/SP SUPPLY PROFESSIONAL
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The creation of well-written fleet safety policies is challenging in many organizations, as it often slips in importance to other priorities.
New hires should receive onboarding training that includes a defensive driving course. Existing drivers should receive regular (such as annual) driver training to encourage safe driving. At-risk drivers should receive remedial training to help them improve deficient skills and follow-up assessments to gauge improvement. In all cases, organizations must ensure that the goals of the training are understood so drivers will buy in to the potential benefits. Enforcement must be prefaced with the creation and communica-
tion of robust policies that define acceptable driving practices as well as standard driving performance expectations. The policy should explain the consequences of infractions and be applied strictly and fairly across the board. The failure to enforce policy just one time can cause the entire safety program to fail. The creation of well-written fleet safety policies is challenging in many organizations, as it often slips in importance to other priorities. Organizations still need to make time for this, as policies can
change the effectiveness of fleet support to the organization. All stakeholders, from senior leaders to immediate supervisors, must contribute to managing driver behaviour. To ensure success, senior leadership must demonstrate good driving behaviours themselves and avoid distractions, speeding and crashes. Management should be involved in rewarding good driving behaviour by recognizing drivers who are crash-free or achieve fuel savings through eco-driving. Management should also be involved in sanc-
tioning bad drivers, so they are seen as fully supporting the policies of the organization. The title of the article may be misleading, as the “three little things” in each of the sections are actually three fairly significant things that must be identified, addressed and/or supported to ensure healthy fleet operations. There is no fixed recipe for success, but education, enforcement and engagement from management can combine to stop unwanted driver behaviours and encourage good ones. FM/S FLEET MANAGEMENT SUPPLYPRO.CA 27
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Fleet Management By Stephanie Wallcraft
Electric revolution
Test driving the 2021 Santa Fe SUV The automotive industry’s electric revolution is now in full swing as battery prices continue to drop and electrification becomes more accessible. Hyundai’s approach to this shift is an interesting one: the automaker is releasing new offerings left and right, including everything from standalone battery electric vehicles to electrified iterations of mainstream models. Dig into the latter, and things get even more curious. Sometimes, hybrids become exclusive to top trim levels. Here on the 2021 Santa Fe mid-size two-row SUV, though, a hybrid powertrain is available on a lower grade and standard on a higher grade, while the top grade 28 OCTOBER 2021
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can only be had with a turbocharged gasoline engine. It’s a lot to wrap one’s head around. So, the better play is to simply go into the shopping process with a laser-focused vision of what you want. To that end, the 2021 Hyundai Santa Fe Luxury – the previously mentioned upper-tier trim that’s offered exclusively as a hybrid – is certainly want-worthy. Priced at $46,155 including a $1,925 destination charge, this grade’s balance of powertrain drivability and feature content makes it one of the top value propositions in its segment. It’s one of the more attractive mid-size SUVs on the road inside and out, and it’s also argu-
ably the best-looking product in Hyundai’s current line-up.
Powertrain
Hybrid models receive a powertrain based on a 1.6L turbocharged four-cylinder internal combustion engine that produces 178hp and 195lbs-ft of torque on its own. Paired with a 44.2kW electric motor mounted on the front axle, the total system output becomes 226hp and 258lbs-ft of torque, 195 of which is available from a complete stop thanks to the electric motor’s instant response. Mechanical all-wheel drive is standard on the Santa Fe, regardless of powertrain. This produces a very satisfying power dynamic, the movement
through which is aided by Hyundai’s decision to pair this with a six-speed automatic transmission, as opposed to a continuously variable transmission (CVT) as is typically employed on hybrid powertrains. The latter may have improved fuel consumption, but the Natural Resources Canada rating of 7.4L per 100km in combined driving is already above average for this vehicle class. Our observed fuel rating of 7.1L/100km included roughly 300km of highway driving with four passengers and a full load of cargo, meaning that the Santa Fe performed better than expectations with no special effort from the driver. Speaking of cargo, the Santa Fe impresses in this department with FM/SP SUPPLY PROFESSIONAL
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1. For cargo space, the Santa Fe offers 1,032L of cargo space behind the second row. 2. The equipment offering on the Luxury Hybrid grade includes heated and ventilated front seats, wireless smartphone charging, an attractive 12.3-inch digital instrument cluster and a power-operated panoramic sunroof.
It’s one of the more attractive mid-size SUVs on the road inside and out, and it’s also arguably the best-looking product in Hyundai’s current line-up.
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2. 1,032L of cargo space behind the second row, hybrid or otherwise. This is one area where the Santa Fe holds a significant advantage over its closest competitor, the Toyota Venza, which returned for 2021 as a hybrid-only model. While the Venza has significantly better fuel consumption estimates (6.1L/100km combined), it offers only 816L of rearward cargo space. For our weeklong summer getaway with two adults and two children, that extra 200L made the difference between stretching out versus tucking backpacks and life jackets into footwells.
Equipment offering
As is typical for Hyundai, packaging on the Santa Fe is priced all-in:
the only option is a $200 colour charge for applying any shade other than white. The equipment offering on the Luxury Hybrid grade is very strong including heated and ventilated front seats, heated outboard rear seats, wireless smartphone charging, a very attractive 12.3-inch digital instrument cluster, 19-inch wheels, and a power-operated panoramic sunroof. By choosing this top hybrid model instead of the top Ultimate Calligraphy grade and its gas-only engine, you leave upgrades on the table such as 20-inch wheels, a head-up display and overhead camera, upgraded Nappa leather seats, a 12-speaker Harman Kardon audio system, Hyundai’s Blind
View Monitor system (which projects a camera view of each side’s blind spot onto the instrument cluster when the turn signal is activated), and Highway Drive Assist, a semi-autonomous but not handsfree technology. For a $3,700 difference in cost, we recommend choosing the hybrid, not only for its better fuel efficiency but also because the Luxury grade uses Hyundai’s legacy eight-inch infotainment system instead of the newer 10.25-inch widescreen, which comes with some quirks that are less easy to live with. Between the quality of the drive, the interior space, the fuel efficiency, and the well-packaged list of features, the 2021 Hyundai Santa Fe
Luxury Hybrid makes an extremely compelling case for itself as an SUV for daily driving. FM/SP
As Tested Price (incl. freight and PDI): Starts at $45,955; tested at $46,155 Engine: 1.6L turbocharged four-cylinder plus 44.2kW electric motor Power: Total system output 226hp; 258lbs-ft Transmission: 6-speed automatic Rated Fuel Economy (L/100km): 7.1/7.9/7.4 Observed Combined Fuel Economy (L/100km): 7.1 FLEET MANAGEMENT SUPPLYPRO.CA 29
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THE LAW—BY PAUL EMANUELLI
DEALING WITH COMPLEXITY DON’T UNDERESTIMATE BID EVALUATION CHALLENGES As illustrated in the following recent decisions, Canadian public purchasing institutions are facing an increasing level of complexity in meeting the legal standards for defensible bid evaluations. For example, in its November 2020 decision in Canada Forgings Inc. v. Atomic Energy of Canada Limited, the Ontario Superior Court of Justice determined that the factual, technical and legal issues raised in a challenge to a government tendering process were too complex for a jury trial. The dispute dealt with a bidding process for the refurbishment of the Bruce “A” CANDU 9 nuclear reactor. Atomic Energy of Canada Limited received three bids but failed to accept any of those bids during the 180-day bid validity period and, after that period expired, bypassed those bids and decided to deal with a different supplier for its requirements. One of the bypassed bidders, Canada Forgings Inc., brought a legal challenge claiming nearly $20 million in damages. The Court rejected the plaintiff’s request for a jury trial, ruling that the issues were so complex that laypersons on a jury could not adjudicate them even with proper instructions from a judge. The case was directed to a six-and-a-half-week trial by judge alone. In fact, even specialized tribunals face challenges in adjudicating bid protests due to the complexity of the subject matter. For example, in its February 2021 decision in Heiltsuk Horizon Maritime Services Ltd. v. The Attorney General of Canada, Canada’s Federal Court of Appeal overruled the Canadian 30 OCTOBER 2021
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International Trade Tribunal, a specialized body recognized for its expertise in government procurement disputes, after concluding that the Tribunal made significant errors in its adjudication of a bid protest. The dispute involved a federal government RFP for emergency towing vessels for the British Columbia coastline. The controversy turned on an evaluation criterion for minimum towing power that required the ships to “exert a minimum continuous bollard pull of no less than 120 tonnes when all required engine driven consumers (shaft generators, etc.) are taken into account.” A losing bidder challenged the government’s evaluation process, claiming that the winning bidder’s vessels did not meet the technical towing requirement. The tribunal made a series of rulings in response to the legal challenge, including two separate re-evaluation orders. On appeal, the court found that the tribunal’s second re-evaluation order was flawed since the tribunal directed the government’s re-evaluation panel to consider technical factors outside of the scope of the RFP. While the court ultimately dismissed the complaint and upheld the original award, this case serves as a reminder to avoid bid compliance criteria that are based on complex technical factors and unclear verification procedures since those complexities expose evaluations to protracted legal proceedings. In addition to tender compliance challenges, government evaluation decisions are also subject to challenge on the scoring process used to identify the top-ranked
bidder. Many of these scoring challenges involve disputes over the assessment of a bidder’s prior experience. For example, in its March 2021 determination in Brion Raffoul v. Department of Public Works and Government Services, the Canadian International Trade Tribunal rejected a bid protest filed by a losing bidder who alleged that the government relied on unnecessarily restrictive and biased prior experience criteria. The case dealt with a federal Request for Standing Offer (RFSO) for patent agent services. The complainant took issue with the RFSO’s mandatory evaluation criterion that required bidders to have successfully prosecuted one patent family, in which the patents were issued in Canada, the US and at least two other countries outside of North America, and where each patent was issued in the past 10 years. The complainant alleged that the 10-year time limit and the geographical restrictions were unreasonable. While the challenge was ultimately rejected after the government proved that its criteria were rationally connected to legitimate operational requirements, this case shows how suppliers are becoming increasingly active in challenging bid evaluation criteria and resulting contract award decisions. All too often, public institutions underestimate the complexity of government procurement processes and are caught off guard when their evaluation and award decisions are legally challenged. However, in the aftermath of legal proceedings, the complexity and risks of the evaluation process
Paul Emanuelli is the general counsel of The Procurement Office and can be reached at paul.emanuelli@ procurementoffice. com.
“In addition to tender compliance challenges, government evaluation decisions are also subject to challenge on the scoring process used to identify the top-ranked bidder.”
become all too apparent. Moving forward, purchasing institutions should not underestimate the inherent challenges contained in the bid evaluations process and should ensure that their project teams are adequately resourced to run defensible evaluations. SP SUPPLY PROFESSIONAL
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2021 ASCENT IIHS TOP SAFETY PICK+
Full-time all-wheel drive for full-time confidence in motion. Superior drivability, outstanding control and handling you can count on.
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Innovative advance warning safety system that helps you avoid potential danger on the road. Subaru’s eye on safety.
Like your company, we at Subaru are all about going the distance. Which is why we’ve got safety and durability covered like no other, giving you the peace of mind that comes with knowing your drivers are well protected when they’re on the road. Factor in high resale value, great fuel efficiency and low total cost of ownership, and it’s easy to see that selecting Subaru for your fleet just makes good common sense.
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On-board technology system connecting your Subaru to the world. 24/7 safety and convenience wherever you go.1
2
Visit us at subarufleet.ca
1. SUBARU STARLINK® Connected Services are offered on an initial three-year free subscription on select trim levels. Customers are required to enroll in the SUBARU STARLINK® Connected Services program. To operate as intended, SUBARU STARLINK® Connected Services require a sufficiently strong cellular network signal and connection. See your local Subaru dealer for complete details. 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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With the introduction of freighter aircraft and construction of our state-of-the-art cold chain facility underway, we are transforming our business to move yours forward. LEARN MORE AT WWW.AIRCANADACARGO.COM
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