THE PROBLEM SOLVER
Gerald Ford on perseverance, helping others, and loving what you do Local versus global sourcing
The 2025 Audi S3
Ethical procurement Supply chain in the C-suite Sustainable manufacturing
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BY KARELIA SARAVIA
LOCAL VERSUS GLOBAL SOURCING NAVIGATING
RISK THROUGH STRATEGIC
BALANCE
In today’s volatile global landscape, building a resilient purchasing commodity strategy requires more than just cost optimization. It demands alignment with broader business goals, scenario planning, and a deep understanding of supply chain dynamics.
Before crafting any sourcing strategy, procurement leaders must ask themselves, ‘what is our company trying to achieve? Are we aiming to grow revenue, diversify our portfolio, or expand into new markets?’ The answers to these questions shape everything, from supplier selection to capacity planning.
Equally important is understanding the maturity of the product. Is it in a growth phase, plateauing, or declining?
For example, in the automotive sector, supplier dynamics are increasingly shaped by the growth segmentation of specific commodity groups. Interiors, electronics, and batteries are surging ahead, fuelled by electrification and digital integration. Meanwhile, components like suspension, transmission and seats remain steady, while ICE and exhaust systems face a gradual decline as OEMs pivot toward zero-emission platforms.
These insights help purchasing teams tailor strategies that address key questions: Should we consolidate or expand our supplier network?
Are our volumes increasing, stable, or shrinking? Do we have the right supply base to support diversification?
Are we overly reliant on any single supplier or region?
Are our suppliers aligned with our long-term innovation roadmap?
How exposed are we to geopolitical or regulatory risks in our current supply base?
Do we need supplier partnerships that can help us differentiate our products?
How resilient is our supply chain to demand fluctuations or disruptions?
To advance the company’s vision, a commodity strategy should be anchored in a well-defined framework that reflects core business goals and product lifecycle stages. It should also allow the agility to adapt as market conditions evolve.
FLEXIBILITY AND SCENARIO PLANNING
Recent disruptions, such as COVID-19, the Russia-Ukraine war, Suez Canal blockage, and shifting US tariffs, have highlighted the importance of embedding flexibility into procurement strategies. For example, companies that sourced heavily from China to reduce costs, without developing alternate local or regional suppliers, now face significant exposure. Those that anticipated such risks are better positioned to react on time.
In the automotive sector, onboarding a new supplier can take 12-to-18 months, with PPAP cycles alone adding up to nine months. Without pre-planned alternatives, response time is too slow to act effectively on sudden disruptions.
Rigid strategies that are focused solely on tangible outcomes often overlook the importance
of scenario planning. In an era in which risk is no longer a niche concern, but rather a daily reality, incorporating what-if scenarios into sourcing decisions is essential.
A systematic and proactive analysis of these scenarios will allow procurement teams to anticipate possible outcomes and solutions and integrate them into their commodity strategies. This includes implementing alternative and dual sourcing for critical materials, internalizing key processes, identifying backup logistics routes, accelerating new supplier development, increasing safety stock, and strengthening supplier relationships, among others. These tactics enhance agility and reduce exposure to geopolitical and supply chain volatility.
The financial consequences of supply chain disruptions are far from trivial. As highlighted by McKinsey Global Institute, companies can expect to lose nearly 45 per cent of one year’s EBITDA over a decade due to recurring disruptions. This estimate, based on probabilities and industry data, reflects a seven-percentage-point average decline. This underscores the strategic importance of upstream alignment and risk management.
To support this dynamic process, organizations should empower their procurement teams with advanced tools and technologies. Capabilities like supplier mapping and AI-driven analytics can forecast emerging trends, simulate potential disruptions, and deliver actionable insights that strengthen strategic decision-making.
Karelia Saravia is a global purchasing executive with over 20 years of experience in the automotive industry. Her expertise spans strategic sourcing, supplier development, and risk mitigation across global markets.
Embedding risk management into commodity strategy sessions helps procurement teams stay proactive and focused. Even without advanced tools, a simple matrix – categorizing risks and mapping them by impact and likelihood – can guide prioritization.
The goal isn’t to chase every possible threat, but to act on what’s relevant and actionable. Look for strategic overlaps: one decision that mitigates multiple risks or aligns with long-term goals.
For instance, rather than developing a new local supplier in India to bypass import restrictions on a China-sourced commodity and mitigate that geopolitical risk, a global firm could pivot to an established partner in South Korea. This takes advantage of a free trade agreement while advancing the company’s global procurement consolidation strategy.
SUPPLIER RELATIONSHIPS
As sourcing shifted to low-cost regions, many companies scaled back business with local suppliers. This weakened long-standing relationships. Rebuilding these connections is now essential. When the macroenvironment drives business towards localization, suppliers prioritize partners they’re engaged with, not those that left years ago.
Recent US tariffs have prompted companies to reconsider domestic suppliers previously viewed as non-strategic. A cost-only commodity strategy might have cut ties entirely, but a more balanced approach would have maintained a certain threshold volume to preserve the local source and the relationship, ensuring agility and supplier engagement when conditions change.
“To advance the company’s vision, a commodity strategy should be anchored in a welldefined framework that reflects core business goals and product lifecycle stages.”
CUSTOMER STRATEGY AND UPSTREAM ALIGNMENT
As sustainability and social responsibility become central to corporate strategy, customers are increasingly setting compliance benchmarks for their suppliers – targeting specific goals related to emissions, conflict minerals, labour practices, diversity, and more.
Procurement teams should align closely with sales and engineering departments by fostering collaboration to gather customer insights and ensure commodity strategies support broader business objectives.
On the other hand, some customers adopt their own interpretation of supply chain risk and unilaterally impose changes on suppliers’ sourcing strategies based on what they perceive as optimal. While these directives are often positioned as efforts to enhance resiliency, they can limit organizations from sourcing materials in regions that fully comply with established and lawful ESG frameworks. Rather than encouraging dialogue and collaborative risk management, such man-
dates are frequently rooted in partial or oversimplified assessments. From experience, these well-intentioned restrictions often create more operational complexity than they resolve.
THE LIMITS OF LOCAL
Flexibility has its limits. In some regions, supplier ecosystems are underdeveloped due to low volumes, lack of technology, poor infrastructure, high absenteeism, or limited raw material availability, which make these sources uncompetitive. In these cases, even the most agile strategy can’t overcome structural limitations. Cost, competitive advantages and economies of scale still matter, and are still a driving force for procurement.
When dealing with bulky or heavy products, freight costs often become a major factor in pricing. In these scenarios, a “local-for-local” strategy typically proves more efficient. Supply chains are usually shorter and positioned near the manufacturing site, enabling a leaner, just-in-time delivery model that minimizes delays and reduces logistical overhead.
For smaller, lightweight goods where freight isn’t a major cost driver, global sourcing often remains more economical. In my experience, price gaps of up to 40 per cent between Chinese- and Western-made goods are common. Even with substantial tariffs, the difference often remains large enough to justify sourcing internationally. Notably, many Chinese suppliers have responded to tariff pressures by adjusting their pricing. This has unlocked savings that were previously off the table.
Despite this, it’s common for regional leaders wanting to prioritize local suppliers, even when it leads to higher costs or operational inefficiencies. Such decisions underscore the importance of realistic risk management. Mitigation, rather than elimination, is often the more sustainable path.
This illustrates why a “one-size-fits-all” approach is rarely effective. Procurement teams must understand their product, their supply chain down to the Tier-n level, including market dynamics, cost benchmarks at the raw material and operating levels, and the region’s technological maturity.
THE ULTIMATE TAKEAWAY
Globalization isn’t ending, it’s evolving. A balanced approach where global and local suppliers coexist is key. The core message is clear: organizations must prioritize agility and preparedness. Whether facing geopolitical shifts, trade disputes, or climate events, the more thought and anticipation invested in scenario planning, the stronger the commodity strategy framework becomes. From this framework, companies can make informed decisions, building robust business continuity plans and position organizations to thrive, not just survive, in uncertain times. SP
realized. Storytelling makes that impact tangible. It is a leadership tool – a way to influence strategy, inspire peers, and elevate the profession. Every leader has a story. It is time to share it.
WHY CANADA NEEDS SUPPLY CHAIN VOICES AT THE EXECUTIVE TABLE
The economic challenges Canada faces – from tariffs and trade volatility to energy transition and critical minerals supply – converge on supply chain. Excluding this insight from strategic decisions is not just a missed opportunity; it is a risk to resilience, growth, and competitiveness.
The reality is clear to leaders across industries. As Chris Mitchell, Chief Procurement Officer, Executive Director Procurement for the Province of Nova Scotia and one of the judges at the NISCL Awards, observes: “procurement profession-
“Supply chain and procurement professionals shape outcomes every day – stabilizing operations, protecting margins, enabling sustainable practices, and driving innovation.”
als today are asked by political leaders increasingly often to deliver innovative solutions. More than ever, from junior to the most senior levels of my team, I require individuals to listen, consider, make judgements and decisions, and communicate those decisions in an agile and fast-
paced environment. No longer housed in the basement next to the filing room, procurement is taking a lead role in C-suite level decisions all the while demonstrating exceptional leadership.”
Recognition reinforces influence. Programs like the NISCL Awards spotlight leaders whose decisions drive organizational resilience, innovation, and growth. By celebrating excellence, we validate individual contributions while demonstrating the strategic importance of supply chain across Canada’s economy. These examples show what is possible when leadership is visible, voices are heard, and the gap to the C-Suite is bridged.
TELLING OUR STORY, TOGETHER
Supply chain and procurement professionals shape outcomes every day – stabilizing operations, protecting margins, enabling sustainable practic-
es, and driving innovation. Too often, these contributions remain invisible. It is time they are heard. At the National Institute of Supply Chain Leaders, we actively celebrate and amplify the impact of supply chain leaders. Initiatives such as the NISCL Awards recognize outstanding leadership, innovation, and resilience, providing a platform to share stories that shape strategy, inspire peers, and elevate the profession. These programs highlight the value of storytelling – showing that the work you do every day is seen, valued, and influential.
When your leadership is visible, it strengthens strategy, empowers teams, and reinforces the strategic value of the profession – for organizations, for industries, and for Canada’s economic future. SP
BY JACOB STOLLER
TECHNOLOGY AND SUSTAINABLE MANUFACTURING
TECH HAS THE POTENTIAL TO MAKE ORGANIZATIONS MORE SUSTAINABLE
Speeding up a test procedure might not sound like a viable way to reduce a company’s carbon footprint. However, when Burnaby, BC-based fuel cell manufacturer Ballard Power Systems deployed an AI-based solution to streamline the final quality check for battery units, the shorter test time dramatically reduced the amount of hydrogen consumed by the process, leading to millions in projected savings for the company.
The case exemplifies how advanced technology targeted at efficiency can also improve a company’s environmental footprint.
“In this case, the hydrogen savings are very significant,” says Greta Cutulenco, CEO of Kitchener-Waterloo-based Acerta.ai which created the solution for Ballard. “With newer digital and AI technologies, you can actually drive not just process optimizations but also improvements that lead to significantly reducing waste.”
This isn’t just about identifying specific losses. Any effort that reduces the resources required to produce a given product improves the environmental footprint for that product.
“If you’re able to increase production with the same amount of energy, you’re definitely going
to be more efficient and more sustainable,” says Stephen Dixon, CEO of St. Jacob’s, Ontario-based Knowenergy. “And if you improve reliability, that also makes you more sustainable because you cut down the waste from re-starting processes whenever they go down.”
Often such sustainability improvements are hidden by-products of initiatives aimed at quality or efficiency. “Rather than creating what we might call inadvertent sustainability, it is useful to keep an eye on those variables through monitoring which tells you whether you’re more sustainable,” says Dixon.
INTERNET OF THINGS
Thanks to the wide proliferation of IoT devices in manufacturing environments, the data needed to detect and manage waste is widely available in many companies. “The transition to more digital manufacturing means we have more data, and with that, more ways to optimize production to make it more efficient,” says Cutulenco.
More companies are relying on software to leverage this data. “What the software does now is provide an inexpensive way to take the
data from these low-cost monitoring tools, and to interpret that data so that it can be used to drive actions,” says Dixon. “And then you can collect ongoing data and use it to verify that you achieved the savings or avoided consumption from the investment that you made. So, you can validate your processes.”
To this end, Elmira, Ontario-based Enviro-Stewards has developed a software product called Stewwi, based on the acronym for “System to track energy, water, and waste improvements.” Stewwi provides decision-makers with a dashboard for setting targets and tracking the progress of their improvement initiatives.
“The program tracks the implementation status of each of your environmental measures and uses live sensors to keep track of the savings, the reductions in greenhouse gases, and the payback period. Accompanying algorithms generate notifications upon loss of anticipated savings so that gains can be restored in a timely manner,” says Bruce Taylor, Enviro-Stewards CEO.
A key priority for Taylor is to alert companies to the common mistake of grabbing all the data that’s available and then figuring out what to do
with it. “Each time you put in a sensor, you want to ask yourself ‘why here, and how am I going to use the data once I get it?’” says Taylor. “A lot of places already have so many sensors, but you can lose the forest for the trees. So instead of thousands and thousands of sensors, our approach is to implement only the ones that can change.”
Being selective also prevents the common problem of “alarm storms,” which are scenarios where operators are presented with so many alarms that they wind up simply ignoring them.
On the other hand, it’s now possible in some cases to track parameters without directly measuring them.
“If you look at residential as an example, we now have AI-powered monitoring tools that detect utilization patterns for all your appliances by looking at the input to a house without having to actually meter those devices,” says Dixon. “But to benefit from these capabilities, you have to have strong underlying control systems and procedures.”
In complex manufacturing environments, many of the inefficiencies that crop up are not the result of independent conditions that can be metered, but of vicious cycles amplified by complex interdependencies between diverse variables. For example, Acerta’s AI-powered technology, Line-Pulse, identifies barely detectable anomalies in manufacturing processes that if not corrected can combine with other factors to trigger significant problems further down the process.
“A lot of times, especially in the more complex production lines, you have many different portions of production inter-relating in order to
“With newer digital and AI technologies, you can actually drive not just process optimizations but also improvements that lead to significantly reducing waste.”
make the final product,” says Cutulenco. “Even if you think of something as simple as plastic injection molding, these are very complex machines where you’re having to control variables such as temperature, pressures, how you store the plastics, and how all these impact each other. It’s very hard for humans to visualize how all these variables cross-correlate, but AI is well-suited to do that.”
BEYOND THE SCREEN
A full understanding of processes and their impact on the environment, however, can’t be gained only by sitting behind screens and looking for patterns and correlations – much depends on being connected with the people on the shop floor who have intimate knowledge of the processes.
Taylor relied on such input when he worked with Idaho-based Lamb Weston, a leading supplier of frozen potato products, to reduce
a substantial waste of potatoes. The problem is widespread in the food industry. According to a 2023 study commissioned by the public-private partnership Pacific Coast Food Waste Commitment (PCFWC), frozen potato facilities waste between 21-to-38 per cent of the potatoes they process.
One of the quick wins at Lamb Weston was identified by asking straightforward questions of shop floor operators.
“Where are the wasted potatoes going?”
“Over there. I clean up a huge pile of them every day.”
“Why are they there?”
“Because the belt overflows and they fall on the floor.”
“Why does the belt overflow?”
“Because the cutter jams and the potatoes keep arriving.”
The solution was decidedly low-tech: upstream of the cutter, install a flap valve which will close when the cutter jams, redirecting the potatoes to an alternate cutter. That measure alone saved 1.2 million pounds of potatoes per year, the equivalent of 560,000 meals in the human supply chain.
The case reveals that environmental losses aren’t just discrete quantities that can be measured with meters or IoT devices, but often consequences of deeply flawed processes. Improving processes, accordingly, often holds the key to significant improvements in environmental performance. Technology is a powerful enabler, but leaders have to understand the problems they’re trying to solve in order to leverage it appropriately. SP
BY LARRY
BUSINESS ETHICS
WHAT’S YOUR NORTH STAR?
What has more sides than a Rubik’s cube? Business ethics. The philosopher Virginia Held provided a framework on ethics which affects business decisions to this day. The ethics of care, meaning to do what you know to be right, in any situation; and the ethics of justice, meaning to do only what the law requires, explicitly.
These two ethical positions shape supply chain actions. Procurement leaders apply their managerial expertise to navigate the potential dilemmas which can be created between ethics of care and ethics of justice. What would you think about the ethical conduct of a city which knowingly ignores their obligations to state clearly their evaluation criteria and weighting on competitive bids? At first it would seem unethical or unprofessional. It would only be considered illegal if a third party chose to challenge the city’s position and won. This opens up a discussion on the other business attitude: catch me if you can.
Unethical practices and illegal conduct will continue in most sectors. This occurs from price fixing
on bread or misleading labelling on products to the personal conduct of executive leaders. The concern over a poor corporate image when getting caught usually results in “15 minutes of bad news” and we move on. Further research from Harvard’s Max Bazerman, shows that when we choose to be less ethical to take an advantage, or turn a blind eye to a questionable practice, we start to slide down the slippery slope. The inevitable outcome leads to ever increasing risk-taking, which is condoned in the name of profits, until it falls under illegal practices. There’s a fine line between unethical conduct and illegal actions. We need to appreciate the difference.
Leading organizations stand behind their value statements. These statements refer to the implicit expectations as to how they will conduct business and the expectations that their business partners will support these values. Their ethical conduct is reiterated in their company’s code of conduct for staff. They issue a supplier code of conduct not because it’s a nice thing to do, but because it’s what affects staff behaviour and meets the values of the communities they serve. Businesses operate under a social license. The social license aligns with the ethics of care – we can make profits and serve a larger purpose.
THE MOVE TO DEI
One of the hot-button issues today in business ethics is the commitment to DEI in policies. Diversity, equity and inclusivity, and its adjunct, accessibility, rose to prominence in the past decade. DEI recognized that exclusion of people over race, colour, ethnicity, or faith, is unacceptable. In Canada, the recommendations by the Truth and Reconciliation Commission, fall under this broad discussion of DEI. It’s a good example of ethics of care. Some business leaders argue that only the most qualified people should be in positions of power. The problem with this perspective is, if you only choose from the preferred pool of candidates, you will never find the best qualified people. A bias will
“DEI recognized that exclusion of people over race, colour, ethnicity, or faith, is unacceptable.”
self-limit the possible choices. We can find a reference in all major professional sports. Many of the best players are people of colour. Until the stigma of racial bias was overcome, the best qualified could not be considered, as they were intentionally excluded. We are dealing now with DEI as an ideological issue, forcing companies and institutions to dismiss their commitments or face financial penalties. The views by one country that does not support DEI are being imposed on other countries through trade agreements and access to funding. This is an ethical challenge for many. Once we concede on one set of values, we begin the slide down a slippery slope towards conducting business at any cost. This is not going to be a sustainable strategy and is incongruent with ethical standards.
Ethics change as society’s values change. Business practices and ethical conduct adapt to reflect the current level of social acceptance. Values change as we gain a better understanding of the risks for not adapting to progressive policies, for the good of all. When we look at the shift towards social procurement practices, we see how ethics played a positive role. Social procurement was aimed at providing meaningful work to individuals who faced systemic barriers to employment. The stigma attached to these individuals often meant they were labelled as unemployable. They were in a cycle of poverty and relied on charity. The ethics of care showed that this was a myth. Many people who once faced systemic barriers have been able to successfully gain employment and equitably participate in our economy.
The social return on investment has shown that financially it makes sense to be inclusive and
accommodate people. If we disregard DEI, and go with the ethics of justice, we will revert to stigmatizing people and not allowing them into the preferred pool. The ethics of care has shown that social procurement and DEI are complementary. We need to trade with countries which have a poor record of human rights and respect for environmental standards. However, we will continue to do business with them and advocate for a change in values. The recent contract by the BC Ferry Corporation to buy ships from China while China imposes outrageous tariffs on Canadian canola producers, is one of our ethical dilemmas. There aren’t perfect solutions to these issues. The art of compromise is always at play.
BUSINESS AS USUAL?
Professional codes of ethics for supply chain leaders require a discretionary choice between buying goods or services from a supplier with ideological differences. A supplier may not support the principles or values which the buyer’s organization wants to enforce. Yet, the buyer must continue to do business, as the lack of competitive options could invite financial harm or loss of supply. The 2025 international trade and tariff war and geopolitical tensions require strategies that balance the supply and demand sides with the need for sustainable operations. Should we continue to buy from the BRICS countries or only those countries that meet our ethical expectations? What’s your North Star? SP
Larry Berglund, SCMP, MBA, FSCMA, is a supply chain leader, consultant, and author.
BY DENIS SANCHEZ
A NEW RAIL STANDARD ACCREDITATION BOOSTS TRUST IN THE RAIL SUPPLY CHAIN
A popular image that arises when thinking of passenger rail in Canada is the mountains and lake views aboard the Rocky Mountaineer’s glass-domed coach. But there is so much more to passenger rail than beautiful views. The sector is essential to urban mobility, regional connectivity, climate change and economic development.
The Toronto-Quebec Rapid Train project, for instance, is projected to bring user value of up to $9.2 billion, GDP-boosting effects of over $3 billion and reduced greenhouse gas emissions by $2-to$7 billion. The benefits are substantial and will transform a region that is home to over 16 million people. But, as with any major infrastructure endeavour, it is complex, and its reliability depends largely on the use of safe, compliant, and high-performing suppliers.
To tackle this and other sector needs, TRACCS, the Transit Rail
Association for Canadian Contractors and Standards, has partnered with Achilles, a global leader in supplier risk. The result has been TRACCS Assured, a new standard for accreditation in our passenger rail sector that is aligned with recommendations from TRACCS and a group of leading rail experts in their Fixing the Foundations report.
WHY TRACCS ASSURED?
Our national infrastructure is ageing, and demand is increasing. This puts pressure on project delivery and maintenance. Supplier networks across the country are fragmented, subject to inconsistent safety, compliance, regulatory and quality standards. This creates confusion and inefficiency instead of reducing risk and improving performance. As a result, projects slow down, and costs increase. Rail projects in Europe tend to last up to a year and cost $200-$300 million per kilometre, Canadian rail projects are averaging between $400 million to over $1 billion and taking three-to-five years or more.
This not only affects infrastructure development but creates distrust in our ability as a nation to deliver major projects, increasing investment risks and affecting our competitiveness. Behind all this is a system plagued by inefficiency from duplicated and disconnected processes, lack of standardization, and inconsistent compliance oversight.
Last December, the Department of Transport sponsored a study that reviewed the regulatory regime under the Railway Employee Qualification Standards Regulations (REQSR) and made an exhaustive review of the state of rail safety, training, and certification issues. Their Regulatory Impact Analysis Statement expands on the value of standardization in risk assessment and safety management in a sector where both freight and passenger rail are intertwined due to sharing lines and other infrastructure.
Last year, TRACCS and Achilles started designing a new standard of accreditation for the sector. TRACCS Assured launched earlier
“Procurement leaders realize efficiency gains by adopting shared assurance standards rather than relying on duplicate vetting processes.”
this year, and it provides a rigorous standardized model that simplifies supplier risk assessment, designed by rail practitioners to align with rail operational realities and replacing multiple audits with one recognized assurance process. The new standard complements federal oversight and is in line with the recommendations made by the Transportation Safety Board of Canada in the report cited above.
The developments in our passenger rail sector have large implications for supply chain professionals across all industries. Just as rail projects largely depend on the ability and performance of reliable and safe contractors and suppliers, so do other infrastructure, CAPEX, and maintenance projects.
Procurement leaders realize efficiency gains by adopting shared assurance standards rather than relying on duplicate vetting processes. Shared accreditation drives shorter sourcing, faster contract award, better project performance and delivery, reduced risks, and higher investment confidence. These benefits apply across multiple industries. Construction and energy projects face similar contractor assurance challenges. Manufacturing also needs consistent standards to avoid bottlenecks. And public sector infrastructure projects are often affected by inefficiencies and duplication of prequalification efforts.
Standard accreditation has long been recognized as a valuable economic tool. ISO 9001 certification, for instance, correlates with higher financial performance, operating gains, and better return on assets. Accredited certification takes place
in 80 percent of global trade, reducing trade costs, boosting innovation, and building trust across borders.
LOOKING AHEAD
The work with rail leaders, suppliers, contractors, TRACCS, transit and federal government agencies is only starting. The reception received by the accreditation model has been great and more suppliers join the program on a regular basis. Both suppliers and their hiring organizations recognize the benefits of standardization to build a passenger rail system that is safer, more reliable, and sustainable.
And for supply chain professionals across other industries, supply chain assurance is not a rail issue. It is a cross-industry challenge that, when addressed strategically, can become a strategic lever for reliability, efficiency, and trust.
The Rocky Mountaineer has come up in so many of my conversations with friends and colleagues from other countries who are perplexed at the images of Jasper, Banff, Lake Louise, Vancouver, and Whistler, among others. But rail is more than transit.
The Mountaineer is one example of how safe, reliable, and high-quality rail operations can attract international demand and strengthen our national brand abroad. To sustain that trust, supply chains that feed the sector must be as impressive as the sights passengers see. Supplier accreditation through programs like TRACCS Assured turn that vision into reality.SP
Denis Sanchez, MCIPS, MS, MA is regional sales manager, Canada, at Achilles (www. achilles.com).
By Kathy Fowler
The strategic lever Upfitting drives cost containment, utilization, and uptime
Fleet managers face relentless pressure to control costs while keeping vehicles and technicians productive. Rising fuel prices, volatile acquisition costs, and climbing maintenance expenses have made total cost of ownership (TCO) the top concern across North American fleets. At the same time, underutilized vehicles and downtime erode efficiency, often costing more than the asset itself.
One lever is often overlooked: vehicle upfitting. More than a line item on a purchase order, upfitting can be a strategic tool that lowers lifecycle costs, maximizes utilization, and minimizes downtime. Planned proactively, the right upfit strategy helps fleets do more with less.
Cost containment (TCO)
With the average new-vehicle price near $48,600 in 2025, managers can’t afford to overspec or overspend. Depending on the work, a van, a truck with a capsule,
or a service body may be the right fit. By understanding the tasks technicians perform and the capabilities that can be accommodated through the right upfit, fleet managers can right-size their fleets instead of defaulting to oversizing.
Smart upfitting helps contain costs by:
Lowering acquisition costs: Slip-in truck capsules and lightweight interiors often replace larger, more expensive vehicles. Downsizing from Class 3 trucks to half-ton pickups can deliver the same functionality with less capital investment. Avoiding duplicate spend: Modular, EV-ready, and transferable gear prevents costly retrofits as fleet needs evolve.
Preserving resale value: Permanent service bodies limit resale options. Transferable or removable equipment broadens the buyer pool and helps trucks sell faster.
Stretching investment across cycles: A $15,000 capsule reused across three vehicles reduces effective cost to $5,000 per truck, turning an expense into a reusable asset. Supporting lease strategies: Transferable capsules and shelving can move seamlessly to new vehicles, avoiding tear-down costs and preserving upfit value.
Utilization and Downtime
Utilization means maximizing both vehicle and technician productivity. Poorly organized or sidelined assets drive costs quickly. Proactive upfitting improves utilization by: Boosting productivity: Disorganized vehicles can waste 30 minutes daily per tech. Across 50 vehicles, that equals 6,000 hours annually, or nearly three full-time employees. Purpose-built shelving and storage streamline workflow and improve first-time fix rates.
Reducing downtime: A service body ties vehicle and equipment together – when the truck is down, so is the tech. Slip-in capsules transfer to another pickup, keeping technicians on the road during repairs. For vans, durable upfit products provide secure storage that minimizes damage and wear, helping extend vehicle uptime. I ncreasing lease flexibility: When a leased vehicle cycles out, transferable equipment moves to the replacement truck without gaps in readiness.
Better utilization isn’t just about miles driven, it’s about labour efficiency and uptime, both of which directly impact profitability.
Proactive versus reactive upfitting
Many fleets still follow a reactive model: choose a vehicle first, then ask an upfitter to adapt it. This
Kathy Fowler is marketing manager at Sterling Fleet Outfitters Inc.
often leads to over-buying and underutilization. A contractor may default to service bodies when a pickup with a capsule could deliver the same function at lower cost.
By involving an upfitter early, fleets can right-size vehicles, minimize acquisition costs, and keep utilization high across the lifecycle.
A scenario in action
A mid-sized utility fleet with 100 vehicles, 25 of them service bodies, reviewed its fleet mix with an upfitter. The results showed both immediate and long-term savings:
Acquisition savings: Shifting half of the service bodies to pickups with transferable capsules cut upfront costs by about $10,000 per unit, totalling $125,000 in immediate savings.
Lifecycle savings: Service bodies often need replacement every cycle. At $24,000 every four years, costs add up fast.
Transferable truck capsules move from one truck to the next for about $2,000, saving fleets more than $60,000 per unit over 12 years.
Faster replacement cycles: Capsules mount onto standard pickups, which OEMs stock. This
lets fleets avoid long factory lead times and put replacement units into service quickly.
Productivity boost: Organized interiors saved 20 minutes per tech per day, equal to 80 hours annually per vehicle.
Remarketing advantage: Standard pickups with transferable gear sold 20-to-30 per cent faster than service bodies.
Lease efficiency: As leases expired, capsules were moved to replacement trucks, preserving upfit value.
This fleet realized upfront acquisition savings and compounding
Underutilized vehicles and downtime erode efficiency, often costing more than the asset itself.
lifecycle savings while also gaining faster replacement options and higher utilization.
Strategic lever
Fleet managers already rely on levers like fuel efficiency, lifecycle management, and driver behaviour to manage costs. Upfitting deserves a bigger role. It is one of the few tools that simultaneously impacts TCO, utilization, downtime, and leasing flexibility, all critical for today’s fleets. By treating upfitting as a strategic lever rather than an afterthought, managers can lower acquisition costs, increase technician productivity, reduce downtime, and preserve asset value across cycles. FM/SP
The numbers don’t lie.
(s + hrv + lte)
(safety + high resale value + long-term efficiency)
What’s the smart fleet investment?
The equation is simple, offer your team the three essentials: safety, high resale value, and long-term efficiency. Subaru solves your fleet needs with precision. And it’s not just smart, it’s mathematically sound. Do the math, optimize your fleet costs.
By Stephanie Wallcraft
An absolute delight
Test driving the 2025 Audi S3
In this world preoccupied with SUVs, let’s not forget the unbridled joy a performance sedan can bring. In this case, the sedan in question is the 2025 Audi S3. The fourth generation launched for 2022, but a 2025 facelift has added some juicy updates like a power bump, chassis upgrades, and rear axle torque vectoring to go with standard quattro all-wheel drive. A new rear differential is inherited from the even more raucous RS3 (which, as an aside, makes a triumphant return to Canada for 2025). The S3 also receives updated headlight, taillight, grille and wheel designs, along with available selectable daytime running light signatures. New shifter and
air vent designs and updated lighting enhance the 2025 S3’s interior.
Under the hood
With 328 horsepower, 22 more than the 2024 model, and max torque of 295lbs-ft from its 2.0-litre turbocharged four-cylinder engine, the 2025 S3 runs from zero to 100km/h in 4.7 seconds to an electronically limited top speed of 250km/h. Peak torque is now available through a wider rev range of 2,100 to 5,500rpm. This is the right amount of power for public roads. Any more and you’re leaving capability on the table when driving within the limits of legality. It all looks sensational wrapped in Python Yellow with the available
black roof and carbon spoiler, plus optional 19-inch wheels with low-profile tires (which, to be fair, do crash over potholes and transfer some noise into the cabin at highway speed).
On a racy stretch of asphalt, this car is an absolute delight. Power delivery is assertive – verging on a handful at times, especially in Sport mode – while steering is sharp as a tack. The sport suspension with available damper control keeps the car glued to the pavement.
Before you even put a pedal down, the S3 makes a great first impression, especially with the optional Nappa leather with red stitching and carbon fibre inserts equipped in our tester. The dash-
board’s simple yet angular design –with a layout that favours the driver, just as a car like this should – sets the mood immediately. The gear selector, with a low-profile design lifted straight out of Audi’s newer EVs, is on trend.
Certain elements, like the 10.1-inch infotainment screen and climate control panel with LCDlook graphics, aren’t as techforward as the competition. But they look less cheap and more retro in this context, and their simplicity is a breath of fresh air. Plus, the 10.25-inch digital instrument cluster can display the builtin navigation that comes with the top Technik trim directly in front of the driver.
1. The S3 features a 10.1-inch infotainment screen and climate control panel with LCD-look graphics.
2. With 328 horsepower and max torque of 295lbs-ft from its 2.0-litre turbocharged four-cylinder engine, the S3 runs from zero to 100km/h in 4.7 seconds to an electronically limited top speed of 250km/h.
Natural Resources Canada estimates the 2025 S3’s fuel economy at 10.4L/100kms in the city, 7.6 on the highway, and 9.1 combined. We observed an impressive 6.8L/100km in our testing, which combined city and rural roads with highways.
Our quibbles with the S3 are mostly minor. The available wireless charging pad couldn’t charge an iPhone 13 quickly enough to keep up with the drain from running Apple CarPlay (There are two USB-C ports up front and two in the back as alternatives). The seat cushions are comfortable, but the centre console bin cover is short, so drivers with short arms may not be able to rest an elbow on it. And while heat-
ed front seats and outboard mirrors are standard, the flat-bottomed sport steering wheel doesn’t support heating, and ventilated front seats are not offered. These feel like oversights in a car that pushes well past $60,000 as tested.
Comparison shopping
But they’re easier to overlook when you price out the competition.
The closest product in the current Mercedes-Benz Canada portfolio is the AMG C 43, which is higher-powered (416hp, 369lbs-ft) and starts at $83,200 (note this is before fees, which Mercedes dealers set independently). For fleet buyers in particular, that’s likely overkill. The 2025 BMW M340i is closer
(386hp, 398lbs-ft) starting at $74,679 fees in; it’s a great car and more modern than the S3 in some respects, but it still may be more than some buyers need. The Acura Integra Type S (320hp, 310lbs-ft) is even closer at $60,835 with fees, but it can’t match the Audi’s refinement.
In that context, the S3 looks like a bargain. Spec it in Progressiv trim starting at $62,100, fees in – apart from built-in navigation, the Technik trim’s extra features are mostly niceties – and you’ll drive away with a car that’s simple to use, a blast to drive, and hits a sweet spot between performance and price. FM/SP
“It all looks sensational wrapped in Python Yellow with the available black roof and carbon spoiler.
Price (incl. freight and PDI):
Starts at $71,650*
Engine: 2.0-litre turbo I4
Power: 328hp, 295lbs-ft
Transmission: 7-speed automatic
Rated Fuel Economy (L/100km): 10.4/7.6/9.1
Observed Combined Fuel Economy (L/100km): 6.8
*MY2026 pricing shown; accurate 2025 pricing was no longer available at press time.
As Tested (2025 Audi S3 Technik)
EARLY DISCLOSURE WHY YOU NEED TO DISCLOSE SUB-WEIGHTINGS
Public procurement rules require public institutions to disclose the criteria that they will be relying on when evaluating competing bids. With reference to the common evaluation category of prior project experience, this article explains why public institutions need to disclose evaluation sub-weightings in their solicitation documents to better ensure the legal defensibility of their contract award decisions.
For the purposes of this discussion, assume that you are drafting a solicitation document for a highvalue project where you state that prior project experience will be scored out of 40 per cent of the total bid score, that bidders will be required to submit three prior projects to demonstrate their relevant experience, and that those three prior projects will be scored against the five following sub-criteria:
1 project value;
2 similarity to the current project;
3 timely completion of prior project;
4 on budget completion of prior project; and
5 use of the same key personnel proposed in the current bid.
This first level of disclosure is insufficient to meet the transparency standards required in a public sector tendering process since, without disclosing further sub-weightings, evaluators are left with too much latitude to manipulate the final bid rankings by applying hidden sub-weightings to the five sub-criteria when scoring the bids.
For example, if the evaluators are applying an implied equal weighting rule, that would mean that each of the three prior projects would be weighted at around 13.3 per cent
of the total for that 40 per cent category. However, even if we accept that implied sub-weighting per project, it is not clear how the five sub-categories would be weighted against the 13.3 per cent of points available for each prior project. This would require a second assumption that each sub-category is equally weighted at around 2.6 per cent of the 13.3 per cent points available per project. This awkward fragmentation of percentages raises doubt over whether the evaluators will mechanically apply an equal weighting rule in their scoring, or whether they will apply other hidden sub-weightings behind the scenes.
POTENTIAL MANIPULATION
If the sub-weightings are not disclosed, a losing bidder can allege that the evaluators manipulated the process by arbitrarily applying non-transparent sub-weightings after reviewing the bids to support a predetermined outcome since manipulating the sub-weightings allows them to change the overall scores and rankings by changing the relative importance of each sub-criterion based on the information submitted in the bids. Even if this was never the intention of the evaluators, leaving the process open to this type of manipulation raises serious questions about the integrity of the resulting contract award decision.
Public institutions should disclose their sub-weightings to provide bidders with more transparency, to provide evaluators with guardrails for how to score the bids, and to protect against after-the-fact allegations by losing bidders that
the evaluators relied on hidden criteria to improperly manipulate the award. In summary, failing to provide clarity on the allocation of sub-weightings constitutes a major design flaw in a solicitation document that makes the outcome difficult to defend, while providing next-level disclosures is a relatively straight forward due diligence exercise.
The practice of confirming and disclosing sub-weightings serves as a safety check since it requires project teams to turn their minds in advance to consider if an equal weighting rule is appropriate. For example, if the five sub-categories noted above are not equally important – if the first category focusing on project value is actually worth half of the points since low-value project experience is less relevant to assessing a bidder’s ability to perform on a high-value project –then the level of importance of that first sub-category should be disclosed rather than being applied as a hidden preference.
From a practical perspective, when this due diligence exercise is properly performed, it usually leads to project teams adopting clearer round numbers in their scoring. For example, when scoring three prior projects, it is far clearer to score the category out of 30 per cent with each prior project counting for 10 per cent of the total points. Those points can then be sub-divided equally across the five sub-categories at two percent each if the sub-categories are equally important. However, if the first sub-category, past project value, is seen to be the most important sub-factor, then the
Paul Emanuelli is the general counsel of The Procurement Office and can be reached at paul.emanuelli@ procurementoffice. com.
“Failing
to provide clarity on the allocation of sub-weightings constitutes a major design flaw in a solicitation document.”
10 points per project can be allocated as six per cent for project value and one percent each for the remaining four sub-criteria.
DUE DILIGENCE
Either way, the ground rules need to be clearly set out in advance in the solicitation document since performing proper due diligence on sub-weightings is a far better option than proceeding with vague evaluation rules that expose a project to unnecessary and avoidable legal risk. SP
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