Supply Chain World Volume 8 Issue 5

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Chairman Andrew Schofield

LETTER FROM THE EDITOR

Managing Director Joe Woolsgrove Editor Libbie Hammond Assistant Editor Will Daynes Staff Writers Alex McDonald Danielle Champ Production Manager Fleur Daniels Art Editor David Howard Advertising Designer Rebecca Side Sales Director Alasdair Gamble Operations Director Philip Monument Operations Manager Natalie Griffiths Research Managers Jo-Ann Jeffery Ben Richell Kieran Shukri Marissa Roberts Basil Sharpe Editorial Researchers Adam Blanch Mark Cowles Tarjinder Kaur-D’Silva Jeff Goldenberg Mark Kafourous James Page Wendy Russell Richard Saunders Advertising Sales Johanna Bailey • Alex Hartley • Dave King • Theresa McDonald • Ibby Mundhir • Reid Lingle Sam Surrel • Mike Berger Web Sales web@schofieldpublishing.com Subscriptions i.kidd@schofieldpublishing.com

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© 2021 Schofield Publishing Ltd

Finding solutions Hello and welcome to the May issue of Supply Chain World. This month we touch on a variety of different topics in the features – including artificial intelligence (AI) and the promise it holds for supply chains. In her feature on page 10, Polly Michell-Guthrie highlights the benefits that AI, including its most used algorithms of machine learning, can bring, but she also emphasizes the importance of people, as they work best together with algorithms. ‘…so for supply chains the best direction is to augment people power, rather than replacing it,’ she reassures us. Breaking through mountains of data and benefiting from the information inside is covered in the Materials Handling feature that is on page 4. Steven LaFevers takes a look at forklift truck telemetry and the efficiency gains that actionable data can deliver to an operation. Warehouses are also on the agenda – according to Thomas Hainzel on page 6, ‘by moving towards greater automation, and use of robotics, it is estimated that warehouse operators can save up to 70 percent in overall operating costs while

meeting customer service needs and achieving greater flexibility’. He actually describes the array of smarter solutions on offer with warehouse digitalization and automation as ‘dazzling’ – exciting times are ahead in this arena! Finally, we look at automation, and how predictable supply chain constraints can be removed with the right solution. Technology, data and solutions – thinking out-of-the-box and resolving bottlenecks – all of these are more critical than ever in today’s supply chain environment. The vast array of sectors that are focusing on their supply chains is also something we reveal in our profiles section – from healthcare to real estate; restaurants to airfield solutions; beverages to electronic manufacturing services, what unites these seemingly disparate industries is their need for efficiency, their desire to reduce costs, the imperative to improve services, and meet the needs of end users, and form close and rewarding relationships with suppliers. It’s fascinating to read such a cross section of stories – I do hope you enjoy them all.

Libbie Hammond libbie@schofieldpublishing.com Please note: The opinions expressed by contributors and advertisers within this publication do not necessarily coincide with those of the editor and publisher. Every reasonable effort is made to ensure that the information published is accurate, and correct at time of writing, but no legal responsibility for loss occasioned by the use of such information can be accepted by the publisher. All rights reserved. The contents of the magazine are strictly copyright, the property of Schofield Publishing, and may not be copied, stored in a retrieval system, or reproduced without the prior written permission of the publisher.

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CONTENTS

Features 4 Material handling

With so much data available to forklift truck fleet managers, how can they sort through the clutter and find the information that is truly useful?

Profiles

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6 Warehouses

Is there a case for warehouses to get smarter as well as larger? The opportunity is there for operators to take initial steps into Supply Chain 4.0

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10 Staff

People and algorithms work best together, with the lights on, so for supply chains the best direction is to augment people power, rather than replacing it

AD

14 Automation

The ability to automate operations and remove daily functional constraints is predictable, avoidable, and necessary. How AGV vendors have finally moved the constraint

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16 News

Some of the recent developments within the supply chain arena – new contracts, exciting announcements, research findings and interesting solutions

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Le


COVER STORY

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CAPREIT

Northside Hospital

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ADB SAFEGATE

Sonic Manufacturing Technologies Le Duff America

Vive

ADB SAFEGATE

Le Duff!

Weathering the

storm

ges of 2020, elmed by the challen Rather than be overwh the past year to put itself in the used ADB SAFEGATE has to navigate a future that will be n e supply chain best possible positio more fluid and reactiv defined by having a

Mike Cobern, Vice

R

Chain World egular readers of Supply with the name will likely be familiar seen the ADB SAFEGATE, having its pages in business feature within uninitiated, a quick recent years. For those it justice, but ADB summary hardly does integrated of provider SAFEGATE is a leading safety, efficiency, improve solutions that boost reduce sustainability, and raise environmental of airports and airlines the operational costs

than 1200 employees worldwide. With more in more than 2500 airports helping it to serve ’s in short, ADB SAFEGATE over 175 countries, intelligent tools spanning mission is to provide and service, increasing the gate, airfield, tower to ce, from approach overall airport performan departure. James – ADB Catching up with Melanie the of Supply Chain for SAFEGATE’s Director of 2021, the first topic Americas – in April

unsurprisingly how conversation is perhaps and in 2020. “I think first the business fared to note that due to foremost, it is important supporting airports the nature of our work ly were almost immediate around the world we business. As such, essential an classed as being t the duration of we have worked throughou ring manufactu with our the Covid-19 pandemic, l – while of course operationa remaining plants necessary safety protocols following all of the

also by a team of people – and being supported working remotely. disruptions at the “There were minimal We entered into beginning of the pandemic. ished strong, well-establ that period with a of Americas – made up supply chain for the which helped to numerous great partners, by of the impact caused shield us from much through the year, the virus. As we progressed ation level of communic we ramped up our

After a year spent navigat ing the Covid-19 pandem ic, Le Duff America is looking forward to getting back track with the launch on of ten new restaurants in 2021

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I

t was late March 2020 when, for Le Duff America, everything changed overnight. The impact of the Covid-19 outbreak was swift, and the virus began to affect foodservice operators immediatel y. “No amount of training or experience could have prepared us for the Covid-19 challenge,” explains Mike Cobern, Vice President of Purchasing at Le Duff. “For the foodservice industry, it felt like being in a car on the freeway and instead of slowing down to get to your stop, scw-mag.com

President of Purchasing

at Le Duff

“ In a larger sense, if we do what we do best - and we will there will be plenty of opportunities out there for further growth in 2021

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the brakes are slammed down and you make a screeching halt instead. “I think if we had seen

this coming as an

industry, there may have been even more panic. The fierce nature of the outbreak meant that it suddenly forced us to change the way we did daily business. There was not a lot of time to overanalyse or overthink because we were all immediately scrambling to implement a plan for our staff, our shareholde rs and, most importantly , our guests.”

A foodservice veteran of over four decades, Le Duff operates a variety of US restaurant chains and sandwich bars, including La Madeleine and Brioche Dorée. Since its founding, the company has continued to grow, innovate and develop, building strong industry relationships and a reputation for high-quality , French-inspired food outlets. This strong foundation has, to a large extent, played a key role in helping Le Duff overcome a difficult 12 months. “Well,” Mike says, “we have certainly seen

better years. I guess

when you have been

around as long as I have, you tend to think you’ve seen everything, but, as last year taught us, you haven’t. “In short, we made it through a tough time,” he continues. “That’s not to say that we’re completely satisfied with where we are today, but the fallout could have been much worse. We had virtually no food or service loss over the last 12 months, primarily because our operators, our vendor partners, our primary broadline

distributor, and our produce network worked together to find solutions.” Quick to adapt to the changing landscape

of the food industry in 2020, Le Duff worked closely with suppliers to ensure that all parties could make it through the Covid-19 crisis unscathed. Still, despite Le Duff’s efforts, the severity of the pandemic gave rise to a host of unforeseen supply issues with which the company had to contend. “We had vendors experience interruptions scw-mag.com

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Le Duff America

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MATERIAL HANDLING

Unlock material handling efficiency with data How to break through mountains of data and connect the dots for real benefit. By Steven LaFevers

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hink back to March 2020 and the beginning of the Covid-19 pandemic. One of the most peculiar (and memorable) storylines was the great toilet paper shortage. Like bread and milk in preparation for a major weather event, toilet paper became the must-have item for consumers preparing to hunker down in quarantine. From neighborhood bodegas to grocery stores to big-box retailers, toilet paper shelves were empty. And even when it came back in stock, retailers instituted strict rationing in an effort to prevent shoppers from hording and provide a more regular supply. Behind the scenes, paper suppliers were scrambling to keep up and boost production – and the lift truck data supports this. We looked at a major paper product manufacturer’s

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lift truck fleet data and, sure enough, truck session hours rose sharply at the outset of the pandemic, indicative of the all-hands effort to address the surge. Now, what if the manufacturer knew this and acted quickly to supplement their fleet with rental trucks to cover the working time and maintain the optimal average working hours per truck? Of course, lift truck data offers great benefit far beyond tracking the origins of a toilet paper shortage. When it comes to keeping downtime to a minimum, fleets structured efficiently and operators working at peak performance, access to the right data goes a long way. But with so much data available – related to individual operators, equipment use, individual components and more – how can fleet managers sort through the clutter? A telemetry system sorts through

mountains of data to identify the most valuable information and – here’s the important part – provides actionable insights that take the guesswork out of your work. User-friendly dashboards available online through the cloud make large data sets more manageable, even on mobile, allowing access to near real-time fleet metrics and notifications on the shop floor. Managers get notifications about things like lift truck impacts, maintenance alerts and concerns on pre-shift safety checklists for near immediate action and resolution. It all adds up to meaningful efficiency gains in everything from labor management to fleet size and equipment procurement. Each day, operators are required by OSHA to fill out a pre-shift safety checklist. Rather than using paper-based systems, they can use


Main image: Telemetry is a tool to improving overall fleet efficiency Above, left & right: Telemetry device that’s on lift trucks equipped with Hyster Tracker Left: Telemetry mobile app

the telemetry devices mounted to equipment, complete with onboard prompts and fast alerts to key stakeholders to photograph and document any issues through the portal, informing maintenance action. Managers can customize checklist frequency to suit individual needs, and pull checklist information for a specific day, truck or operator through portal reporting tools. To access equipment and begin the OSHA checklist, personnel must swipe a unique access card. This enables facilities to restrict equipment access only to operators with proper training and certification, and track operational data like equipment impacts and idle time by the specific employee. This increased accountability can encourage better driver behaviors, help reduce equipment damage and preserve uptime.

More recently, some manufacturers have introduced auxiliary features to provide extended functionality. One example is an onboard camera system that automatically saves footage minutes before and after an impact. Not only do supervisors get a notification if an impact registers, they get a complete picture of the circumstances around lift truck impact events. Another added feature enables lead-acid battery monitoring, gathering data on maintenance habits, watering, equalization and charging to help avoid premature wear due to mismanagement. Optimizing lift truck size and makeup is a lot like finding the elusive ‘Goldilocks’ setting. Not too many pieces of equipment so that operations pay for lift trucks that lie dormant, but not too lean to the point any unplanned downtime grinds throughput to a halt. Utilization data helps businesses understand how they use equipment, providing the datadriven basis for decisions on fleet size and lift truck product type. Seasonal peaks or unexpected spikes in demand may require a larger fleet than other

times of year, which could lead operations to accumulate excess equipment. But using telemetry to gather and analyze utilization data can allow managers to decide on a smaller, year-round core fleet of trucks, then rely on rental agreements to handle spikes. In fact, analyzing utilization data like lift truck session hours can illuminate when spikes are happening – like those due to unexpected toilet paper demand. While leveraging utilization data may not have avoided the impact of the pandemic on store shelves, it could have alerted managers of the need to bring in rental trucks to help handle the surge. By supplementing the core lift truck fleet, the optimal average for working hours could be maintained, helping extend equipment life and avoid unexpected service issues. Steven LaFevers is Vice President, Emerging Technology at Hyster Company. Hyster Company offers 130 lift truck models configured for ICE and electric power, in 2,000 to 105,000-lb load capacities. Hyster also offers robotics and telematic solutions that deliver high productivity, low total cost of ownership, easy serviceability and advanced ergonomics, supported by one of the industry’s largest, experienced dealer networks. www.hyster.com

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WAREHOUSES

Get smarter Warehouses. Big and clever? By Thomas Hainzel

A

s vaccination programs take effect, the light at the end of the pandemic tunnel begins to glimmer more brightly. For warehousing, it also casts light on imminent investment decisions to be made. Right now, industry impetus is behind bigger warehouses. But is there also a case for warehouses getting smarter, as well as larger? Supply chain has been under the spotlight for more than a year. Too much or too little

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inventory, challenging staffing arrangements, an instantaneous boom in e-commerce, combined with an equally immediate shift to omni-channel have each contributed to supply chain stress. Many industry experts are focusing on long-term predictions about how to face the future. In some quarters, it’s suggested that a reset of near-shore and offshore logistics can reduce localized over-dependency. Elsewhere, it’s proposed that just-in-time manufacturing,


and associated hyper-lean supply chain, has maybe got a bit too lean. But these strategic decisions are multi-year shifts that will take time to implement. In the nearer term, warehousing needs to find other ways to drive capacity and productivity.

Floorspace growth One identifiable trend is projected growth in warehouse space as part of the response to changes in purchasing patterns. Brands

such as Aldi, Asda and Lidl have all increased capacity and hired additional warehouse workforce. And with companies like Amazon Prime and Walmart now offering next-day delivery, this too drives the need for more warehousing physically closer to the end customer. In Europe, according to a Savills research report based on Capital Economics forecast data, we could see an additional 11.6 million square meters of warehouse demand by the

end of 2022. And, based on a JLL Real Estate projection, predictions indicate that total warehouse stock in India will increase by more than 75 percent between 2019 and end of 2023. The same organization asserts that demand for industrial real estate in the US could reach an additional one billion square feet by 2025. So, one near-term response is more space. Add in a growing number of retail-toindustrial conversions, and warehousing looks

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WAREHOUSES

like it’s getting bigger. Much bigger. While such investments represent logistics growth, which is good, the question remains – what other measures can warehouse managers take to help resolve their near-term flexibility and capacity conundrums?

Technology enablers The answer may perhaps lie in logistics warehouses themselves. They provide a logical starting point for quick wins by introducing new approaches and reworking process workflows. For some warehouse operators, the future is already underway with early adopters applying robotics and automated processes to drive productivity, control cost and make the most of available space. For the new starter in automation, three essential technology enablers need to be considered. First, location-wide, high-bandwidth connectivity. Warehouses can be now

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be outfitted relatively quickly and costeffectively with 4G or 5G private wireless networks that extend throughout the operation and can communicate with other warehouse locations. High performance wireless broadband connectivity is necessary to provide the platform for efficiency-driving solutions that run over the top. There is one thing to note here. From user experience, we learn that Wi-Fi does not withstand the rigors of a smarter warehousing experience. Continuous coverage aside, there are fundamental differences in performance between Wi-Fi 5/6 and either 4G or 5G. In practice, 4G and 5G private wireless networking delivers lower round-trip latency and greater scalability than Wi-Fi, enabling warehouse automation projects to come into their own. This faster, more reliable, uninterrupted connectivity is essential to deploy massive Internet of Things (IoT) – with

IoT being the second technology enabler essential to warehouse transformation.

IoT and analytics Apply IoT, and all devices, machines and people in the warehouse can be connected. This enables robots and other automated systems to move around, track and position assets as well as complete tasks such as packing, assembly, inventory and cleaning. Other applications include wireless HD video feeds, autonomous guided vehicles, augmented and virtual reality. The third technology enabler is analytics. Data analytics-based systems help leverage IoT intelligence to monitor worker safety, predict adverse supply chain events, assess alternate workflows and proactively monitor system maintenance requirements. Analytics also open the door to asset management systems that predict maintenance needs and automatically


“By moving towards greater automation, and use of robotics, it is estimated that warehouse operators can save up to 70 percent in overall operating costs while meeting customer service needs and achieving greater flexibility

shift flows to ensure optimum system performance with little or no disruption. At the same time, predictive systems can assess the potential impact of unprecedented supply chain events, and leverage digital twins to plan, test and propose measures that ensure continuity. Analytics also provide real-time transparency, making it possible to respond quickly to changing supply and demand conditions, providing flexibility and resilience without sacrificing cost optimization.

Supply Chain 4.0 The array of smarter solutions on offer with warehouse digitalization and automation is dazzling. But it makes business sense too. By moving towards greater automation, and use of robotics, it is estimated that warehouse operators can save up to 70 percent in overall operating costs while meeting customer service needs and achieving greater flexibility. The notion of Supply Chain 4.0 has been

discussed for years by logistics strategists and innovators, but mostly as a ‘someday’ project. The issues raised by pandemic fallout have however, prioritized the need to accelerate Supply Chain 4.0 automation. Of course, warehouse operators will continue to invest in larger facilities to meet short-term needs as supply chain enters a new fluctuating, consumer demand-led era. But they also have the opportunity to take initial steps into Supply Chain 4.0. And in doing so, yes – warehouses can be big, but they also can be clever. Thomas Hainzel, Head of EMEA Manufacturing & Logistics at Nokia Cloud & Network Services, leads the business development and segment sales for factory digitalization, smart manufacturing and supply chain logistics. He currently focuses on infrastructure, platform, application and service solutions in the domain of private wireless networks, 4G/5G technologies and Industrial IoT. As a trusted partner for critical networks, Nokia is committed to innovation and technology leadership across mobile, fixed and cloud networks. It creates value with intellectual property and long-term research, led by the award-winning Nokia Bell Labs www.nokia.com/networks/industries/supply-chain-and-logistics/

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STAFF

Working together Why you need patterns AND people to power your supply chain AI. By Polly Michell-Guthrie

T

he world-renowned physicist Stephen Hawking warned that artificial intelligence could replace humans, and with AI adoption increasing and the idea of a ‘lights out’ autonomous supply chain looking possible, it’s

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high time to consider if this is really the best route forward. AI, including its most used algorithms of machine learning (henceforth AI/ML for short), holds incredible promise for supply chains. AI/ML and the broader field of data science,

which I sometimes call ‘fancy maths,’ comprise an amazing pattern-finding machine. But the power of these patterns for a supply chain has its limits. The best way to have an impact is not to turn off the lights and send the people home but to augment your planners with


AI/ML so each is at its highest and best use. AI/ML adoption is on the increase, and the pandemic has accelerated this trend. Fiftytwo percent of executives say AI tools have boosted productivity, PwC AI Predictions, 2021, and global analyst Gartner predicts that

75 per cent of organizations will move from piloting to operationalizing AI by 2024. A recent IBM survey found its ranking has risen on the transformation agenda from fifth to second. The question is not if companies will adopt AI/ML but how they should do so.

In general, AI/ML algorithms are masters at finding patterns in large amounts of data, but the key word here is ‘large.’ Since the maths ‘learns’ by looking for patterns, it most commonly is ‘trained’ using copious amounts of historical data. Once it has learned the

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STAFF

pattern from the training data, the algorithm uses that pattern to make predictions on an entirely new data set. These AI/ML algorithms themselves are often (although not always) combined with a set of processing rules to automate a response to the prediction. These machine insights and automation can tackle a scale far beyond the cognitive capacity of humans. This pattern-finding ability can ‘sense’ demand from signals beyond traditional sales data, thus offering enhanced sources to improve forecast accuracy. It can predict what lead times will actually be based on history instead of human guesswork, saving a planner from tedious manual analysis of a complicated bill of materials. It can forecast and optimize trade promotions. These are

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but a few examples of applications that could aid supply chains. After all, striving to build a better plan is a perennial goal of supply chains, and increasing plan accuracy with algorithms is making an impact. But while AI research has advanced by leaps and bounds these days, accuracy must be kept in equilibrium with agility. All perfect plans are upended by supply chain disruptions, and the times are growing more, not less volatile. The ability to respond to these events quickly is an equally important muscle to build. We want the best insights we can build to increase accuracy in an agile supply chain run by humans. Because humans are still better than machines in some core areas, which is why the lights aren’t going out any time soon. I’ll highlight three capabilities where people

excel: context, collaboration, and conscience. When AI/ML learns from historical patterns in large volumes of data, it can be confounded when confronted with volatile data and especially with unprecedented events. Supply chain disruptions, particularly those with the magnitude of the pandemic, make patternfinding a challenge, and algorithms are unable to understand what is happening. Humans uniquely possess the ability to derive meaning from context, so when disruptions disrupt the models, it is planners who are able to use business acumen and domain expertise to make the best decisions. For example, during the pandemic, forecasting models powered by machine learning couldn’t sense demand no one could understand, so in the interim planners had


to use their domain expertise and context to made the best decisions possible. After a few weeks of sales, a team of data scientists at Kinaxis were able to apply other predictive modeling techniques not reliant on finding patterns in long-term sales history to find clusters in the most recent sales data, which they then used as a rougher forecast estimate. The combination of humans understanding the context, making initial decisions, and then guiding algorithms for short-term approximations rendered better decisions. Similarly, AI/ML can find patterns in data relationships, but algorithms do not understand relationships between people. Supply chains may be a process for making and moving stuff but underlying the links in the chain are relationships between people.

The pandemic exposed the criticality of these relationships, as companies found collaboration was one of the most essential components to managing the disruptions their company experienced. This collaboration took many forms. Colleagues and internal functions worked together in new ways, as everyone pitched in to mitigate the crisis. Companies worked closely with their suppliers, who faced their own challenges, to ensure survival of these smaller companies upon which their supply chain depended. And non-traditional partners emerged as companies collaborated with those outside their industry to manufacture products like personal protective equipment, sanitizer, and ventilators, or provide services like assistance with transporting products. Finally, AI/ML is a bundle of algorithms but has no conscience. It is up to humans to guide and determine whether the fancy maths is used for good or for ill. There are ample examples at both ends of the spectrum. While the United States and China as individual countries have led research advances in AI, the European Union has argued that as a collective the continent is best positioned to lead in advocating for ‘human-centric’ AI that is trustworthy and in keeping with European values. Interest in protecting privacy is higher in EMEA, which led to European leadership in establishing General Data Protection Regulation (GDPR), so the same vision can inform AI/ML. One key element in building trust with AI/ ML is interpretability. While these models are usually famously black box in nature, there are tools that exist to shine light into the box and help the planner understand the factors that drove the prediction. One such approach is SHAP (SHapley Additive exPlanations), which can be used in all kinds of ways, such as showing the features that most impacted a ML-powered forecast in demand sensing. As planners can test and see the factors impacting their forecast they are more likely to adopt AI/ML tools. In fact, GPDR includes a set of rights related to the explainability of AI. Another factor central to building trust in AI is expanding its access beyond the narrow cadre of data scientists. Fortunately, an emerging approach called automated

machine learning (or AutoML) is expanding access to these techniques to whole new categories of people without requiring rarefied expertise. By automating many of the steps involved in building a machine learning pipeline, a business user without training as a data scientist can build many usable models, especially for areas like common forecasting tasks. This development is so promising that McKinsey predicts demand for what they call AutoML practitioners to be double that of data scientists. When AutoML is paired with tools to ensure interpretability of models to mitigate their black box nature, the combination can ease adoption and offer tremendous business value to a far wider range of companies, including their supply chains. Trust in the fancy maths is critical, but so is transparency in the data. People all along the entire supply chain, from the planners of materials, production, demand, inventory, etc. need to have visibility into the same data at the same time. It’s called a supply chain because the functions are linked, which means each impact the other. Cascading information down the chain means waiting for someone’s updates to be entered and creates latency that can lead to finger-pointing and erode trust. The impact of agility and the insights rendered by both humans and machines are limited if transparency is lacking. To prevent planners from being mired in tedium, AI/ML can use machine intelligence to automate mundane tasks and deliver insights that humans just can’t see. This opens up a world where planners can apply their capabilities of context, collaboration, and conscience to focus on exceptions and manage the complexity beyond the scope of machines. By putting the power of the complex maths into the hands of far more humans by using AutoML, supply chains can far more effectively scale application of AI/ML. These people will adopt the AI/ML if it includes the tools to insure its interpretability. Planners can know what’s happening sooner and act faster on that information if they have a foundation of agility and transparency. People and algorithms work best together, with the lights on, so for supply chains the best direction is to augment people power, rather than replacing it.

Polly Michell-Guthrie is VP Industry Outreach, Kinaxis. Everyday volatility and uncertainty demand quick action. Kinaxis® delivers the agility to make fast, confident decisions across integrated business planning and the digital supply chain. People can plan better, live better and change the world. Trusted by innovative brands, Kinaxis combines human intelligence with AI and concurrent planning to help companies plan for any future, monitor risks and opportunities and respond at the pace of change. Powered by an extensible, cloud-based platform, Kinaxis delivers industry-proven applications so everyone can know sooner, act faster and remove waste. www.kinaxis.com/en

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AUTOMATION

Moving on Predictable supply chain constraints can be removed with automation. By Thomas R. Cutler

F

or the past several months, the notion of a Supply Chain constraint, was a freighter stuck in the Suez Canal and the ripple impacts of a traffic jam. While anomalistic, that situation pointed to a weak link in the preparedness of getting materials to manufacturing plants or distribution centers. While not every scenario can be anticipated that could impact getting finished goods to customers, it is remarkable how many constraints are occurring daily and avoidable. Theory of Constraints (ToC) argues that the constraint can be selected and managed. Indeed, in manufacturing plant floors, warehouses, distribution centers (DCs), and third-party logistics (3PLs), the constraint is the antiquated process of moving raw materials, pallets, finished goods out the door either to a secondary regional DC or to the end-user. Ill-suited

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fork trucks fail to meet the design specifications of large facilities nor the required structure of high-turn operations, whether in FMCG (fast moving consumer goods) or kitting in an automotive assembly plant.

The predictability of the constraint ToC is a business philosophy; living with constraints is a reality. John Hayes, (pictured left) Director of Sales for Balyo US (www.balyo.us) shared some of the most common constraints he has observed and how automation and new technology solutions removed these constraints.


According to Hayes: “When a warehouse or DC fails to automate the consequences are serious including reduction in capacity, increased costs, and human impact.” In today’s pandemic or near post pandemic environment sourcing labor has become the overriding issue for all warehouses and DCs. This singular fact causes the above symptoms. The rapid increase in demand and the rapid decrease in labor has created the perfect storm. Hayes emphasized: “When demand increases but there is a lack of labor, the result is expensive overtime…usually at one and half times the typical hourly rate. I have seen projects justified singularly on reduction of overtime. In this case, the automation system had an unseen benefit. It lowered the overall system utilization adding years to the life of the automation equipment.”

Reason warehouses and DCs have fallen behind Warehouses and DCs are behind technologically because of the general inability of vendors to provide a system that can solve enough problems to make the project financially viable. Recently that has changed.

Balyo Reach Truck Vendors now have reach trucks that offer horizontal transport (think from dock doors to the end of aisle) as well as the added step of placing the product into the existing standard racking. When the last step is added the ROI finally begins to make sense. Keeping in mind that the lack of labor is driving the interest in automation, it still MUST provide a reliable service at a cost that is justifiable. While the next freighter stuck in the Suez or Panama Canal cannot be accurately predicted, the ability to automate operations and remove daily functional constraints is predictable, avoidable, and necessary. AGV vendors have finally moved the constraint.

Overtime pay compounds the problems associated with cost as well as a very real human cost. Mobile equipment weighing upwards of 12,000 pounds cause driving fatigue and catastrophic lethal results. Hayes shared: “One accident in a warehouse or DC that impacts the racking could very well damage and put one complete aisle out of use ending in catastrophic failure. These structural failures don’t just knockdown one rack but many racks. In this event, the concern becomes loss of life.”

Thomas R. Cutler is the President and CEO of Fort Lauderdale, Floridabased, TR Cutler, Inc., celebrating its 22nd year. Cutler is the founder of the Manufacturing Media Consortium including more than 8000 journalists, editors, and economists writing about trends in manufacturing, industry, material handling, and process improvement. Cutler authors more than 1000 feature articles annually regarding the manufacturing sector. Nearly 5000 industry leaders follow Cutler on Twitter daily at @ThomasRCutler. Contact Cutler at trcutler@trcutlerinc.com. https://www.trcutlerinc.com/

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News In Brief Supply chain leaders Tech Mahindra, a leading provider of digital transformation, consulting, and business re-engineering services and solutions, has joined forces with growing group of global corporations including Ericsson, IKEA, Telia Company, BT Group, Unilever, Nestlé, Telefónica and Ragn-Sells, en route to driving climate action throughout global supply chains. Sandeep Chandna, Chief Sustainability Officer, Tech Mahindra, said: “By joining the 1.5°C Supply Chain Leaders we are

Getting connected

committing to reducing our greenhouse gas

Alvogen, a global pharmaceutical company, has selected Kinaxis to create a more

emissions across our full value chain in line

connected supply chain to better manage growth. With Kinaxis, Alvogen will have end-to-

with the 1.5°C ambition – and to urge our

end visibility across the entire supply chain and have the ability to manage the network via

suppliers to do the same.”

an integrated planning platform, driving efficiency, agility and improved scalability.

The 1.5°C Supply Chain Leaders will

Based in Morristown, New Jersey, Alvogen focuses on developing, manufacturing and

work together to drive climate action

selling generic, brand, over the counter (OTC) and biosimilar products for patients around

throughout global supply chains in line with

the world. The company is built on the strong foundation of Norwich Pharmaceutical

science and support small and medium-sized

Services, a U.S. company with a 130-year history and an unsurpassed regulatory track

enterprises (SMEs) through the SME Climate

record.

Hub, understanding the need to work with

When searching for a partner, Alvogen chose the Kinaxis RapidResponse® platform,

and support suppliers to halve emissions

concurrent planning and a suite of applications to deliver the connected and collaborative

before 2030 and achieve net zero emissions

supply chain it needs to scale its business. The always-on capabilities of RapidResponse

before 2050.

gives Alvogen the confidence in its decision-making while improving the trust and transparency within the supply chain. This helps to reduce inefficiencies, costs and the chance of obsolescent products as well as streamline operations across its complex global

Cross-industry collaboration

supply chain.

IBM, Red Hat and Cobuilder have announced a global collaboration to co-develop OpenBuilt, a new platform designed to help securely connect

Award winners

fragmented construction industry supply

CORE (UK) Ltd, leaders in digital supply chain

chains. Built on Red Hat OpenShift and

management software have been awarded the

running on IBM Cloud, OpenBuilt will offer

prestigious Queen’s Award for Enterprise for

new digital solutions to help innovate and

International Trade for outstanding growth and

drive more efficient, sustainable and safer

commercial success in international trade.

construction projects. A cross-industry ecosystem of five

The London-based software firm which counts the EU, UK and US as its biggest sales

partners will play a vital role in the

markets, was recognised as an exemplary model

development process together with IBM,

in international exporting in what has been an

Red Hat and Cobuilder, including Cemex,

exceptionally challenging year for the global economy. Led by CEO and co-founder Benjamin

EDIN Network, Backe, Sol Services and

Puncher, CORE was applauded for growing an impressively steep 67 percent increase in

Element.

international sales over three consecutive years, up from just six percent in 2017. Overseas

OpenBuilt is designed to allow companies

turnover also increased by 1,695 percent in the three-year period.

across the global built environment and

Mr Puncher commented: “Over almost three decades CORE has delivered innovative supply

construction industry to securely connect

chain management and visibility solutions to an extensive list of organizations across a range

their current technology platforms and

of industries. We are proud to call some of the world’s biggest retailers long standing clients

digital solutions to partners, suppliers or

including Primark, M&S and Argos. We’re absolutely delighted to receive the highly sought

subcontractors in their supply chain via a

after Queen’s Award for Enterprise for International Trade and feel proud of our consistent

single integration hub.

growth which was achieved through our continual commitment in demonstrating the benefits of a digitized supply chain to new and existing clients.”

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NEWS New features

Strategic acquisition

TIE Kinetix, a leader in 100 percent supply chain digitalization, has announced the

Panasonic Corporation has agreed to acquire Blue

Spring Release of its FLOW Partner Automation platform. A major highlight is

Yonder, the leading end-to-end, digital fulfilment

improved onboarding capabilities that enable more trading partners to connect to

platform provider. Panasonic will purchase the remaining

the platform in a shorter timeframe and with a higher success rate due to advanced

80 percent of shares (for $5.6 billion) of Blue Yonder,

verification. Additional updates demonstrate that the company is dedicated to

adding to the 20 per cent which Panasonic acquired in

enhancing user experience and is following through on their commitment to

July 2020.

improving user support.

This acquisition enhances Panasonic’s own digital

“Onboarding is one of the biggest challenges in any digitalization project, but we’re

transformation and customer-centric focus. Panasonic

working hard to simplify the process as much as possible,” says Jan Sundelin, CEO,

CEO Yuki Kusumi stated: “I’m extremely happy to

TIE Kinetix. “Our new onboarding capabilities highly reduce the need for support and

welcome Blue Yonder and its associates to the

increase overall productivity for our customers.”

Panasonic Group. Both companies have the same mission to support customers’ frontline operations and we have a high affinity in our corporate cultures. By merging the two companies, we would like to realize a world where waste is autonomously eliminated from all supply chain operations and the cycle of sustainable improvement continues. There are still many such losses and stagnation in supply chain operations, so through the drastic reduction of wasted labor and resources, we would like to provide better ways of working, and contribute to customers’ management reform and also to the realization of a sustainable society by carefully using limited global resources. I am confident that by combining the power of Blue Yonder and Panasonic, we can create innovation in global supply chains.”

Challenges for suppliers Business to business trade activity grew by ten percent in the first quarter of 2021, but a recent surge in order volumes is creating fresh challenges for suppliers after a year of intense disruption, new transaction data from Tradeshift can reveal. According to Tradeshift’s latest Index of Global Trade Health, order volumes jumped 16.9 percent in Q1 and one in five suppliers are concerned about their ability to keep pace with demand. The strain on supply chains is particularly acute among manufacturers. Order volumes across the sector were up by 80 percent year on year in March, but invoice volumes grew by just 20 percent over the same period. The emerging delta between orders and invoices suggests that working capital is failing to flow through to suppliers to support the sudden ramp-up in customer demand. In a survey of suppliers, Tradeshift found that nearly a third of respondents had seen their cash flow position deteriorate over the past six months. Nearly half said that they’ve seen an increase in the number of late customer payments since the beginning of the year. Christian Lanng, CEO, Tradeshift commented: “A year ago, an unprecedented event caused havoc among global supply chains. Today, an unprecedented recovery is creating further disruption. Lack of transparency makes it very hard for supply chains to react to rapidly changing conditions. Digitalization is seen as a way of building more resilient, collaborative supply chains. For such a transition to be successful we need to take the conversation beyond transparency for buyers and look at whether the systems we are deploying are also delivering equivalent value to suppliers.”

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CAPREIT

The best place to live,

work & invest

A

s one of Canada’s largest real estate investment trusts, CAPREIT currently owns or has interests in, and manages, approximately 67,600 residential apartment suites, townhomes and manufactured housing community sites well-located across

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Canada, in the Netherlands and Ireland. The business is staffed by a professional, enthusiastic team with a unique, proactive management style. The business is led by President and Chief Executive Officer Mark Kenney, who has over 28 years of experience in the multi-family sector and who is actively

involved in creating and implementing company policy, directing the property management team, and overseeing the marketing, procurement, development and acquisitions departments. Supporting Mark are a group of experienced and hard-working individuals, all of whom are dedicated to


The Madison, Nova Scotia

Canadian Apartment Properties Real Estate Investment Trust (CAPREIT) prides itself on providing quality accommodations across Canada, Ireland and the Netherlands

ensuring their residents are provided with a safe, happy home, and who also work hard to provide investors with long-term, predictable returns and cash distributions. One such member of staff is Tonia Kagiannis, Senior Director, Procurement & Ancillary. An experienced Director of

Procurement with a demonstrated history of working in the design industry, Tonia has been working at CAPREIT since 2018 and this makes her ideally placed to share some more details about this fascinating organization with our readers. She began by summarizing the reason CAPREIT has achieved its position

in the market – it is Canada’s largest publiclytraded provider of quality rental housing. “At CAPREIT, we treat our residents with the utmost respect and strive to meet their needs well beyond their rental apartment,” she said. “The reason for our success is simple: the needs of our residents are central continued on page 24

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21


Our vision at Tectra Group is to be known among our customers as Canada’s most professional roof and building envelope contractor in today’s diverse construction industry.

Tectra customers feel confidence, relief and security knowing that Tectra goes to every extent to fulfill customer expectations

Find out what our clients have been experiencing for yourself by calling us at 416-748-0808 from anywhere nationwide for your consultation.


We are roofer-founded and led by a roofer with over 25 years of hands-on experience. Tectra’s expertise lies in all forms of flat roofing repair and replacement, sloped roofing and most importantly, raving customers

Tectra’s experience does not stop at roofs; it extends to all areas of the building envelope including wall and window systems such as curtain wall, panelized cladding, insulated metal cladding, precast, EIFS and conventional brick systems. Top tier clientele such as CAPREIT understand that an integrated approach to building envelope design and construction results in the most durable product and a longer-performing asset. Tectra’s team of professionals bring the integration that your average roofer does not.

Who do you want on YOUR building’s roof? Visit our website at: www.tectragroup.com


CAPREIT “ We truly believe in creating the best places to work and live. We run our procurement team this way to ensure we support our operations teams, our corporate office, and that we provide them with what they require to be the best in the industry and the best support for our residents continued from page 21

to our operation and influence everything we do. We not only work with our residents to provide a home, but we work to create a comfortable residential community in which to thrive.” She continued with some further details

Tectra Group

about the extraordinary high levels of service that CAPREIT is determined to deliver. “Being in the residential industry, we consistently endeavor to provide high quality products and services, which range from contracts with our vendor partners to maintaining our buildings.

Tectra Group has been working steadily with CAPREIT since 2018 delivering on-budget and on-time roof replacements from coast to coast across Canada. It is our drive and passion for excellence that enables us to perform to the standards expected by CAPREIT and our commitment to quality that keeps those projects performing for decades to come.

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This covers areas such as cleaning services, garbage, pest control, in suite renovations, maintenance of our buildings and keeping them safe with a range of measures, such as security, cameras, elevators, fire and safety equipment/procedures and so on. “We also ensure we are on top of any of the renovations that are required in buildings to maintain their quality and appearance. In doing this, we have met with our vendors to make sure that the products being used are moving towards a more sustainable option, and that includes such maintenance items as paints, water-based floor finishing, products used within the buildings and cleaning supplies.” In fact, working with vendors to use eco-friendly products has been a focus for CAPREIT for a few years. “We even have a department that focuses on sustainability as a wider remit,” said Tonia. “For procurement, we have focused on the products being used as our first step. We also have put a sustainability program into our corporate and regional offices so we can capitalize on the many benefits that these initiatives offer. We


Willoughby Walk, British Columbia have made our offices eco-friendly in areas such as garbage, recycling, and food waste bins. We do not use water bottles anymore and have installed filtered water machines, and we also no longer use plastic cups, plates or straws.”

Positive contributions With Tonia having highlighted the importance of environmentally-friendly approaches to CAPREIT’s work, it is worth exploring this area more fully, as Environmental, Social & Governance (ESG) is of extreme importance to the organization. CAPREIT recognizes that not only is ESG disclosure increasingly being associated with investor expectations and business performance, but also that investments extend beyond just buildings, and include the people it employs, the tenants it houses, the suppliers it engages, and the communities in which it operates. With this in mind, CAPREIT can both generate a positive return for its investors, as well as make meaningful contributions to society and the environment. Therefore, it views the integration of

an ESG strategy as a key competitive differentiator that helps the business proactively address risks, create new value-add opportunities, and ultimately deliver on its commitment to be the best place to work, live and invest (more on this

later). To maintain a focus on this area, the company formulated a comprehensive ESG strategy in 2019. “Building and delivering ESG competency means we have a common corporate definition and understanding of ESG and how responsibility and accountability

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CAPREIT

are trickled across varying decision-making processes and departments,” comment Mark Kenney, President and Chief Executive Officer and Elaine Todres, Chair Of HR&C Committee on the CAPREIT website.

The strategy includes five foundational building blocks that set the tone for effective integration going forward. The first of these involved formalizing a nation-wide ESG Policy supported at the corporate, department

and employee-level across CAPREIT. This is designed to embed consideration of ESG factors through all stages of the decision-making process to promote healthy workplaces, community benefits, and environmental stewardship. The policy has been approved by the ESG Steering Committee, executive leadership team, and Board of Trustees.

Sustainability practices The business also socialized the ESG strategy coast-to-coast and began building an ESG competency across the organization. Two ESG sub-committees were set up, in addition to its ESG Steering Committee, to support the integration of CAPREIT’s ESG strategy across the corporate and operational teams, and the company completed a Global Real Estate Sustainability Benchmark (GRESB) pre-assessment. Finally, it initialized a Taskforce on Climate Related Financial Disclosure (TCFD)-aligned climate-related risks and opportunities assessment. Such dedication has already been seeing results. As CAPREIT aligns its ESG strategy integration into an overall corporate program called ‘Elevation 2023’, it has highlighted three targets – be The Best Place to Work, The Best Place to Live and the Best Place to Invest. Recognizing the first category, in 2019 the company was voted PlatinumLevel Aon Best Employer in Canada for the seventh consecutive year. For the second initiative, it achieved 8/10 for its overall staff performance score on its resident satisfaction survey, and on the third criteria, it demonstrated the leadership and vision needed to ensure long-term value for

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Kings Club, Ontario

Multitech Contracting 2000 Inc.

Multitech Contracting 2000 Inc. have been providing reliable renovation and rehabilitation services since 1989. We have performed general contracting services for CapReit over 15 years. We provide them with innovative ideas to better the appearance of their units in a quick and cost efficient manner. We do a full renovation unit, situated in a favorable area where we know their rent income will be maximized on a monthly basis. We provide a complete scope, illustrating an innovative renovation that will ensure a competitive advantage is gained over the numerous condominium buildings throughout Canada. We always work with a budget that benefits CapReit and which results in the greatest return within a short period. Our in-house manufacturing department aids us in staying on budget and finishing the renovation on a timely basis. Furthermore, any issues or concerns that may arise during the renovation are immediately addressed.

shareholders, as well as a focus on diversity, with 43 per cent of self-identified female representation on CAPREIT’s board. With the focus on the Governance side of ESG firmly directed and managed, we turn attention once again to the Environmental stewardship aspect of the ESG strategy – this is something that has actually been part of CAPREIT’s DNA for over two decades. It has always delivered an ongoing commitment to sustainability by integrating environmentally responsible strategies and practices into varying aspect of its business, not just in the areas Tonia identified, but also in a wider sense – for example, when considering a merger or acquisition, it includes environmental and social factors as part of its due diligence and decision-making. By managing its operational footprint, and implementing sustainability practices across its portfolio, CAPREIT has been able to reduce related adverse impacts on the environment in areas such as Energy, Water and Waste – in fact, it has invested over $47m in energy conservation measures, has saved eight per cent in energy over the last ten years and has achieved reduced GHG emissions of 8,500 tCO2e in the last decade. The ‘Social’ part of ESG is also of the same importance to CAPREIT – people, partners and communities are part of the bedrock of its philosophy and the foundation of its business rests in the people it attracts, retains and supports. ‘Our people drive our solid growth’ Mark Kenney is quoted as saying in the business’ 2020 Annual Report. “People are what makes CAPREIT a successful company,” confirmed Tonia. “From our people that run the business on site all

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CAPREIT

the way to our corporate staff, I don’t believe CAPREIT would be as successful as we are without this focus on the team. CAPREIT truly treats all our employees as a family and listens to feedback from the staff. We are always trying to find ways to improve to

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make people (both staff and tenants) a top priority and happy to be living in a CAPREIT building or working at a CAPREIT location.”

People first A criterion that has been briefly referenced already as an essential building block of a successful team is diversity – in the company’s 2020 Annual Report, Saleema Kassam, Legal Counsel, acknowledged this with the quote: “Welcoming diversity and fostering inclusion is our commitment.” The Report describes how the organization believes that creating a diverse and inclusive workforce helps it to better interact with and support the communities in which it lives and works, enabling it to deliver innovative approaches and solutions both within and outside the organization. ‘Our employee base includes an almost equal gender split between men and women, and since 2017 women have represented about half of our annual recruitment. We celebrate the more than 55 languages spoken at CAPREIT, a reflection of the diverse makeup of the Canadian population and our resident communities. Our workforce is also highly multi-generational, ensuring we represent the interests of all age groups. We are very proud to be working with social housing agencies and programs, leasing suites to them where we can and where most needed. Almost 2100 apartments in our portfolio have been leased by these agencies for people in need,’ the report continues. This well-represented workforce is then supported by best-in-class learning and development opportunities that cultivate extraordinary talent. Moving out of its offices and into its communities, the company


Lum Pur Fleuve, Quebec

prides itself on engaging with residents and taking a holistic approach to resident care, as well as investing in its neighborhoods, to deliver initiatives to help enact social and environmental change and impact. The company offers support through its

Begley Overhead Doors

Begley Overhead Doors have been the leader in overhead door supply and maintenance in the GTA for over 60 years. Our top-quality materials and workmanship ensure the longevity and smooth operations of any door that we install. Begley’s preventative maintenance program improves the reliability & security of your door and works to reduce: unnecessary service calls, major repairs, and unexpected capital expenses. Service provided by Begley is reliable, secure, and committed. Your overhead door problem is our problem - and we’re good at fixing problems. The best way to deal with overhead door issues is to prevent them.

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CAPREIT 3700 des Compagnons, Quebec

resident outreach program, WeCare, its annual customer satisfaction survey to measure performance, and finally, through its ombudsperson program, CAP CARES.

Supply chain management It is through working closely with people and developing relationships that the most successful interactions are achieved, and this can be particularly relevant to the Supply Chain Management segment. CAPREIT believes that by managing and improving the environmental, social and economic performance of its supply chain management, it can conserve resources, optimize processes, uncover product innovations and increase influence through the promotion of its corporate values. Two of its key supply chain achievements include formalizing ESG-related provisions into its contractual agreements and policies to ensure alignment with business integrity and responsible business practices; and utilizing an online screening platform to ensure its partners remain in compliance with regulatory and corporate requirements. As Senior Director, Procurement & Ancillary, the supply chain arena is where Tonia’s expertise comes to the fore. She was able to share some insights into some of the methods in place that help CAPREIT increase supply chain efficiency. “I truly believe in forming relationships with our partners as

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key to our success,” she emphasized. “With our partners, we can bring the services and products we require to all our staff, tenants and other relevant parties. Being respectful and having honest and open communication is the key to strong relationships. This forms the foundation of a team and it has proved to mutually beneficial for us and our suppliers.” Tonia then continued with some more details about the procurement side. “We have many programs and processes that we use to ensure we follow the correct procurement process,” she said. “We have teams that we work with that successfully assist us with reporting, such as our finance team, our reporting and analysis team, our marketing team and many more. “We use SAP for our procurement process, and we are now working on bringing in Ariba programs too. Furthermore, we have partnered with Crawford Compliance, and of course, we have a comprehensive tendering process for all projects such as any renovations, structural, interior and/or exterior work.” Having stressed the importance of

“ We will be looking to grow further as we always do and being successful in managing our buildings. CAPREIT has such a wide range of buildings, town homes and MHC land that we are constantly increasing, and we always focus on continuous improvements - making our buildings look better, be safer and a create places where people are proud to live and work communication, Tonia noted that the benefits of this approach had come to the fore during the Covid-19 pandemic, when all businesses were tackling the issue of volatility in the supply chain and creating new ways to manage any difficulties or challenges that arose. “Communication is key,” she agreed. “We have been working diligently to be in constant communication with our internal

staff and our external partners. Even with the shutdowns and potential Covid-19 cases, we have managed this period with limited hiccups. “Our people, our brand and how we care for our residents and staff are all connected to what sets us apart from the competition,” she added. “We truly believe in creating the best places to work and live. We run our procurement team this way to ensure we

Pragma Tech

It has been our pleasure to be able to work with CAPREIT Canada wide for their waste and recycling concerns.

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CAPREIT Infiniti, Alberta

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support our operations teams, our corporate office, and that we provide them with what they require to be the best in the industry and the best support for our residents.” The insights that Tonia has shared into CAPREIT and its operations make it clear that this is a business that prioritizes distinction in all areas. Upholding and maintaining this level of quality is not an easy task - however, if awards and accolades are a reflection of performance, then this is a business that is at the top of its game. CAPREIT is consistently recognized by its industry peers for its longstanding culture of excellence, innovation, service, and financial and operational performance. These awards echo CAPREIT’s continued commitment to deliver shareholder value and exemplify how it undertakes to be the best in the business.

Property portfolio One particular award is worth highlighting – in 2020 CAPREIT successfully achieved Silver BOMA BEST Certification at 460 Brant Street in Burlington, Ontario. BOMA BEST is Canada’s largest environmental

assessment and certification program for existing commercial buildings. The standards set forth in this program help CAPREIT and its tenants uphold their responsibilities in achieving the highest level of environmental performance and efficiency. BOMA BEST assesses ten key areas: Energy, Water, Air, Comfort, Health and Wellness, Custodial, Purchasing, Waste, Site and Stakeholder Engagement. As an industry recognized program, the certification provides owners and managers with the framework for assessing the environmental performance and management of a building and, in turn, make necessary improvements to lower costs and reduce carbon footprint. This award-winning property at 460 Brant Street is included within the Commercial Property portfolio of CAPREIT, alongside various other buildings (these can be viewed on its website www.caprent.com/ commercial). With commercial buildings around Canada, CAPREIT is ideally placed for those looking for office space, retail space, or parking/storage to lease. To support both existing and potential clients, it also releases

a Commercial Newsletter, which shares the latest news, project announcements, events, and more from the CAPREIT Commercial division. The Commercial team is proud to support its clients in their business endeavors, and this culture of care around its clients is also particularly prevalent in another division of the business - Student Living. CAPREIT acknowledges that moving away from home to a new school or college can be daunting for young people, and its staff are wellequipped to assist with all their needs - from the application process to learning about local resources near a new home and school. CAPREIT’s goal is to make the transition from home to school as smooth as possible for student and parent alike. Its buildings are safe, secure and close to school, and it has on-site staff who are fully-equipped and ready to help students settle into their new apartment. Once again, as with Commercial property, the CAPREIT website offers a convenient resource to find the right location for student property, and this also applies

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CAPREIT Yorkson Grove, British Columbia

to potential tenants that are looking for apartments to rent – a searchable database and a guide to the apartments and areas makes it simple for possible renters to find their ideal location. It also includes links to the properties in Ireland and the Netherlands that are managed by CAPREIT. The Land Lease option is also online offering a sound and affordable financial alternative to traditional home ownership, these manufactured home communities offer the benefits of owning a home with the convenience and amenities that come with being part of a community. Residents in CAPREIT Land Lease Communities own their home but lease the land on which the home is built, with one of the benefits being a much-reduced cost of ownership. Via an online map, the website makes it simple to find the ideal location, with pictures and details of each community highlighted. Exploring the CAPREIT website gives a sense of perspective on the scale of the operation and the impressive number of properties that the business has in its portfolio. Adding to these numbers is an ongoing process and, as Tonia noted, the business has no intention of slowing down as it goes forward into 2021 and beyond. “We will be looking to grow further as we always do and being successful in managing our buildings. CAPREIT has such a wide range of buildings, town homes and MHC land that

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The Point, British Columbia we are constantly increasing, and we always focus on continuous improvements - making our buildings look better, be safer and a create places where people are proud to live and work,” she stated. “We have to continue to be positive, work through these hard times and keep up the spirits of our staff, as this has not been a normal year for anyone,” she concluded. “I am proud to highlight that one of our true successes this year is how we have adapted to working from home and kept the business running. We have supported our buildings to ensure that we keep them clean, updated and that we were there when needed.”

CAPREIT www.caprent.com Services: Real estate operating company

Metro Compactor Service

Metro Compactor Service is Canada’s leading expert in waste and recycling equipment, committed to quality in its staff, service, and products. The company offers a full range of technology enabled waste equipment services and sales for the multi-unit residential, commercial, industrial, and institutional markets nationwide. Wilkinson Chutes Canada pioneered Garbage & Linen chute system design and innovation in the 1920’s and has set the gold standard in the industry since. The company offers a full range of chute liners, doors, and waste sorter systems. The two companies have united their service departments to provide a one stop shop for residential property managers.

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Northside Hospital

Recognize and

respond Northside Hospital is achieving supply chain resiliency by eliminating constraints

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Below: Northside Hospital, Cherokee

I

t seems that ‘new normals’ are the constant now rather than the exception. Disruptions brought on by events such as 9/11, the financial crisis, and the Covid-19 pandemic have wreaked havoc globally on supply chains and changed the way goods and services are purchased and delivered. The pandemic has had a dramatic impact on supply chains across the board especially in healthcare. According to Carl Waller, Northside Hospital’s Vice President of Supply Chain Management, healthcare systems that were better able to weather the effects of the pandemic typically had supply chains that recovered quickly from the disruption caused by shortages of personal protective equipment (PPE).

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Northside Hospital “The Theory of Constraints (TOC) which was introduced in the mid1980s by Eli Goldratt, defines a constraint “as anything that limits a system from achieving higher performance versus its goal – a bottleneck” Achieving resiliency

Above: Carl Waller, Northside Hospital’s Vice President of Supply Chain Management

Resiliency is a frequently used term today that describes the ability to recover rapidly from difficulties. The consequences associated with a lengthy recovery can be devastating if the pace of disruption outstrips the rate of recovery. Achieving resiliency largely depends on the ability to eliminate constraints in the supply chain. The Theory of Constraints (TOC) which was introduced in the mid-1980s by Eli Goldratt, defines a constraint “as anything that limits a system from

achieving higher performance versus its goal – a bottleneck.” Once a constraint is eliminated, the next constraint is identified, eliminated, and so on. Northside Hospital has incorporated some basic elements of TOC into its supply chain management philosophy and believes it has been a major factor in the organizations’ ability to achieve resiliency during periods of disruption. The first step in eliminating a constraint is identifying the constraint in the context of supply chain strategy, metrics, and risks. Understanding the impact of the constraint not just on supply chain, but the entire organization is an extremely important part of the identification process. Predicting future constraints based on the elimination of a current constraint is also a valuable planning exercise and allows the organization to foster a proactive approach to achieving and maintaining resiliency. Northside segregates constraints into two categories, strategic and tactical. A strategic constraint is one that affects the broader organization, may require a longer timeframe to eliminate, and usually involves external stakeholders. Conversely, a tactical constraint is one that can be eliminated in a relatively short timeframe, requires fewer resources, and may or may not involve external stakeholders. Addressing tactical constraints may contribute to the elimination of a strategic constraint.

Eliminating constraints to flexibility and throughput Northside’s supply chain mission is to cost effectively source and deliver high quality goods and services necessary to provide innovative and unsurpassed patient care. Effectively sourcing and delivering high quality goods means that the supply chain must provide the right products at the right place at the right time to support patient care objectives. This requires enough flexibility in the system to ensure that supplies are readily available regardless of changes in demand, while simultaneously avoiding an over-investment in capital.

Constraint #1 – inventory space Over time, Northside’s rapid growth outpaced the capability to store sufficient inventory on-site to meet demand. The inability to house enough critical inventory increased the risk of stock outs and ultimately cancellation of surgical and diagnostic procedures. To eliminate this constraint, Northside and its primary distributor worked together to create an offsite virtual warehouse dedicated to Northside within the distribution center that serves Northside’s facilities. “We call it a warehouse within a warehouse,” said Carl. Frequent deliveries are made from the distribution center to Northside’s hospitals on a just-in-time

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Northside Hospital System employs ASP Global’s direct sourcing model to improve patient experience Northside Hospital locations in Atlanta have been recognized as a recipient of the Healthgrades Outstanding Patient Experience Award for extraordinary focus on quality for nine years (2013-2021). Northside has made a concerted effort to improve the patient experience continuously. As part of these efforts to improve quality, they believe that every interaction with patients, and the products they use, is a unique opportunity to bring additional value to its patient-centered care model. An example of this model is demonstrated by amenity kits and products given out to patients during their stay across various departments, including maternity. Northside delivers more babies every year than any other community hospital in the United States. They find that quality products for newborns and their mothers are critically important to enhance their stay. ASP Global worked closely with Northside to design and directly source a long-sleeved baby shirt with built-in “mittens” integrated into the sleeves to prevent infants from scratching themselves. Northside and ASP Global then designed and developed customized maternity kits, kits for breast cancer patients, a patient comfort care kit, as well as other specialized amenity kits. The gesture has touched Northside’s patients, and they are highly impressed with the high quality of these kits. ASP Global is proud to provide Northside Hospital with these customized amenity kits for every patient who walks through its doors to make each patient’s hospital stay as comfortable as possible. If you are a large hospital or health network ready to put direct sourcing to work to improve your patient experience or de-risk your supply chain, let ASP Global help you!

Phone

(404) 696-6999

Email

info@aspglobal.com

Website

www.aspglobal.com

ASP Northside Advert.indd 1

5/13/21 9:48 AM


Northside Hospital basis, thus eliminating the constraint caused by space limitations at each facility.

Constraint #2 - receiving

Left to right: Kevin Love - System Director - Procurement, Charley Walker - System Director - Distribution & Logistics, George Shelton - System Manager - Clinical Supply Chain, Carl Waller - System VP - Supply Chain Management

A constraint caused by an increase in the frequency of deliveries coupled with organizational growth occurred at the loading dock at Northside’s Atlanta campus. “We experienced bottlenecks at the loading dock due to the limited number of receiving bays relative to the volume of goods being received,” noted Carl. This was exacerbated by the fact that the route to the loading dock was the same as that used by employees to park. There was no space for dock expansion so the constraint would have to be addressed in another way. The

Lifelines for society…engines for growth The need for supply chain resilience was a matter of life and death during the pandemic. That’s not all. Increased reliance on digital channels over the past year raised customers’ expectations for personalized products and services to new heights. Meeting these expectations necessitates a whole new digital architecture and ways of working. The pandemic elevated the critical role that supply chains play into sharp focus. Now, a whole range of factors is converging to drive a new normal for this vital function. From fast-changing customer demands and a mounting emphasis on sustainability, to the role of new digital business models and the opportunities they bring, we’re seeing supply chains reinvented as engines for value creation. Becoming growth enablers It’s no longer enough to be efficient. Today, supply chains also need to be growth enablers. How? By delivering hyper-personalized products, services and experiences. By being resilient and flexible. And by doing good for society, and for our planet. We call this the customer-centric supply chain. Organizations with a customer-driven mindset use advanced digital technologies and rich data to identify and respond to individual customer needs. They segment customers and products in real time around these unique needs. They also mobilize a diverse ecosystem to meet them – all while optimizing costs and working sustainably. An end-to-end approach to drive change While every customer-centric supply chain is unique, we’ve developed a robust approach that accelerates supply chain transformation – from strategy and segmentation, to product design, procurement, planning, manufacturing and fulfilment. Combining human ingenuity and technology, we help create the new capabilities organizations need to engage their customers, achieve breakthrough visibility and responsiveness, flex to meet real-time demand, adopt automation and operate responsibly. Delivering value with Critical Supply Connect One example of the value we provide is our collaboration with Avanade and Microsoft. Together we developed the interactive supply-chain solution – Critical Supply Connect. The platform played a key role at the height of COVID-19 by cohesively connecting hospital systems with PPE suppliers. It has expanded since then to help other industries fulfill vital PPE items. It’s a great example of a customer-centric supply chain. For more information, visit accenture.com/customer-centric-supply-chains This content is provided for general information purposes and is not intended to be used in place of consultation with our professional advisors. This document refers to marks owned by third parties. All such third-party marks are the property of their respective owners. No sponsorship, endorsement or approval of this content by the owners of such marks is intended, expressed or implied. Copyright © 2021. Accenture. All rights reserved. Accenture and its logo are registered trademarks of Accenture.

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Northside Hospital Below: Northside Hospital, Forsyth end solution was to install dock management software. Although not widely used in healthcare, the application optimizes inbound and outbound traffic resulting in improved dock productivity and door turnaround. Dock activity was analyzed and a schedule was developed for each vendor based on the criticality of supplies being delivered. Items such as surgical supplies and pharmaceuticals were delivered first, while non-essential delivery of supplies were sequenced throughout the remainder of the day. Deliveries during shift changes were also minimized. Utilizing the dock management software eliminated the delivery bottleneck thereby increasing throughput.

Constraint #3 – supply shortages Another constraint that inhibited flexibility was an occasional shortage of supplies caused by factors such as scarcity of raw materials, vendor consolidation, peaks in clinical activity, and weather events among others. To address the constraint, Northside worked with its suppliers, distributors and import partners to secure alternative channels that could fill potential supply gaps. These channels could be quickly activated when demand for supplies exceeded the ability

Owens & Minor and Northside Hospital Partnership results in enduring supply efficiencies Owens & Minor is proud to partner with Northside Hospital, a network of hospitals and medical facilities in the Atlanta metropolitan area. Northside and Owens & Minor further expanded their long-standing partnership last year. Since then, Northside has grown significantly in distributed volume through acquisition and organic growth. During this period of rapid expansion, Northside’s supply chain leadership has worked with Owens & Minor to ensure seamless inventory management, so Northside staff have what they need, when they need it, and can drive enterprise-wide efficiencies while providing the best possible patient care. This innovative partnership has produced a modern approach to distribution. The Northside/Owens & Minor integrated service center is built on one simple principle: when you do better, we all do better. This unique model gives Northside visibility and control over its logistics efficiencies and the freedom to do business with vendors of its choice. This is just one of the many ways Owens & Minor underscores its Mission of Empowering Our Customers to Advance HealthcareTM. Northside continues to leverage Owens & Minor’s unique value chain by implementing multiple distribution and service offerings across the continuum of healthcare. In addition to employing proprietary services like PANDACSM, an on-site inventory program, and SurgiTrack®, a comprehensive clinical supply delivery service, the health system benefits from Owens & Minor’s Logical Unit of Measure (LUM) solutions to address resource and space constraints, minimize manual tasks, and quicken product delivery to the patient. Northside also uses Owens & Minor’s Customer Owned Inventory Management program to reduce complexity and waste and increase visibility. Together, the integrated processes seamlessly consolidate customer-owned inventory with traditionally distributed supplies in a single supply chain. These newly realized efficiencies became especially important as the healthcare industry navigated the ongoing supply challenges of Covid-19. Through the pandemic, Northside and Owens & Minor worked together on proactive solutions to support business continuity in the face of ever-changing circumstances. As the pandemic response has evolved, Owens & Minor and Northside continue to collaborate to drive greater supply chain efficiencies. Owens & Minor is consistently impressed with Northside’s progressive approach to supply chain management. With the inventory efficiency gains and process improvements achieved in a relatively short period of time, the partnership is poised to yield considerable savings in the years to come, supporting a resilient supply chain no matter the circumstance.

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Northside Hospital Below: Northside Hospital, Atlanta

Above: Northside Hospital, Duluth

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Below: Northside Hospital, Gwinnett

of primary manufacturers to supply product. Additional warehouse space provided by the distributor as well as incremental storage gained through acquisition could accommodate buffer stock if needed. Eliminating this constraint paid huge dividends during the pandemic. Being able to leverage the alternative channels ensured an adequate supply of PPE.

Northside Hospital www.northside.com @NorthsideHosp Services: One of Georgia’s leading health care providers

Conclusion Removing these constraints described above required minimal investments in capital, but resulted in dramatic improvements to Northside’s supply chain. Eliminating the constraints could not have happened without the involvement of numerous stakeholders including clinical staff, executive management, suppliers and distributors. In summary, TOC forces a focus on bottlenecks in the supply chain. If done correctly, the elimination of constraints will result in throughput and flexibility commensurate with demands placed on the system. Investing in non-constrained resources will yield very little benefit as output already equals or exceeds demand for those resources. Constraints will change as the environment in which the supply chain operates changes. Being able to recognize and respond quickly to those changes is key to achieving and maintaining resiliency.

Northside Hospital is an integrated health care delivery system that serves the Atlanta region. It operates five acute-care hospitals with 1,558 licensed beds and more than 250 outpatient locations across the state of Georgia. Northside is one of the most respected and fastest-growing health care organizations in the Southeast and is committed to balancing clinical excellence with compassionate care. The health system leads the U.S. in newborn deliveries and is among the state’s top providers of cancer care, sports medicine, cardiovascular and surgical services. It has been recognized by Healthgrades, the leading online resource for information about physicians and hospitals, as one of the top U.S. hospitals for outstanding performance in delivering a positive experience for patients during their hospital stay. Northside also has been ranked as one of the Best Places to Work among all top large employers in the United States by both Glassdoor.com and Comparably.com. More than 24,000 employees and a network of 3,900 physicians serve approximately 4.6 million combined inpatient and outpatient visits a year across a wide variety of services, including cancer care, heart and vascular, maternity, pediatric and adult imaging, GI, surgery, spine care, urology, sleep disorder, and emergency medicine.

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ADB SAFEGATE

Weathering the

storm

Rather than be overwhelmed by the challenges of 2020, ADB SAFEGATE has used the past year to put itself in the best possible position to navigate a future that will be defined by having a more fluid and reactive supply chain

R

egular readers of Supply Chain World will likely be familiar with the name ADB SAFEGATE, having seen the business feature within its pages in recent years. For those uninitiated, a quick summary hardly does it justice, but ADB SAFEGATE is a leading provider of integrated solutions that boost efficiency, improve safety, raise environmental sustainability, and reduce the operational costs of airports and airlines

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worldwide. With more than 1200 employees helping it to serve more than 2500 airports in over 175 countries, in short, ADB SAFEGATE’s mission is to provide intelligent tools spanning the gate, airfield, tower and service, increasing overall airport performance, from approach to departure. Catching up with Melanie James – ADB SAFEGATE’s Director of Supply Chain for the Americas – in April 2021, the first topic of


conversation is perhaps unsurprisingly how the business fared in 2020. “I think first and foremost, it is important to note that due to the nature of our work supporting airports around the world we were almost immediately classed as being an essential business. As such, we have worked throughout the duration of the Covid-19 pandemic, with our manufacturing plants remaining operational – while of course following all of the necessary safety protocols

– and being supported by a team of people also working remotely. “There were minimal disruptions at the beginning of the pandemic. We entered into that period with a strong, well-established supply chain for the Americas – made up of numerous great partners, which helped to shield us from much of the impact caused by the virus. As we progressed through the year, we ramped up our level of communication

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ADB SAFEGATE

Above: Melanie James – ADB SAFEGATE’s Director of Supply Chain

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with our supply chain partners in order to determine how the pandemic was affecting their business, as well as making more frequent reviews of our open blanket orders, contracts and KPIs. This meant that we were then able to make a series of quick pivots in the following months in order to react to a rapidly changing environment and levels of customer demand for specific items, such as electronics and semiconductors to name just two examples.” It goes without saying, therefore, that ADB SAFEGATE would have learned a number of valuable lessons over the last 12 months, not least of all about the resilience of the supply chain itself and about how new, more dynamic ways of working are already shaping the future of supply chain management. “The most important fact to emerge from the last year was that we could be confident and reassured that we had a good foundation in place to withstand the various impacts of the pandemic,” Melanie continues. “What did occur, however, as the analogy goes, ‘as the water recedes, the rocks appear’, within the supply chain system exposing potential threats that perhaps would not have been visible under less challenging circumstances. This gave us the unique opportunity to delve into these issues in order to best mitigate them and optimize for any future disruptions that may occur.

“One of the solutions we have devised for this is the revamping of our RISK assessment process to include tier II and tier III partners within our supply chain. We are applying this approach from the top down, looking at it not only at a supply chain level, but also from a product/customer facing perspective, and applying full mapping to all of our supply chain partners, processes and KPIs. This very much speaks to our being a very ‘customer-first’ organization that has always been keen to identify ways that we can do things better.” What the Covid-19 pandemic has also done is shake up what have long been traditional ways of operating across all supply chains. Where typically these function in a very sequential manner, where plans and forecasts are made for the months – and sometimes years – to come and then be executed, as Melanie rightly observes the new normal – as it were – is set to be a much more fluid environment. “The days of serial planning within the supply chain, in my opinion, are not going to work nearly as well moving forward,” Melanie highlights. “With so many variables and layers of potential disruption present today, it is imperative that we maintain a supply chain that is fluid if we are to meet the challenges, while also serving our customers’ needs and demands. To that end, we have taken a


“With so many variables and layers of potential disruption present today, it is imperative that we maintain a supply chain that is fluid if we are to meet the challenges, while also serving our customers’ needs and demands

very pragmatic approach and adopted full contingency planning for various possible scenarios, which incorporate everything from how our key products and services are delivered, to how we best support our key customers and supply chain partners.” Being the business that it is, ADB SAFEGATE’s efforts to achieve continuous

self-improvement did of course also predate the Spring of 2020. It was at the turn of last year in fact that it made the decision to change its freight strategy, partnering with a 3PL provider in a move that would turn out to be hugely beneficially when navigating the freight challenges that have remained prevalent since April 2020. “The switch to a full 3PL

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ADB SAFEGATE

provider for freight has proven itself to be a great decision for the company,” Melanie enthuses. “In doing so, we now possess full tracking capabilities that we can provide to our customers at their request, so the customer satisfaction benefits are enormous. Also, having a true partner working alongside us to deliver these benefits has proven to be invaluable when faced with some of the more unique freight-related challenges that we have encountered in the last 12 months.” For ADB SAFEGATE, 2021 has been a case of “so-far so-good”, but as Melanie goes on to point out, the company is not satisfied with resting on this, and is pushing forward towards a number of goals and/or targets. “As with any business, we obviously have budgets, objectives and performance targets that we want to meet, and we are moving along nicely to achieving those, while also working hard to improve things like our base KPIs,” she says. “At the same time, we will move towards completing our supply chain mapping and disruption planning activities. “What is also imperative is that we continue to reinforce our regular lines of communication with our partners and customers – for example through the updating of our supplier report cards which we send out quarterly – but also with our own internal departments and colleagues, most importantly those that are customer facing. In today’s rapidly changing world, it is so important

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that everyone understands one another’s pain points, so as to try and mitigate for any challenges that may arise. This is going to be super critical for supply chains to operate effectively, and it all boils down to simple communication making a huge difference. “So, in summary, in the months ahead, ADB SAFEGATE will be focusing on RISK assessments and contingency planning, while also looking at various initiatives and identifying innovative ways of weathering the different challenges relating to costs or shortages

within the supply chain. We know that there are forecasted shortages or blips on the horizon in certain specialized sectors, such as the electronics market, but we are doing everything possible to be prepared for any outcome.” As Melanie states at the conclusion of our conversation, the above factors mean that her job is not without its challenges, with everyday bringing new lessons to learn, but much more importantly, new opportunities are created to optimize performance and to initiate growth.

ADB SAFEGATE www.adbsafegate.com Specialty: Airfield lighting, gate and tower solutions for airports

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Sonic Manufacturing Technologies

Let’s get

digital

Big things are brewing at Sonic Manufacturing Technologies as the company announces the arrive of the digital supply chain

S

onic Manufacturing Technologies has pioneered the electronics industry with its innovative transformation into a fully digital supply chain, despite a tricky year for the technology sector. Specializing in electronics manufacturing services (EMS), Sonic provides PCB layout, prototyping, new product introduction and production at scale; and has taken its core processes to new heights. David Ginsberg, Vice President of Supply

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Chain for the company, updates us on the commitment to digital that the company has demonstrated since we last spoke with them in 2018, and how this leading-edge tech has accelerated Sonic to the forefront of Silicon Valley manufacturing. “2020 was particularly difficult, but we were fortunate to be classed as an essential service because we supply equipment to hospitals and medical labs. On top of that, the pandemic influenced a lot of work and opportunities that were headed

offshore to be built locally, so we took on new customers and new products, and will manufacture these products longer before customers might consider an extended global supply chain again,” he tells us. Along with navigating the ever-changing Covid-19 landscape, Sonic has become the first company to introduce a fully digital supply chain in the electronics industry. According to David, its capabilities successfully automate the supply chain from start to finish: front-end data


“ What I’ve always wanted to convey to the industry is that the digital supply chain does not have to be a large and complex consultancy-oriented project. At its core, it is very intuitive and emulates how you’re already doing business

cleansing logic, accurate material requirements planning (MRP) processes, calculating and processing supply availability against demand requirements, all the way through to managing and validating shipping dates and invoices. “It’s now a complete digital cycle and handles as high as 75 per cent of the one million parts per week coming into the factory,” he informs. This is a game-changer that increases efficiency, agility and responsiveness. “Digital is a bit counterintuitive. It is less about presenting

ever more data and analytics to people and more about presenting ever more of your mind’s capacity for decision making to the computer. Now with Digital, the planning and ordering process moves in seconds or minutes, rather than running it through a one or two-week procurement cycle. So, if 75 per cent of the parts are ordered within a minute or two after the MRP, then it’s really only the exceptions that move into purchasing,” David elaborates. It goes without saying that there

is simply no way for human beings to move at this speed. But since people manage the exceptions, and a smaller amount of work needs to be assigned to each person, each employee now has the time to apply their expertise, skills and knowledge to solving unique issues. “They’re now dedicating their talents to problem-solving, rather than simply calling up the supplier of record and placing repeat orders, which the computer does very well. Job satisfaction goes up, boredom from

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Sonic Manufacturing Technologies

Orbweaver

Digitization has the power to propel your business forward. Unlocking the power of real-time integrations with your trading partners is key to deliver on the promise of business automation. Orbweaver has been leading this digital conversation with respect to supply chain integration since 2012. Based in Bethlehem, Pennsylvania, the company is trusted by global manufacturers and distributors to move millions of pieces of data per second, information critical to the success and differentiation of these enterprises. The company maintains a diverse portfolio of products to assist you in all aspects of supply chain digitization. For more information, please visit www.Orbweaver.com.

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repetition goes down. Honestly speaking, having this much of the organization focused on exception management and problem solving has been transformational for us,” highlights David. As the topic of Digital becomes more prevalent in industry, a pressing concern is the effect it will have on the necessity of human jobs. However, David notes that the way in which the digital supply chain is designed demands human action. This is because a level of trust has to be invested into relationships where computers are ‘hardwired’ into each other for data-sharing. “Any time you do integrations like this, there’s a degree of stickiness between both parties, which means that the company and personal relationships tend to be long-term; while for exceptions and problem-solving, knowing your partner is equally important,” David says. In his opinion, it is vital to prove to suppliers that strengthening digital relationships is as financially in their interest as it is for the buyers. Sonic’s integrated partners, using application programming interfaces (APIs), have seen increasing proportions of Sonic’s business in their revenue, and they process

orders to invoice at ever lower costs. “Digi-Key was our first partner, and we now have about 12 live connections to most of the major US electronics distributors.” Even within the company, the digital development is in no way sacrificing its people for the success of digital progress. “Going digital has not cost anybody their job and that result is deliberate. Learning to work interactively with a digital supply chain is a whole new and valuable job skill,” David continues. Rather than replacing people, this process is about performing better organizationally to provide a higher level of customer service at a faster speed and a lower total cost. In his example, he says: “Think about a printed circuit board with 100 different components on it. If the APIs and stock suppliers we’re working with are capable of bringing in 92 parts on time, that means that I would have eight exceptions. Without getting those eight exceptions into the building, the product would just sit there, waiting for those last parts to arrive before it could be built and shipped. The faster you move the supply chain, the more exceptions there are to manage and therefore the need for more exception


managers, not less. There will never be a time when automation replaces 100 per cent of the parts coming into the building; so relationships matter.” This clearly shows that, contrary to popular belief, capable problem-solvers remain crucial to the digital supply chain. Although digital has already achieved many benefits for Sonic in the electronics industry, Sonic is determined to continue to lead the industry in digital supply chain; and looking into the rest of a difficult 2021, its main goals are twofold. First, by rolling out more transactions with more suppliers, improved performance and revenue growth becomes part of the ongoing digital transformation. David would love to implement more transaction sets with his suppliers. “Being involved in these conversations and working with the right supplier teams to offer additional API capabilities fosters an environment where this will happen organically, and it also means that the evolution of digital capabilities will perpetually increase in sophistication,” he highlights. From here, Sonic can only go up. Second, the past 12 months hit the electronics market brutally; prices are higher and parts are harder to come by, which means there are challenges in both their pursuit and the management of the business. “My headscratching for this allocated and constrained market is in how much leeway to give the computer on purchasing higher-priced parts, and how much of that should go to a human expert. If you give the computer too much authority to spend money, you’ll inevitably go out of business, but if you put too much work

on your staff’s plate, they can no longer work effectively on solving each individual problem,” David tells us. “The lower cost of digital can compensate somewhat for the higher cost of materials in this marketplace. Beyond speed, accuracy and volume, we can frequently buy constrained parts before our competitors, or even our own staff, know of their availability.” As David explains digital transaction costs, whenever the computer completes a transaction, a buyer did not need to complete this exchange, while on the supplier’s end, an inside sales person did not manually process it, and the costs to both parties go down. “Speed and accuracy go up as well because it’s a computer transaction that doesn’t make typos, forget a step or run out of time; making everything about the process improve,” he continues. “People therefore evolve from transacting the routine to solving the difficult.” In a way, the company has managed to hack the digital supply chain with just two programmers, David and supply chain engineer Niyati Patel. They have achieved results that larger, more expensive IT teams have yet to achieve during the same period. “We do all the SQL programming in house and work with Orbweaver for the API integration and transport.” David is determined to share Digital Supply Chain with the industry for the success of other businesses. “What I’ve always wanted to convey to the industry is that the digital supply chain does not have to be a large and complex consultancy-oriented project. At its core, it is very intuitive and emulates how you’re already

doing business,” he emphasizes. He adds that the entire transaction choreography of the existing phone call or email exchange of a buyer with a supplier can easily be duplicated in APIs, meaning there is no need to invent new logic to automate the supply chain process. The customer requests supplier data, compares it to internal demand and schedule, then applies existing procurement rules for cost, quantity and delivery that are based on how an existing buyer or planner would decide. The ‘passing’ data is sent to a digital purchase order for transmission; exceptions are routed to humans. “I hope to offer some classes or industry presentations later this year to coax people down this path.” By paying attention to detail at the level of data quality and transactions, Sonic has achieved demand-driven manufacturing efficiencies and is championing the future of the digital supply chain revolution. “We’ve been able to build this with zero budgeting in just a few years and we are fully convinced that this is the right way for the industry to go because the results are immediate and substantial. Customer service goes up, costs go down; Agility and Responsiveness are achieved without ever having been a standalone metric or project team,” David concludes.

Sonic Manufacturing Technologies www.sonicmfg.com Specialty: Electronics manufacturing services provider (EMS)

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Le Duff America

Vive

Le Duff!

After a year spent navigating the Covid-19 pandemic, Le Duff America is looking forward to getting back on track with the launch of ten new restaurants in 2021

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I

t was late March 2020 when, for Le Duff America, everything changed overnight. The impact of the Covid-19 outbreak was swift, and the virus began to affect foodservice operators immediately. “No amount of training or experience could have prepared us for the Covid-19 challenge,” explains Mike Cobern, Vice President of Purchasing at Le Duff. “For the foodservice industry, it felt like being in a car on the freeway and instead of slowing down to get to your stop,

the brakes are slammed down and you make a screeching halt instead. “I think if we had seen this coming as an industry, there may have been even more panic. The fierce nature of the outbreak meant that it suddenly forced us to change the way we did daily business. There was not a lot of time to overanalyse or overthink because we were all immediately scrambling to implement a plan for our staff, our shareholders and, most importantly, our guests.”


Mike Cobern, Vice President of Purchasing at Le Duff

“ In a larger sense, if we do what we do best - and we will - there will be plenty of opportunities out there for further growth in 2021

A foodservice veteran of over four decades, Le Duff operates a variety of US restaurant chains and sandwich bars, including La Madeleine and Brioche Dorée. Since its founding, the company has continued to grow, innovate and develop, building strong industry relationships and a

better years. I guess when you have been around as long as I have, you tend to think you’ve seen everything, but, as last year taught us, you haven’t. “In short, we made it through a tough time,” he continues. “That’s not to say that we’re

distributor, and our produce network worked together to find solutions.” Quick to adapt to the changing landscape of the food industry in 2020, Le Duff worked closely with suppliers to ensure that all parties could make it through the Covid-19 crisis

reputation for high-quality, French-inspired food outlets. This strong foundation has, to a large extent, played a key role in helping Le Duff overcome a difficult 12 months. “Well,” Mike says, “we have certainly seen

completely satisfied with where we are today, but the fallout could have been much worse. We had virtually no food or service loss over the last 12 months, primarily because our operators, our vendor partners, our primary broadline

unscathed. Still, despite Le Duff’s efforts, the severity of the pandemic gave rise to a host of unforeseen supply issues with which the company had to contend. “We had vendors experience interruptions

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Le Duff America

and problems of their own that caused a ripple effect in the supply chain. Our protein suppliers were hit hard and some have decided to change how they do business and what they produce,” Mike states. “More than anything else, we had to adapt our business model overnight to accommodate more take-out style food. Packaging, in particular, was a huge issue for us and everyone else. When everyone needs more of one type of packaging, whether that’s plastic, Styrofoam, metal, or paper, only one thing can happen - the supply

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chain stretches, and that is not a good thing.” In spite of the obstacles in its path, Le Duff remained true to its core values of honesty and integrity in 2020, and continued to operate fairly and collaboratively with its partners to find new solutions. The united front paid off. “I always say that you should make hard demands of your vendor partners, but you should also be an active part of the solution,” Mike declares. “Compromises were always going to be necessary last year because no one has a

magic wand, but critically, we are committed to surrounding ourselves with the best suppliers. If you do that, the impasses will take care of themselves, and that’s exactly what happened.” In the same way that Le Duff aims to work only with the industry’s best suppliers, the company also places great emphasis on obtaining the latest equipment and, most importantly, attracting a deep pool of hard-working, highly-skilled people. For Mike, the company could not have achieved such positive results over the past year if it had not been for its long-standing and well-established quest for operational excellence. “Part of my position here is to oversee our domestic production facility, Gourmet Cuisine Inc, which manufactures products not only for our cafes, but for our external customers as well,” Mike remarks. “The products we make are, of course, perishable, and we had a list of shelf-life concerns to deal with, including the start and stop aspect of the pandemic, finding ways to deplete our stock during a business slow down, and then predicting the kind of reaction we could expect when recovery finally began and how we could satisfy the increase in demand. “Luckily for us, the team at our facility has excellent leadership and I would be remiss not to acknowledge our supply chain staff, who performed miracles working offsite at all hours to make things happen for our cafes. It’s so nice to see the people who report to you showing themselves as real stars of the business, defining our path forward. When I hear feedback, I always say that I cannot take all the credit myself because it belongs to our staff. I am incredibly fortunate to have this team on both sides of my area of responsibility.”


Le Duff’s ambitions for the future were made evident in 2020 when, while many of its competitors were scaling back their operations, the company opened two brand-new units. An essential step towards how the business hopes to serve food in the future, the two outlets encapsulate Le Duff’s modern vision for the sector. “The first of our new stores is located in the Park District of downtown Dallas – an area that features grab ‘n’ go offerings where guests can enjoy a dine-in service or a take-out option that allows them to take food across the street to a park,” Mike reports. “The second opening is in the same vein, only larger, and in the suburb of Addison. That site has a brand-new feature where guests can actually see our breads being prepared and baked. It’s a great visual. We have got a great story to tell with how we make bread, so why not share that!” Considered to be the first examples of Le Duff’s new 2.0 store model, the Dallas units will be joined by similar contemporary outlets in the

months ahead. Later in 2021 for instance, the company plans to launch ten new La Madeleine Express mini cafes across the US, as part of a partnership with Walmart. “These prototypes will feature a smaller footprint than our standard cafes, working out somewhere between 980 and 2200 square feet depending on the location,” Mike reveals. “The outlets will offer a grab ‘n’ go menu, meaning you can take food out or relax and dine-in if you wish. Of course, the menu will feature La Madeleine Express favorites like Chicken Caesar Salad and Tomato and Basil Soup. They will also include some new items specifically created for the Walmart locations, like pizza with a French twist. “We’ve heard Walmart customers’ feedback loud and clear,” Mike adds. “Their demands have changed during the pandemic and we aim to adapt accordingly by including retail areas featuring our line of soups, dressings, and jams for guests to take home.” Given the company’s plans for expansion and new store openings, Le Duff is expecting

an incredibly busy and highly successful year in 2021 – a welcome boost following the slump experienced by the foodservice market in 2020. Beyond the introduction of its new La Madeleine Express concept, Mike believes that the focus for Le Duff is simple. “First and foremost, we’ll continue to put the safety and needs of our guests first. We used some of the downtime in the pandemic to review our health and safety processes in the new normal. That will continue this year because you can never go overboard on food safety. “In a larger sense, if we do what we do best and we will - there will be plenty of opportunities out there for further growth in 2021,” Mike says in summary. “Even with the pandemic hanging over us, there are lots of good things happening in this industry and we want to make the most of that.”

Le Duff America www.en.groupeleduff.com Services: Restaurant and cafe operator

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