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www.supplychaindigital.com

January 2018

DHL Moving with the times Exclusive interview with Paul Dyer, CEO of DHL UK and Ireland

Staying ahead through procurement innovation

DIGITAL PROCUREMENT Accenture leading the digital procurement revolution


INTRODUCING A NEW CONCEPT OF INDUSTRY-SPECIFIC VS CROSS-INDUSTRY LEARNING FOR 2018 With the ever increasing consumer demand for excellence in logistics and the emergence of automation in supply chain, it’s now crucial for senior executives to keep up-to-date with the latest trends, strategies and techniques while expanding their professional network. Choose from 3 industry-specific events or benefit from a week of cross-industry learning:

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Head of SCM & Quality, Europe

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VP Supply Chain & CEO, Europe

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FOREWORD HELLO AND WELCOME to the first Supply Chain Digital issue of 2018; we’re starting as we mean to go on here at Supply Chain Towers, with a packed edition full of must-read interviews, analysis and company reports. Adorning the cover this month is Paul Dyer, who is celebrating a year in charge at DHL UK & Ireland. In a candid interview, the CEO looks back on the first 12 months of his tenure and explains why the company is making inroads into a number of industry sectors that represent new ground for DHL. In this new age of disruption, even companies with the clout of DHL are looking to expand their businesses into new areas, conscious that technology is changing once conservative sectors at breakneck speed, allowing new smaller and agile competitors to take a slice of the pie. Of course, DHL has the size and finances to make its mark in new areas; the company has tasked some of its brightest minds to consider how it can leverage its capabilities, experience and technological know-how in sectors that may once have been a closed shop.

What is clear is that DHL will not simply sit back idly while its traditional business is disrupted; it is on the front foot looking to be the disruptor in other areas. It is a decision that many other companies will have to make in 2018 – will they stick or twist? Elsewhere, you’ll find an eyeopening interview with Kristin Ruehle, Accenture’s Global Procurement Business Process Services Lead, who talks about the company’s roadmap for the ‘Next-Generation Digital Procurement’. It’s a piece not to be missed by anybody who’ll be working in that sphere in 2018 and beyond. And while we enter a new year, we’ll still be delivering thought-provoking company reports throughout 2018, getting below the corporate jargon to find out what makes the world’s leading businesses’ supply chain and procurement operations tick. Avery Dennison, Tomorrow Street and Thames Water are among the big hitters featured this month. Finally, if you want make your voice heard, join the conversation on Facebook, Twitter and LinkedIn.

Enjoy the issue! www.supplychaindigital.com www.bizclikmedia.com

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F E AT U R E S INTERVIEW

DHL Moving with the times

08

PROCUREMENT INSIGHTS

16 THE SMART SUPPLY CHAIN 4

January 2018

TECHNOLOGY

Accenture calls for action on the digital procurement revolution

26


TOP 10

46 TOP 10

SEA FREIGHT CARRIER COMPANIES

LOGISTICS & DISTRIBUTION

36

How to embrace digital disruption

54

Events

5


F E AT U R E S

62

Avery Dennison USA

112

Tomorrow Street Europe

136

Thames Water Europe

84 100

AGCO Corporation USA

AkzoNobel USA

150

FLSmidth Europe


AWJ Investments LLC Middle East

160 172

Coty ASIA

Valmet ASIA

182

Gulf Health Council Middle East

204

Anheuser-Busch InBev Africa

220

224

Convoy Haulage Ltd Africa

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INTERVIEW

DHL: Moving with the times In an exclusive interview with Supply Chain Digital, Paul Dyer, DHL Supply Chain’s UK & Ireland CEO, reflects on his first year in the job, the increasing importance of tech and winning contracts in unfamiliar market sectors Writ ten by JAMES HENDERSON


INTERVIEW IN THE WORDS of CEO Paul Dyer, DHL Supply Chain’s UK & Ireland (UK&I) is a company “in the fast lane of business”. This is a statement backed up by statistics: with 45,000 employees spread over more than 400 operating locations and an annual turnover of approximately €4bn ($4.7bn), DHL Supply Chain UK&I is a truly substantial organisation. Dyer is a relative newcomer to the position, but not to the industry. Having begun his career in logistics some 26 years ago, Dyer previously worked for Ocean Group, which transitioned into Exel and then DHL. Prior to his current role, he held a variety of positions in DHL, including President of its global automotive sector and Managing Director for the European LLP product and UK&I automotive business. Dyer took over in his current role in January 2017 after the retirement of incumbent, Perry Watts. Over a coffee at Southwark’s fashionable working space, The Print Rooms, Dyer reflects on his first year in the hot seat, admitting that the pace of change in the industry is perhaps more rapid 10

January 2018

than he had first envisaged. “I think the market is changing faster than I had probably anticipated. So many parts of our customer base are being impacted, probably more strongly and significantly than I originally imagined,” he comments. “While I’d been away from the retail space for a few years, I was aware that ecommerce and the power of the consumer was impacting supply chains, but perhaps wasn’t aware of the extent. “As a result, we’ve put a lot of effort into working with our customer base to understand how their supply chains are changing, and the cost impact that is having. The retail space is very dynamic and is evolving rapidly – as a business we have to respond to that and help our customers navigate that change.” The disruptive and transformational power of technology is being felt right across the business world, particularly the retail logistics and delivery space, which has seen its traditional business model turned on its head through the rise of ecommerce and changing consumer habits. “In retail, our business in the


“You might ask why is DHL, traditionally a ‘trucks and sheds business’, is going into ground handling services? Well, it’s because our mindset is that we can improve any supply chain” PAUL DYER CEO, DHL Supply Chain UK&I

main was built up through servicing the stores. We built most of our networks looking at what was the most efficient way to get that product to the store for a customer. Today, we are looking at what is the most efficient way to deliver a product to a home,” says Dyer. “Now we speak to customers about how are we going to help them reduce the cost to serve, or the impact of that cost base of single order unit fulfilment through to home delivery. That’s a really big challenge and what I would call a transformation

– detailing the journey of a product from point A to the end consumer.” In its warehouses, DHL UK&I is already utilising technology to help its employees, specifically the EffiBOT: a fully automated trolley that follows pickers through the warehouse and takes care of most of the physical work. Dyer says the company is already using technology systems to manage huge streams of data that come with processing millions of orders, while it is also looking into potential uses for machine learning. It is clear from speaking to Dyer that 11


INTERVIEW

“The retail space is very dynamic and is evolving rapidly – as a business we have to respond to that and help our customers navigate that change” PAUL DYER CEO, DHL Supply Chain UK&I

47k 512k

Number of employees at DHL UK&I

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January 2018

Number of employees at DHL Group


there is a desire and determination to adapt the DHL business, leveraging its healthy market position to expand into untapped markets. “I want us to be seen in the marketplace as the only true endto-end supply chain management company,” says Dyer. “Not many of our competitors can offer the huge range of services that we can, so that is an ambition we can really aspire to. That means we’ve got to be amazing at our core business, which is running warehouses and running transportation. But we also have to offer an unrivalled range of services to improve and take forward supply chains. There’s a lot going on behind the scenes that I think will show we can do that.” That vision is already paying dividends, with DHL UK&I recently winning a couple of highprofile contracts in what might be considered atypical industry sectors. The first is a contract from easyJet to manage its ground handling operations at London Gatwick Airport, which will see DHL handle over 9mn departing passengers each year. Explaining the move, Dyer 13


“I want us to be seen in the marketplace as the only true end-to-end supply chain management company” PAUL DYER CEO, DHL Supply Chain UK&I

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INTERVIEW comments: “You might ask why DHL, traditionally a ‘trucks and sheds business’, is going into ground handling services? Well, it’s because our mindset is that we can improve any supply chain, and ultimately in an airport the flow of people and baggage through to a plane is a supply chain. We’ll be using around 850 people with a huge amount of knowledge. I think something like that is hugely exciting for us, and just shows that we’ve got the capability in our organisation to improve and almost do anything.” In this vein, it was announced in November that KFC has appointed DHL and QSL to manage the supply and distribution of food products, packaging and consumables for over 850 restaurants throughout the UK. Key areas of focus for DHL will be reducing logistics-related emissions to net zero over the life of the contract, optimised delivery scheduling to provide a faster turnaround of orders, and greater integrity of food during transportation allowing for even fresher products upon arrival at KFC restaurants. By Dyer’s own admission, it’s a space where 3PLs have

not traditionally played, instead dominated by wholesalers and distributors, but he maintains that “with a different approach and a different partnership we think we can drive something really positive”. Dyer says the contracts are proof positive that while DHL has to deal with disruption, it can also act as the disruptor, bringing a fresh approach to new market segments. “We are very much focused on disrupting other industry sectors, but we are also looking at our established markets and looking at how we can do things differently, how we can do things more effectively. I’ve encouraged that by putting together 25 of our brightest people and tasking them with exploring how we can achieve this. They’re based in a startup environment with access to programmers and a lot of other resources. “There are not many companies who can take some of their brightest people, invest millions and say: ‘You guys need to think about what’s going on in our industry; where can you help our customers and our business?’ So we are taking all these challenges really seriously.” 15


THE SMART SUPPLY CHAIN Ambrosus is harnessing the power of blockchain to disrupt the existing supply chain models for food and pharma. Supply Chain Digital speaks with CEO Angel Versetti about its work with IoT sensors to enhance blockchain capability, its partnership with the UN and how its native token Amber will add a new level of trust and functionality to the supply chain. Writ ten by DAN BRIGHTMORE


PROCUREMENT INSIGHTS


PROCUREMENT INSIGHTS

The temperature that vaccines need to be stored at can be controlled with real time automatic auditing AMBROSUS IS ONE of a few companies disrupting existing supply chain models through innovative use of new tech and a collaborative approach. The Swiss-based startup aims to combine development of its own tamper-free sensors, for the quality assurance of food products and pharma, with a bespoke, scalable blockchain tailored for the supply chain to work with sensors 18

January 2018

that deliver data you can trust. “We have a bolder vision than most for a blockchain with a generalpurpose protocol,” argues Ambrosus CEO Angel Versetti. “Around this protocol, through the usage of our token Amber (AMB), we have created the opportunity for developers and other stakeholders in the industry to create software or hardware solutions integrating our protocol into


“Alongside this value proposition we enable real time auditing and automatic audit controls of the supply chain, where parties can agree on what parameters must be part of their deal” – Angel Versetti, CEO Ambrosus

what they’re doing to create a new stream of revenue for themselves.” Right now, Ambrosus is focused on developing APIs (application planning interface) to connect with existing infrastructure to bring companies on board which already have their own sensor systems, enabling them to turn those sensors into oracles. “An oracle in blockchain terms is a trusted source of information,” explains Versetti. “The parameters that the sensors record can immediately be registered directly on the blockchain or, if data intensive, could be stored off chain, so the cache could be stored on the public repository to give all parties access.” The most basic service Ambrosus will provide to the supply chain is proof of process, the tracing of objects and a guarantee of quality. It also programs smart contracts to enable different stakeholders to enter commercial agreements with each other. “Alongside this value proposition we enable real time auditing and automatic audit controls of the supply chain, where parties can agree on what parameters must be part of their deal,” adds Versetti. “For example, in the case of vaccines, what temperature must they be stored 19


PROCUREMENT INSIGHTS at? What types of processes need to be applied? All these parameters are recorded alongside the deal and we have a convenient user interface giving an overview to the participants of what happened to the product. “Plus, if you’re delivering a batch of meat to a restaurant, but it hasn’t been stored in the correct conditions for a couple of hours, the restaurant may reject it for not meeting its standards. However, if the meat is still safe to consume, you, as an intermediary supplier, have a perishable product you need to get rid of. Here, we would have what we call a fall-back function where a secondary client

“Due to global inefficiencies there is a distressing amount of food waste, so we’re seeing how we can apply our solution to significantly decrease it while creating new streams of revenue for participants” – Angel Versetti, CEO Ambrosus

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is, by default, ready to purchase that meat at a specified discount and immediately that contract can be transferred to the new client allowing you to recover some of your costs.” Versetti sees any commercial transaction involving the actual transfer of value working in this way and this disruption is sure to provide competition for traditional incumbents on the supply chain: “Because it’s a blockchain you can transfer both the cryptocurrencies as well as tokenised currencies and they are coupled with smart contracts, so you have the quality assurance.” Ambrosus is currently working to make its blockchain compatible with norms and regulations. “If your business is in a particular area where parameters of quality in your product must be proved, instead of spending on assessors or carrying out other random checks you could have the transparency of all the necessary processes recorded on the blockchain,” Versetti adds. “Then this information can be easily shared with governmental authorities and other entities.” Versetti concedes that though the building blocks are in place


Ambrosus is involved in a pilot project involving producers of coffee in Africa for Ambrosus to grow, there are challenges to overcome to make its services fully scalable. “First you have the bottleneck issue with the blockchain technology itself – it’s still a very big experiment,” he says, qualifying the fact that it’s been a successful one, but still early days, and offers a key question still to be answered: “Can we have a solution that is scalable in terms of the number of transactions that it can record per second?” Versetti notes that with literally trillions of sensors

due to come online in the next five years they’ll need to be processed and validated through the network. The second challenge identified by Versetti is the need to turn sensors into oracles. “We are the first blockchain to propose a workable solution,” he argues. “An oracle is not just a trusted source of information, it also speaks directly to the blockchain and yet, so far, there hasn’t been an oracle connected to the real world, because blockchains have been self-contained systems. You can relay instructions 21


PROCUREMENT INSIGHTS from the outside, but that doesn’t generate data from the outside.” Versetti explains that oracles rely on public wisdom but that protocol is both complicated and inefficient. What does he propose as a solution? “In terms of having a sensor supply information into the blockchain, it could be done by sensors also generating a private signature to notify the blockchain it is neither hacked nor broken, therefore you can trust the information it transmits. Because, in the end, if you record data on the blockchain it’s securely stored, but what if the data itself is not real? This is the major challenge to solve and we have a proven concept. But in order to make that scalable we need a large number of sensors, so we’re doing a series of pilot projects to have a sensor talk to the blockchain without running a node – a node can be 20gb, but a sensor has only 54kb of memory and a tiny CPU. You need to enable an ultra-wide client for sensors to be able to interact with the blockchain so this is another key solution we’re focused on.” Ambrosus is combining its business goals with an altruistic approach to the deployment of its tech via its 22

January 2018

Ambrosus’s blockchain solutions are deployed in supply chain operations worldwide

Angel Versetti, CEO, Ambrosus


“Supply chains could govern themselves and look, for example, at the amount of basic resources in the economy of a particular town or area and, if there is a shortage or excess, change the numbers accordingly” – Angel Versetti, CEO, Ambrosus

work as an official partner in the Sustainable Food Systems cluster at the United Nations (UN). “Due to global inefficiencies there is a distressing amount of food waste, so we’re seeing how we can apply our solution to significantly decrease it while creating new streams of revenue for participants,” says Versetti. “Most of our biggest partnerships in the private sector are currently under non-disclosure agreements,” concedes Versetti, but reveals Ambrosus is “working in Switzerland with every single major company” and in contact with the likes of Nestlé through events like the Hello Tomorrow global summit for innovative startups. The company is also partnered with Trek Therapeutics, developing a pilot project seeking FDA approval with its blockchain capabilities endorsed at EU level. Meanwhile, Ambrosus continues its marketplace development with another ongoing pilot project involving producers of coffee in Africa, the distributors and transporting companies involved there and coffee suppliers and distributors in Hong Kong and China. “We’ve also been approached by entities specialising in metals, 23


PROCUREMENT INSIGHTS

Ambrosus is an official partner in the Sustainable Food Systems cluster at the United Nations fuels, diamonds and different commodities who are interested in using the same protocols for their industries,” he adds. “We’re happy, because the more stakeholders we have using our network and token the better it will become.” Currently, Amber is not transferable, but people are using IOUs and other financial operations with it and 24

January 2018

Ambrosus plan to provide escrow functions. “The Amber token itself is innovative in this space,” believes Versetti. “Many tokens existing in blockchains today serve little purpose. At most they serve as an app coin – like using a coin to operate the washing machine in a launderette. Our token can work in a similar way but the key difference with Amber is that


“The challenge for us would be to deliver this technological convergence and only then could you have the truly smart city with an automated supply chain” – Angel Versetti, CEO, Ambrosus

it is a data-bonded token proposition. The token becomes a digital certificate accompanying a product as its unique identifier. The token is moving along the supply chain accompanying the product and all the sensor readings of quality parameters and exchanges is assigned to that product so you can see its provenance and full history.” Amber signals an opportunity for Ambrosus to move ambitious plans forward with Versetti particularly excited about a solution that can make supply chains automatic, and not just with food and pharma. “In three years this would be a realistic goal,” he asserts. “Supply chains could govern themselves and look, for example, at the amount of basic resources in the economy of a particular town or area and, if there is a shortage or excess, change the numbers accordingly. And certain quality and safety norms wouldn’t have to be checked constantly so the system could intelligently monitor them and take certain decisions itself. The challenge for us would be to deliver this technological convergence and only then could you have the truly smart city with an automated supply chain.” 25


Accenture calls for action on the digital procurement revolution Writ ten by STUART HODGE

Kristin Ruehle, Accenture’s Global Procurement Business Process Services Lead, talks us through the company’s roadmap for the ‘The NextGeneration Digital Procurement’


TECHNOLOGY


TECHNOLOGY

ACCENTURE IS A company passionate about digital procurement. In a recent report, the global management consultancy made no bones about the disappointment it feels at what it perceives as an almost industry-wide failure to embrace the technologies available for digitising procurement. It states that “procurement organisation has been largely left behind in the digital 28

January 2018

revolution. That needs to change.� The report looks at how bots can be used to automate and streamline manual or routine procurement tasks, how making use of available expertise such as speaking to buying agents and advisors will help people make the best purchasing decisions and deliver optimal value to the business. Accenture specialises in helping procurement companies to digitise


“Procurement is a fertile ground for growth in the digital age — but not in its current form” – KRISTIN RUEHLE Global Procurement Business Process Services Lead, Accenture

their business operations, and the report shows confidence that the familiar frustrations surrounding procurement today will give way to a simple and intuitive buying experience for users to enthusiastically embrace. Kristin Ruehle, Global Procurement Business Process Services Lead at Accenture, happily outlined the reasons behind the report and why she believes the future of 29


TECHNOLOGY procurement is “truly digital”. “We published the report to help cut through industry buzzwords to help businesses understand how next-generation capabilities can transform their procurement organisations,” she explains. “Businesses are not standing still. They are transforming in unsuspecting ways by selling new and different products and services and delighting their existing client base while creating relationships with entirely new markets and new buyers. “Procurement is a fertile ground for growth in the digital age – but not in its current form. By digitising procurement and operational capabilities and enabling new digital business models, any company is capable of cutting new ground and making the wise pivots necessary to ultimately become a fully digital business.

“The benefits of digital procurement are clear. Firstly, digital improves the buying experience. Through digital, procurement organisations can create an intuitive buying experience for employees, increasing control and ensuring corporate spend is going to preferred suppliers. “Secondly, digital procurement enables a data-centric approach to procurement. By looking beyond basic data, such as what was purchased and at what price, and seeking data from outside the organisation, procurement gains contextual insight into buying processes which can improve future decision-making. Procurement teams able to collect data in this way can also use it as fuel for emerging technologies such as AI, natural language processing, analytics and bots. “To help customers transform to digital procurement, Accenture has

“We published the report to help cut through industry buzzwords to help businesses understand how next-generation capabilities can transform their procurement organisations” – KRISTIN RUEHLE Global Procurement Business Process Services Lead, Accenture 30

January 2018


made significant investments to enhance our internal capabilities. This includes investments in a proprietary digital platform that captures project data; applications that turn data into actionable insights; advanced automation and RPA (robotic process automation) bots that efficiently connect our experts and execute process steps; and analytics that uncover new insights from outside the organisation to inform decisions. “As the report sets out, it’s difficult to

achieve a successful transformation if you only focus on piecemeal solutions, such as analytics or AI. The key is to look at the full picture and leverage technologies in a unified way.” In the report, Accenture has outlined its own vision for the future, which it calls the ‘The Next Generation Digital Procurement,’ based on 18 years’ experience of working across hundreds of clients in all industries and regions. Research figures from the 31


“Organisations that start implementing digital procurement today will have a much more efficient and effective procurement operation than their competitors” – KRISTIN RUEHLE Global Procurement Business Process Services Lead, Accenture

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TECHNOLOGY Hackett Group indicate that 84% of procurement organisations believe digital transformation will fundamentally change the way their services are delivered over the next three to five years, while Accenture’s own research has revealed that 85% of executives plan to invest in AI over the next three years, with the technology set to become a critical ingredient of digital procurement. AI has the potential to boost productivity by up to 40% by eliminating repetitive tasks and supporting people in complex and creative problem-solving. Ruehle is confident that by embracing digital procurement as well as the other new technologies available, the supply chain industry as a whole can thrive. “Digital procurement will fundamentally change the nature of the supply chain industry,” she asserts. “By improving how goods and services are purchased and increasing insights into spend, digital processes and technologies will help supply chain organisations better mitigate risk and meet compliance requirements. “Additionally, the insights gained through digital procurement will support corporate objectives and

sustainability goals and fuel product and process innovation. From an end-user experience perspective, supply chain professionals can expect to benefit from a more intuitive buying experience and accelerated buying processes. “In a nutshell, digital procurement means more efficient, effective and transparent procurement processes that are based squarely on big data insights.” One of the key facets of a fullydigitised procurement organisation is eProcurement software, solutions which support the purchase and payment of supplies, work and services through the internet. “There are several benefits that stem from using eProcurement software,” Ruehle continues. “From improving visibility into spend, increasing productivity and accelerating transactions, to standardising the buying process, reducing errors, and increasing compliance. As such, eProcurement software is a core foundation of digital procurement, but is not sufficient in itself to truly transform procurement functions. “Often, these software solutions are focused on enabling a process 33


TECHNOLOGY and can feel cumbersome for users outside of procurement and they lack inherent AI capabilities. The Next Generation Digital Procurement demands tools to work with and around eProcurement, especially when it comes to integrating data silos across the organisation to improve analytics and fuel automation. “We advise businesses to leverage eProcurement solutions to provide appropriate guidance on the execution of the procurement process. This should include guidance on the supplier, price and channel. “Businesses should also leverage the solution to ensure control and visibility. The key is to leverage eProcurement software to simplify processes. For example, ensure

Kristin Ruehle

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January 2018

you don’t need five approvers for a small dollar request, and nor should you treat every category of spend and spend amount as the same.” This all seems to make sense as Ruehle says. Where is the hold-up coming from, then, in terms of the industry becoming fully self-actualised in optimising digital procurement? Well, Accenture research has also shown that procurement is something of a laggard when it comes to digital transformation, with companies today least likely to use analytics in procurement in relation to other functional areas, at only 40% as opposed to 59% use of analytics in finance and 55% in customer service. Rather than looking at the negatives, however, Ruehle’s enthusiasm remains unabashed as she underlines the possibilities that this presents for companies. “For me, this highlights a significant competitive opportunity. Organisations that start implementing digital procurement today will have a much more efficient and effective procurement operation than their competitors. “Businesses should start investing today if they’re going to be prepared


eProcurement software is a core foundation of digital procurement to be digital. Next Generation Digital Procurement requires wholesale change – it can’t be achieved by flipping a switch. As businesses move forward, there are three key considerations to bear in mind. “Firstly, transformation takes time. Companies need to collect the relevant data, develop the necessary systems and processes, and build the underpinning analytics and AI to ensure they have in place a procurement operation that’s fit for the future.

“Secondly, it takes real investment. Fortunately, digital procurement capabilities are increasingly available as a service, which could reduce upfront investments and accelerate transformation. “And finally, transformation takes vision. This is a big departure from how procurement has traditionally operated. An internal champion within the company must define what the future procurement organisation will look like and how the company can make it reality.” 35


LOGISTICS & DISTRIBUTION

How to embrace digital disruption Writ ten by DAN BRIGHTMORE


Traditional players in the logistics industry risk becoming irrelevant unless they embrace change in order to deliver more customer-centric services. Supply Chain Digital examines the findings of a new report by Accenture, which offers businesses advice on how to upgrade digital logistics strategies, calling on companies to raise their game and prepare to disrupt


LOGISTICS & DISTRIBUTION

Augmented reality will revolutionise warehouse processes

NEWCOMERS PRIMED BY digital transformation are transforming traditional working relationships in the freight and logistics business. Leveraging big data and built-on cloud and connected platform technologies, they offer customers a seamless experience comparable with the consumer pathway: ease of access, clear pricing and near realtime integrated service. Meanwhile, industry incumbents are stuck in a mostly manual ‘business as usual’ mode and risk loss of competitiveness and value from their operations. 38

January 2018

However, according to a recent report by Accenture on digital disruption in freight and logistics, if traditional players embrace digital adoption and harness the power of new technologies to build new digital business models, they could not only enhance their competitiveness, but also boost earnings by approximately 13% per annum. Accenture warns that the incursion of agile new entrants into the freight and logistics value chain are set to fragment it with new customer-centric business models. For example,


‘Leveraging big data, and built-on cloud and connected platform technologies, they are offering customers a seamless experience comparable with the consumer pathway: ease of access, clear pricing and near real-time integrated service’

online marketplaces can connect shippers directly with Logistics Service Providers (LSPs) and carriers for instant quotes, with the business intel to manage contracts and automate processes. This threatens the position of freight forwarders as the system’s main capacity brokers. • Advice If a business thinks it’s time to raise the game to meet customercentric requirements, what’s the best way to begin challenging these disruptive insurgents? “Digitising their operational processes will

help incumbent players rise to the challenge posed by platformbased pricing models and remain competitive,” says Accenture. “But they also need to seize the valuegenerating opportunities that the application of new technologies delivers.” Accenture believes that eight digital technologies, at varying stages of maturity, are especially disruptive, with each capable of changing the industry while delivering necessary transformation. • Blockchain – this secure data distribution and validation technology improves shipment visibility and brings trust into the sale and movement of international cargo. 39


LOGISTICS & DISTRIBUTION • Augmented reality – this will revolutionise the picking, packing and commissioning processes in warehouses and crossdocking areas. If the technology is not applied, handling costs won’t be competitive and will lead to margin decrease. • Robotics – Robotics process automation will increase the automation level to almost 100% in the transport planning and customer invoicing processes, leaving almost no activities to human beings in the future. • Autonomous logistics – a driverless way of bringing goods from A to B will revolutionise the industry by eliminating dependency on the human factor. Data collected via sensors, (radiofrequency identification RFID), barcode and remote devices along the entire value chain will be a make-or-break capability. • Digital platforms – these change the revenue mix by enabling both physical and virtual product offerings that do more than handle products from one point to another. 40

January 2018

“Over the next three to five years, a combination of new competitors, rising customer expectations, and a shift in global trade routes will force traditional intermediaries to transform – or lose relevance” – Accenture

By giving clients insights along the supply chain, digital platforms also enable the optimisation of other parts of the business. • Big data analytics – with data from the entire ecosystem, this will provide a whole new set of information that enable 3PLs (third party logistics) to strongly drive operational efficiencies through a higher utilisation of assets. • SaaS (Software as a Service) core solutions – standardised and easy to deploy and parametrise applications replace monolithic bespoke core applications that were used in freight and logistics, driving operational agility into the business.


3D printer creating a white plastic gear • 3D printing – this will significantly boost the decentralisation of finished goods production, not only changing today’s transport volume, but also allowing the horizontal integration of additional value chain activities, thereby extending a product portfolio. • Advice for business… Accenture maintains the application of these technologies can offer those struggling to adjust to digital disruption access to a diverse range

of new business models capable of realising significant value-generation opportunities. Choosing the right mix from these seven business models, identified in Accenture’s report, is key to defining your strategic goals, and the following advice is offered: • Digital sales – actively engage and leverage existing online freight platforms with differentiated service offerings to get access to new clients and spot markets. Use internal sales and customer 41


LOGISTICS & DISTRIBUTION

Big data, built-on cloud and connected platform technologies are transforming the freight and logistics business analytics to analyse existing clients’ shipping behaviour and develop proactive sales initiatives. • Customer specific platforms – customer specific platforms are the one-stop-shop for all customer information and interaction: quoting, shipping information, ordering, tracking and tracing and billing. By integrating analytics, the platform provides customisable reporting features to help clients improve logistics planning. 42

January 2018

• 3D print farm – set up 3D-printing centres at critical geographic nerve centres to supply clients with finished/semi-finished components, printed through the LSP as contract manufacturer. • Matchmaker – establish and grow an online freight platform through the company’s own knowledge and global expertise, allowing a many-to-many buyerseller relationship – either through development or partnerships.


“Digital capabilities are critical to meeting the challenge of digital disruption successfully” – Accenture

• Holistic supply chain management – increase service offerings along the complete value chain of LSP clients – up and downstream. Offer proactive solutions, based on big data and analytics and combined with external data to provide actionable insights for clients’ strategic business planning, forecasting and proactive risk management. • Forwarding execution specialist – provide clearly defined service offerings, focusing ‘physical’

transport execution (consolidation, packing, labelling, pre-carriage, on-carriage, documentation, etc.) on online platforms. To enable competitive prices on such platforms, LSPs need to use automation extensively – physically, within warehouses/yards, and virtually, along business processes to optimise operating cost. • Smart capacity optimisation – utilise smart assets (containers, ships, trucks, aircraft, trains, etc.) to 43


LOGISTICS & DISTRIBUTION

enable IoT services for the logistics ecosystems as an additional service offering and to radically optimise the company’s capacity planning and management. So how will these new business models unlock value? Accenture explains: “Some digitise the customer experience; others, operations; and still others facilitate scalable ecosystems of partnerships, including competitors, with the power to optimise supply chain services.” The report maintains the key to maximising value generation will be to “deliver new capabilities that customers find easy to consume – either via easy-to-use platforms and online sales capabilities, or by leveraging match-making capabilities to provide completely digital services”. Accenture’s research concludes that exploring the potential for business model adjustments will enable a diverse range of market players (including freight forwarders, contract logistics specialists and carriers) to achieve a positive impact on their EBITDA (earnings before 44

January 2018

No incumbent can afford to postpone the move to digital

interest, tax, depreciation and amortisation) by as much as 5%. This was based on the fictitious reference of a freight and logistics company with an industry average net revenue of $17.75bn and $643.43mn in EBITDA as a starting point for hypotheses, refined by interviewing startups in the industry, then tested by a group of 15 Accenture logistics industry experts. The impacts were subsequently ‘blind’ peer reviewed by other experts for objectivity. Accenture preaches the importance of accepting the need for change:


ACCENTURE IDENTIFIED FOUR KEY TAKEAWAYS FOR BUSINESSES PLANNING TRANSFORMATION: Transform the core business to provide fuel for growth by identifying what’s needed to stay viable and increase profits. Grow the core business to fuel growth in the incumbent business model by identifying what’s needed to drive top-line growth.

“Digital capabilities are critical to meeting the challenge of digital disruption successfully. We believe that incumbents need to consider and drive this ‘rotation to the new’ as a conscious and deliberate act of renewing and transforming their core business, while growing into new businesses and services.” In a separate Industry 4.0 study, recently carried out by Accenture, the percentage of transport and logistics companies that rated themselves ‘advanced’ on digitisation was just 28%, so there’s still some way to go.

Grow the business by identifying potential new directions and removing obsolete business services. Manage the pivot to get the timing, scale and scope of required investments right.

Allied to this, the report findings highlighted no incumbent can afford to postpone the move to digital: “Over the next three to five years, a combination of new competitors, rising customer expectations, and a shift in global trade routes will force traditional intermediaries to transform – or lose relevance.” 45


TOP 10

SEA FREIGHT CARRIER COMPANIES The global sea freight market features 6,038 active ships with a total TEU of 21,447,649. Based on weekly capacities of regional trade by number of TEUs (twenty-foot equivalent units), Supply Chain Digital takes a closer look at the world’s 10 largest sea freight carrier companies… Writ ten by ANDREW WOODS

This list was compiled with the help of Alphaliner’s Top 100


T O P 10

09 MOL

10 HAMBURG SÜD GROUP www.hamburgsud.com

Founded in 1871 and established as part of a conglomerate of 11 Hamburg- based merchant houses, Hamburg Süd (HSG) was originally part of the Oetker Group, before being sold to A.P. Moler-Maersk Group’s shipping line. Together with its Brazilian subsidiary Aliança, HSG is one of the leading ocean carriers in the traditionally significant South American market. The company, which employs over 6,000 staff, has a current TEU of 560,356 and a 2.6% market share.

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www.mol.co.jp/en This Japanese shipping company has spent over 130 years transporting global freight and has a current TEU of 574,083. Its history dates back to 1878 with the iron-hulled steamer Hideyoshi Maru which moved coal from Japan to Shanghai. MOL has been part of a number of mergers over the years, the most recent of which was the formation of Mitsui O.S.K. with Navix.


07 OOCL

www.oocl.com

08 YANG MING MARINE TRANSPORT CORP www.yangming.com

Formed in 1947, Orient Overseas Container Line is a Hong Kong-based container shipping and logistics service with a total TEU capacity of 685,423. OCL offers 78 weekly services around the world and is a major supplier to China. In July 2017, the parent company, OOCL, received a $6.3bn takeover bid from its Chinese rival COSCO. The bid has been accepted subject to shareholder and regulatory approval.

As of May 2017, Yang Ming operates a fleet of 98 vessels with a 6mn deadweight tonnage, operating with a TEU of 586,788, of which container ships are the main service force. The company was formed in 1972 and has an extensive network of global terminals. Its name is derived from ‘the sun’ (yang) and the ‘combination of the sun and moon’ (ming).

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T O P 10

05 HAPAG-LLOYD www.hapag-lloyd.com

06 EVERGREEN LINE

www.evergreen-line.com Evergreen Line is a unified trade name for the four shipping companies of the Evergreen Group, comprised of businesses in Taiwan, the UK, Italy and Hong Kong. Evergreen currently operates a fleet of 190 ships with a capacity of 1,058,378 TEU. In July 2017, Evergreen Line was awarded Best Shipping Line ‘Asia-Africa’ by Asia Cargo News at the 2017 Asian Freight, Logistics and Supply Chain Awards.

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Hamburg-based Hapag-Lloyd is a multinational German-based transportation company, which includes the shipping line, HapagLloyd AG. Hapag-Lloyd was formed in 1847, and currently offers a fleet with a total capacity of 1,513,477 TEU including one of the world’s largest and most modern reefer container fleets.


03

04

CMA CGM GROUP

www.cma-cgm.com

COSCO SHIPPING CO. LTD

http://en.coscocs.com COSCO, or COSCO Group, is China’s largest shipping and logistics services supplier. A government-owned company of the People’s Republic of China, its headquarters is in Ocean Plaza in the Xicheng district of Beijing. It owns 1,114 ships, including 365 dry bulk vessels and a container fleet with a current TEU of 1,820,971. In July 2017, COSCO initiated a $6.3bn takeover bid for rival shipping company OOCL.

Headquartered in Marseille, France, CMA CGM S.A. is a French container transportation and shipping company. CMA is a leading worldwide shipping group, with 455 vessels using 200 shipping routes between 420 ports in 150 different countries. Its current TEU capacity is 2,464,356 and it enjoys a market share of 11.5%.

“July, 2017, COSCO initiated a $6.3 billion takeover bid for rival shipping company OOCL” 51


T O P 10

02 MEDITERRANEAN SHIPPING COMPANY www.msc.com

Founded in 1970, by Captain Gianluigi Aponte, MSG is a privately-owned

global organisation with an established fleet of 490 container vessels with an intake capacity of circa 2.464, operating at 3,579,220 TEU capacity. Its global sailing schedules cover 200 routes, calling at 500 different ports. It has a 14.6% market share.

“Founded in 1970, by Captain Gianluigi Aponte, MSG is a privately-owned global organisation with an established fleet of 490 container vessels�

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January 2018


“Maersk has been the largest container ship and supply vessel operator in the world since 1996 and has 88,000 employees across”

01 APM-MAERSK www.maersk.com

A.P. Moller–Maersk Group, known as Maersk, is a Danish business conglomerate with activities in the transport and logistics and energy sectors. Copenhagen-based Maersk has been the largest container ship

and supply vessel operator in the world since 1996 and has 88,000 employees across 130 countries. In 2016, Maersk posted a revenue of $35.46bn and its current TEU is 3,579,220, affording the company a 16.7% market share. 53


E V E N T S & A S S O C I AT I O N S

Events The biggest and best events and conferences from around the world‌ Writ ten by AN D R E W WO O DS


E V E N T S & A S S O C I AT I O N S

Live Americas 2018 Miami, USA 4-8 February

SCM World is a cross-industry community of the world’s leading supply chain practitioners, working together to advance the profession of supply chain management. The event features world class speakers from leading supply chain organisations from different stages of digitisation from companies such as Kimberly-Clark, Amazon, Levi Strauss and Procter & Gamble www.scmworld.com/live-americas 56

January 2018


ProcureCon 2018

Amelia Island, Florida, USA 20-22 February ProcureCon will feature 40 CPOs and 80 game-changing speakers from companies such as Microsoft, Siemens and Lowes. Attendees are invited to network throughout the three days of an extensive agenda covering all aspects of procurement. “ProcureCon events are an inclusive experience: You’re encouraged to interact and network with everyone and anyone at the conference, at any time during the event… There are a multitude of interactive session formats during the event, in both large and small groups, because you don’t want to be talked at eight hours a day for three days. It’s your conference, and you’re encouraged to customise your agenda and experience as you’d like.” procureconeast.wbresearch.com

CPO/CSCO Awards Winners 2018 Review tbc 23 February

The Global Logistics Excellence Awards puts a spotlight on the heroes of the sector who have risen in spite of challenges whether managing logistics operations within the enterprise or as 3PL players. The Award Show will identify shortlist and bring to the forefront individuals, organisations and projects that have created excellence in the domain of logistics. globallogisticsawards.com 57


E V E N T S & A S S O C I AT I O N S LogiMAT 2018 - 16th International Trade Fair for Intralogistics Solutions and Process Management Stuttgart Trade Fair Centre, Germany 13-15 March

International exhibitors and decision-makers from industry, trade and the service sector will be coming together at the exhibition centre at Stuttgart Airport to find new business partners. LogiMAT will focus on innovative products, solutions and systems for procurement, warehouse, production and distribution logistics. International trade visitors from over 60 countries. Full-service suppliers, niche operators, start-ups and established global players – the exhibitors at this show – come here to meet customers at eye level. www.logimat-messe.de/en/exhibitor-services-0

ISM

Nashville, USA 6-9 May ISM2018 is the ‘must-attend professional development conference of the year’. With sessions developed by industry leaders, ISM2018 is the only supply management conference developed by practitioners for practitioners. Guest speakers will include Mitt Romney CEO Bain Capital), Arianna Huffington (Huffington Post) and John Rossman (ex Amazon). ism2018.org

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5th Annual World Procurement Congress London Intercontinental London, The O2, London, UK 16-17 May

Agile Procurement: Thriving Through Disruption will include guests include 50 senior procurement professionals and 100-plus speakers – from companies such as Adidas, Avril and Shell – discussing digital procurement, cyber security, talent recruitment, upskilling and retention. “World Procurement Congress has established itself as the foremost global gathering for senior procurement professionals. Nowhere else will you gain the global insight and access to a more senior network of peers and authoritative content…” events.procurementleaders.com/events/ congress/world-procurement-congress

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E V E N T S & A S S O C I AT I O N S

9th Annual North American Supply Chain Summit The Westin Peachtree Plaza, Atlanta, USA 5-7 June

The event features 50-plus keynote speakers from companies such as Coca-Cola, Nike, IBM and Schneider talking about the new wave of disruptive digital technologies is transforming processes for businesses and their customers. Discover how leading companies are capitalising on digital trends to update their business strategy, create sentient supply chains and empower the workforce of the future. Organisers have also created dedicated tracks and sessions that address how organisations are driving the responsible business agenda, bringing together experts from sustainability, communications, procurement and innovation departments as well as investors, NGOs, governmental bodies and academics. events.eft.com/scsc

Gartner Supply Chain Executive Conference London 23-25 September

Gartner Supply Chain Executive Conference is the world’s most important gathering of supply chain leaders, discussing how disruptions large and small confront today’s supply chains on a daily basis and how “organisational survival depends on the ability to anticipate, adapt, and transform supply chains to deliver reliability and performance”. www.gartner.com/events

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CSCMP EDGE 2018 Nashville, USA 30 September-3 October

Discover over 100 forward-thinking sessions covering real world strategies implemented to maximize and transform supply chains and learn from some of the brightest academics and practitioners in supply chain today. “The Council of Supply Chain Management Professionals (CSCMP) hosts the must-attend supply chain event of the year — CSCMP’s Annual Global Conference, EDGE. From leading-edge content to cutting-edge supply chain solutions, EDGE reflects the unparalleled resources CSCMP offers today and symbolises our unwavering commitment to supply chain in the future.” cscmp.org

CIPS SM Awards

Queen Elizabeth II Conference Centre, Barbican, London 31 October Chris Bell, Commercial Director – City of London Corporation, one of this year’s Judges, and winner of the ‘Procurement and Supply Management professional of the year 2016’ will chair the day and presenters from the various winning organisations will deliver case studies. www.cips.org/en-gb/event

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HOW AVERY DENNISON STAYS AHEAD THROUGH PROCUREMENT INNOVATION Written by Nell Walker Produced by Denitra Price

Roland Simon, VP Global Procurement Materials Group & Corporate Sustainability at Avery Dennison, explains how the company has remained the leading industry name after spawning its own market 80 years ago


The Pallet Alliance takes a holistic approach to pallet program management that’s far more than just quoting pallet prices. Managing cost drivers like sourcing, design and implementation delivers a comprehensive solution tailored to fit operational requirements. But it doesn’t stop there. Customized reporting and unmatched re expertise drive ongoing improvement for ongoing value, year after year.

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S U P P LY C H A I N

A

Fortune 500 giant in the pressure-sensitive adhesive labelling, tags, and inlays industry, Avery Dennison has grown exponentially from its humble beginnings. Founded in 1935 in Los Angeles, California, the business now operates in over 50 countries and employs around 25,000 talented staff. One might assume that a business of this size could find procurement challenging, or be laden with outdated legacy processes; for Avery Dennison, the opposite is true, thanks to a strong sense of continuous improvement, innovation, and people power. An integral part of driving these advantages is VP Global Procurement Materials Group & Corporate Sustainability, Roland Simon. Notably, Simon spent 23 years with Goodyear, honing his management skills. While he entered the business with a degree in physics, he was

looking for an opportunity to work in a factory environment, and went on to spend over two decades as an expat in Europe and Thailand. Along the way, Simon was able to get more of a taste of procurement and manufacturing, and repatriated to the USA in 2003 in a procurement role. During a four-year stint as Chief Procurement Officer at Ferro Corporation, Simon’s future Avery Dennison boss, who was particularly skilled at networking, began communicating with Simon about what he was doing at Avery Dennison. Similarly to Ferro, the company was trying to build a centralised system on top of an old procurement organisation, and worked across a similar footprint. This led to Simon forming a close relationship with him, and becoming fascinated in the vision that he had for Avery Dennison. It

“R. Stanton Avery had a vision that the best way he could serve his community was through building a business, creating jobs, and building an economy” – Roland Simon, VP Global Procurement Materials Group & Corporate Sustainability


Pallet Alliance Brings Pallets into the Digital Supply Chain For Avery Dennison, integrating pallets into its digital supply chain was a natural step. Its pallet program is the product of more than 12 years of collaboration with Pallet Alliance, and was built from the ground up to take fr advantage of emerging advances in procurement and information technologies, delivering significant, sustainable cost reductions. Leading manufacturing companies across America turn to Pallet Alliance for custom pallet programs that evolve in response to changing manufacturing environments and products. With the ability to integrate into online ab procurement and in-house ERP platforms alike, as well as to provide industry-leading dynamic reporting solutions, Pallet Alliance provides standardization, transparency a nd control. and Among companies that think the pallet spend starts and ends at the pallet itself, periodic RFP’s are the main cost-cutting tool. These consume valuable internal resources and produce only marginal savings on dated ma products and processes. Forward-looking companies like Avery Dennison—who

919.442.1400

make sizable investments in modernizing their supply-chains—turn to Pallet Alliance to take control of their pallet spends. The Pallet Alliance process begins on the plant floor and progresses through the entire supply chain. Solutions include process transformation, equipment modification, pallet redesign, sourcing changes, and IT so integration. Through identifying and mitigating factors that drive cost, Pallet Alliance delivers sustainable savings. The end result is a fully customized and optimized pallet program, with a single accountable entity for consolidated ordering, billing, reporting, and project management.

solutions@tpai.com

tpai.com

Pallet Alliance has retained its three largest customers for an average of 15 years. MMH annual reader survey for 2017 identified Pallet Alliance as the top-ranked management company ma for custom national pallet programs. Category leaders in American manufacturing turn to Pallet Alliance for truly custom solutions to manufacturing and distribution challenges. Visit tpai.com to transform the way your business moves.


Roland Simon

VP Global Procurement Materials Group & Corporate Sustainability

Roland Simon is responsible for strategy and management of the Label and Graphic Materials Group global spend for both direct and indirect materials. Prior to Avery Dennison, Roland held the CPO position at Ferro Corporation for four years after spending 23 years at Goodyear Tire & Rubber Company in a variety of manufacturing and procurement positions in Asia and throughout Europe. Roland earned his bachelor’s degree in Physics-Engineering from Washington & Lee University and a master’s of business administration from the Durham Business School. Roland joined Avery Dennison in 2011 and is based in Mentor, Ohio.


AV E RY D E N N I S O N

happened to align with what Simon was interested in and capable of. Soon after, Simon was offered a job by the same man, and was initially placed in charge of global raw material procurement. Once his boss moved on two years later, Simon stepped into his role and took over the Procurement Materials Group, including responsibility of corporate sustainability. Industry pioneer So, over 80 years since its inception, how exactly has Avery Dennison impacted and contributed to the industry? “Avery Dennison is the creator of the industry that we’re in,” says Simon.

“R. Stanton Avery was the founder of the company, and he invented the self-adhesive label products that were used to build the company. He had a vision that the best way he could serve his community was through building a business, creating jobs, and building an economy. Avery Dennison has evolved in every direction since, and Avery Dennison is widely considered to have a continuing large influence on the industry. Since Simon became an integral part of the business, the strategy has been to continue leading the existing market, to grow into higher value segments, and expand applications of functional materials to which adhesives can be applied.


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S U P P LY C H A I N

Its work in creating specialised adhesives is one example of the company’s high levels of innovation. “In the automotive industry there is a big push for improved fuel economy,” Simon explains. “Automobile companies are interested in reducing the weight of the vehicle, so they’re beginning to substitute mechanical fasteners – which are made of metal – with structural adhesives. “At Avery Dennison, we are experts at developing specialised adhesives that can be coated in what we would call a substrate, that you can peel and stick.” The power of procurement Simon’s procurement role has been a vital component to these ongoing changes, because Avery Dennison integrates all functions into the business. There are two fundamentals which the procurement division tries to fulfil as a function, and these are to be a strategic partner to the business, and to be a valuable thought partner. “Integration is about the way we are structured; the way we perform our roles,” Simon explains. “We want to be close to our internal stakeholders. We also want to be as valuable to our suppliers as we can be, and to fulfil the biggest promises

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Science that sticks Better adhesion is closer than you think. Resins & Resin Dispersions for Adhesives: PINEREZ™ and SNOWTACK™. Snowtack dispersions utilize the ROBUST™ manufacturing process technology, which produces tackifier dispersions with finer particle size and virtually zero grit. Adhesive manufacturers can produce high-quality adhesives by incorporating these SNOWTACK™ tackifier dispersions in their formulations. With better science, manufacturers limit defects, improve coating characteristics and enhance line performance on high-speed coaters.

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S U P P LY C H A I N

possible to those suppliers. We can offer more and more value to them through growth in our channels, our footprint, and access to our newer technologies, meaning they are able to participate in our vision and growth.” It’s a refreshing position, because procurement is all too often considered an afterthought. For Avery Dennison, it is a valuable part of its success. In Simon’s words, “the root of integrating with the business is the foundation of how we developed the powers within our function”. A huge focus for Simon in this area is recruitment of skilled employees. To him, the quality of his people directly correlates with the group’s success; he personally oversees around 70 people across the world, and leans towards those with a broad range of professional experience. “A large proportion of them have former marketing experience, finance experience, manufacturing experience, and we have some procurement specialists mixed in,” he says. “So we have a function of people with different backgrounds and the capability to be business thought partners as opposed to simply one half of a functional transaction. We do a lot more than just place purchase orders.” Indeed, Simon and his team translate the realities of the company’s materials markets

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S U P P LY C H A I N

and supply chain capabilities to marketing and R&D, and together, the information is translated to added value solutions for its customers – global converters and brand owners. Simon’s goal is for his team to be influencers; in fact, employees even undergo influence training. “For a long time, for procurement people it was all about how to influence stakeholders,” he says. “In my team, I feel we’re beyond that, in the sense that my message to my team is that, to reach the maximum amount of growth, they need to allow themselves to be influenced.” Simon believes it shows particular maturity to be confident enough to be influenced by someone else’s thought process. “If I allow my supplier to influence me with a good idea they have had with regard to what our customers need or what solutions might resonate in the market, or we influence each other and come up with an innovative material or process – and we marry those things – that’s the golden chalice.” Of course, this is an ongoing

desire with no finishing line, because collaborative relationships are what Avery Dennison strives for as a company. High levels of communication mean that procurement aligns neatly with innovation, and so Simon’s department ends up working on leading edge technologies in a collaborative way. Harnessing technology One component of this is implementing technology to work out aggregated costs of materials that go into a product. “For example, we have people in our business who sell labels,” Simon explains. “The label might have three components: a film face, an acrylic adhesive, and a release liner. It doesn’t do me much good, when I’m talking to the product manager, to tell him ‘your base off price is going down two cents’; the release liners might be going up five cents, but he thinks his costs are going down. So when I talk to a product manager, I actually want to be able to talk to him about the aggregated cost of

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EXCELLENCE IS OUR STANDARD IN MANUFACTURING, PRODUCT COMPLIANCE, QUALITY AND SERVICE.

Partnering with Avery Dennison has been an important step of our forward strategy. At Manucor, we take special care to create value for our key customers and we are committed to making their innovation process as timely and eďŹƒcient as possible. LEARN MORE.

www.manucor.com

SUSTAINABLE SOLUTIONS. ENDLESS INNOVATION. At Kraton, innovation is driven by creativity, passion and active assessment of market trends. We encourage close cooperation, knowledge-sharing and transparency in our relationships with customers, favoring our combined strengths. We work in state-of-the-art laboratories on technology platforms focused on our engineered polymers and bio-based tackifiers to ensure that our innovation takes emerging customer needs and regulatory changes into account. Our innovative focus targets safer and cleaner technology solutions, enabling the formulation of adhesives tailored to meet your challenges: from difficult-to-bond substrate to increasing process speed as well as alternative functionalities. tm

Š2017 Kraton Corporation.


S U P P LY C H A I N

this product and about his overall costs compete in the market.” This is the communication which leads to increased innovation. The product manager might come back to Simon and tell him that the cost of a product is no longer something that will drive growth, so a different solution is required, and they might ask for help to develop something that performs better.

“We will go back to wherever we’re getting the adhesives from, and we’ll work on an innovation. It could be a cost-weight reduction; it could be a different formulation – whatever it takes to perform better in the market.” The procurement process is, after all, dictated by what is happening in the market. The marketing team tracks how Avery Dennison needs to compete, and that is communicated

“We want to be as valuable to our suppliers as we can be, and to fulfil the biggest promises possible to those suppliers” – Roland Simon, VP Global Procurement Materials Group & Corporate Sustainability

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POLIFILM is one of the leading German manufacturers of polyethylene extrusion film and surface protection film delivering worldwide. With extensive knowledge and expertise, POLIFILM delivers top-quality solutions for a very wide range of applications for flexible packaging such as Food and Drink, Medical, Pharmaceutical and beyond. Technical Films are used in the Self-Adhesive Label industry, Automotive Learn More. or Steel industry.

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We are one of the world’s leading suppliers of durable direct thermal papers for labels, tickets & tags and point-of-sales use. Our product range is complemented by specialty coated one-side label face stock for applications like pharma and security labels. Our products are represented globally via an extensive sales and customer service network. www.jujothermal.com jujosales@jujothermal.com


S U P P LY C H A I N

across the chain until a solution is created. Simon and his group try to be specific in the procurement strategy, and focusses on solutions where real-time aggregated cost can be seen. While this is a challenge, Avery Dennison is continuing to work on the technology that will enable this process to be as simple and accessible as possible. This is by no means the only new use for data that the company has embraced. Over the past 18 months, Simon and his team have been working on a set of metrics and a data platform with the supply base. “We have maybe 180 of our suppliers on there, which represents well over 80% of our supply base from a spend perspective,” Simon explains. “On this system, we’ve begun to measure them across a platform of sustainability metrics. “We communicated it right from the start that we weren’t implementing this tool for the purposes of side-byside comparison or even purchase decisions,” he continues. “We were trying to create a baseline on which we could continually improve.”

Sustainable guardian Avery Dennison has been working on the continuous improvement of its own sustainability for many years, and considers this approach with its partners a way to work more collaboratively on the same issues. “We’re becoming more aggressive and we want sustainable products to be a larger component of our own development,” Simon explains. Every sustainable initiative that has been implemented has proved positive for the business, and for Simon, sustainability begins at the source. “A lot of the perceptions of sustainability has a lot to do with being responsible, in terms of socially and in the environment,” he says. “I see a third component to this, which is being responsible to your business and your stakeholders. Your people. “And so, when we look at the concept of sustainability, we’re always looking at the innovations that are going to be the long-term drivers in the business. The innovative process we have with the supply base is, more and more, also about different sustainable solutions. Things that

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AV E RY D E N N I S O N

AVERY DENNISON IS PRESENT IN MORE THAN 50 COUNTRIES WORLDWIDE are recyclable, renewable, that reduce our carbon footprint – and it’s for the purpose of being socially responsible, but also for the purpose of being a sound business.” Simon considers this a unifying quality for the business, both internally and with suppliers. It is appealing to any business for a partner to be green; everybody wants to be associated with a company that embraces its sense of responsibility. And Avery Dennison’s position on

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this is paying off. With waste reduction and improved efficiency considered cornerstones of the business, employees have the freedom to become involved with sustainability projects, and what’s more, they are excited by the prospect. The sense of unification has had a ripple effect through the entire company. Avery Dennison is also a very strong operations organisation, and boasts a worldclass Recordable Incident Rate on


S U P P LY C H A I N

its safety. As a standard part of its DNA, the company continues to do more with less in its innovation, and considers quality of leadership to be a vital component of its success. “I’m not talking about myself, but all of my colleagues, all of my peers,” says Simon. “We have an exceptional group of people.” He concludes: “What we do here

between our people and with our people can be something very difficult, and not too many industries could replicate it. One of the convictions we have at Avery Dennison is that we believe the quality of our internal collaboration and cooperation across functions and boundaries, is a competitive strategy.”

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AGCO’s

transformational

path to true supply chain excellence Written by Nell Walker Produced by Denitra Price

Challenger - 1000 Series HHP


Greg Toornman, Director, Global Materials, Logistics and Freight Management at AGCO, describes the business’ supply chain transformation and the incredible impact of the overhaul


AGCO

A

leader in the agricultural equipment world, AGCO was founded in 1990 and has been developing a global network ever since. Of course, the quicker a business grows – particularly at the rate AGCO has done – the more often its processes need to be overhauled and improved, at which point talented transformation specialists must be recruited. Enter Greg Toornman, an AGCO employee since 2004 who stepped into his current role as Director, Global Materials, Logistics, and Freight Management six years ago after a trio of successful transformational assignments within the company’s Global Purchasing organization. He is responsible for leading the transformation of AGCO’s Global Materials and Logistics functions, the issues inherent in which were identified back when Toornman was first hired. In 2004, AGCO realized that the mergers and acquisitions approach was having a huge impact on the top revenue line. With the view to create greater synergy, two SVPs were brought in – one to focus on manufacturing, one on purchasing and materials management – and AGCO embarked on integrating its operations in North America, South America, Europe, and Asia. “That took from 2005 until about 2012,” Toornman explains. “In 2012, we saw that there were still opportunities within the materials management and logistics, and that the tools we utilize in supporting our factories from a global-wide network perspective were not well integrated

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“If you are part of the ownership and you embrace the change, typically you’re more open to delivering solutions rather than pointing the finger, because it’s your project” –Greg Toornman, Director, Global Materials, Logistics, and Freight Management

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and not well connected. The product development roadmap direction we embarked upon was moving towards a global platforms strategy, similar to what you’d find in the automotive industry where you have a similar platform produced in multiple regions with a common supply base.” Looking at the options the business had, the team came up with a global material management transformation initiative called GMMT. This initially involved bringing in experts from within manufacturing, logistics, IT, finance, and purchasing to brainstorm where to focus first. In 2013, a vision was in place to have a globally-integrated network for all inbound and outbound transportation, plus all B2B information exchange (forecasting, releases, order confirmations, ASN’s) required for supplier relationships, by 2018. All the regions AGCO operates in were invited to develop what the future of the business would look like; rather than a top-down approach, the company worked with a tactical execution layer to understand the challenges involved and ensure a

Greg Toornman

Director, Global Materials, Logistics, and Freight Management

better service would be provided. The plan and approach proved so successful that, rather than being a challenge, it was very efficient to move forward with the globally aligned five year strategy as the regions were key contributors to the future state vision. “In any type of corporate-led global initiative, typically you’re fighting with the regions or sites for them to embrace it,” Toornman explains. “In

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this case, we had to fight high demand because we couldn’t implement it as quickly as everyone wanted. So that was kind of a good problem to have.” The inbound-outbound transformation became standard after its success in Europe; it has since been successfully implemented in China, and is currently in the implementation phase in North America. South America will follow, with implementation starting there in January 2018. No large-scale change ever happened without hiccups.

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However, with AGCO’s Supply Chain leadership team being entirely behind Toornman’s plans, the company was able to work through the obstacles as they emerged. “If you are part of the ownership and you embrace the change, typically you’re more open to delivering solutions rather than pointing the finger, because it’s your project,” he explains. “Really, the key strategies


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AGCO Corporation - Group Picture

that we focus on are within various levels of the organizational function are 1. to believe in it, 2. to understand it, 3. to embrace it, and 4. to enable it.” This cooperation has to extend away from the company itself, of course, and through the supply chain. “We paint a picture to the supplier, saying ‘yes, we hear you as a collective group – here are the things we are doing and investing in to make

it easier for you, as the supplier, to do business with AGCO’,” says Toornman. “You start working on that a year in advance, and when you then reach out to those suppliers and ask them to change what they do, how they do it and when they do it, they are aware of why you’re doing it because it helps them satisfy their opportunities or the needs they’re expressing to you.” It’s all about teamwork and collaboration for AGCO. Thanks to this approach, when the initial European regions inbound 4PL freight initiative roll-out occurred, only 10 suppliers out

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Greg Troornman and colleague posing in front of grain trailer

of 1,550 proved resistant. Toornman says: “We were very happy with that because we focused on how to get supplier participation and compliance to the level we needed beforehand.” It worked so well because AGCO’s ideas benefitted the suppliers too. Under the previous logistical infrastructure, a supplier would have an AGCO truck show up at each factory door, but it could be 20+ different trucks over the course of a week. Now, it’s one truck per day picking up for 20+ factories across the globe. This mutually beneficial type

of partnership stems from AGCO’s core values, all of which embrace ethical working – which, again, extends to suppliers. “In our supplier performance manual, there is an expectation and understanding of what it means to do business with AGCO, to grow your business alongside us, and what happens if you are not in line with our values,” Toornman explains. “Transparency, integrity, respect – basic things that are just part of doing business with AGCO and how our team members operate when engaging both internally and

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AGCO Corporation - Group picture on trailer

externally. To us, it doesn’t matter much who you’re engaging with – it’s the way you do that thing, the way you say the thing, and how you deliver on your commitments.” Technology helps AGCO interact with every faction of the supply chain, from freight management tracking through the company’s performance measurement system, to openly sharing of AGCO’s own performance

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statistics. Whether purchasing, quality, logistics, materials, or engineering, there is one transparent, standardized way that supplier performance is evaluated and made easily visible both internally and externally. AGCO has seen great improvements in its direct material suppliers as well as its freight carrier performance over the past few years as the business has


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“Our path is to be number one in customer-perceived quality, and with that, we’re on a very strong journey and making good inroads” –Greg Toornman, Director, Global Materials, Logistics, and Freight Management

started to measure, track, and drive delivery performance improvements. “The freight carrier performance is something that we have truly realized the benefits of taking a global approach to evaluation and awarding,” says Toornman. “A great example of this is our partner, ACL (American Container Lines) who handles our

transatlantic shipments of our agricultural equipment. We have seen great level of ongoing and sustained performance from ACL over the past years. AGCO provides a consistent set of expectations, this makes it more efficient and subsequently effective for our suppliers to meet or in the case of ACL, exceed our overall performance expectations. “ACL has set high service level standards during their seven-year partnership with AGCO and raised the bar on expectations of what a freight partner should look like. ACL

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has improved AGCO’s supply chain through expedited product release, export clearance services and special project support in addition to services such as loading/off-loading, tire mounting, washing and storage.” Dustin Barney, AGCO N.A. Materials Management Director at AGCO, adds: “With its latest fourth generation ConRo vessels, ACL provides a solution that is faster and more fuel efficient while providing increased space and easier loading and offloading. Investing in its equipment and technology while remaining focused on value added services for the customer is what

AGCO Corporation -Employees

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makes ACL a great partner for AGCO.” AGCO is able to share all of this gathered information crossfunctionally, Toornman says. “A lot of times some of the supplier engineering team members or sales engineers may not know how their company is actually doing in terms of quality, purchasing, or logistical performance. At the same time, on our side, if we have an engineer developing a new product with a supplier that has terrible quality or delivery, we don’t want that.” The main advantage of this visibility is that it makes both the suppliers and AGCO itself work harder and forge stronger relationships, both internally,


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AGCO Your Agriculture Company

MF7715S -Grain Trailer

at every level, and externally. This is all part of AGCO’s Supply Chain digitalization initiative, which focusses on elements of what Toornman calls ‘truly innovative manufacturing’, utilizing such advancements as Google Glass and IoT. “We have many companies wanting to come and see our sites’ digitalization levels; this is occurring across global level we share what we have done, how we have done, and also learn from these visits,” says Toornman. “All those different elements have what we call a ‘center of excellence’

that develops them on behalf of the rest of the global organization,” he explains. “Our most mature facilities within a particular activity develop, do discovery work, perform the initial discussions, and conduct he initial internal pilots – whilst sharing the results – on a specific digitalization element before the global roll-out process starts.” A great example of this is how AGCO develops its returnable container projects. Three years ago, the company was looking to develop returnable packaging solutions

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between the Chinese and European operations. It piloted a concept with a company named Goodpack Ltd, which supported AGCO with creative options that proved to be very successful led out of its Changzhou, China site. The concept was to rent the large steel containers from Goodpack’s China operations and utilize the containers for shipments between the Changzhou facility and two European sites. Goodpack would then pick up the empty containers in France and Finland. “We saw an 18% improvement in our sea container density, significant improvements in product quality, major waste reduction, and container unloading efficiencies,” Toornman says. “Within six months of the pilot’s very successful start, we were able then to develop and implement similar solutions with our products shipping from Brasil into Mexico and Argentina. “AGCO is realizing a huge level of value and return from our relationship with Goodpack,” he continues. “This type of approach only works if a company has a strongly aligned communication methodology and

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global network of relationships. This enables much more to get done as we do not see solutions to the same opportunity being developed independently. Our leadership teams talk on a regular basis on our global logistics alignment calls; these sessions are essentially a status update for various initiatives that are ongoing across the AGCO globe.” The work AGCO is doing to increase its digital capabilities is viewed by Toornman as an “opportunity to differentiate ourselves from what our competition is doing at a much more intimate level,” because customers spend a lot of hours in the machines AGCO sells, and when the process of acquiring the high-quality item is as simple as it can be, brand loyalty is born. “Sometimes a customer gets so excited about their new tractor or combine coming up the line that they want to visit the factory,” Toornman says. “We want that too. Our path is to be number one in customerperceived quality, and with that, we’re on a very strong journey and making the best in class product inroads.”


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Group Picture inside AGCO Corporation’s facility

vPurchasing decisions tend to be based on recent experience in this industry; from a sales and marketing perspective, one may be selling a product, but from the point of view of service and aftermarket support, one is maintaining customer repurchase and loyalty. AGCO aims to create a proactive customer experience that includes preventative maintenance and limiting downtime for the customer. “By proactively ensuring the customer is not having an unplanned breakdown, we’re able to maintain a stronger level of repurchase

loyalty because the customer’s recent experience is positive,” Toornman says. “We manage the complexity of customer need through innovation, and we’re more agile and adaptable than bigger companies. “We are really proud of what we’re doing,” he concludes, “but at the same time we have a long way still to go in our journey to supply chain excellence.”

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STANDARDIZED AND

RE-ENERGIZED

Inside AkzoNobel’s operational transformation Written by Nell Walker Produced by Denitra Price


AKZONOBEL

Millissa Hernandez Flanagan, SVP Integrated Supply Chain at AkzoNobel, describes the ways in which she has reorganized the business to improve safety, drive productivity, enhance growth and deploy a heartbeat of the business with and operational excellence

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hile you may not be aware of the ways in which AkzoNobel has impacted the products you use every day, it is a business that has remained almost omnipresent since its inception in 1994. As a global leader in paints, coatings, and specialty chemicals, AkzoNobel serves businesses and consumers via 46,000 staff across 80 working locations with its industry expertise and skill. When a company of this size and reputation requires a change, the task of finding a true expert can be daunting, if necessary. In the case of AkzoNobel, the right expert was found in the form of Millissa Hernandez Flanagan, SVP Integrated Supply Chain. Hernandez Flanagan holds

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degrees in chemistry and chemical engineering, and has been honing her knowledge and experience for 33 years across the realms of metals, refining, chemicals, and plastics. Having been a major team player for big names like ConocoPhillips, GE, Novelis, and SABIC, she joined the AkzoNobel family just over two years ago. The common thread for her career has been operational excellence, supply chain leadership,and change management, and as such, these are areas in which she truly thrives. So, how has Hernandez Flanagan’s extensive skillset contributed to AkzoNobel’s success thus far? “My approach to transformation is always very similar,” she explains. “I use an approach of


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“THE REASON THIS MODEL WORKS SO WELL IS BECAUSE WE KEPT IT SIMPLE” – Millissa Hernandez Flanagan, SVP Integrated Supply Chain

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When Outcomes Matter, manufacturing companies like AkzoNobel call upon Venetia Partners to help fix, build and transform the business performance of their integrated business operations and supply chain. Venetia Partners supported AkzoNobel’s Pulp & Paper Chemicals business in the design and deployment of their supply chain organization and strategy. Venetia’s deep operational and deployment experience in asset-intensive industries translates into extremely high-value consultants that leverage your team to create and leave behind lasting improvements deep inside your operation. Having also been the in the driving seat of major supply chain transformations like Novelis, we know the organizational and managerial shifts required from in and outside a supply chain to produce real outcomes.

In supporting AkzoNobel’s transformation, Venetia drove bottom line results by: • Providing interim plant management to turn around a struggling operation • Mobilizing, training and deploying “Accelerated Outcomes” teams to embed the new operating practices deep into the business, where the transactions happen — ensuring adherence and sustenance in the new way of operating the business • Deploying industry leading business practices and processes (“Playbooks”), developing internal personnel and driving the necessary behaviors across the globe. • Launching a roadmap for the deployment of industry-leading operating practices, tools and governance for an improved end-to-end supply chain planning/execution capability • Establishing KPI-driven process improvement plans and dashboards for underperforming business areas/ departments and processes

Effective, collaborative and result-producing advisory partnerships like Venetia and AkzoNobel are rare. Find out how Venetia Partners’ knowledge and passion can work with your team to achieve new performance levels. Learn more: www.VenetiaPartners.com.


AKZONOBEL

“WE NOW HAVE AN END-TOEND TEAM FOCUSED ON SAFETY, PRODUCTIVITY, AND GROWTH, SO WE CAN CONCENTRATE ON MAKING MONEY” – Millissa Hernandez Flanagan, SVP Integrated Supply Chain

looking at strategies and building an organizational model around that strategy as a team, before deploying it. What has made that work, and what I’ve learnt over the years, is that the team owns the strategy from the beginning.” On first stepping into her current position, Hernandez Flanagan realized it was a business which was growing wildly. Chemicals – her specialty – in particular have been consistently profitable, showing incredible growth worldwide. However, the

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business needed to grow even further and wider, but lacked the infrastructure to support that growth. “The teams knew where the gaps were,” Hernandez Flanagan says. “They identified the gaps, and so when we built an organizational model, we used continuous improvement methodology to drive and lead key projects to build it out. This meant using standard operational excellence models to think about what a supply chain team should look like.” Having established a fully-formed


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and efficient team, Hernandez Flanagan then applied that structure to her specific division – Pulp and Performance Chemicals – and allowed the group to take ownership of it, building layers and growing into their roles. Implementing excellence Hernandez Flanagan helped to build an End to End Integrated Supply Chain organizational model removing siloed processes and helping the business to deal with mergers and acquisitions more effectively. Her team, which boasts a broad range of skills, now

exceeds 2100 people globally – and that requires standardized tools. “When you put in a model where you need to standardize and leverage acquisitions, standardized processes, roles, tools, data and governance are needed,” she explains. “To support infrastructure needed, we added a process excellence group that knows how to optimize global operational processes and tools. They know ERP and middle-layer software, and how to make it work at site level. We have 28 sites across 19 countries, and we’ve effectively deployed standardization at every one of those sites.”

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AKZONOBEL EMPLOYS

46,000 STAFF

ACROSS 80 WORKING LOCATIONS

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One might assume such a change required a drastic overhaul of staff too, but this has not been the case for AkzoNobel. Many of its teams have worked together their entire career but while they are all very experienced, they lacked knowledge of operational excellence. For Hernandez Flanagan, the key was not hiring new people, but training the talent the business already had. “I didn’t make many changes. I brought in a few new leaders – one for capex, one for global supply chain, and so on – but aside from that, I kept the Akzo team and trained them. We had to make some adjustments along the way, but thanks to getting existing staff on board with change management, we’ve really knocked it out of the park. “They know this business, and they now have gained new knowledge on operational excellence and are really driving it. They’re now wildly set for success.” Hernandez Flanagan had also deployed similar systems at GE, SABIC, and Novelis. “The reason this model works so

well is because we kept it simple,” she says. “We had the right blend of existing talent who took the training very well, and now we’re looking at growing talent.” Hernandez Flanagan considers it a responsibility of hers and AkzoNobel’s to invest in the industry and emerging talent, and so the team is working on creating and training fresh talent with education programs that will fast-forward them into the market. This education also extends to systems which are increasingly becoming industry standard, such as Kaizen and Six Sigma, and how AkzoNobel can apply them to itself. Hernandez Flanagan is now working on value stream mapping to solidify the company’s continuous improvement strategy yet further, increasing site capacity and employee education side-by-side. The teams are constantly growing and training, and safety and productivity continues to increase as a result. “Whether you’re looking at productivity through optimization, maintenance, procurement, or opening up capacity doing value

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stream mapping, it’s a heavy focus and starts with a mindset of Excellence,” she says. First, we drive Safety Excellence, keeping our team safe. This fosters an atmosphere of excellence required to then drive productivity and enhance growth.” Leading the industry This attitude goes a long way to explain AkzoNobel’s worldclass position. In safety, working

AkzoNobel – creating life’s essentials

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environment, and sustainability, as well as operational efficiency and change leadership, the Pulp and Performance Chemicals business continues to lead the way. Hernandez Flanagan is of the opinion that transformation of a businesses should always be focused on the right degree of change required for the challenge striving to maintain safety excellence, maximizing productivity and enhancing growth with optimized capital. Deployment of an end to end Operational Excellence strategy should be conducted in multiple waves that complement key business opportunities. “Having standardized basic HSE, Six Sigma, operations, maintenance, quality, supply chain, procurement, and capital projects, we’re now striving for excellence at the right level within each function,” says Hernandez Flanagan. “Enhancing our Digitization strategy is on our radar, to take us to the next level of excellence within our business.” Sustainability is also a passion for Hernandez Flanagan and her team. Green initiatives can often by overlooked in the supply chain


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industry, but AkzoNobel values its eco efficiency targets, concentrating on lessening its use of electricity and optimizing water across all of its sites. “We’re looking improve our carbon footprint around the globe,” she says. “We also focus heavily on zero hazardous waste to landfill initiatives, and all components that drive the eco-efficiency portion of sustainability for the company.” With each element of the transformation’s infrastructure firmly in place and underway, AkzoNobel’s task is to continue its positive development into the future. “We now have an end-to-end team focused on safety, productivity, and growth, so we can concentrate on making money – and how do you make money? Through Safety, Productivity and Growth.” Making money for AkzoNobel means remaining excellent with regard to safety, sustainability, and productivity. The business has received substantial productivity feedback since making its recent changes, and these changes allow it to grow faster and deeper than the

competition through unconstrained continuous improvement and the optimization of both capex and opex. “Our differentiator now is that we already have our end to end Integrated Supply Chain team in place, and we’ve deployed an Operational Excellence strategy over the last 18 months,” says Hernandez Flanagan. “We’ve got the right people, the right processes, the right data, and the right tools. The infrastructure is in and that’s how you manage and grow a business in a smart way.” She concludes: “Historically we have seen businesses making revenue and hit targets, but it’s short-term. An Operational Excellence model with an end to end Integrated Supply Chain structure provides a heartbeat that has poised our business for growth, and that is very exciting.”

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TOMORROW STREET

BRIDGING THE GAP BETWEEN STARTUPS & CORPORATIONS Written by Laura Mullan Produced by Richard Durrant


A JOINT VENTURE BETWEEN VODAFONE AND TECHNOPORT, TOMORROW STREET IS LOOKING TO TAKE BUSINESS-READY STARTUPS ON A JOURNEY TO REACH THE WORLD

T

he CEO of Tomorrow Street, Warrick Cramer, is all too aware of the challenges facing startups today. In 1999, he took a leap and set up his very own mobile payment security company and, like many startups today, he faced many hurdles before he found entrepreneurial success. “If I reflect back on my personal life to when I was developing my own tech startup, it was really hard,” Cramer says. “I got so many rejections before I actually found someone that believed in the product and after that, the product went on to be implemented worldwide. “Everyone said that it was impossible, that it would never work, and a lot of startup companies that I meet today are going through something very similar,” he notes. “A lot of founders have put everything on the line and have had to make a lot of sacrifices to get to where they are. Therefore, I really wanted to create an environment where startups could come and bring their aspirations to life.” From networking with foreign companies to understanding international laws, Cramer has

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WARRICK CRAMER CEO of Tomorrow Street

Tomorrow Street: Bridging the gap between start-ups and big business


INNOVATION IS AT THE HEART OF OUR PARTNERSHIP Driven by a shared passion for innovation, Vodafone and Huawei’s long-standing cooperation has successfully delivered transformational, industry-leading, technology. We will continue to relentlessly explore ways to build intelligent networks and reshape the world with mobile to deliver limitless growth potential and light the way forward. We envisage new business models and new partnerships emerging with the rise of innovative ICT technology. We see a future of Cloud-based networks, with 4.5G and 5G technology, AI enabled, with excellent Customer Experience Management all helping create the new Digital Vodafone! Working together towards an exciting future, our partnership is ready and committed to world-class innovation to bring benefits to both corporations and consumers in the Digital Gigabit Society, where all things are connected. Together, we are building a Better Connected World for everyone and everything.


A beacon under the night sky in Australia

Exploration lights the way forward The relentless pursuit of innovation enlightens the intelligent world. www.huawei.com


TOMORROW STREET

first-hand experience of the obstacles tech startups face. He is keen to help startups expand their global footprint and this is one of the many reasons why Tomorrow Street, a Luxembourgbased innovation centre, was born. Helping businessready tech startups Harnessing the power of both the Vodafone Procurement Company (VPC) and Technoport,

Tomorrow Street is an ambitious innovation centre that strives to help business-ready tech startups to grow and expand globally. Incubators and accelerators typically support early stage startups with everything from product concept to product launch. However, after that, startups often struggle to take the next leap to grow their business worldwide. Striving to make a meaningful difference in the tech space,

Warrick Cramer, CEO, Tomorrow Street

Xavier Bettel, Prime Minister of Luxembourg

Deputy Prime Minister Eienne Schneider with Prime Minister Xavier Bettel of Luxembourg and VPC CEO Ninian Wilson

The Luxembourg Prime Minister on Tomorrow Street


Deputy Prime Minister Eienne Schneider with Prime Minister Xavier Bettel of Luxembourg, Ronald Schellekens – Vodafone Group Director and Ninion Wilson, CEO VPC inaugurating the Tomorrow Street innovation centre

Tomorrow Street fills a gap in the global innovation scene. Specifically targeting late-stage startups, the innovation centre helps tech businesses expand globally in a low-risk way. “We look at small tech startups and we say, ‘Can they scale?’, ‘Are they able to grow outside their home market?’, and if the answer is yes, then we want to bring them to Tomorrow Street,” explains Cramer. “We surround them with all the right people

to help them to achieve that and to make their idea really come to life. “In this way, Tomorrow Street completes an entire innovation ecosystem, which does not exist anywhere else in the world,” Cramer adds. “If you’re looking at Silicon Valley, Asia or even Europe, there are plenty of accelerators and incubators. However, there’s no-one that really does what we actually do - and that’s really about helping companies scale up and promoting disruptive

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We see something. Amid the streams of ones and zeros, we see a world where oceans of data yield sparks of insight and unending questions are being answered. A world where every space is intelligent and each connection is seamless. Where cutting-edge computing has the power to carry mankind to new planets, and faster data analysis accelerates the race for a cure. Where solutions come before problems arise and physicists have the power to map the universe’s origins. We see a world where Everything Computes, and what’s next is extraordinary. ©Copyright 2017 Hewlett Packard Enterprise Development LP.


See it all at hpe.com


TOMORROW STREET

Tomorrow Street’s signing on LB Networks

technologies across the world.” Providing a platform for 16 different late-stage startups, Tomorrow Street is particularly interested in businesses that focus on the Internet of Things (IoT), Artificial Intelligence (AI) and security. “If you look at these three areas, they’re actually all interlinked,” observes Cramer. “If you are looking into IoT you’re going to need security, and if you’re pulling data out of those billions of devices, then you will need something that can actually crunch the data and make it useful and so this where AI comes into play.

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“The world is moving very quickly,” Cramer adds, “and having those three pillars of focus is important because that’s where we think the world is going.” Harnessing the power of Vodafone As a joint venture between the Vodafone Procurement Company and Technoport (Luxembourg’s national startup incubator), Tomorrow Street leverages the resources and talent of both organisations to create something far beyond anything else in the innovation sphere.


TECHNOLOGY

“Tomorrow Street completes an entire innovation ecosystem, which does not exist anywhere else in the world” Warrick Cramer CEO, Tomorrow Street

Targeting late-stage business-ready tech companies, selected startups enjoy free access to Tomorrow Street’s facilities, Vodafone’s supply chain, and will have up to three years to grow. Situated on the top floor of the Vodafone Procurement Company (VPC) building in Luxembourg, the Tomorrow Street Innovation Centre leverages the international network and skillset of the VPC to drive and manage massive growth. “The Vodafone Procurement Company is a very powerful engine,” Cramer says. “The reason why I say that is because we have suppliers coming in here every single day. The startups get access to all the different type of roadmaps in the world and get to really see in advance what’s going to happen in this space over the upcoming years.” The VPC is, by all means, an immense operation. It centrally manages close to 80% of Vodafone’s global spend, looks after 14,000 supplier relationships, and works closely with internal business partners to deliver the company’s procurement strategy across more than 450 product categories. By utilising this engine for growth, Tomorrow Street allows startups the opportunity to build bridges between some of the most exciting companies in the world as well as Vodafone’s customer base of more than 500mn people. “Within the Vodafone Procurement Company, you have a really deep level of knowledge that is

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all together in one location, which doesn’t happen in other parts of the business,” comments Cramer. “What that means for a startup is that they can meet people and other suppliers that can actually make a difference to their business. From a connection or networking point of view, it’s very powerful.” A public-private partnership Luxembourg’s national startup incubator, Technoport, works alongside the VPC to give selected tech startups the chance to grow their global footprint. This publicprivate partnership will support up to 16 tech startups so that they can grow and foster talent in the country. Technoport has been supporting entrepreneurs since 1998 as a public, national startup incubator for Luxembourg. Over the past five years, it has approved 42 new companies in the incubator with 24 leaving successfully. With this proven experience in the startup world, Technoport offers a hands-on mix of support and services. Alongside VPC, the pair are hoping

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to make a lasting impact on the tech sector and the country at large. “I think this joint venture is a really fantastic opportunity for Vodafone, Technoport and the Luxembourg government. It really shows how public and private partnerships can work together and co-exist so it’s a win-win model for both of us,” observes Cramer. “From a Vodafone perspective, the Innovation Centre brings new companies and new technologies to our customers. We get to see what trends and disruptive technologies are entering the market and I think that really gives us great insight because a company doesn’t have to be big anymore to make a difference. From a Technoport point of view, as Luxembourg’s national startup incubator, it’s really about creating jobs in the economy, creating new industries, and fostering talent in Luxembourg.” Digital Luxembourg Located in the business hub of Kirchberg, Luxembourg, Tomorrow Street is strategically positioned


IN A CULTURE OF POSSIBILITY

INNOVATION IS A RENEWABLE RESOURCE.

Learn how telcos deliver new services faster with VMware NFV. vmware.com/ukcloud

REALISE WHAT’S POSSIBLE.™


TOMORROW STREET

in what is widely regarded as a ‘startup nation.’ Geographically located in central Europe, the country is pushing digitisation and is making its mark as an epicentre for digital disruption. “There’s so many big, corporate organisations based here in Luxembourg and the beauty of it is that you can actually go and talk to them because they’re your neighbours or you’re closely associated. The ability to have those conversations without the red tape or hierarchy that normally exists in a bigger country doesn’t happen here and I think that’s what makes Luxembourg so powerful.” Ranked 9th in the world for both IT readiness and global innovation, Luxembourg is widely recognised as a driver for innovation. Cramer believes this is largely due to the government’s ability to adapt and openmindedness to new technological advancements. “The Luxembourg government is great because they are very forward-thinking,” he says. “Historically, if you think about where they’ve come from, they went from the steel industry to banking, and now to ICT. I think Luxembourg is a very dynamic country with a dynamic government.  Now they’re doing a lot of work in the innovation sector and they’re really helping to foster growth in the sector.” Initiating human connections With a professional and culturally diverse team, the talent and expertise of Tomorrow Street’s workforce

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2017

The year that Tomorrow Street was founded

50

Number of employees at Tomorrow Street

16

The number of startups that Tomorrow Street will support


TECHNOLOGY


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TECHNOLOGY

are integral to its success. Boasting over 20 languages and experience across corporate, entrepreneurial and technical fields, the staff at Tomorrow Street work closely with startups towards a mutual goal of driving growth in the tech industry. “From my perspective, the team is the most important thing at Tomorrow Street,” observes Cramer. “They are more important than me or anyone else. They all bring different specialised skills to the table and they add value to a lot of the startups that are coming to the centre. I might have a vision, but I need a fantastic team behind me to make it really come to life.” Indeed, whilst digital technology is the core focus of Tomorrow Street, Cramer believes that the way in which the centre initiates human connections is what gives it a competitive edge. “Tomorrow Street is really about human connections,” he says. “It’s about being supported, being able to bounce ideas off people, and it’s about when you are having a bad day, you can know that there are people around

you that can connect and understand exactly what you’re going through. “Technology is fantastic in the way it can connect people across the globe, but it’s still not the same as physically being there with someone and being present,” Cramer adds. “I think that’s where the human aspect is very important and we should never lose sight of that as we develop these digital ways of communicating. I think, equally, if not more important, that the technology is the human aspect.” Collaboration and Partnership Collaboration is, by all accounts, an integral part of Tomorrow Street’s DNA. Since its launch in September this year, the company has garnered support from major players in the digital technology sector. These partnerships are extremely advantageous to the startups involved as they provide networking opportunities, resources, and leading industry knowledge. “Tomorrow Street is all about collaboration and partnership,” says Cramer. “I think the founding principles

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Break out space inside Tomorrow Street offices

of the centre and its core values revolve around how we can actually work with our partners and people in the future. We’re very lucky to have the support of our partners and to have an environment where we can all work together under one roof on new and exciting technologies that could potentially change the world.�

Tomorrow Street Life changing for small businesses

Making a difference Overlooking the bustling business hub of Luxembourg city, it seems that Tomorrow Street is truly at the epicentre of something extraordinary. It offers both a professional and creative environment, with themed pods and sleek boardrooms on-hand for the selected startups. Combined with the expertise and resources provided, it is easy to

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visualise the ground-breaking startups that will soon occupy this space and transform the tech sector.   “I think we’re at the start of something really great here,” reflects Cramer. “I’ve travelled around the globe and talked to many governments and large corporate organisations and a lot of the feedback that I get is that we’ve got something that can really make a difference. I think the next five years will be very exciting for the innovation centre. I think we are going to grow exponentially, to be really honest with you.” The tech industry is often preoccupied with finding a silver bullet or a so-called ‘unicorn’

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“Working in a big organisation, we can sometimes forget that some of the small gestures that we can make can have a big impact on small startups and companies. We can really make a difference and that can be lifechanging” Warrick Cramer CEO, Tomorrow Street


TECHNOLOGY

company, however, Tomorrow Street is about more than that – it’s about taking business-ready startups to a global stage, helping disruptive technologies enter the market and, most importantly, truly revolutionising the tech sector. “For me personally, one of my core missions is trying to make a difference,” says Cramer. “It’s not always about looking for that unicorn or that silver bullet because, although

we’d love to find it, it shouldn’t be our main focus point. Working in a big organisation, we can sometimes forget that some of the small gestures that we can make can have a big impact on small startups and companies. We can really make a difference and that can be life-changing.”

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Thames Water A supply chain transformation Written by Dale Benton Produced by Richard Durrant


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Thames Water, the UK’s biggest water and sewerage company, has undergone a radical supplier transformation of late, as the organisation looks to match the quality of its network with a level of service that delivers

A

s one of the largest utility companies in the UK, serving more than 15million customers on a daily basis, Thames Water has a clear responsibility to provide essential services that are of the highest quality, and it can successfully do so through a strong and reliable supplier network. However, managing a network of suppliers and contractors that encompasses around 12,000 people working directly for the organisation or as part of a thirdparty contract can prove difficult. It was not so long ago that Thames Water was consistently ranked the lowest in the annual supplier satisfaction survey from British Water. Fast forward to 2017

however, and Thames Water now ranks within the top two and has won a number of major awards, (including Construction Client of the Year and the Supply Chain Excellence Customer Service award). The reason for the historically low rankings, as Jon Loveday, Group Commercial Director explains, was a lack of any real commercial strategy, the supplier contracts and company goals were misaligned and there was a deep rooted belief that suppliers represented lowest cost and could not provide a value proposition. “I wasn’t brought in to develop a strategy initially, I was tasked with managing Thames Water’s existing suppliers,” he says. “Thames Water was seen as an aggressive client

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and difficult to deal with. It was a contractual approach and disputes were commonplace that really didn’t leave room for developing any form of rapport or solid relationship between the organisation and the suppliers. “It was really hurting Thames Water and all parties overheads were growing to deal with the mistrust”. It was through Loveday’s role in managing that supplier network that he and the organisation identified an opportunity to create a transformation strategy, one that would significantly change the way in which Thames Water operated from top to bottom. To put it simply, Loveday set out to create a standalone commercial function for Thames Water and in order to do so, the first order of businesses was to quickly settle a number of disputes between the organisation and its supplier network. This, Loveday points out, allowed the organisation to remove pain points in order to focus entirely on proper commercial management of key contracts. One of the first transformations took place in the waste network, a

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contract which oversaw the crucial maintenance of all the sewers across London and the Thames Valley area. “At the time he joined the programme had around 7,000 customer facing jobs in backlog, a significant level of distrust had built up between the contractors and the Thames Water employees meaning that not enough time was be focused on the problem at hand. Planning and execution was disjointed and too much time was spent on checking whether jobs were valued and paid for correctly rather getting the job done expediently for customers”. For Loveday, the task was to realign the organisation’s approach to the supply network in order to establish a more mature, integrated contract. This initially involved much closer and open working with the suppliers, creating a culture where challenges were approached together. Performance management and subsequent actions were carried out jointly through tough weekly sessions. This established a sense of order and soon the operation got back to a managed level. Since then


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“It was critical in getting not only the Thames Water people aligned but more importantly, getting the suppliers aligned around one vision” – Jon Loveday, Group Commercial Director, Thames Water

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the Thames Water and supplier teams have become co-located in a purpose built centre. KPIs and the commercial model have been refined and aligned. “We’ve got to a point now where we have a very mature contract and very, very mature commercial model which is the envy of the industry,” says Loveday. It would be easy to suggest that the sole driving force behind the transformation of Thames Water’s whole approach to its supplier network is just improving the relationships and focusing on the bottom line. Loveday, though, is keen to stress that the transformation was born out of a base level need to improve the company’s operational performance. Thames Water, as noted previously, has more than 12,000 people working every day on its assets, including 5,000 direct staff, but with no commercial strategy in place it was clear that there was also something else missing: alignment. “Previously there was a focus on the direct staff, despite the large numbers of contractors we

had working on projects for us,” says Loveday. “We just seemed to ignore them and yet many are in customer facing roles.” Loveday set out to and rebranded all of the customer facing roles so that everyone wore the same uniforms and drove the same vehicles. It made commercial sense, but also from an operational and customer perspective is started to align behaviour towards customer service instead of the individual needs of companies. Next up was alliancing, for Loveday, was very symbolic as it represented a new way of working, shared outcomes rather than traditional rate-based contracts. “What we did from a behavioural standpoint is align people to a new vision for the organisation, a new set of values,” he says. “It was critical in getting not only the Thames Water people aligned but more importantly, getting the suppliers aligned around one vison.” By establishing a more alliance based approach, this allows Thames Water to create more customer focused contracts that enables more

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effective and efficient suppliers, all team have created a suite of leading whilst critically reducing the amount analytics capability and tools. These of overhead that was historically include spend analytics with circa building up on both sides. £7bn of historic spend and £3bn of As a leading utility within the UK, future spend profiled and commodity Thames Water’s funding is regulated, price tracking. More and more of and so reducing overhead spending the frameworks are now procured and realising cost savings wherever and managed by the Thames team possible is crucial in the continued which its partners then use. success and transformation “We’re using this data of the organisation. along with some clever To that end, analytics. It’s helping Loveday’s us to understand our commercial spend now and how team has taken it is likely to influence procurement to our future spend, the next level. be that on future Number of employees at Thames Water Behavioural projects or even future procurement internal programmes,” techniques are now says Loveday. standard in much of Thames Water has also utilised what Thames Water do, this is a cutting-edge performance tool because having the right people called Pulse. Pulse provides realis in many ways more critical than time tracking of the organisation’s the right price. Thames Water performance and provides rightly focus on working safely Loveday with a clear picture as and creating an environment of to what the organisation is doing innovation as well as price. in terms of spend, project time, Data and analytics play an and more importantly, where important part. The commercial savings are being made.

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“Through the use of these tools, we are tracking every day just how well we are performing and how well we could perform,” he says. “They help us achieve what we want to achieve, cost savings, signing of contracts, but also we know if we don’t sign a contract exactly how much its going to cost us. They are really powerful tools.” All of this granular data has enabled a level of understanding of the true cost of operations that only a short period ago was hidden. This has led to another of the major successes Loveday has overseen at Thames Water, the creation of the Logistics Management Centre, (LMC). The LMC now manages the majority of the supply chain operations for Thames Water and a number of its partners. With five warehouses, eight forward stock locations, stock is dynamically managed and distributed. Where is it beneficial to do so Thames Water buy, maintain and distribute their own plant. The function provides a 24/7 response to emergency bursts and floods across the patch. By cleverly utilising specialist vehicle assets to their full potential the LMC have delivered significant savings to the business (circa 15-30% across all activities). “the true cost of logistics was hidden with separate contracts, what we have discovered is that we can plan better, react quicker and run logistics vastly more efficiently by

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pooling resources across all the business units and supply chain. We have plans to triple the size of this function next year”. The transformation of Thames Water is an ongoing process. The organisation has already seen success, the very same survey in which it was failing has now ranked it within the top two utility companies in the country. Loveday is all too aware that for any transformation of this scale, the real measure of any success, particularly one with a supplier network like that of Thames Water, is the response from those suppliers and contractors where the relationship was previously non-existent. “We’ve had a real positive response,” he says. “We’re trying

to get people that are going to be compatible with our values and our goals and ways of working, and to make these alliances a success. So, it’s not just the clever commercial models, it’s actually taking it to a people level to try and give these things a head-start because any contract is only as good as the relationships you’ve got and those relationships take time to develop.” And time it will take, but Loveday can already see a change in fortunes for Thames Water. “There are a number of large suppliers that previously wouldn’t work for Thames Water, and now they do. This is because of our historic aggressive approach that we have worked so hard to transform,” he concludes.

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How FLSmidth’s supply chain setup enhances customer productivity


Written by Fran Roberts Produced by Richard Durrant


FLSMIDTH

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FLSmidth is the market-leading supplier of productivity to the global mining and cement industries. With offices in more than 50 countries, it delivers engineering, equipment and service solutions to customers worldwide

Within the cement industry, we are as known as Coca-Cola is in the soda industry.” This is how Søren Grubbe, VP of Supply Chain, introduces Denmark’s FLSmidth. Currently celebrating its 135th anniversary, it’s easy to see how the company has built such a reputation over more than a century. FLSmidth is a world-leading technology company which, through countless innovations in engineering, has pioneered the cement and mineral industries. FLSmidth has a strategy, where it delivers projects, products, and services. “This is a very unique combination,” Grubbe comments. “Where many of our competitors are very much focused only on projects, or only products, or only services, we have the full end-to-end flowsheet of products. Also, we focus on the full lifecycle of a facility, both in the construction and operations phase. That’s one of our key success factors.”

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“Within the cement industry, we are as known as Coca-Cola is in the soda industry” – Søren Grubbe, VP of Supply Chain

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www.progressive-labs.com


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Sustainable productivity enhancement Of course, to have enjoyed such longevity – surviving both world wars, which saw Denmark cut off and occupied – there are many factors behind FLSmidth’s success. “We actually have the expertise of all the different technologies that goes from when you get the limestone in a cement plant, to actually have the final cement in a bag,” Grubbe advises. “The same goes on the mining side.” Such expertise helps FLSmidth drive efficiencies for its clients. The company wants to be the productivity provider number one, not only for its customers, but also internally. “We drive success through sustainable productivity enhancement,” states Grubbe. “We drive success for our customers by helping them improve their productivity, but we also drive success internally by improving our own internal productivity in our processes, ways of working, new tools and better visibility.”

Improving the flow In response to this, the company has launched several programmes to help drive productivity. “The latest initiative I’ve started is what I call FLSmidth Production System. This is a programme focusing on our own internal factories that are producing parts, either for cement plants or mine sites. That programme is a tailormade program for FLSmidth, where I have taken the best from the Lean world, the Six Sigma world, and then I added that into a theory of constraints philosophy,” Grubbe advises. “What is important in our industry is that we can deliver fast and with high reliability. The flow is important, because the faster we can deliver, the faster our customers can make money, and the faster we can deliver them spare parts. Of course, the downtime is also reduced. Speed is very critical in our business.” FLSmidth is focusing on reducing lead time and enabling us to always deliver on time. “When we know the bottleneck, we can improve the bottleneck,” Grubbe continues. “We can improve the flow and an added

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value is that we also improve our productivity.” Technavio market research analysts estimate the global cement industry to grow at a steady compound annual growth rate (CAGR) of more than 9% by 2020. With this in mind, productivity is clearly a strong focus for the future. FLSmidth has just launched this programme at its largest site in China, where 400 employees are based. “We are very proud of that. We have got quite good results from this pilot programme. A lot of other plants are waiting in the queue to get on board into this programme,” observes Grubbe. FLSmidth used an external partner, Progressive Labs, to help develop this programme. “First of all, they have really brought a unique skillset of competencies that we didn’t have ourselves, but they have also added some technology that has helped us synchronise engineering with procurement and production to one transparent and controllable flow,” enthuses Grubbe.

Focused on customers With offices in more than 50 countries, FLSmidth is keen to ensure that it brings sustainable productivity enhancement to any new location it enters. “We have always been very focused on our customers, and having the intimacy to our customers, being at site, being very local. When we win a cement contract, we go in and hire locals. We bring experts to train them, and using local staff creates jobs in the local environment. That is really a boost to the country

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or region because it creates a lot of spinoff effects,” Grubbe explains. “The governments support this business model, because it creates jobs and it improves the local economies. From a sustainability point of view, this business model ensures that we take responsibility for developing countries. Another aspect that we are continuously striving to improve is, of course, to minimise our environmental impact by developing products and solutions that use less energy. We limit the exhaust coming out of the cement plant by using our best-in-class filters. We have a unique water filter technology. We are industry leading in minimising water consumption and we are sending cleaner water out into the environment than our competitors.”

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Unique products Although FLSmidth is currently celebrating a milestone year, the company certainly shows no signs of slowing down. “We are seeing a huge growth in our service business, but also, FLSmidth has a lot of unique product companies, where we are selling products, not only to cement and mining sites, but also to other industries. We actually see a huge growth potential in these product companies, because these products are very unique and actually market leaders within their product niche. We are very much focusing on gearing up our entire organisation to be more focused on product deliveries, fast service, and really unique products,” Grubbe details. “That’s where we are building our growth.”


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Søren Grubbe VP of Supply Chain

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BEAUTY 4.0 The innovation and digitisation of Coty’s supply chain Written by Catherine Sturman Produced by Charlotte Clarke

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Arya Gupta, Coty’s Procurement Director of Global Chemicals & Innovation, reveals how his team’s culture and technological knowhow has helped to drive profitable growth for the beauty industry giant


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he beauty industry has grown exponentially. With cosmetics once worn solely by wealthy individuals or those on screen, the $445bn industry has seen established businesses overhaul their outdated corporate models amidst a diverse demographic landscape, intensifying competition, changing consumer tastes and the way beauty products are bought today. Established over a century ago, beauty product manufacturer Coty has been part of this revolution, and is witnessing the effects of digitisation on a global scale, with increased demands for products which are highly innovative and meet specific consumer demands at each market. “Digital is disrupting the beauty industry in a big way. Buying behavior has changed dramatically and consumers want new products faster than before,” observes Arya Gupta, Coty’s Procurement Director of Global Chemicals & Innovation. With its worldwide manufacturing operations and R&D capabilities, the business is undergoing a significant transformational journey, guaranteeing exceptional and innovative product offerings in the Beauty space which are fully designed with consumers in mind. “We believe in the freedom of self-expression. It’s about being who you want to be. We want to empower this,” explains Gupta.

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“Digital is disrupting the beauty industry in a big way. Buying behavior has changed dramatically and consumers want new products faster than before� Arya Gupta Procurement Director of Global Chemicals & Innovation, Coty

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“We want to make sure that we live this every day. We want to be inventive and create possibilities for consumers. The concepts of diversity, individuality and authenticity are central to this.” Priding itself not only on its agility and commitment to adapt to the pace of change, Coty has expanded beyond its core markets in Europe, North America and Brazil, China and Asia-Pacific, gaining approximately US$9bn in revenue in 2017. Such is its success, it aims to further cement its presence as a leading player within the beauty industry worldwide. Own it. Drive it Spread across the Americas, the EU and APAC, Coty’s mission to remain a key player and create longterm shareholder value has seen it retain its unique culture, which Gupta notes with immense pride. Shaped by its core values, Coty’s business spirit of entrepreneurship has seen its lean, diverse organisation become encouraged to not only share a passion for beauty, but bring different solutions to the table to the delight of its consumer base.

“Our culture is a key differentiator for us, and a good example is our ‘Own it. Drive it mentality’”, continues Gupta. “This sets us apart from our competitors as we approach every business decision with the mind-set that it is our own company and money in which we are investing.” “Following two mega mergers and acquisitions with Procter and Gamble and Hypermarcas, we began to re-define ourselves while embarking on this massive transformational journey. Our purpose, beliefs, charter and corporate identity are the very heart of who we are at Coty,” he says. Supplier strengths Coty’s ‘Own it, drive it’ mantra has seen the business’s global category procurement team become an essential bridge between the business and the global supplier base. “Mapping our business requirements with what our supply base can deliver has enabled us to provide innovative solutions and unique ways of approaching business problems,” observes Gupta. “We build strong partnerships

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with marketing and research and development teams at Coty to get an in-depth understanding of what the business needs. With this knowledge, we map it with our expertise on the company’s supply base – from our Core supplier partners to strategic players (and their particular goals and drivers), to trends in innovation and shifting business models,” he adds. “The entire effort is to ensure that our action supports our overarching business objectives and realise the company’s broader aspirations.” Responsible for leading the transformation of Coty’s strategic sourcing destinations for chemical ingredients in Asia, Gupta has not only driven, but as part of a very lean and strong global category team, works to continuously strengthen Coty’s ambitions to achieve top line growth and bottom line profitability, achieving exceptional results sustainably. Fully exemplifying best-in-class category procurement for Chemical ingredients, the team is reinforcing and securing significant value to the business and its operations. “This is particularly impactful for a fastgrowing organisation like Coty, where speed to market is key,” says Gupta.

1904

The year that Coty was founded

$9 BN

The annual revenue for Coty

Technological investment Throughout its transformation journey, Coty has invested in overhauling its traditional processes and implemented best-in-class, cloud-based point solutions and custom-built systems. The use of value

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“Mapping our business requirements with what our supply base can deliver has enabled us to provide innovative solutions and unique ways of approaching business problems” Arya Gupta Procurement Director of Global Chemicals & Innovation, Coty

engineering within its procurement tools has also enabled the business to cater to the growing demands of its consumers, make quick, informed decisions within the development of new products and scale up its sourcing and procurement capabilities in alignment with company growth. “Technology and automation are supporting us in bringing an even deeper market insight from a category sourcing excellence point of view. It is helping us in Supplier Relationship management (SRM) through precise segmentation, identification and definition of the Core,” notes Gupta. “Also, it lets us obtain a real-time view across all our business lines, functional areas and endeavors around the globe to be able to connect the dots and make timely recommendations.”

“Additionally, it improves the Procure to Pay process especially measurement of procurement results and risk management,” he says. “To all of that, when you add excellence in execution from a high-octane team – it translates to ‘being brave and going beyond’ – a highly potent combination for the business.” Increased consumer awareness The rise of digital tools and technologies leading to increased consumer awareness has led suppliers, consumers and stakeholders to look closely at ways in which raw materials, ingredients and chemicals are routinely sourced by companies in the manufacturing of new products. Filtering into Coty’s values, the business is continually looking at

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new, innovative ways to increase its sustainable focus across its operations. To this effect, it has signed the Global Compact United Nations (UNGC) initiative to support the 10 principles surrounding human rights, labour, the environment, and anticorruption across its entire workforce. It has also implemented a number of in-house sustainable programs to tackle its global, social and environmental challenges head on. Additionally, similarly to building beneficial relationships with its suppliers and stakeholders surrounding its procurement and supply chain operations, Coty’s Responsible Beauty Initiative (RBI) was launched in collaboration with Clarins, Groupe Rocher and L’Oreal.

Operated by EcoVadis as a common foundation for supplier assessment and interaction, the RBI will further Coty’s overall performance throughout the beauty supply chain and details deep insights into Coty’s sustainability efforts within its procurement operations. Gupta notes that it will therefore bring together the global beauty industry, deliver long-term positive change and maximise Coty’s shared value. “It will amplify members’ efforts to boost sustainability in their supply chains, while ensuring the suppliers of the industry have sound ethical, social, and environmental business practices in place,” he adds. “We recently became a member of the Roundtable for

“Technology and automation are supporting us in bringing an even deeper market insight from a category sourcing excellence point of view, especially in the management of supplier contracts and agreements” Arya Gupta Procurement Director of Global Chemicals & Innovation, Coty

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Coty sells billions of dollars worth of products around the world

Sustainable Palm Oil (RSPO). A very important milestone towards responsible category sourcing.� It is clear to see that Coty’s transformation journey has seen it cater to emerging trends and, but most importantly seen the business re-evaluate its purpose. Leveraging tools and technologies to garner increased efficiencies in its supply

chain and speed to market, it has long-term ambitions to fully liberate the diversity of its consumers and become a lead voice in celebrating and liberating beauty.

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Valmet: Delivering supply chain value to customers and partners Written by Laura Mullan Produced by Charlotte Clarke


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With a lean, sustainable approach, Valmet has become a global leader in the industry for putting its customers first

A

t Valmet, one value underpins everything the company does – its desire to go above and beyond when serving its customers. As a leading developer and supplier of technologies, automation, and services for the pulp, paper and energy industries, the Finnish company has gained a name in the sector for its customerorientated, value-driven approach. Manish Sharma, Director of Supply Chain, Asia-Pacific, believes that it is the company’s promise to deliver exceptional customer performance which is key to its success. “We are very customer-oriented,” explains Sharma. “When our customers are successful, then we are successful, and if we are successful then our suppliers are also successful – it’s a win-win situation for us.”

Working closely with suppliers Valmet’s services cover everything from spare parts and consumables to maintenance outsourcing and plant improvements. Valmet also offers remote service solutions. However, regardless of the technology, all of the company’s work is driven by its promise to deliver value-added services. As a result, by collaborating closely with its suppliers, Valmet strategically develops its partners to ensure they are the right fit in terms of cost and value. “We work very closely with the suppliers because we are committed to giving value both to our customers and back to our partners,” Sharma says. “Some of the products we are manufacturing are being supplied globally and they are being

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customised to meet the specific needs of each of our customers. Therefore, we always need to know whether the needs and the requirements of our customer will be met and understood by our suppliers.”

Technological innovation With 220 years of industrial history, Valmet garnered a rich wealth of expertise but, despite its current knowledge, it is also keen to promote continuous improvement and innovation. Driven by its customers’ needs, Valmet has invested heavily in R&D, working on products that enhance raw material, water and energy efficiency and promote the use of renewable materials. With over 400 R&D professionals around the globe and about 1,400 protected inventions, technological know-how is the backbone of Valmet’s value creation, says Sharma. “For Valmet, technological innovation means that we can create added value for the customer,” he explains. “There have been lot of new solutions launched into

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the market which can be more efficient, more reliable and more beneficial for the customer. “We are sharing the knowledge we have gained also with our suppliers who are mastering their own technologies. It’s a question of coming together, collaborating, developing new technologies and new ways of doing things so that we are continually improving and creating more value for our customers.”

Lean operation By harnessing its technological prowess, Valmet is not only trying to drive efficiency and reliability, it is also trying to adopt a lean approach. “We also have to innovate our operations to see what costs we can lower,” explains Sharma. “So, for example, we are trying to see if we can bring in some alternative raw materials into use which are more flexible, leaner and which take less time to manufacture or deliver to the customers.” Design-to-cost is an increasing focus for the company, and it strives for this through its supplier relationship management and its lean approach.


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Valmet has around 400 R&D professionals around the globe and about 1,400 protected inventions

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“It’s a question of coming together, collaborating, developing new technologies and new ways of doing things so that we are continually improving and creating more value for our customers” – Manish Sharma - Director, Supply Chain, Asia-Pacific

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Valmet believes in right first time approach which helps to increase cost-efficiency and drive value. Boasting an extensive supply chain with around 10,000 active suppliers in over 50 countries, Valmet also focuses on procurement savings to enhance profitability. By increasingly sourcing from cost-competitive countries, subcontracting more and consolidating its shipment and warehouse network, the Finnish company is striving to improve its profitability and value.

Championing sustainability With its technological ingenuity, Valmet is also keen to promote responsible business practices that champion sustainability. Whether it’s environmental concerns or health and safety, it seems that sustainability is an integral component of Valmet’s DNA. Valmet is recognized as one of the world’s sustainability leaders, and was included into the Dow Jones Sustainability Index for the fourth consecutive year in 2017. “We are trying to add value to our innovations by improving their efficiency, optimising

quality and in turn maximising customer satisfaction. We can’t do without championing sustainable practices,” notes Sharma. “Some of the things we’re doing include bringing in energy efficient solutions based on biomass and waste solutions. We’re also talking about energy, efficiency, cost efficiency and looking into where we source our materials. “We also have to make sure that we comply with all the compliance rules of safe materials, sustainable techniques, and safety standards. This is all part of sustainability and we aim to continue to develop sustainable practices globally.”

Continuous improvement With operations now in about 30 countries and 160 locations, Valmet is, by all means, a global company. But Sharma doesn’t underestimate the work that a global company demands. “We are a global company and so I’d say the main challenge that we face today is adapting to local customers’ needs,” reflects Sharma.

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VA L M E T

“There are cultural challenges. There are language challenges. These are things we need to consider when doing business in a new country. You have to be flexible. You have to be a global company with a local adaptation so that we continue to deliver whatever is being asked of us by our customers. This is one challenge for us. We need to continuously look at and review ourselves, and we always need to adapt.”

Customer-focused At the heart of Valmet is its commitment to moving its customers’ performance forward and becoming a global champion in serving them. Thanks to its sustainable ethos and technological prowess, the company has seen both fiscal and brand success and is looking forward. Sharma is optimistic that

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this success will continue as Valmet positions itself to target high-growth trends and sectors in the industry. “We’ve also seen that the demand for tissue is growing because, as people’s living standards improve, then there will always be a linked growth in tissue and hygiene,” notes Sharma. “In the next five years, I believe this is going to be one of the leading areas in the sector and so these are key areas of focus for us. “On the energy side, there has been a lot of focus on biofuels in countries like Japan and Korea because people have seen that other energy resources such as nuclear are not as human-friendly,” he adds. “They are also looking into alternative ways of producing energy and so, as a company with technology that can use biomass, waste or multiple fuels, in our portfolio, we predict that this will be another area where we will see a lot of opportunities.”


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Narrowing the gulf in healthcare procurement Written by Fran Roberts Produced by Heykel Ouni


2016 marked the 40th anniversary of the first meeting of the Gulf Health Council, in Riyadh, Saudi Arabia. Today, regular meetings are held to discuss the health issues of concern in the states. Part of the Council is Gulf Joint Procurement programme, which ensures the standardisation of the medicines directory and medical supplies of all specialities across the GCC

T

he Gulf Health Council is a regional technical specialised organisation with its membership restricted only to the Cooperation Council States, plus Yemen. Within this organisation sits Gulf Joint Procurement programme. “The Council enjoys a legal impartiality and financial and administrative independence,” advises Fatthi Alkathiry, Director at Gulf Joint Procurement. The Health Council of the GCC aims to develop cooperation and coordination among member states in the preventive, curative and rehabilitative health fields, as well as other mutually beneficial activities. The idea of the joint procurement for medicine began in February

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1976, when the Ministers of Health of the GCC states requested that the Council form a technical committee among the states. The committee’s main objective was to study the possibility of member states benefiting from direct control, like the processes in Saudi Arabia and Kuwait. A second key objective was to standardise the purchase of certain medicines. “The set objective at that time was to study the development of a unified system for the registration and control of medicines and the development of a guide for medicines in the GCC states,” Alkathiry explains. “The Gulf Health Council for Joint Procurement seeks to standardise the directory


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Fatthi Alkathiry Director

A leading Procurement Director, currently working with in Gulf Joint Procurement for Gulf Health Council, Mr Fatthi AlKathiry focuses on developing the vision, mission and operational plans for Gulf Joint Procurement. Providing leadership, strategic planning and assurance for procurement administration, AlKathiry acts as the vendor management partner for all the business units, ensuring all relationships are strategically, culturally, and ethically aligned with GHC’s mission and values. Throughout his career with GHC, AlKathiry has continuously enhanced the organisation’s sourcing, procurement and performance management capabilities by attracting public and private hospitals to become participants in Joint Procurement. With a proven ability to develop, maintain and execute procurement policies, Al Kathiry consistently supports the Joint Procurement mission and meets the stakeholder requirements, facilitating a seamless implementation and adoption of solutions.

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“The Gulf Health Council for Joint Procurement seeks to standardise the directory of pharmaceutical devices and medical supplies throughout the Gulf Joint Procurement programme” –Fatthi Alkathiry, Director, Gulf Joint Procurement

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of pharmaceutical devices and medical supplies throughout the Gulf Joint Procurement programme, with the controls in place across the GCC member states.”

High-quality medicines With vast potential to impact the lives of others, the Gulf Health Council takes very seriously putting the interests of citizens in the Gulf countries above all considerations. With a growing population in the region, healthcare is set to become even more important. The GCC healthcare market is projected to grow at a 12.1% compound annual growth rate (CAGR) from an estimated US$40.3bn in 2015 to US$71.3bn in 2020, according to Alpen Capital. “The mission of the Gulf Joint Procurement programme is the development of a unified directory for medicines and medical supplies for all specialities, and the provision of high-quality medicines, medical supplies and devices to member states and participating hospitals, to the right location, at the right

time, and from the manufacturers registered with the Central Registration Programme, at fair prices. The ambition of Gulf Joint Procurement programme is to be the benchmark in the provision of standardised procurement services, based on global procurement standards,” reveals Alkathiry. In order to adhere to global procurement standards, Gulf Joint Procurement programme coordinates the process of selection, standards specification, and quantity of pharmaceuticals, medical supplies, and equipment required by Ministers of Health in member states, as well as standardising the preparation of tenders.

Ensuring safety The most prominent services that indicate the extent of progress and modernisation in a country are those services that concentrate on sustained health welfare and safety of the people. To this end, Gulf Joint Procurement programme ensures that all of the medicines it procures meet the highest safety

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standards. “We supervise the process of receiving samples and ensure the safety of their use, storage and preparation during the tender stage,” states Alkathiry. The tendering services offered by Gulf Joint Procurement programme are possibly the most integral ones to the success of achieving its mission. “We receive tender documents, and source and prepare schedules of comparison between tenders. Also, we plan, coordinate and prepare meetings of the joint procurement committees,” reveals Alkathiry. “We follow-up on the recommendations of the executive committee and decisions issued by these committees and coordinate with the member states as to the combined quantities required. Finally, we announce the results of the purchase decision and recommendations, and we receive, verify and study complaints and objections concerning tenders, and refer to the supplementary commentaries.”

The factor of time Many may not know that time is

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“THE AMBITION OF GULF JOINT PROCUREMENT PROGRAMME IS TO BE THE BENCHMARK IN THE PROVISION OF STANDARDISED PROCUREMENT SERVICES, BASED ON GLOBAL PROCUREMENT STANDARDS” –Fatthi Alkathiry, Director, Gulf Joint Procurement middleeast.businesschief.com

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Fatthi Alkathiry, Director, Gulf Joint Procurement, taking part on a discussion panel for a healthcare forum the most important factor in the procurement process. “The most important reasons for the success of Gulf Joint Procurement programme is committing to the time of tendering over the next 40 years. The whole tendering process takes around four months, starting from the directory updating meeting and preparation for tender until the tentative notice of award,” explains Alkathiry. “This attracted several bodies, other than the health ministries in the member states, to apply for participation in the Gulf Joint Procurement programme.”

Upgrading the health sector In order to achieve such success, Gulf Joint Procurement programme collaborates with a number of other key players. “Our partners are the ministries of health in the GCC. We have six countries there – Saudi Arabia, Kuwait, United Arab Emirates, Oman, Bahrain, and Qatar. They are members of the Gulf Health Council. Also, we have more than 20 public hospitals like King Fahad Medical City, King Faisal Specialist Hospital in Riyadh, and King Abdullah Medical City in Mecca,” states Alkathiry.

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Fatthi Alkathiry, Director, Gulf Joint Procurement “All suppliers from our programme are our partners also. We have about 18 categories of materials. “The mission of the Health Council is to promote and upgrade the health sector in member states by providing constructive initiatives and responding to the regional and global health issues. We challenge and support the decision-making process, and the health policies with the aim to strengthen the cooperation and integration between the member states, the health sector and among

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that, achieve the Council objectives. Its values are accountability, professional leadership, continuous development, evidencebased decisions, creativity and innovations, quality, cooperation and coordination, integrity and ethics.” Such partnerships and values have been key to the success of Gulf Joint Procurement programme. “I think we’re not successful without three main key factors – coordination, collaboration and integration,” Alkathiry comments. “Without these


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three main factors, the 40-year old Gulf Joint Procurement programme would not be successful.”

business, so if you don’t encourage your people to innovate, you are wasting your resources, I believe.”

Encouraging innovation

Automation for the people

Out of 50 employees within the Health Council, seven employees are serving in the Gulf Joint Procurement programme. Alkathiry strives hard to attract and retain the best staff to ensure the continued success of Gulf Joint Procurement programme. “I create a workspace where every employee is engaged by the work they do and inspired by who they work for. Without good staff you will not achieve your goal. The management structure achieves this by encouraging everyone to innovate. “It doesn’t have to be earthshattering. It can be a small change, but innovation equals improvement. Innovation must streamline, must enhance, must endure. Innovating our business by looking for ways to reduce expense, speeding up or streamlining processes, improving customer interactions and experience, making our products or services better. Innovation drives

Such innovation is central to Gulf Joint Procurement’s future plans. “I’m working now with my team to automate our processes. There are plans in the future, to implement a new system for the Gulf Joint Procurement programme. Currently we have requirement to automate our process, and link with the GCC countries and the suppliers to make quotations align, and to organise everything historically. The second thing - there are plans for expansion of the service procurement to market our services to the private hospitals to join in our programme,” Alkathiry concludes.

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A digitised, centralised restaurant supply chain: How AWJ Investments offers a competitive edge Written by Fran Roberts Produced by Heykel Ouni


Awj, the Arabic word for pinnacle, is entirely apt when it comes to AWJ Investments, which has grown over just a few short years to become a key player within the Emirati restaurant industry. The company’s mission is simple – to lead international markets with unique restaurant concepts

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treet food has been sold around the world by vendors since ancient times, but it’s a relatively recent trend that has seen the emergence of high quality offerings. According to thefoodpeople, the global food trends agency, street food is now consumed by an estimated 2.5bn people worldwide each day. One of the most ubiquitous forms of street food, and one that hails from the Middle East, is of course falafel. “AWJ Investments is an investment group which was founded back in late 2013 with a couple of concepts in mind. The main idea behind founding AWJ Investments was to introduce a very vibrant and effective system of change to the look of Arabic street food,” explains Rami Nasr, Head of Procurement and Logistics.

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Operation Falafel is the flagship brand of AWJ Investments, with the first branch opening in March 2014 at The Beach at Jumeirah Beach Residence (JBR). The Beach is a retail complex constructed on the actual beach in front of JBR, a waterfront community located against the Persian Gulf in Dubai Marina. “Operation Falafel offers the authentic Arabic street food. Once you enter any of our Operation Falafel outlets, you feel the industrial and urban ambience with the interiors of the shops. Operation Falafel is the company’s flagship store and it is our mainstream brand,” Nasr says. “Since we started Operation Falafel, we’ve had a great acceptance from the local market and the customer feedback is amazing. At the moment we are running 10 different locations


RAMI NASR Head of Procurement and Logistics

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AW J I N V E S T M E N T S

for the brand. We recently opened one branch in Riyadh, and Operation Falafel has been registered in 82 countries all around the world. We’ve already signed many franchise agreements

obtaining the rights to operate Operation Falafel abroad in different countries such as the US, the UK, Switzerland and the Netherlands.”

Contemporary concepts The Beach is also home to a number of other concepts operated by AWJ Investments, such as Awani – a contemporary restaurant serving the best of classic Levant cuisine. Catch-22, a seafood fusion restaurant, alongside Chicks ‘n’ Friends, which specialises in fried chicken and accompanying sides, join the selection at The Beach, as well as Yalseh, the latest concept operated by AWJ Investments. “Yalseh is the first Emirati beach lounge in Dubai,” states Nasr. “It has been operational for one year now, and we offer most of the traditional Emirati food items where a person can go and have dinner and a

“Since we started Operation Falafel, we’ve had a great acceptance from the local market and the customer feedback is amazing” RAMI NASR Head of Procurement and Logistics


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hookah directly on the beach.” AWJ Investments also operates Smoky Beach, Surf Bite and Lulu & Murjan, and is the sole franchisee of Filicori Zecchini Italian Coffee in the UAE. In order to maintain such an array of brands – each specialising in different types of cuisine – AWJ Investments works hard to maintain a robust supply chain. “Managing our supply chain is a very complex process, taking into consideration that we have many concepts that we cater to,” acknowledges Nasr.

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A competitive advantage In order manage its supplies, AWJ Investments has a main centralised warehouse that functions as a hub. “Everything gets delivered to this warehouse. We have a very proficient team there who takes care of segregating the items based on the specification of every item that they receive, and then it gets dispatched to each outlet based on their requirements. Our consumption of the raw materials is really remarkable,


FOOD AND DRINK

taking into consideration the number of outlets that we have, so this puts us in a position where we have a competitive advantage over the other competitors in the market to receive better pricing,” Nasr remarks. AWJ Investments is well known in the market for having a very transparent strategy. “Economy of scale allows us to be more competitive and to be ahead in the market. Having our own logistics team where we cater to all our outlets gives us the responsibility of getting all the items to each and every outlet, based on their timelines, so this is what puts us ahead,” explains Nasr. “We have a centralised procurement system, centralised production facility and a centralised warehousing unit. This definitely gives us an added value and an advantage against other players in the market. Also, we have a designated team for each concept that we own, and that team is well trained on the requirements of each concept that they are taking care of.”

22

The current number of outlets in the UAE

90 MN AWJ Investments’ annual revenue

Data is power Technology also plays a substantial role in managing the complex supply chain at AWJ Investments. “Using technology in the supply chain is crucial for any firm nowadays. We are using a very advanced ERP system, which connects all our divisions together in our company. We have a very solid software system, which is being solely used for

1,300 The number of employees at AWJ Investments

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our supply chain,” Nasr states. “Our warehousing system is also connected to this, as is our logistics side. We can monitor and control our deliveries through this advanced system and this also enters through our delivery process where we have centralised deliveries. Of course, data is power in our current times, so having the latest technology enables us to use the data in the best possible way when we plan our supply chain – whether the forecasting or the actual order placing or opening any RFQs, it all goes through this technology.”

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An extensive journey It’s a very extensive journey for any raw ingredients to make it to the plate at any AWJ Investments location. “From the moment that we choose a menu and we start creating the menu items, we start collaborating with a chef and design the menu item or the dish,” comments Nasr. “The journey starts from the chef choosing the best match for his recipe, after which we go through item sourcing and getting the product entered within our sample production facility, where different chefs observe this single ingredient.


FOOD AND DRINK

“From the moment that we choose a menu and we start creating the menu items, we start collaborating with a chef and design the menu item or the dish” RAMI NASR Head of Procurement and Logistics

“After this we start sourcing that supplier in a very clear frame process, where we invite the suppliers to get the total specification achieved, which should comply with external regulations, the governmental regulations of the food items and internal quality standards that we use in the company. Once an item is chosen, it then gets into an approved items list, which is totally systemised. Being a supplier or being a trusted vendor with AWJ investments is a privilege. We’ve been lucky to work with different vendors throughout the local and international market.” AWJ Investments’ suppliers are evaluated almost quarterly.

They get rated on different levels, including the consistency of their service, the quality of the product chosen, how consistent the quality is, and how fast their delivery was. Choosing a supplier for an item for AWJ Investments goes through a cycle that starts with selecting a menu item, until this ingredient gets to be supplied on a daily basis to the company’s state-of-the-art production facility located in Dubai. “We have a collection of vendors that we are meeting with and they are our partners of success,” continues Nasr. “Quality comes at a certain cost, so it is always a challenge having the best cost and maintaining the best quality possible.”

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Eye for detail Exploring global opportunities, AWJ recognises the potential of a rapidly evolving food and beverage market, with the aim of acquiring and growing a brand that is internationally recognised and loved. In order to leverage on such global opportunities, AWJ Investments is seeking to draw from the key factors behind its impressive success so far. “There are many factors of our success during the past four years in which AWJ Investments has been operational. One of them is basically the eye for detail that you can witness if you visit any outlet that is owned or operated by AWJ Investments,” Nasr observes. “We ensure that for each client that enters any of our outlets it’s a very pleasant journey from the moment they enter until the moment they leave.” In order to provide a pleasant experience for all customers, AWJ Investments strives hard to maintain the highest standards. “Our key success is our customers and the view that we get from customers, and that underscores many processes,” acknowledges Nasr. “Making sure that every single item is consistent for every client whenever they come to try. Making sure that our standards maintain the highest level possible. Making sure that once the customer receives their food it’s exactly as if they are eating it out of the chef’s hands.”

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FOOD AND DRINK

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“In 2018 we are planning to have 47 outlets spread over the Middle East with one outlet in the United States. Our strategic vision is to operate 97 outlets by 2020� RAMI NASR Head of Procurement and Logistics

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Future plans Despite already operating myriad concepts, AWJ Investments is already working on its next restaurant. “Coopers is our newest project and it is yet to open,” Nasr reveals. “Coopers is a beach urban diner. The food presentation is very simple yet the taste is very flavourful. It is a grab-and-go concept that has been in the making for the past seven to eight months.” Within the next five years, AWJ Investments plans to travel and explore markets across Europe, North Africa and the US, experimenting with new tastes and old, and infusing traditional flavours with a fusion of traditions. “Our future plans are to expand regionally and internationally with the different brands that we have. At the moment

our expansion plan is towards many territories or countries. Our first franchise branch of Operation Falafel opened in the eastern region of Saudi Arabia last month. This is one of many units that we are looking to have in the Saudi territory,” Nasr enthuses. “Of course, our next step will be the United States and we are going there very soon. We are almost done with the preparations for Operation Falafel to be presented to this market. In 2018 we are planning to have 47 outlets spread over the Middle East with one outlet in the United States. Our strategic vision is to operate 97 outlets by 2020.” Having achieved much already in such a short space of time, AWJ Investments certainly shows no signs of slowing down in the foreseeable future.

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Brewing up economic growth in Africa Written by Dale Benton Produced by Justin Brand


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FOLLOWING ONE OF THE WORLD’S LARGEST ACQUISITIONS INVOLVING SABMILLER, AB INBEV HAS SET ITS SIGHTS FIRMLY ON MAJOR GROWTH NOT JUST IN AFRICA, BUT FOR AFRICA

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or centuries, AnheuserBusch InBev (AB InBev) has brought people together by brewing some of the world’s most renowned beers, including Budweiser, Corona and Stella Artois. With a footprint which spans Africa, Europe, Asia and the United States, AB InBev can lay claim to the title of being the world’s largest brewer. But the organisation has loftier ambitions than size, and a responsibility to focus on more than just the bottom line. Its vision is to generate real growth that in turn creates a better life for more people in more places, and the company is doing this by investing heavily in people and communities. This is evident nowhere more so than in Africa, where in 2016, there was a business combination between AB InBev and SABMiller, a leading brewer on the continent. As with any acquisition, changes

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were made to both structure and staff complement. AB InBev Procurement and Sustainability Vice President, David Hauxwell, has been blown away by the dedication and the love for the company felt by those who remained. “We have been able to go to market and find passionate people, and more importantly, kick off our Global Management Trainee and Procurement Trainee programmes to attract and retain the best talent. AB InBev has people who really believe in this company and in the culture of what we are trying to achieve,” he said. SABMiller, founded in Johannesburg in 1895, was very much rooted in Africa. AB InBev is at the beginning of its African journey, but it can call upon more than a century of experience as one of the largest and most successful brewing companies in the world as it looks to the future.


A map outlined in barley in The celebration of the Grower’s global Appreciation Day business combination signals the company’s intent on establishing a firm foothold in the African market, not only to drive success and profit but to drive growth and create a real legacy of change across the entire continent. “We realise that to be a sustainable, futurefocused business, the resources, health and wealth of the communities in which we operate are vital,” said Hauxwell, who is responsible for leading the procurement and sustainability charge. Hauxwell, who has more than two decades of experience in the supply chain and procurement space, said AB InBev had a clear procurement

“We realise that to be a sustainable, future-focused business, the resources, health and wealth of the communities in which we operate are vital” DAVID HAUXWELL VP of Procurement and Sustainability at AB InBev

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Visit our website for more information: convoy.ducorpgroup.com

REDEFINING VALUE LOGISTICS FOR EAST AFRICA

Fleet Network (Owned And Subcontracted): 200+ Trucks

African Countries Covered: 6

Regional Hubs: 3

Warehousing Space: 10,000Sqm

Dedicated Staff: 170+

Freight Moved: 300,000 Tons

Industries Served: 9+

Logistics Service Verticals: 11+

Convoy Haulage Limited provides pivotal transp and contract logistics solutions for many DSE lis companies, and multinationals in Tanzania who fields of beverage, tobacco, humanitarian relief, and exploration, FMCG, and industrial supplies.

We have one true goal – to provide cost effective, efficient, agile and reliable logistics to all of our c Our road freight services include full truck load, l than truck load, domestic and transit transport, w our contract logistics services include value adde


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DELIVERING SUCCESS FOR ABINBEV services such as warehousing, distribution, supply chain management and customs brokerage services. For our clients, we provide full visibility into order status, generate performance reports, and keep scorecards of service quality which are on par to ISO requirements and Occupational Health and Safety Assessment Series (OHSAS) certified. We are also gradually increasing our offerings for customers by proposing innovative strategies to shorten the time from order to delivery, reduce carbon footprint on inbound and outbound transportation, and further work towards cost minimization on freight.

COMMITMENT TOWARDS JTI We provide dedicated trucks to TCC, with standby trucks parked for loading 24/7. We keep TCC trucks away from unhygienic material and are committed to only tobacco transport.

We work with ABInbev strategically to lower transport spend and bring innovation towards their transport requirements; tackling complex issues such as trailer modifications to increase payload and tyre modifications to increase lead times.


www.convoy.ducorpgroup.com When you navigate through the road network of Tanzania, you are bound to come across a Convoy Haulage truck, a company that was born out of a single vision to provide pivotal transportation solutions and an unrivalled commitment to the customer. Convoy Haulage was founded in 2013, focusing its operations on providing logistics services across East Africa, including entire geographical coverage of Tanzania where the company is based. Convoy’s network reach also spans up to South Africa and South Sudan, where trucks fulfil routine consignments. The company has helped deliver more than 300,000 tonnes of freight. The company has over 170 employed staff, is based at three major hubs in Tanzania, three state of the art workshops, and over 10,000sqm of warehousing facilities within those three hubs. With such a significant workforce, the company has one true goal – to provide cost effective, efficient, agile and reliable logistics to all of its clients - many who are owned and/or operated by global multinational giants. Convoy Haulage’s road freight services include full truck load, less than truck load, domestic and transit transport, while its contract logistics services include services such as warehousing, distribution, supply chain management and customs brokerage services. For its clients, many of whom are also Dar es Salaam Stock Exchange(DSE) listed, Convoy Haulage provides full visibility into order status, generate performance reports, and keep scorecards of service quality which are on par to ISO requirements and Occupational Health and Safety Assessment Series (OHSAS) certified. The company is also gradually increasing its offerings for customers by proposing innovative strategies to shorten the time from order to delivery, reduce carbon footprint on inbound and outbound transportation, and further cost minimization on freight.

Brewing success Delivering Success Tanzania Cigarette Company Ltd (TCC), a member of of Japan Tobacco International, is Tanzania’s premier tobacco manufacturer and distributor. Convoy Haulage Limited is the logistics provider for TCC’s finished goods and raw materials. Convoy Haulage moves freight for TCC throughout Tanzania and additionally in regions covering Zambia, South Sudan, and DRC.

In the company’s journey to become the premier transporter and logistics company throughout East Africa, one of the largest international companies currently operating in Africa chose Convoy Haulage as its partner of choice – the world’s leading brewer, AB InBev. With AB InBev Tanzania, Convoy Haulage was selected not only for its cost effectiveness but for its key service offerings that were customized to AB InBev’s requirements. This understanding and local touch allowed Convoy Haulage to provide true value to AB InBev, value that surpassed all expectations that the brewer had in the company.

“Convoy Haulage has delivered high quality added-value logistics solution for TCC. Convoy’s team understand and adhere to our strict SHEQ requirements and standards, and provide us with timely reports, dedicated new trucks, and cost-optimized services. Convoy Haulage is our strategic partner and we look forward to maintaining this over the years” Paskas Rauya, Logistics Manager for TCC

PATTNI FOUNDATION Each year, Convoy Haulage pre determines a percentage of turnover, to allocate towards not-for-profit initiatives through the Pattni Foundation. The Pattni Foundation is an in house grant-making foundation. The Pattni Foundation has previously been involved with projects that include: • Close and Clean Water Project which involves building of water bole holes in remote areas of Tanzania • Provision of bed sheets and pillow cases for local hospitals in Geita • Bridge2Aid Empowerment project- Training of rural Health workers • Project Shiksha – envisions aims at getting more and more students enrolled into the primary classes and to put a check to the current number of primary school dropouts


and supply chain strategy across its entire African footprint which helped to provide the best raw ingredients sourced from local providers. “AB InBev is continuously investing in a legacy which has been established through a commitment to work with local farmers, retailers and entrepreneurs to brew beer using only the best ingredients.” As AB InBev focuses on enriching the lives of local suppliers and producers, Hauxwell has overseen something of a procurement transformation in recent years. “What we see today in the procurement and supply chain space is that supply chain has taken on a much more key strategic role in an organisation like ours,” he said. “Not only are we driving efficiencies, but also leading real transformation in sustainability and entrepreneurship.” With AB InBev’s footprint covering 27 breweries across 14 countries, this strong procurement and supply chain approach is driving the top and bottom line by supporting new product development and innovation by ensuring suppliers are ready and capable. With global operations, one could be forgiven for assuming that the company applies a

“AB InBev is continuously investing in a legacy which has been established through a commitment to work with local farmers, retailers and entrepreneurs to brew beer using only the best ingredients” DAVID HAUXWELL VP of Procurement and Sustainability at AB InBev

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one-size- fits-all mentality across its operations. In Africa, AB InBev has four different business units: West, East, Southern Africa and a standalone South African business unit, which each operate in different territories. “While there are only short distances between these units, each presents its own unique challenges. We have to tailor solutions to fit each market. What is successful in South Africa, is not going to work just across the border in Mozambique. It’s about working on the solutions that will be successful, and not solutions that look good on paper,” said Hauxwell. The key element to a successful beer lies in what is inside the bottle, and in order to obtain the perfect ingredients, AB InBev invests significant funds into African agriculture. The company views the agriculture industry as one way in which it can truly support and build local communities. John Rogers, Raw Material Procurement and Agricultural Development Director for AB InBev, said the company had a best practice mentality. “We try and apply a standard approach as much as possible across our agriculture development programmes within each market and we take a farmer centric approach - our prices will be competitive - but we also focus on driving other areas that allow the farmers we work with to be more profitable, to want to partner with us and to ultimately continue to supply us with essential ingredients.”

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PHOTO (left to right): Bishen Morgan, Procurement Director: Logistics and Marketing, SAB & AB InBev Africa; Taryn Rosekilly, Procurement PPM Director, SAB & AB InBev Africa; Thabo Machethe, Procurement Director: Indirects and Commercial, SAB & AB InBev Africa; David Hauxwell, Vice President for Procurement & Sustainability: SAB & AB InBev Africa; Tsungi Mandebvu, Procurement Director: Packaging, Procurement, SAB & AB InBev Africa; David Grant, Sustainable Development Manager: SAB & AB InBev Africa; Zoleka Lisa, Procurement Capabilities Director: SAB & AB InBev Africa; John Rogers, Director of Raw Material Procurement and Agricultural Development: SAB & AB InBev Africa; and Sanjay Premraj, Supplier Development Director: SAB & AB InBev Africa


AB InBev’s procurement team

This ‘farmer-first’ mentality is evident throughout AB InBev’s entire global agriculture vision. Whether it’s in North America, Europe or Asia, Rogers points to a desire for the company to develop and maintain a hands-on approach which is vital in ensuring that the company can truly develop and grow communities. “This talks to the company’s other key growth initiative of entrepreneurship. Through a number of agriculture programmes, AB InBev ensures that it has the resources in the field to drive real value to the

grower, which in this instance are the farmers and suppliers,” he said. One such example of this is evident through the deployment of trained agronomists that are the embodiment of that hands-on approach. “These agronomists are in the field, working with the farmers, providing greater knowledge and sharing best practices,” said Rogers. “They ensure the grower has the technical resources and access to latest research they need to be more productive and more efficient.” AB InBev can promise to deliver

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Powering brewin in Africa


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Vodacom takes pride in enabling ABinBev’s digital journey through Africa The future is exciting Ready?


growth and value to a local community and to the African agriculture space, but how does it measure that it is walking the talk? “We know we can drive tangible value within African agriculture,” said Hauxwell. “But we need to be able to demonstrate this, and we have a number of measurement and evaluation processes in place to look at who is within our growth programmes and exactly how we’re delivering that growth.” David Grant, Head of Sustainable Development: Africa Zone, can attest to this drive for growing value within African agriculture. As a brewer, sustainability and agriculture go hand in hand, as the company has a responsibility to create and foster a sustainable supply chain. “Sustainability is definitely one of the core values of our business,” said Grant. “It’s evident in a number of ways – we have grounded strategies surrounding entrepreneurial growth and development, water stewardship, circular economy and our renewable energy drive.” That renewable energy drive refers to AB InBev’s ambitious goal of sourcing all of its electricity from 100% renewable sources by 2025 and, as Hauxwell noted, the role of procurement has become more and more relevant to the

“We have to tailor solutions to fit each market. What is successful in South Africa, is not going to work just across the border in Mozambique. It’s about working on the solutions that will be successful, and not solutions that look good on paper”

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DAVID HAUXWELL VP of Procurement and Sustainability at AB InBev


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TOGETHER WE MAKE A DIFFERENCE The need to provide a comprehensive supply chain service to clients gave rise in 1987 to the establishment of Unigrain and in 1991 Grain Carriers, a trading company and a road transport company. Unigrain Commodities was established in 2001 to service the winter grain market. Grain Logistics was a further extension of the group’s strategy to penetrate the supply chain. Unigrain Storage supply services to grain producers and grain processors to facilitate and manage grain on their own premises.

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People management is a high priority at AB InBev company’s sustainability strategy. “Sustainability has been a buzzword for years, however our approach to tackle it is changing. Climate change and sustainability impacts everything that we do. It affects our growers, our production and the communities we operate within.” Sustainability has become even more focused under AB InBev’s global procurement strategy through the leadership of Tony Milikin, Global Chief Procurement and Sustainability Officer. There is a commitment to impactful projects and initiatives that

will make a measurable difference. With the acquisition of SABMiller, AB InBev had the opportunity to deliver a series of entrepreneurship programmes which were aligned under the wider procurement and supply chain umbrella. “Procurement holds the key to allowing entrepreneurs access to the markets they need in order to grow their business,” said Hauxwell. “As procurement professionals, we are constantly trying to figure out how we can go beyond simple price, beyond the traditional

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to create 10 000 jobs across relationship with suppliers and for in South Africa by 2022, and me, we’ve really cracked that with the Accelerator programme is the Accelerator programme.” key to reaching this goal. The Accelerator and “We understand that by creating Entrepreneurship programmes, and growing the suppliers, we’re headed up by Sanjay Premraj, creating real, meaningful jobs Supplier Development Director and in the end, a more robust and Zoleka Lisa, Procurement, local economy,” said Premraj. Capabilities and Sustainability Hauxwell looks at it from Director, respectively, a broader perspective, create and develop noting that the the key suppliers of company’s entire the future which leadership team are representative The year that across its African of relevant Anheuser-Busch zones has what demographics. InBev can be he describes as an “What we have traced back to “African dream.” found in Africa is that, “We want to be a company while there are a number that’s growing, a company that of local suppliers that we can is efficient, a company that people work with, they don’t immediately love to work for and that makes a real have the capabilities required to be difference in society,” said Hauxwell. a part of the AB InBev supply chain,” “We want to attract suppliers and said Premraj. “The Accelerator retain them in our company, while programme works with these growing that community. That’s where suppliers to grow them to a point the job creation agenda fits in.” where they can integrate seamlessly As AB InBev keeps an eye on and become key partners.” building its future supply chain, “it AB InBev has set itself a target

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AB InBev invests in many community programmes as part of its CSR strategy

also nurtures its current supply chain to ensure that the relationships we have continue to be of true benefit not only to us at AB InBev, but to the suppliers themselves,” Lisa said. A new bidding tool has been launched in the African zone for all of AB InBev’s suppliers. “We’re constantly introducing new capabilities in procurement,” she said. “As part of the new tools we are rolling out, we ensured that we went into each of our African markets to

equip those suppliers with a better understanding as to how to use the new technologies. We’re really looking at it as bringing our suppliers into the digital age by introducing them to new technologies and working with them to expand their skillsets.” This is a sentiment echoed by Premraj, who noted that the world is changing and both AB InBev and the supplier base must change with it. “Sometimes, given the geographical limitations regarding


skillset and workforce capabilities, this can prove challenging.” But that challenge is part of AB InBev’s mission to create real and tangible growth. “We want to push the change, and in many cases suppliers want to change, but don’t have the capability to do so. That’s where our Accelerator programme works to ensure longevity, relativity and helps the supplier to grow as we grow.” While Premraj and Lisa are focused solely on the African markets, creating long lasting competitive suppliers, this concept expands

“We are bringing our suppliers into the digital age by introducing them to new technologies and working with them to expand their skillsets” ZOLEKA LISA Director Procurement Capabilities & Sustainability at Anheuser-Busch InBev for Africa

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“We want to make sure that people in this continent understand that we’re here to make a difference. That we’re here to grow the communities we operate in. We truly care about Africa and we really want to grow Africa” DAVID HAUXWELL VP of Procurement and Sustainability at AB InBev

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chespak.co.za chespak@global.co.za

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AB InBev helps populations around the world to access safe water supplies

beyond African boundaries. “We try to create world class supply and world class suppliers. It’s about creating suppliers that can compete with one another, not just in Africa but on a global scale. We want to create globally placed suppliers.” Both Lisa and Premraj worked for SABMiller and were two of many people based in Africa who embarked on a new journey as part of AB InBev. With the business combination completed in 2016, the whole African arm of AB InBev is just over a year into this new venture and as one would expect with any acquisition, there were changes.

“There was some consternation from employees as to what it meant for their futures that a big company such as InBev had come in,” said Premraj. “And while there were clear similarities and shared DNA in the two companies, of course you’re going to lose people, which is unfortunate.” “AB InBev has people who really believe in this company, in the culture of what we are trying to achieve,” said Hauxwell. “They believe in the future of this company, and the future for themselves.” Two of the people that truly embody that belief and love for what AB InBev is striving for,

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InBev looks to drive growth and to are Lisa and Premraj, who had empower people and communities, previously worked with SABMiller. because she has been Lisa, for example, had been empowered by this working in Africa, shaping merger to lead some and directing key exciting initiatives procurement strategies post the business for SABMiller, and can combination. see first-hand exactly The number “It’s been how AB of Anheuser-

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SAB entrepreneurship programme launch

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incredibly interesting to be a part of this change,” she said. “The company has enabled me to work with my global counterparts, to understand and apply the best procurement practices across the two organisations globally. The concept of being an owner and dreaming big has allowed me to drive ideas that I am passionate about and that will build our business. “ As with any merger, particularly one involving one of the largest brewing companies worldwide, how much of what made it the leading brewer in Africa will still remain? “A year down the line, AB InBev has adopted or absorbed some of the best practices from SABMiller,” said

Premraj. “We operate as one company - one organisation - and we apply a set model consistently across all parts of the globe, which is made up of the best of both companies.” Hauxwell believes that the only way the company can grow in Africa is to grow Africa itself. “We want to make sure that people in this continent understand that we’re here to make a difference by growing the communities we operate in. As we progress into the future that will become much clearer and, in 10 years from now, we will be known as the best company on the continent, and the most preferred company to work in. That for me, personally, is what it’s all about. Delivering real value, and growth for both people that work within the organisation and for the communities in which we operate.”

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Convoy Haulage Limited:

FUTURE-PROOFING TRANSPORTATION AND LOGISTICS FOR TANZANIA Written by Dale Benton Produced by Kiron Chavda


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Convoy Haulage Limited provides pivotal transport and logistics solutions to companies that have complex supply chain requirements and require cost-effective results

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hen you navigate through the road network of Tanzania, you are bound to come across a Convoy Haulage truck, a company that was born out of a single vision to provide pivotal transportation solutions and an unrivalled commitment to the customer. That vision for unrivalled commitment to the customer is present throughout its customer base in East Africa, providing the highest quality of Scania and Mercedes Benz trucks, peerless lead times and unbeatable prices. It is a core value that has remained within Convoy Haulage as the company has grown. Convoy Haulage was founded in 2013, focusing its operations on providing logistics services across East Africa, including entire geographical coverage of Tanzania where the company is based. Convoy’s

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network reach also spans up to South Africa and South Sudan, where trucks fulfil routine consignments. The company has over 170 employed staff, is based at three major hubs in Tanzania, three state of the art workshops, and over 10,000sqm of warehousing facilities within those three hubs. With such a significant workforce, the company has one true goal – to provide cost effective, efficient, agile and reliable logistics to all of its clients - many who are owned and/or operated by global multinational giants.

THE ROAD TO SUCCESS Since its founding in 2013, when its entire operation consisted of only two trucks making in house deliveries for a sister company, Convoy Haulage’s fleet now boasts over 100 owned trucks, over 100


S U P P LY C H A I N

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C O N V O Y H A U L A G E LT D

‘For Convoy Haulage, there has always been one key element in the company’s growth - the people’

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subcontracted trucks, and works across a wide range of industries, from beverage to mining, tobacco to agri-businesses, humanitarian relief to FMCG, and many more. For Convoy Haulage, there has always been one key element in the company’s growth - the people. As the company has strove to provide agility, efficiency and integrity throughout such significant growth, it has not come without challenge. Throughout this growth however, a commitment to its people has seen Convoy establish a strong sense of positive synergy from top to bottom, synergy that has realised far greater results through collaborative working than the sum of individual performances. Over its three major hubs in Tanzania that spans the northern, southern and central regions of the country, the company has helped deliver more than 300,000 tonnes of freight. A crucial component that has enabled such a significant amount of haulage has been the company’s approach to client base. For its clients, many of whom are also Dar es Salaam Stock Exchange(DSE) listed, Convoy Haulage provides full

visibility into order status, generate performance reports, and keep scorecards of service quality which are on par to ISO requirements and Occupational Health and Safety Assessment Series (OHSAS) certified. The company is also gradually increasing its offerings for customers by proposing innovative strategies to shorten the time from order to delivery, reduce carbon footprint on inbound and outbound transportation, and further cost minimization on freight.

BREWING SUCCESS WITH AB INBEV In the company’s journey to become the premier transporter and logistics company throughout East Africa, one of the largest international companies currently operating in Africa chose Convoy Haulage as its partner of choice – the world’s leading brewer, AB InBev. This partnership in particular represents exactly the way in which Convoy Haulage wants to be seen as the logistics partner of choice. With AB InBev Tanzania, Convoy Haulage was selected not only for its cost effectiveness but for its key

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170+

Number of employees at Convoy Haulage Ltd

service offerings that were customized to AB InBev’s requirements. This understanding and local touch allowed Convoy Haulage to provide true value to AB InBev, value that surpassed all expectations that the brewer had in the company. The partnership between the two companies came at a time when AB InBev was in the midst of completing a major acquisition of the African brewing company SABMiller as it looked to solidify a footprint within Africa.

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Tanzania is one of the most remote regions of East Africa and so navigating this challenge required a logistics partner that had a key understanding of the geography and a network of high quality trucks. Convoy provides not only cost effective logistics, but works closely with AB InBev to be part of the conversation surrounding innovation and a world leading product offering. This, then, made choosing Convoy Haulage as its logistics partner a no-brainer.


CONTINUOUS IMPROVEMENT Convoy Haulage’s major service is the provision of economical and reliable road freight services and end-to-end contract logistics with value added services at no additional cost. The company creates long term solutions for clients who focus on growing their core business and give Convoy the responsibility to create logistics as part of their core competitive advantage. Its road freight services include full truck load, less than truck load, domestic and transit transport,

while its contract logistics services include services such as warehousing, distribution, supply chain management and customs brokerage services. Having secured a major partner, perhaps now would be the time for Convoy Haulage to take the foot off the gas? Not for Convoy Haulage; the road to becoming the premier logistics partner across East Africa is very much only at the beginning. Convoy Haulage is aggressively growing to cater to wider range of industries that have even more complex logistical demands.

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To ensure that it continues to grow, continues to push the boundaries of its capabilities and deliver key logistics solutions that fit some of the most dynamic clients, Convoy Haulage must continue to assess itself and its relationship with its partners in order to quantify exactly how, where and when it can improve. There are a number of key ways in which Convoy Haulage achieves this, using transparency and selfassessment. Convoy has invested more than $2million in state of the art workshops that ensure its trucks have zero breakdowns. The company tracks its performance heavily and provides performance reports to all clients, scrutinising its performance on key metrics such as lead times, on-trip breakdowns and delays. This is consistent with the company’s promise to deliver reliable fleets and solutions that are exceptionally well maintained. That reliability and credibility is everything and it is built not only through unrivalled lead times and a strong approach to safety, but through a commitment to continuous improvement.

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THE ROAD TO FUTURE SUCCESS As Convoy Haulage continues to grow, a key element is that the company continues to test itself and seek new ways to further optimise itself in order to continue to provide service solutions for its ever-expanding portfolio of clients. Following year-on-year growth, where next for Convoy Haulage? Well, the company is integrating cloud based systems for clients to access and monitor their warehousing and freight requirements into an optimised cross solution, and the company is also working in partnership with clients to achieve joint sustainability goals that are aligned towards carbon offset programs. Innovation in service provision allows Convoy Haulage to provide enhanced agility, cost savings and new efficiencies through the supply chain, which then get transferred directly to the client. This, is what Convoy Haulage does best.


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Tanzania Cigarette Company Ltd (TCC), a member of of Japan Tobacco International, is Tanzania’s premier tobacco manufacturer and distributor. Convoy Haulage Limited is the logistics provider for TCC’s finished goods and raw materials. Convoy Haulage moves freight for TCC throughout Tanzania and additionally in regions covering Zambia, South Sudan, and DRC. “Convoy Haulage has delivered high quality added-value logistics solution for TCC. Convoy’s team understand and adhere to our strict SHEQ requirements and standards, and provide us with timely reports, dedicated new trucks, and costoptimized services. Convoy Haulage is our strategic partner and we look forward to maintaining this over the years,“ says Paskas Rauya, Logistics Manager for TCC.

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Supply Chain Digital Magazine - January 2018  
Supply Chain Digital Magazine - January 2018