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w w w. sup p l ych ain dig i t al.c om • J a nua r y 2 016

The quiet

revolution How technology has changed the automotive industry’s supply chain

Bridging the generation gap Appealing to digital migrants and digital natives in the omnichannel age

Shifting gear JDA helps FCA maximise supply chain speed


EDITOR’S COMMENT

Automotive supply chains 2016 issue of Supply Chain Digital. In this issue we are looking at supply chains in the automotive industry. First up, we have an interesting feature on Fiat Chrysler Automobiles (FCA), which is the world’s seventh largest auto manufacturer — shipping 4.6 million cars in 2014 — so relies heavily on its global supply chain as a competitive advantage. And technology has had a huge impact on automotive supply chains, as DHL explains in another of our special reports. We’re also covering the growth of online commerce and the differences between the modern, internet-enabled shopper and the older generation who are less adept at shopping online – creating a challenge for retailers and carriers to meet the demands of both types of customer. WELCOME TO THE JANUARY

We do hope you enjoy the issue, send us your feedback @SupplyChainD Lucy Dixon

Managing Editor EMEA

lucy.dixon@wdmgroup.com

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CONTENTS

Features

LOGISTICS Shifting gear TECHNOLOGY The quiet revolution

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6 20

SUPPLY CHAIN MANAGEMENT BRIDGING THE GENERATION GAP 4

January 2016


Company Profiles

24

Saudi Arabian Airlines

50 WestRock

60

Martin Brower

70 TYTAL


LOGISTICS

Shifting gear


How JDA has helped FCA maximise supply chain speed and responsiveness 7


LOGISTICS

AS THE WORLD’S seventh largest auto manufacturer — shipping 4.6 million cars in 2014 — Fiat Chrysler Automobiles (FCA) relies on its global supply chain as a competitive advantage. Its brands include such household names as Alfa Romeo, Chrysler, Dodge, Fiat, Jeep, Lancia, Ram, Ferrari and Maserati. These vehicles are produced at facilities 8

January 2016

in more than 40 countries, then shipped to customers around the world. The growth of global demand for automobiles has created new challenges for FCA in the past few years, as the company seeks to answer that demand as quickly and profitably as possible. “We’re constantly trying to improve speed of delivery, whether that means


SHIFTING GEAR

adapting part flow requirements in our assembly plants to handle schedule changes, or what most consumers would think of — getting the finished vehicle to the customer faster. At FCA, we’re constantly figuring out ways to be more flexible so we can increase that speed of delivery,” says Karl Mortensen, Director of Global Inter-Regional Flow Operations at

‘We’re constantly figuring out ways to be more flexible so we can increase that speed of delivery’

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LOGISTICS

PROJECT DETAILS Objective • Increase production speed and consistency by identifying and addressing constraints as early as possible. Solution • JDA Order Sequencing & Slotting Services • JDA Consulting Services • JDA Support Services Real results • Improved ability to identify and address constraints • Increased responsiveness and production consistency • Enhanced parts availability and increased parts accuracy • Unified systems and processes across global plants.

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January 2016

FCA. In creating a fast, agile supply chain, recognising and managing constraints is a priority for FCA. “Today, capacity management is our biggest challenge,” he says. “With the automotive industry growing the way it has been recently, we’re running our plants as hard as we can, which also means we’re running our suppliers as hard as they can. So how do we identify those capacity chokepoints as early as possible — and then work to resolve them? That’s really key to our focus these days.” Last year, FCA added order sequencing and slotting capabilities from JDA’s manufacturing planning solution to provide even greater precision in managing constraints and maximising production capacity. With built-in optimisers and operating constraints, this JDA solution ensures that order schedules maximise productivity across multiple facilities. Based on specific order requirements such as customer priority, delivery commitments and product features, vehicles are placed into the optimal manufacturing sequence at FCA. Reducing production roadblocks today, JDA technology helps FCA increase its speed and profitability.


SHIFTING GEAR

‘Identifying capacity constraints much earlier has been absolutely key in allowing FCA to react sooner to problems’

“JDA Order Sequencing & Slotting allows us to take orders that come in from the dealers and the markets and put them into weekly and daily buckets, based on manufacturing constraints that have been identified,” Mortensen says. The order sequencing and slotting technology enables FCA to identify problems with order flow much earlier than its previous process, where the company didn’t slot the orders. Now it can take corrective action with the dealers

and with the markets, Allowing its production to flow smoothly. “Slotting is a key first step in managing the orders that come in from around the world. Then the orders get sequenced into our plants,” Mortensen says. “I can say that identifying capacity constraints much earlier has been absolutely key in allowing FCA to react sooner to problems. We are seeing some initial indications of improved part availability. We’re seeing an increase in parts accuracy.” 11


S U P P LY C H A I N M A N A G E M E N T

Bridging the

generation gap Appealing to digital migrants and digital natives in the omnichannel age W r i t t e n b y: N i k l a s H e d i n , C E O o f delivery management expert C entiro

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SCM THE GROWTH OF online commerce has seen the emergence of two types of shopper. Firstly, there is the ‘digital native’, a modern internetenabled shopper that feels perfectly at home online using social media and retail sites like eBay. Meanwhile the older generation of ‘digital migrants’, who grew up without the internet, are less adept at shopping online. Both have stark differences in preferences. The challenge for retailers and carriers is to deliver an exceptional customer service that meets the demands of both types of customer. They will only get one shot at this: research from YouGov showed that as a result of a poor shopping experience, 71 percent of UK adults would be likely to switch to an alternative retailer when next shopping for products online. Two tricky customers The digital native relies heavily on online channels for shopping. Their typical characteristics include purchasing more items, prioritising delivery speed and using a wide range of retailers. Digital migrants, on the other hand, still feel more comfortable shopping in store and only venture online for very specific items. They 14

January 2016

prioritise quality and customer service, typically shopping only with a select few trusted brands. Key to serving both groups successfully is having a flexible delivery network. Offer flexible delivery options So how can retailers please each customer? Providing a choice of delivery options is a firm foundation to build on as it allows each shopper to choose the option that best suits them rather than mandating an arbitrary time slot. The digital native who prioritises speed over convenience may prefer next day or same day delivery services, so they can get their hands on items sooner. For digital migrants, offering very specific delivery windows will be important

‘To deliver a positive customer experience, retailers also need to continually engage customers from the initial purchase right through to delivery’


B R I D G I N G T H E G E N E R AT I O N G A P

to them as it provides them with maximum convenience. While these shoppers tend to purchase less often, they may buy higher value items, so valueadded options such as tracking services and insurance cover could well be appreciated. Take ownership of the last mile experience For retailers in this competitive space, reputation is now more important than ever; substandard customer service reflects poorly on their brand. You have only to look at last year’s late deliveries during Black Friday to see

how customer relationships can be damaged by retailers breaking their promises. Whether the consumer is a digital native or a digital migrant, you need to fulfil your promises or risk losing out to the competition. To deliver a positive customer

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SCM experience, retailers also need to continually engage customers from the initial purchase right through to delivery. Directing either a digital native or a digital migrant away from a retailer’s site to that of a carrier can disrupt their brand experience, as well as potentially deterring them from making subsequent purchases. Digital natives in particular are more likely to be tracking orders, so will want to see tracking information coming from the retailer rather than their logistics partner. Owning the whole customer journey from the initial purchase through to fulfilment will be key to success, especially when disgruntled shoppers can easily voice their frustrations over social media. Manage returns effectively In the same way that today’s omnichannel environment is allowing consumers to buy products flexibly, they are now demanding the same flexibility and positive experience from the returns process. According to YouGov’s research, 63 percent of UK adults factor the ease of being able to return items into which retailers they shop online with. Digital natives will typically order multiple items often 16

January 2016

‘Omnichannel commerce has become more competitive: retailers and carriers can no longer afford to target just one type of customer’


B R I D G I N G T H E G E N E R AT I O N G A P

with the view to returning them. This is especially applicable to online fashion, where shoppers will typically buy multiple sizes and colours. On the other hand, digital migrants might hardly ever return an item and purchase higher value items overall. Being able to tailor returns to both these groups will be increasingly important in the future and will help retailers foster customer loyalty

from returns, as opposed to simply treating it as a cost-recovery exercise. Omnichannel commerce has become more competitive: retailers and carriers can no longer afford to target just one type of customer. Having the right insight into deliveries and returns can go a long way to ensuring differentiation and effectively serving the needs of today’s digital natives and digital migrants. 17


The quiet

revolution


TECHNOLOGY

How technology has changed the automotive industry’s supply chain W r i t t e n b y: M i c h a e l M a r t i n V i c e P r e s i d e n t S t r a t e g i c Development, Global Automotive, DH L Supply Chain

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TECHNOLOGY A QUIET REVOLUTION is upending the traditional hierarchy of players in the automotive industry, forcing every participant to focus on what it will take to build the future automotive business model. One thing is clear - the old ways of doing business are over. So just what is this new model? It is a hybrid industry that fuses high tech and automotive into a new super sector. Vehicles are now technology on four wheels. Technology – not chassis design, braking systems or tyres – has become preeminent. This upsets the status quo in the century-old business model in the automotive sector; a status quo where the big original equipment manufacturers (OEMs) held all the market power. Not only is this significant for OEMs, it carries seismic implications for the automotive supply chain. It’s driving OEMs to form closer relationships with their suppliers – relationships that extend far back into the supply chain. In this new reality, tier four suppliers are every bit as important as tier one suppliers. The near-term outlook for the global automotive industry is mixed. Analysts expect global light vehicle production to grow over the next two years, but 20

January 2016

at a much slower pace than during the past five years. Despite this, the outlook for automotive sales overall is positive. Statista Inc. predicts global car sales will peak around 73 million units this year, up more than one million units from 2014. And, while the automotive OEMs’ profit margins are down from the previous highs of the last five years, they remain robust, ranging from eight to 14 percent. Vehicle production requires


THE QUIET REVOLUTION

DHL Resilience 360 monitoring thousands of parts and inputs from a large number of suppliers. Historically, the bargaining power of suppliers was very low with the OEMs setting the rules, stipulating component designs and generally controlling the game. This is changing. Auto suppliers’ contribution to vehicle make-up has increased from 56 percent in 1985 to around 82 percent today. This has led to the formation of ‘mega suppliers’ i.e. large suppliers

that control an ever-growing portion of the supply stream through acquisition and vertical integration. In this new paradigm, suppliers spend more on R&D than OEMs. For example Bosch, the largest supplier globally, spent 9.9 percent of its sales on R&D in 2013. In contrast, General Motors spent 3.5 percent of its sales on R&D. Suppliers are also bringing upstream product capabilities into their fold by forming new partnerships 21


TECHNOLOGY

with technology companies to control more of the supply chain and, as a result, their business. The rise of the mega supplier has an emerging consequential trend – one that carries even greater significance and injects new levels of risk and complexity into the automotive supply chain. That trend is convergence – the melding of the automotive and high tech industries into a potential new super sector. Technology companies and other new supplier entrants are increasingly 22

January 2016

becoming the engine behind automotive innovation. The high tech composition of vehicles today – the ‘connected’ car, self-driving and selfdiagnosing vehicles – is propelling this multi-sector convergence. Conditioned by the electronics sector’s rapid and frequent product innovations in computing, gaming and communications devices, the automotive industry is finding that consumers now expect the same rate of innovation in the vehicles they drive. The tech and automotive industries


THE QUIET REVOLUTION

are now so intertwined that their business relationships have become truly symbiotic, making every supplier - regardless of what tier it falls into - critical. They might be working in completely new geographies, or in completely new areas. We’re interested in supply chain resilience and our Resilience360 tool enables us to come up with an overview of the supply chain by monitoring different pockets of risk in different ways. These risks could be geographical or political. The tool can pick up industrial action risk, giving customers the ability to identify critical suppliers, understand if it’s happening in real time and respond accordingly. Disruption at even the smallest tier 4 supplier may now have the power to bring down an assembly line because it may be the sole source for a vital component. Natural competition In some cases the automotive sector may find itself vying for supplier capacity with the tech industry, which may in fact be the larger customer. This competition naturally injects risk into the automotive supply chain, forcing automotive OEMs to forge closer partnerships with their supplier

base and hedge risk by securing multiple suppliers for the same component. In some cases OEMs may even step in and provide financial and technical support to smaller suppliers of critical technology. The combined impact of these two supplier-based trends is transforming the traditional automotive supply chain. And the pace of this transformation is accelerating. The stakes are high – profit margins, competitive advantage and potentially market share are all in play. Constructing this future supply chain requires closer communication, coordination and collaboration across all tiers of the automotive ecosystem. As the automotive sector moves into the second half of this decade, one fact is now clear. The so-called quiet revolution isn’t so quiet any more. In fact, as the convergence of the auto and tech sectors continues to develop, it will change the face of both industries – permanently. For the auto OEMs, competing for parts with other industries is now the norm. So the task is not just to create a more visible, agile global supply chain but also to orchestrate the entire supplier ecosystem in a way that ensures future growth. 23


Flying high Written by: Lucy Dixon Produced by: Craig Daniels


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SAUDI ARABIAN AIRLINES

HQ in Saudi Arabia

Saudi Arabian Airlines’ ambitious plans for growth would not be possible without an innovative approach to technology

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S

tarting out with a single airliner back in 1945, Saudi Arabian Airlines has grown to one of the world’s leading airlines, with over 30 million guests served by 45,000 employees in 5,000 locations across 100 destinations. And unlike many other airlines, the national carrier operates around the clock. Codenamed SV2020, the airline has a fiveyear strategic plan that aims to double the fleet size by 2020, grow the airlines’ market share, re-invent its products and services and increase its margins. The strategy was formulated and introduced by Director General Engineer Saleh


MIDDLE EAST

bin Naser Al Jasser - who joined the airlines in late 2014- to transform the company in every sense and to further secure its competitive positon regionally and globally as well. Eng. Al Jasser has started a corporate wide transformation program aimed at turning it from a legacy carrier to a competitive travel provider with second to none products and services. Pivotal to its place on the global stage is the role of information technology. Muhammad Ali Albakri, the company’s CFO and CIO, has been in charge of an enormous overhaul of its IT

Saudi Arabian Airlines aims to double the fleet size by 2020

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SUPPLIER PROFILE

EMC

EMC is a global leader in enabling businesses and service providers to transform their operations and deliver information technology as a service (ITaaS). Fundamental to this transformation is cloud computing. Through innovative products and services, EMC accelerates the journey to cloud computing, helping IT departments to store, manage, protect and analyze their most valuable asset — information — in a more agile, trusted and cost-efficient way. We work with organizations around the world, in every industry, in the public and private sectors, and of every size, from startups to the Fortune Global 500. Our customers include global money center banks and other leading financial services firms, manufacturers, healthcare and life sciences organizations, Internet service and telecommunications providers, airlines and transportation companies, educational institutions, and public-sector agencies. Website: saudi.emc.com


SAUDI ARABIAN AIRLINES

MIDDLE EAST

‘While we put in the new systems, we needed to maintain the old technology, the old network and the old applications, to continue supporting our business. So it was more like changing the wheel or the tire on a Formula 1 car while it’s still racing’

division, as he explains: “We have undertaken a huge programme called the IT Masterplan for Saudia, which lasted from 2007 until 2013. During that time we spent in excess of $1 billion upgrading our entire network inside the Kingdom and internationally. We’ve put in a complete new infrastructure in terms of telecommunications, connecting all our offices around the world to our upgraded data centre, our partners’ data centers, and created a disaster recovery centre as well on the other side of the country. We have created a modern IT base and implemented a converged network for data, voice and video, serving all the locations, all the offices, all our operations for the airlines and the other sister companies in Saudia Group as well.” And while all this was taking place it was, of w w w. s a u d i a i r l i n e s . c o m

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MIDDLE EAST

All seats are equipped with special monitors that may reach up to 23� in some aircrafts. A remote control will provide you with complete flexibility for your personal entertainment during the trip.

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Sabre Airline Solutions Gives You The Freedom To Fly The Way You Want Sabre is proud to be a leading technology partner for Saudi Arabian Airlines, with many years of successful partnership. Sabre’s technology is powering the business of Saudia in Sabre Airline Solutions and the Sabre Airline Solutions logo are trademarks and / or service marks of an affiliate of Sabre.Š2015 Sabre Inc. All rights reserved. 10140 0915

commercial and operational areas and is helping Saudia better market and sell its products, provide superior service to its customers and stakeholders and conduct its operations in the most effective way. We look forward to continuing to serve the needs of Saudia and support its continued growth and success as a leading carrier in the Middle East and the world.


SAUDI ARABIAN AIRLINES

MIDDLE EAST

course, paramount that Saudia’s customers received the same fantastic service they were used to. Albakri says: “We replaced about 480 different enterprize application systems and while we put in the new platforms, we needed to maintain the old technology, the old network and the old applications, to continue supporting our business. So it was more like changing the wheel or the tyre on a Formula 1 car while it’s still racing!” It was a particularly complex undertaking never tried on that scale before in the aviation industry as the airline doesn’t have any down time, unlike European and American airlines which have night curfews. “We operate 24/7, which is a unique business model in aviation. Because of the diversity and the size of the Kingdom, and the amount of guests that we

The new luxurious interior of the Boeing 777 for optimum guest convenience

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SAUDI ARABIAN AIRLINES

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January 2016


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carry and the extent of our domestic networks, we have to carry on operating around the clock to be able to meet the demand.” Time wasn’t the only challenge for Albakri’s team in implementing such an ambitious upgrade. At the same time as integrating all the new platforms, Saudia also decided to restructure the entire IT division. He explains: “We set it up as a shared service provider for Saudia Group, so we reorganised and restructured the entire organisation. We acquired all the niche technical skills and competencies we needed to have this division really perform its activity as a shared service provider based on servicelevel agreements with the various business units. So by transforming IT, not only from a

‘Innovation requires time, investment and patience. You cannot consider it as a project; you’ve got to let these people have their own time’ Saleh bin Naser Al Jasser, Director General Engineer

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SAUDI ARABIAN AIRLINES

Clear skies ahead Enhancing the customer experience while improving profitability is the goal of every airline around world. That’s why today’s visionary flight operators like Saudi Arabian Airlines partner with Jeppesen to deploy the latest technologies into their operations. We thank Saudi Arabian Airlines for their unwavering partnership on this journey toward innovation. We wish them only clear skies and tailwinds.

Boeing Commercial Aviation Services partners with airlines around the world to provide them a competitive edge by solving real operational problems, enabling better decisions, maximizing efficiency and improving environmental performance – creating intelligent information solutions across the aviation ecosystem. Jeppesen is a Boeing company.


MIDDLE EAST

Loyalty lounge for business and first class guests

technology point of view but also the business model, we managed to set the division up to become a commercial provider for the group.” But technology does not sit still, Albakri acknowledges, so the transformation within the IT division is ongoing. “In our business we finish one cycle and then have to start another one,” he laughs. “Technology changes and trends change. And making ends meet in an airline is really very challenging so we can’t afford to have IT be a major cost contributor to the operating costs, so we continuously look for ways to improve our efficiency and improve our costs and deliver better products, and advanced products to enhance our guests experiences, improve our products and services, increase our revenues, optimize our operating costs

$$$ Saudia spent hundreds of millions of dollars upgrading its entire IT infrastructure

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SITA IS THE WORLD’S LEADING SPECIALIST IN AIR TRANSPORT COMMUNICATIONS AND INFORMATION TECHNOLOGY Airlines, airports, aircraft, ground handlers, governments, air cargo, aerospace, air navigation service providers and international organizations all use our information and communication technology (ICT) solutions, relying on SITA’s expertise to keep the wheels of the industry in motion.

INNOVATION Community Innovations AIRCOM Flight Tracker ATI Cloud iTravel Mobile App eAircraft Services

SITA Lab Beacon Registry Wearable Technology

Tel +41 22 747 6000 Fax +41 22 747 6110 Web www.sita.aero E-mail info@sita.aero – info.meia@sita.aero


SAUDI ARABIAN AIRLINES

MIDDLE EAST

and add true business values to the airlines.” And employing the right staff is a big part of delivering this, from attracting bright young minds to providing the appropriate training. Albakri says: “First of all, you have to create the ecosystem for it, you have to acquire the young educated minds, inspire them and create the environment so they could really come up with innovative solutions.” This is assisted by partnerships with our strategic technology partners so that Saudia can take the latest and greatest technological breakthroughs (i.e disruptive technologies) and see how could they be applied to the business. “Innovation requires time, investment and patience. You cannot consider it as a project; you’ve got to let these people have their own time. You have to let them think. So we attract

Muhammad Ali Albakri - CIO and CFO

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Over 750 professionals of culturally aware workforce

Successfully delivering complex and large scale IT projects to over 150 enterprises

2nd largest IT Services and Solutions company in the Saudi Market

6 offices and a network of various channel partners covering the rest of the region

EJADA is a leading IT services & solutions provider in the Middle East & North Africa enabling enterprises in banking and finance, telecommunication, transportation, health, government and oil and gas sectors to maintain their competitive edge in today’s dynamic market.

Tel +966 (11) 4722277 | Fax +966 (11) 4724772 info@ejada.com | www.ejada.com Head Office, Riyadh, Saudi Arabia, P.O. Box 55471, Riyadh 11534


SAUDI ARABIAN AIRLINES

SM UP I DP D LY L EC EHAASI N T

the best and the brightest from universities from within and outside the Kingdom and we put them through very generous training programmes, some of them extend to two to three years, and we provide them with the necessarily environment to be able to produce and be contributing members of the Saudi Arabian Airlines Group.” And these opportunities are not restricted to male employees, as Albakri explains: “We made the decision about eight or nine years ago really to introduce more and more women into our workforce in IT. For instance, our SAP Centre of Excellence is half staffed by young Saudi ladies who have been trained and certified to work with SAP technologies, our entire IT helpdesk is now run by women. And we are expanding our team for mobile and tablet development, with a large number of female staff.” The brightest staff – men and women – are recruited and retained by this impressive approach to staff development, says Albakri. “The benefits that we offer, the continuous training, the challenges and exciting types of programmes or projects that they are involved on really makes the job very attractive for them to

‘We made the decision about eight or nine years ago to introduce more and more women into our workforce in IT’

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AIRPORT TECHNOLOGY INTEGRATORS FOR THE 21st CENTURY OUR SERVICES

ABOUT US ICAD is the leading provider of airport integration services in the Middle East. Our areas of expertise include: Information and Communication Technology Systems, Passenger Processing Systems, Air Traffic Control Systems, Security and Safety Systems, Special and Ancillary Systems, Building Controls and Automation Systems, Lighting Systems, and Passenger Boarding Systems.

With our highly expertise team we are proficient of delivering the even most complex multiple-system and multiple-vendor installations with the best competitive edge technology requirements to a highest level of standars and expectations starting from engineering, design, installation, commissioning, operation and including maintenance. With our sophisticated in house testing and pre-staging facilities before on site installation and integration, we maintain our reputation by completing the projects on schedule.

ICAD Headquarters | Sary Road and Khalidiya Street | Building Jeddah 101, Floor 7 | PO Box Jeddah 117188 | Jeddah, KSA-21391 www.icad.com Telephone: +966-12-616-6771 Fax: +966-12-616-6773 E-mail: info@icad.com

Amadeus is a world-class technology company dedicated to the global travel industry

Amadeus provides the technology which keeps the travel sector moving. Our ambition is to facilitate the entire travel journey from door-to-door and in the process improve the travel experience for hundreds of millions of people every year.

Let's shape the future of travel

We are proud and honoured to be Saudi Arabian Airlines’ main strategic partner for airline IT and distribution services. Amongst other key IT Amadeus solutions, Saudia is using the Amadeus e-Retail online airline booking system, the world’s most widely-used airline Internet booking engine, as well as the Amadeus Altéa Suite, a complete Passenger Service System that offers full reservation, inventory and departure control capabilities.

You can follow us on:

AmadeusITGroup amadeus.com

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© 2015 Amadeus IT Group SA

Our people, technology and innovation are dedicated to working with our customers and partners to shape the future of travel.


SAUDI ARABIAN AIRLINES

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stay on, and we of course do everything possible in our ability to make the job more like a career choice, to nurture their skills, and satisfies their personal development goals thereby securing a more productive and stable workforce..” A talented and committed workforce means that Saudia is well positioned to achieve its plans for growth. And to kick things off, the airline has acquired 50 additional new aircrafts to strengthen its domestic and regional capabilities and added more wide body aircrafts for the long haul routes (i.e. Boeing 777-300 & Boeing 787-9). Saudia will be taking its first delivery of the Dreamliner in January 2016 at the same time as celebrating its 70th anniversary. Albakri says: “The aviation business is continuously changing and the Dreamliner is a very sophisticated aircraft. We call it a flying data centre actually by itself as it has more technology embedded into that aircraft than any other aircraft made by mankind.” So, naturally, the role of IT has extended to accommodate such an aircraft, in order to take full advantage of it and ensure proper operation, maintenance and support of the aircraft and its guests. He continues: “The Dreamliner is continuously connected to ground based systems, it’s continuously communicating the status of the engine, the status of the various components of the aircraft, to the ground systems to monitor and advise crews with information to help operate the aircraft more safely and with added conveniences to its guests. And then it

The interior of the Boeing 777

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SAUDI ARABIAN AIRLINES Logopdf.pdf

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SAP is the world leader in enterprise applications in terms of software and softwarerelated service revenue. Based on market capitalization, we are the world’s third largest independent software manufacturer. SAP has more than 263,000 customers in 188 countries and more than 68,800 employees – and locations in more than 130 countries. SAP Middle East and North Africa (MENA) is recognized as one of the fastest growing markets for SAP globally and is a key investment area for the company. It has a complete portfolio of business solutions from ERP to Analytics and from Business Intellegence to Mobility and now moving everything into the cloud. Today, the company has more than 1200+ customers and continues to build capacity across the eco system with more than 1400 qualified SAP consultants and 132 business partners to support. For more information please visit our website www.sap.com/MENA or email us at info.mena@sap.com

IT Services Business Solutions Consulting

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SAUDI ARABIAN AIRLINES

MIDDLE EAST

is providing additional services that couldn’t be provided before, to guests, such as continuous connectivity to the internet, continuous ability to use their own devices and favourite content. There is a lot of sophisticated technology that this type of fleet is bringing with it, and we have upgraded our capabilities to work with it aiming to enhance our guests’ experiences .” The Dreamliner will be used on Saudia’s long haul routes, to Europe and Canada, and some of the Far East destinations will be supported as well. And it is just one of 110 new aircraft that will be integrated into operations totally by 2020 - 28 of those new aircraft will be received in one year – 2016. Such growth is needed for the airline to reach the 50 million guest goal by 2020. Albakri says: “The region where we exist and we operate

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SAUDI ARABIAN AIRLINES

Saudia Guests Services Center (CTO)

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is the fastest growing region so far as aviation is concerned, the largest number of ordered aircraft worldwide is coming from the region, the largest percentage growth of airlines in the world is happening in the region, the largest travel hubs exist in the region such as King Khalid International Airport (KKIA) and King Abdulaziz International Airport (KAIA) both of which are going through massive upgrades by adding new terminals to KKIA and totally rebuilding KAIA. So we exist in a very blessed region in terms of the business, in terms of growth, but also it comes with a very heated competition. So we have to


MIDDLE EAST

“The region where we exist and we operate is the fastest growing region so far as aviation is concerned”

continuously renew and advance our products and services and make sure that we stay as close as possible to our guest expectations, to be able to grow and capture our market share.” And none of this would be possible without the right infrastructure, as Albakri concludes: “Nothing would be possible really without having the right intelligence systems to be able to turn the company around very fast and enable it to absorb that many new aircraft and doubling the number of guests in a short period of time. It just would not be possible without the right technology in place.” w w w. s a u d i a i r l i n e s . c o m

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Merging heritages As the second largest American packaging company, the newly formed WestRock looks to become the preferred partner and unrivaled provider of paper and packaging solutions on a global scale. Written by: Robert Spence Produced by: Phil Duran


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C O M PA N Y N A M E

WestRock is listed on the NY Stock Exchange

H

eadquartered in Richmond, Virginia, WestRock is a renowned packaging company specializing in consumer and corrugated packaging solutions. The company, which supplies everything from pizza boxes and beverage packs to paperboard for packaging and shipping containers, has earned a reputation for 52

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delivering products and services with uncompromising quality and reliability, becoming a leading global partner in the process. Roots WestRock was conceived in January 2015 when historic packaging companies MeadWestvaco Corporation (MWV)


SECTOR

and Rock-Tenn Company agreed to merge, marrying the two companies to form a $16-billion packaging powerhouse. The merger was finalized in July 2015. “RockTenn and MWV have a heritage in paper board and the creation of WestRock represents a historic milestone in our industry,” said Ariel Winton, Supply Chain Manager for WestRock Australia and New Zealand. For WestRock, the merger represents two

“RockTenn and MWV have a heritage in paper board, and the creation of WestRock represents a historic milestone in our industry”– Ariel Winton, Supply Chain Manager

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Steve Voorhees Chief Executive Officer

highly complementary organizations – both of which have been operating in some form for longer than a century – coming together to create a company with leadership positions in the global consumer and corrugated packaging markets. According to Winton, the newly formed company still maintains its Australian and New Zealand identities. “We’re local to Australia and New Zealand, so understanding our customers’ unique requirements in this part of the world is central to our value proposition,” said Winton. What They Do Best 54

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Ward Dickson - Executive Vice President and Chief Financial Officer

WestRock has become the industry leader in the design and manufacture of high-speed, flexible packaging equipment. The company designs and manufactures customisable, fully automatic equipment for food and beverage secondary packs, backed by around the clock engineering support. “We manage the logistics, the installation and the engineering around these machines in order to make it as easy as possible for the customer,” said Winton. “This allows us to have a level of control that ensures quality, reliability and the machine’s performance.”


AUSTRALIA

Machinery CPEmerge

As a vertically integrated business, WestRock also designs and supplies the packs that run through the equipment, and hold over 2,000 packaging patents. According to Winton, “This is the result of a vast body of knowledge which translates to world-class efficiencies for our customers.” The company has 275 operating and business locations. Winton said the company leverages its global networks to ensure best practice and leading innovation is shared locally. “Not many businesses cover the full range of products and services we handle,” added Winton. The newly formed WestRock has already earned some prestigious awards. In October 2015, WestRock won the Lion New Zealand, Acting With Integrity Award, for exceptional performance on key metrics and dedication to continuous

“Everyone here, not just the customer service department, is focused on the customers” – Ariel Winton, Supply Chain Manager

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Innovative packaging solutions for consumer goods & industrial markets

T +64 979 3800 F +64 979 3801 E terri.smith@ororagroup.com

12-14 Lockhart Place, Mt Wellington, Auckland New Zealand

Contact us to discuss how our packaging solutions can support your business

wwww.ororagroup.com

OC23393 11.2015

Orora Cartons are proud manufacturers of award-winning high quality folding cartons utilising offset printing, die cutting and gluing technology. Leaders in the NZ market, we pride ourselves on quality products and personable service.


WESTROCK improvement. WestRock was also the recipient of the 2015 Value Excellence Supplier Award from SC Johnson, winning the award for its focus on operational continuous improvements. Environmental responsibility At WestRock, the company maintains its stewardship of the natural resources it uses and strives to be a good corporate citizen. The company has outlined specific paths to ensure the health of forests through its Sustainable Forestry Practices, Sustainable Forestry Certifications, and its Landowner

AUSTRALIA

Outreach and Research programs. “From a corporate level, we have a wide array of sustainability goals,” said Winton. “And we continue to work hard to achieve them.” With 23 recycling facilities, the company is one of the largest recyclers in the world — recovering, processing and selling approximately seven million tons of recycled products annually as well as providing comprehensive recycling and waste solutions. The company is also leading the way in utilizing integrated programs to assist customers in managing waste streams, extracting as much

Reels of paperboard

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WESTROCK

Bob Beckler President, Packaging Solutions

recyclable material as possible, increasing revenue generated from recyclable materials and supporting customers’ sustainability program. The company works with its suppliers to understand their sustainability needs and help them achieve them. Customers, Innovation and Operational Excellence WestRock is more than just a paper supplier — it’s a solutions provider, and the company is steadfast in 58

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Bob McIntosh Executive Vice President, General Counsel and Secretary

its commitment to customers, innovation and operational excellence. “We have a two-prong approach to our business. The first is obviously our packaging products, but the second is supplying the packaging line and machinery to the customer,” said Winton. The company has assembled a world-class packaging team — employing 42,000 people in 30 countries worldwide — to supply and service the unique needs of


AUSTRALIA

local and global customers, ensuring quality, reliability and great service along the way. “Everyone here, not just the customer service department, is focused on the customers,” explained Winton. “We all understand it and we strive to continuously improve.” Collaboration is another important aspect to the company. According to Winton, cross-functional collaboration plays a critical role in helping WestRock meet the needs of their customers, therefore delivering on what they promise. “The collaboration I see within our team here at WestRock, and with our supply partners adds so much more value than a typical transactional relationship,” said Winton. “Our key suppliers are an extension of our business and we maintain long standing relationships with them.” In terms of innovation, WestRock strives to understand the consumer and aims to turn collaboration and consumer insight into distinctive designs for their customers. The company continues to work closely with customers to deliver low-cost, high-value packaging and marketing solutions to a wide range of markets. “In our industry, personalization has garnered a lot of growing interest and it’s something we’re actively looking at,” said Winton. “It’s something that hasn’t been attempted in our sector but as innovators, it’s something we’re looking to achieve. It’s really an example of ideas driving execution.”

Company Information INDUSTRY

Supply Chain HEADQUARTERS

Suite 202, Level 2, 2 Burbank Place Baulkham Hills FOUNDED

2015 EMPLOYEES

42,000 REVENUE

Not Disclosed PRODUCTS/ SERVICES

Packaging and containers

w w w. w e s t r o c k . c o m

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The unsung hero

Martin Brower has taken a road less traveled on its journey to the top of the supply chain industry Written by: Eric Harding Produced by: Phil Duran


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MARTIN BROWER

Newcastle DC

N

ot just anybody can work for a company like Martin Brower. The ideal employee must have not just an ability, but a talent, to think differently. Employees like these have set up Martin Brower to support the second-best supply chain in the world and the world’s largest distributor for McDonald’s, in addition to handling distribution for Coca-Cola in parts of the US. But in an interesting turn of events, this company chooses to think more about its people and the success stories within its ranks. Unsung hero Martin Brower views itself as an 62

January 2016

extension of the McDonald’s supply chain in Australia and New Zealand. In addition to being a traditional logistics provider, the company also provides value-added services such as promotions and supplier production planning in markets like Australia and Canada. In Australia & New Zealand, Martin Brower services 1,111 restaurants and makes an average of two-anda-half deliveries a week to each. Martin Brower has managed over 160 new menu introductions to McDonald’s this year alone. “We have a strong link with our customer; we’re pretty much an extension of them,” said Head of


AUSTRALIA

Supply Chain Karin Freeman. McDonald’s will research a menu concept, assign suppliers, negotiate prices to manufacture and we will take it from there. “We provide fantastic analytical support, both in promotions and standard products across Australia and New Zealand. In addition, we also do the Happy Meal planning for New Zealand, and source and distribute all operational supplies.” A former McDonald’s employee herself, Freeman led the McDonald’s supply chain in her native South Africa for seven years before spending the past six years at Martin Brower. “One of the key things about where I am today in my career is that I’ve been fortunate to spend several years in leadership positions and being selective of who I work for throughout my career,” said Freeman. “That shrewdness just adds further to my experience. “When I joined Martin Brower, they were on a journey and they needed people on board to help drive it. As a result, it’s been one of the most transformational supply chains in Australia.”

“It’s almost like we are building a plane in the air. We’re flying it and we’re building it at the same time. The skill set for people to thrive in this environment is very unique” – Karin Freeman, Martin Brower head of supply chain

Thinking left field While there is some glamour in being the logistics provider for one of the world’s largest companies, the role also brings a large amount of responsibility along with it. “We had to transform ourselves and the only way to do that was to re-engineer our supply chain to adapt,” said Freeman. w w w. m a r t i n b r o w e r. c o m

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C O M PA N Y N A M E

Melbourne

“We take really high personalities and train them up. It’s been a beautiful blend” – Karin Freeman, Martin Brower head of supply chain

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With a very unique environment, customer culture and constantly changing procedures, Freeman said her team is forced to make decisions very quickly and on the fly in order to meet client expectations. “It’s almost like we are building a plane in the air. We’re flying it and we’re building it at the same time. The skill set for people to thrive in this environment is very unique. It’s almost like you’re looking for a sales person who is a great communicator, has analytical skills and has some production planning experience. On top of


SECTOR

that, a bonus is if they have some McDonald’s experience. To find all of that is almost impossible.” With the help of its ace recruiting company Button Face, headed up by Executive Consultant Art Purdie, Martin Brower was able to change its entire recruitment and talent retainment strategy. Because it’s so difficult to find the right fit, Martin Browner relies on having a good recruiter who knows

what the company is looking for. “Through Button Face, Art has really cleaned the process up for us. He gives his own view on the candidates, which is different than most recruiters. The supply chain area has really been an aspect he’s excelled in. We’re quite happy with the way it works and we don’t see anything changing.” “We take really high personalities and train them up,” said Freeman. w w w. m a r t i n b r o w e r. c o m

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MARTIN BROWER

AUSTRALIA

“It’s been a beautiful blend. I think there’s something to be said for the talent you bring on board and how they can adapt to these changes. “I know by the time they get through to my table for the second interview that they are the best of the best and if given half the chance, will make it. They’ve got the drive, the energy and they can run with the pace.” The right training for the right people With a high focus on safety and an employee orientation plan that spans two weeks, new employees spend time with a variety of different people within their first few days on the job. There’s also a six-month probationary period for evaluations. In addition, Martin Brower gives employees 30-,

SUPPLIER PROFILE

MB truck & driver

BUTTON FACE PTY LTD

Employees: 5 Established: 2014 Industry: FMCG, Retail and Wholesale Services: Supply Chain Planners, Inventory Planners, Replenishment Planners, Merchandise Planners, Demand Planners, Category Managers, Supply Analysts, Promotions Analysts, Logistics and Warehouse and Transport Management. We are a forward thinking National agency with a left of centre approach to Recruitment, We are the new breed of culture recruiters and we minimize turnover within our clients. We are the new faces of Recruitment!!! Management: Art Purdie, National Recruitment Manager Please email our National Recruitment Manager on

w w w. m a r t i n b r o w e r. c o m

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MARTIN BROWER

DC dry above 60- and 90-day plans, providing a list of skills and milestones they need to develop during training. Meanwhile, managers meet with them to gauge their comfort level. The training is essentially a buddy system, where Martin Brower puts new employees with a manager and a more experienced employee to show them everything they need to do. According to Freeman, it can take up to 18 months for a new supply chain employee to fully grasp all aspects of the job. “The complexity of the training 68

January 2016

program is high because there are so many things that come with experience. We love to give employees a well-rounded experience, which is both operational customer facing and supply chain,” said Freeman. “Once you’ve planned a promotion from start to finish, you start seeing how everything fits into place.” On top of their game “Being a McDonald’s supplier doesn’t just fall in your lap,” said Freeman. “You have to work very


AUSTRALIA

hard, and you have to be extremely agile. We’ve changed our whole supply chain to be that.” Since there is no interface technology that works with every supplier, there is a need for a platform that is common throughout. In the supply planning space, the only collaborative program in place to help with operations is Microsoft Excel. Martin Brower has created an advanced version of the program, which gives visibility in any situation and at any point in time during a promotion. “We’ve optimized it so much to make it simple for suppliers,” said Freeman. “What they see is very simple and easy, but on our end, it is an analytical monster.” On the replenishment side, Martin Brower recently implemented JDA Manugistics in 2014. The company uses this tool to do all of its forecasting for both its standard products, as well as promotion management. Next, the company integrates this forecast into Excel so both the replenishment and the supply planning teams receive the same information. This allows them to quickly notice if things are going wrong. “We’re looking to simplify that process,” said Freeman. “Next year, we’ll begin working with McDonald’s on restaurant replenishment which is a big ticket item for both of us. “As we move into the future, Martin Brower intends to continue to drive innovation for our customers as they evolve,” Freeman said.

Company Information INDUSTRY

Supply Chain HEADQUARTERS

20 Bowmans Road Kings Park, NSW Australia, 2148 FOUNDED

1956 EMPLOYEES

8,000 REVENUE

USD $14 billion

w w w. m a r t i n b r o w e r. c o m

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TYTAL:

Innovation in rolling stock conveyance vehicles An outstanding player in the global spectrum of tanker manufacturing makes the most of its expanding market

Written by: Mateo Rafael Tablado, Produced by: Andrea Duque Interviewee: C.P. Guilibaldo PĂŠrez, Presidente de TYTAL


T Y TA L

I

n the year 2000 TYTAL (Trailers y Tanques de Aluminio) opened its aluminum tank manufacturing plant in the city of Cadereyta, Nuevo Leon (Mexico). By 2003, TYTAL’s production line turned the company into an innovative force within aluminum tank manufacturing in Latin America. TYTAL became the first Mexican company to export high-pressure

Key People

C.P. Guilibaldo PĂŠrez Presidente de TYTAL

Los soldadores de TYTAL son sujetos a entrenamiento altas certificaciones en su especialidad

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cargo tanks to the USA and Canada in 2009. Other export targets for TYTAL products include the Middle East, northern Africa, Central and South America; the company is certified by the strictest international organizations for highway and railroad freight, guaranteeing its products’ compliance with quality and safety standards.

“We cannot run the risk of manufacturing with noncertified parts” – C.P. Guilibaldo Pérez, Presidente de TYTAL

os detallados para obtener las más

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T Y TA L TYTAL is enabled to deliver custom-made products that meet the specialized requirements of the oil & gas, energy, construction and food industries. The company is run by Guilibaldo Perez, the president of TYTAL since it was founded 15 years ago. “Production of custom-made tanks delivered ahead of schedule displays our company’s leadership at levels yet to be met by our competitors. In the U.S., it takes long before a manufacturers create new production lines with different standards; special orders are made under contract only, ” stated Perez.

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Global presence and operational adaptability One of TYTAL’s main success factors is the company’s ability to manufacture both railroad and truck tankers. Another important distinguishing factor is its ability to create custommade products, with no minimum order of quantity (MOQ). TYTAL’s manufacturing facility is located only 125 miles from the U.S. border and 300 miles from the port of Tampico (in the State of Tamaulipas). In addition to having sales representatives in four continents, its main sales offices are located in San Antonio and Atlanta. These factors have been instrumental in exporting TYTAL products beyond NAFTA territory and into Colombia, Costa Rica, Chile, Peru, the Dominican

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T Y TA L

L AT I N A M E R I C A

Republic, Venezuela, Saudi Arabia, and Libya. TYTAL plans to expand its exports to other Middle Eastern countries and Europe. Edging out Chinese manufacturers to be the number one option for tankers for important global companies, TYTAL supplies 60 percent of truck tankers for PEMEX fuel distribution. Competitive advantage: international certifications

TYTAL sólo usa componentes

Constant exports demand TYTAL’s products and operational procedures be highly certified. With this specialized area of transportation, safety codes and standards developed by U.S. and Canada agencies and associations prevail

certificados para la fabricación de sus productos

SUPPLIER PROFILE Employess: 380 Founded: 1989 Industry: We provide materials for the following industries: household, manufacturing of pipes, storage tanks and trailers, construction, institutional kitchens, automotive and aerospace. Services: Marketing, logistics and inventory management stainless steel and aluminum in the following forms: sheet, plate, coil, strip, angles, bars and slabs. Recent Prjects: Development of own service center allows us to offer sheets cut to size and to reduce the generation of scrap in the process plates. President/ceo: Ivette Autrique, executive vice president | Rosendo Ponce, north sector director Website: www.prominox.com.mx

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T Y TA L for global manufacturing, due to the countries’ strict levels for quality and safety assurance. TYTAL’s leadership is validated by the following organizations’ approval:

• DOT – U.S. Department of Transportation.

• AAR – Association of American Railroads.

• ASME - American Society of Mechanical Engineers.

• NBBI – The National Board of Boiler and Pressure Vessel Inspectors.

• MC-331 Grade, for high-pressure vessels in the US and Canada.

“We are the first manufacturing company in Mexico funded with 100 percent domestic capital to obtain these certifications,” Perez said. Supply chain on the radar TYTAL’s manufacturing processes demand part of its raw

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“Production of custom-made tanks delivered ahead of schedule displays our company’s leadership at levels yet to be met by our competitors” – Guilibaldo Perez, President for TYTAL

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T Y TA L material to be imported from Middle Eastern countries, Europe, U.S., Canada and China, relying on experienced custom brokers both for land and maritime operations. Not just any kind of piece is suited to be part of a TYTAL finished product, since every single bolt, nut and fastener must be AAR-certified. This also applies to larger components, such as tank car couplings, braking systems, and wheels. High-pressure valves are DOT and MC 331-certified. “We cannot run the risk of manufacturing with non-certified parts,” the company’s president said. Special order, custommade products are a key factor for TYTAL’s

High-tech manufacturing and business management

success globally

TYTAL’s production of durable, reliable, high-quality products demands advanced technology and automation in certain areas of the manufacturing process. The company’s sophisticated process enables the creation of prototype units to undergo extreme testing. “We can create a virtual unit, load it with excessive cargo and detect possible failures and weak points to strengthen,” Perez said. Management operations are supported by MRP software, but due to upcoming expansion projects, the company is already moving to a custom-made SAP system, able to optimize operations regarding technical features,

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administrative tasks, production, inventory, sales and clients data. Qualified and certified staff Highly-skilled professionals working in highpressure tank manufacturing undergo a thorough training and certifying process. TYTAL regularly invests in its workers’ training programs and workshops in order for them to become certified by the AWS (American Welding Society). Obtaining permits and compliance certificates for high-pressure tank cars manufacturing for use between the U.S. and Canada has required TYTAL to:

Only approved and certified materials are used in TYTAL’s

• Expand its operation by 150 percent (from 600 to 1,500 workers). • Certify personnel in charge of quality control.

manufacturing processes

To meet the second condition, TYTAL planned early on by hiring ITESM (Monterrey Institute of Technology and Higher Education) graduates, with knowledge in quality control areas. Some of these new hires will be offered a scholarship abroad to become certified in the highest levels of quality control operations. “All of our welders must be certified and take part in training for the manufacturing processes for high-risk material conveyance vehicles,” Perez said. w w w. t y t a l . m x

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T Y TA L

TYTAL’s welders are subject to thorough training sessions in order to receive the highest certifications possible within the sector

Proper waste management Being part of the large industrial hub formed by the city of Monterrey and its surroundings brings special attention to environmental issues. TYTAL’s disposal of plastic residues from aluminum packaging and paint recycling is taken care of by specialized companies. “We care about our surrounding community, and we are already seeking advice from government agencies about possible impacts on the environment after our forthcoming expansion,” the executive said. 82

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TYTAL HQ and manufacturing facility at Cadereyta, Nuevo Leon. Trailer tankers and railroad tank cars exported to the Americas, Middle East and northern Africa are made here

Ready for upcoming expansion TYTAL’s constant upgrading and maintenance of compliance certifications have created a business opportunity to manufacture railroad tank cars and tanks for LP gas, which opens a wide spectrum for growth potential. Besides the mentioned 150 percent increase in its workforce, TYTAN’s plant is expanding by 23 acres and adding a railroad track, for a total investment between $40 million and $50 million. This also includes automation technology wherever applicable. w w w. t y t a l . m x

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T Y TA L

In Cuprum Metales Laminados we are leaders in specialty cut-to-length Aluminum and Stainless Steel at products. We provide full consulting services so we can together achieve your business goals.

cuprummetaleslaminados.com cml.internationalsales@cuprum.com


L AT I N A M E R I C A

TYTAL expects current sales to double by the end of 2016 and tripling before 2018. “Our plans for the next two years encompass important expansion, becoming able to triple both our current production rate and manufacturing facilities,” said TYTAL’s president.

Company Information NAME

TYTAL – Trailers y Tanques de Aluminio INDUSTRY

Tanker manufacturing for trailers and trains HEADQUARTERS

Carretera Libre Federal Cadereyta a Allende, km. 10, Colonia La Trinidad Cadereyta Jiménez, Nuevo León, México, 67462 FOUNDED

2000 EMPLOYEES

600 REVENUE

US $100 million WEBSITE

www.tytal.mx

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Profile for Supply Chain Digital

Supply Chain Digital - January 2016  

Supply Chain Digital - January 2016