N ove mb e r 2016
HOW ASIAN COMPANIES ARE
MAKING USE OF
TECHNOLOGY TOP10 Global supply chain leaders
ARMY vs. BUSINESS What can the big corporations learn?
Making societies more productive by helping our customers run their businesses. Birlasoft, one of the Global Leaders in IT service delivery, is proud to be associated with Close Brothers for last three years in its journey to become a leading Modern Merchant Bank. Birlasoft is a strategic partner of Close Brothers and supports its mission critical core banking application and Management Information System which puts it in a unique position to create value for next generation business transformations. Birlasoft has successfully implemented: A Fraud Detection Solution which has saved Close Brothers a million pounds since inception. It has been awarded
‘Best vertical solution of year 2014’ by IT Europa - European IT and Software Excellence Award. Close Brothers Premium Finance IT team has successfully delivered a very large Customer Service Program (CSP) by transforming the Banking Application for which Birlasoft was the partner of choice.
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WELCOME TO THE NOVEMBER issue of Supply Chain Digital. For this month’s issue we spoke to SAP Ariba’s Grant Clinch about the company’s recent expansion into China – with fascinating examples of how Asian companies are improving their supply chain and procurement processes using SAP’s solutions. And Sean Farrington, UK MD and RVP Northern Europe at Qlik – and former Army officer – looks at what we can learn from the Army’s Royal Logistics Corps and apply to business supply chains. Other companies we have interviewed for this issue include Australasian construction experts Fulton Hogan and Middle Eastern airline Oman Air. We hope you enjoy the issue, please send your feedback across on Twitter @SupplyChainD
Enjoy the read Lucy Dixon Group Editorial Director firstname.lastname@example.org
F E AT U R E S
What can business learn from logistics in the army
How Asian companies are making use of supply chain technology LIST
Global supply chain leaders
C O M PA N Y P R O F I L ES
Allied Irish Bank Europe
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WHAT CAN BUSINESS
IN THE Sean Farrington, UK MD and RVP Northern Europe at – and former Army officer – looks at what we can learn from the Army’s Royal Logistics Corps and apply to business supply chains
PROFILE AS A FORMER Army officer who has transitioned from a life in the Armed Forces to working and living among civilians, I like to keep an eye on what my previous employer is up to and to see how I can apply some of these learnings to our everyday lives. During my time in the Army, I gained a lot of experience with logistics, working with the Royal Logistics Corps (RLC), a vital cog in the Armed Forces machine and a topic that still forms part of my career today in discussions with my employees, partners and customers. In the Armed Forces, the RLC provides constant support to the Army, whether that’s supplying vehicle parts, tools, ammunition, food rations – or even water. A ‘Logistic Supply Specialist’ in the RLC has to support the Army whenever they’re needed - sustaining and recovering all military operations worldwide. They support all aspects of the Army, no matter what terrain or what the threat is, the RLC will be there making sure that all needs are catered for. While a business supply chain is often about getting a product from A to B, the RLC does for the Army what the combination of Shell, Sainsbury’s, EDF and say Thames Water do for 8
civilians, only on a greater scale, with even more elements to navigate. Following the coming down of the Berlin Wall and the end of the Cold War, the Army was subject to some downsizing. Then, when the Gulf War hit, suddenly a lot of resources had to be relocated from Germany across to Kuwait as effectively and efficiently as possible - albeit with less resource. In the Army, the need of the ‘customer’ can change so quickly and significantly, for example switching from peacetime to wartime operation, the RLC has to be able to react at significant speed. It’s this precision and need for efficiency amid seemingly constant cost-cutting that means the RLC can completely understand the pressures businesses are facing today in managing their supply chains. But here’s where businesses can learn from the RLC to help the situation. The need to use technology was, even back then, recognised. The military knew handling the cuts while getting everything in place at the right time would need a system in place to work out exactly who and what was needed where and when, with spot on precision. And deploying technology equivalent to our current data analysis
“A ‘Logistic Supply Specialist’ in the RLC has to support the Army whenever they’re needed - sustaining and recovering all military operations worldwide”
systems to give them an overview of the situation put the military very far ahead of the curve – especially when you consider that it was before people were really even using the internet. But it wasn’t just the technology that helped the Army with the situation – it was also about correctly managing the people involved and harnessing their abilities. After all, it doesn’t matter how good your technology is if you don’t have the will of individuals to get a job done. One thing that prevails in the RLC, of which we need more in business, is people having 10
a collective sense of purpose and executing on it accordingly. That might mean a last-minute change in roles and responsibilities, but people would step up to the plate with the understanding that, as a collective, they all need to get the job done – and that in itself relates very well to the supply chain in business. Instilling a sense of a mission in employees to get everything to where it needs to be in a timely fashion is crucial. Of course, the scale isn’t as grand and the stakes aren’t as high as in a military conflict, but when customer
W H AT C A N B U S I N E S S L E A R N F R O M L O G I S T I C S I N T H E A R M Y ?
“One thing that prevails in the RLC, of which we need more in business, is people having a collective sense of purpose and executing on it accordingly”
relationships are at stake, failing to get a delivery – whether produce for a sandwich to be made in-store or a DVD straight to a customer’s home – can make the difference between a happy customer or someone who’s going to go elsewhere in the future. Luckily there are some very sophisticated data analysis technologies out there that, when used by people who have been correctly trained and therefore empowered to use them, can do this job very effectively. Ultimately, the supply chain needs to find a way to learn from the RLC and
get a perfect mixture of empowered people who will find a solution to getting the job done, but also technology that can show them the way to do so in the most efficient manner. The Army has, since its early prowess for adopting technology ahead of the curve, started to lean more heavily on people-centric initiatives, rather than technological innovation, but for both the RLC and business supply chains, there’s definitely a perfect mixture to be had in getting all stock, staff and supplies where they need to be.
How Asian companies are making use of supply chain technology
Supply Chain Digital speaks to Grant Clinch, Head of APJ, SAP Ariba, about the companyâ€™s expansion into China 13
TECHNOLOGY Supply Chain Digital: What inspired SAP Ariba to make the move into China?
Grant Clinch: China is aggressively promoting innovation and digital transformation through a new government agenda. The ‘Internet Plus’ initiative, for instance, is driving heavy investment in the building blocks of the internet economy including new digital platforms and cloud-based technologies, which is helping fuel procurement and supply chain growth. The ‘Made in China 2025’ effort looks to promote innovation and transformation empowered by smart manufacturing, which is closely aligned with smart procurement. And the One Belt One Road focuses on driving significant growth in overseas trade. All of this aligns well with our strategy to help companies digitise their business and commerce, and thus will create solid opportunities for us to grow.
What challenges have there been? There are always challenges when entering new markets. You need to 14
be aware of government regulations, product localisation requirements and appropriate license approvals, etc. To be successful, you really need to work with local partners who understand the lay of the land and have connections that can help you effectively build your brand. And this is the approach we are taking in China. We will, for instance, make our sourceto-pay applications available locally through a facility in Shanghai hosted by GDS. And as we go to market, we will employ both a direct and indirect sales model, leveraging the scale and capability of our own sales and consulting organisations along with those of local partners so that we can quickly deliver our solutions to large private companies and mid-tier small and medium enterprises alike.
What are your objectives for your operations in China? Companies across China are increasingly placing digital processes at the core of their business and are looking for cloud-based solutions that can help them to better manage their operations and connect with trading partners. Much like the networks and applications Chinese
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consumers use to manage their personal business, our procurement solutions give Chinese companies a fast and easy way to manage everything from contracts to payments all in one place. And by making them available in China, we can help speed their digital transformation and open a significant new market.
What other parts of Asia does SAP Ariba operate in?
“Companies across China are increasingly placing digital processes at the core of their business and are looking for cloud-based solutions that can help them to better manage their operations and connect with trading partners” - Grant Clinch, Head of APJ, SAP Ariba
We operate in 50 countries across the region. To give you an idea or our size and reach, there are more than 500,000 Asian buyers and sellers connected to the Ariba Network, including: • 300,000 in India • 100,000 in Australia • 70,000 in China • 60,000 in Singapore • 45,000 in Malaysia And in the twelve months ended September 30 2016, these companies used our solutions to: • Source more than $29 billion in goods and services • Exchange over 1.6 million purchase orders worth an estimated $9.5 billion 15
TECHNOLOGY â€˘ Process nearly one million invoices worth close to half a million USD â€˘ Share nearly $1 billion in new business opportunities
What areas of Asia are the most successful for you? From the statistics above, you can see that we are well represented and successful across Asia. Australia, which operates more as a western market than an Asian market, is the most mature market we operate in. China, Japan and Korea are huge economies with strong manufacturing bases in which we are investing, and our growth rates in these markets are very high as our solutions for direct materials sourcing and collaborative
supply chain are particularly relevant. India and South East Asia contain a diverse mix of industries. Many companies in these markets are often are family-owned and looking for us to provide world class technology they can use to drive international growth, so we are seeing a lot of growth in our network and the use of services like Ariba Discovery.
Why do you view Asia as one of the most important areas for increased investment and new business? Asia is in the midst of a significant transformation. Digital technologies are enabling innovation that is fueling disruption and redefining
A S I A N C O M P A N I E S : S U P P LY C H A I N T E C H N O L O G Y
entire industries. You don’t need to look much further than companies like Singapore’s nuTonomy, Xero and Atlassian from Australia and New Zealand; Huawei, Didi and Baidu in China; or Line in Japan, for proof of this. In addition, Asia is home to the largest population of internet users - accounting for half of the world’s total 2.8 billion internet users - and has the largest regional e-commerce market. By 2018, there will be 1.14 billion connected Asians on business and social networks. And by 2020, the Asia Pacific region will account for 44% of all connections and devices worldwide. Now is clearly Asia’s moment
for digital. And the opportunity for us to help them to make the most of it is huge.
How do Asian companies compare when it comes to digitalisation within the supply chain? Just like everything else in Asia, supply chain practices are maturing. More companies have introduced the role of a CPO and are setting up procurement as a shared service. I see this in many of my customer interactions. And they are making investments in platforms to digitise the core procurement operations and want to be the first to innovate in areas like supplier risk and supply chain collaboration.
“More companies have introduced the role of a CPO and are setting up procurement as a shared service”
And these investments are critical, because without Asia, there is no global high tech supply chain. Or retail supply chain. Or natural resource chain.
Can you give us an example of a company you are working with in Asia, and how it is using SAP Ariba? There are more than half a million 18
buyers and suppliers across Asia using SAP Ariba solutions to digitize their supply chains. And they’re doing some pretty innovative things. Take AIA Group Ltd. - the largest independent, publicly listed panAsian life insurance company. In 2010, it was spun off from parent company, AIG. It was operating in 18 markets across Asia Pacific, and suddenly had all the infrastructure
A S I A N C O M P A N I E S : S U P P LY C H A I N T E C H N O L O G Y
ripped out from underneath. So it not only needed a standard, transparent process through which it could source goods and services, but a system to fuel it. It started by creating a centralised operating model for sourcing and procurement that would allow them to leverage collective buying power and drive collaboration among key stakeholders. Then it moved to digitise things. It already had SAP ERP in place and began adding solutions from SAP Ariba to drive its source-to-pay process. And it has since seen improved cross-functional and market collaboration and adoption, along significant sourcing savings and process efficiencies. In Thailand, PTT Global Chemical Public Company Limited (PTTGC) is using the Ariba Network to completely automate its procure-to-order cycle. In going digital, it is not only able to do things faster, but simpler. And it has improved its relationship with suppliers by providing greater visibility into the status of invoices and payments so it knows when they will be paid and, along with access to technology, that improves efficiency and productivity.
Then you have sellers like Malaysiabased Alphamatic Systems who moved to digitise things when manual, paper-based processes began to hamper its operations. It started out like many suppliers do, by collaborating on purchase orders and invoices electronically with customers through the Ariba Network. Then they set up an online catalogue through which it could use to sell products and services. As a result of these efforts, the company has seen revenue from its largest customer increase by 40 percent and its payment cycles cut in half. And Japan-based MiSUMi Group, Inc. is using the Ariba Network and Ariba Discovery â€“ a service delivered on the network that automatically matches buyers who need goods and services with sellers who can deliver them â€“ to more efficiently connect with customers and increase sales. Since joining the Ariba Network, MiSUMi has landed several new customers globally and seen its revenue rise 30 percent because of the process efficiencies and savings the network helps them to create. And there are plenty more examples like this that we can provide. 19
Supply Chain Digital looks at the 10 most important supply chain leaders, as identified by Gartner, and why these companies are being recognised as examples of best practice W r i t t e n b y : T O M W A D LO W
THERE ARE THREE key trends to Gartnerâ€™s latest rankings for global supply chain excellence: closer, customer-driven partner integration, further adoption of advanced analytics and a strong focus on corporate social responsibility. Gartnerâ€™s Supply Chain Top 25 rankings comprise two main components: business performance and opinion. Business performance in the form of public financial and
CSR data provides a view into how companies have performed in the past, while the opinion component offers an eye to future potential and reflects leadership in the supply chain community. These two components are combined into a total composite score. Here are the top 10 companies for 2016, and what Gartner has to say about them:
3.68 (GARTNER’S RANKING)
The world’s largest consumer food supply chain scored a perfect 10 out of 10 for CSR, including a 99 out of 100 in the environmental dimension of the Dow Jones Sustainability Index for its use of “zero-water” smart factories and conversion of bio-waste into renewable energy. Nestlé’s supply chain has consistent priorities around fresh product availability, customer collaboration, capital efficiency, data-driven decision making, complexity management and people development.
The Coca-Cola Co.
3.69 (GARTNER’S RANKING)
The food and beverage leader is driving growth through product innovations and entering new markets and products, particularly in juices and waters. Supply chain, in partnership with the business, is taking a value-based approach to product and packaging portfolio management. The company continues to use its Freestyle smart delivery systems to tailor supply chain solutions by market and segment. In the US, it is a fullservice dispensing machine that can offer a myriad of choices by combining 100+ different sodas and juices, while in the UK, it is a table top format focused more on juices. The company scored nine out of 10 for CSR and has set out ambitious sustainability goals for 2020.
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3.95 (GARTNERâ€™S RANKING)
Samsungâ€™s supply chain team continues to focus on improving customer collaboration and gaining insight into consumer behaviours through connected devices. Samsung Electronics received high marks (nine of 10) on the new CSR component. It recently received two awards for sustainability from the U.S. Environmental Protection Agency (EPA) for its use of sustainable materials in the Samsung Galaxy S6 and its long-term commitment to the proper disposal and recycling of e-waste in the United States.
4.21 (GARTNERâ€™S RANKING)
A key focus area for Cisco has been digitising the logistics function. This includes connecting logistics to the broader supply chain with data, standards, automated event management and machine agents. Cisco is also bringing new technologies to bear in its warehouses, including augmented reality, telematics and video analytics. This is part of a broader effort to digitize its supply chain. It is leveraging in-house Internet of Everything (IoE) technology to improve product quality, gain energy efficiency in operations and reach universal order visibility.
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4.42 (GARTNER’S RANKING)
Spain’s leading fashion retail group best known for its Zara brand. Inditex posted similar strong performances in threeyear weighted average ROA (16.7 percent) and revenue growth (11.2 percent) and scored nine of 10 for CSR. Inditex has set a goal to run 100 percent eco-efficient stores by 2020. The new Zara flagship store in Manhattan tracks sustainability measures across all of its processes and will consume 30 percent less energy and 50 percent less water compared to a conventional store.
4.5 (GARTNER’S RANKING)
The Swedish fast-fashion retailer climbed two spots on a combination of extremely strong three-year weighted average ROA (25.3 percent) and revenue growth (16.3 percent) and a nine out of 10 for CSR, reflecting its strong record in sustainability and workers’ rights. H&M was part of a recent coalition of top clothing companies that called on governments to agree to a strong climate change deal based on concerns that long-term climate effects could harm production of one if its major inputs, cotton. 25
5.34 (GARTNER’S RANKING)
4.62 (GARTNER’S RANKING)
The company is actively pursuing growth opportunities, as evidenced by its largest ever acquisition of chipmaker Altera in 2015. Intel’s next challenge is to drive organic growth in new markets. Its supply chain group has proven to be a worthy partner for growth in the past. Over the course of 2014, the team enabled an entirely new ecosystem of China-based technology providers to support the ramp up of new tablet products. The result exceeded the CEO’s aggressive 40 million unit shipment goal by 15 percent. 26
Amazon, despite dropping down from number one last year, continues to be a leader when it comes to innovation in its products and supply chain. It has sold several million Echo voice-controlled home speakers that allow users to search the internet for information, play music, complete online tasks and control other home devices. It is not hard to see where this could become a popular means of reordering common everyday products. Amazon’s Prime Now same-day delivery service has expanded to more than two dozen U.S. cities and London, and includes delivery from local restaurants and stores in addition to company-owned warehouses.
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5.54 (GARTNER’S RANKING)
Overall, the McDonald’s corporate supply chain team excels at orchestrating the upstream supply network. It promotes and acts as the conduit between outsourced vendors, suppliers, corporate stores and franchise partners. It uses council meetings to collaborate with suppliers on new product innovation and technology, as well as on plant safety. Base expectations with suppliers are managed through a standard supplier performance index, but the differentiator is more cultural and behavioural, as partners tend to put the McDonald’s system first when sharing product and process innovations and staffing support teams with top talent. 27
5.84 (GARTNER’S RANKING)
Unilever, the Anglo-Dutch CP giant, has steadily moved up the rankings over the past several years and is very well regarded by both the peer and analyst voting panels due, in part, to its willingness to share best practices with the broader supply chain community. The company is a role model when it comes to CSR and scored a perfect 10 out 28
of 10 on our new CSR component. Unilever says that it is achieving zero waste through its “four R approach” — reducing, reusing, recovering or recycling — and treating waste as a resource with alternate uses, such as converting factory waste to building materials or composting food waste from staff cafeterias. Longer term, it aspires to be “carbon-positive” by 2030. In 2015, it launched a Foundry Ideas platform to crowdsource innovations for sustainable products as part of its “sustainable living” plan.
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Oman Airâ€™s journey to become the best
Written by Nell Walker Produced by Dennis Morales 31
Abdulaziz Al Raisi, Executive Vice President of Oman Air, is working hard to shine a spotlight on the company’s distinctive branding and its homeland
man Air, the national airline of the Sultanate of Oman, has established itself as an enviable enterprise since 1993. Rather than racing against the giants to become the biggest or most prosperous company, Oman Air puts its efforts into what counts most – excellent customer service and cementing a distinctive brand. Abdulaziz Al Raisi is the company’s Executive Vice President. He has brought his wealth of experiences in the airline sector to Oman Air: “Basically I am an aircraft engineer,” he says. “I did my apprenticeship with Air New Zealand in 1984. I stayed there for five years and trained as an aircraft engineer. Upon completion of my apprenticeship I came back to work with Oman Air, which was called Oman Aviation Services at that time. I started my career as an engineer and became a senior engineer before I moved up to managerial roles. “The company was rebranded as Oman Air in 1993 and began operating long haul services in 2007. I was part of the team which
worked on acquisition and development of our fleet, and customised almost everything. In 2010 I began assisting the CEO in running the company’s day-to-day affairs, which involved controlling the Supply Chain Management and Learning & Development Departments as well as Aircraft Acquisition. “I became the Executive Vice President for Products & Brand Development during the recent restructuring.” Al Raisi is now in charge of everything to do with guest experience, comprising inflight and lounge services, catering, and branding of the airline, including aircraft design and interiors. Much of the company’s image is in Al Raisi’s hands and he is committed to increasing guest trust and growing as a unique brand. As Al Raisi says, “Oman has a very rich culture and a time-honoured heritage,” and he wants
“We are immensely proud of being the national carrier of the Sultanate of Oman and we make an important contribution to our nation” – Abdulaziz Al Raisi, Executive Vice President the Oman Air aircraft to represent that. In order to ensure that the interiors of the aircraft reflect Omani culture with traditional patterns and colour schemes, Oman Air works with reputed designers, and the company considers this as integral to its branding. “Our aim is that any guest who flies on board our aircraft from any destination to Oman Air’s home base of Muscat feels that
they are going to a place which is really unique and fascinating.” In addition to the regular launch of new routes, Oman Air is getting involved in codeshare agreements with other leading airlines in order to provide connections, with the added advantage of increasing traffic to Oman. Oman Air is keen for the Sultanate to be seen as a
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BUILDING THE FUTURE FOR 100 YEARS.
In less than a century, Boeing took the world from seaplanes to spaceplanes, across the universe and beyond. If you thought that was amazing, just wait.
tourist destination, and while it doesn’t aim to compete with regional airlines, it believes that it has a great role to play in showcasing Oman and introducing guests to this beautiful nation by offering the easiest possible connections. The company has grown steadily and contributed around 440 million Omani Rials to the national economy in the last year alone. “Currently our fleet is 45 aircraft and we are expanding further,” Al Raisi says. “We have many aircraft awaiting delivery from Boeing and we are growing at a steady, sustainable rate, bringing tourist business to the capital as we go.” Alongside his many other responsibilities, Al Raisi leads the design aspect of each aircraft which is a huge task. Oman Air is currently working on a new set of first class and business class seats created in Miami to unique specifications, proving its dedication to how the company represents itself. “When it comes to our products, we don’t compromise,”
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Which aircraft best combines comfort with efficiency?
It’s undoubtedly the A350 XWB. Offering 18ʺ wide seats as standard in economy, along with a 25% step change in fuel efficiency and a 25% lower seat-mile cost, it has unrivalled low operating costs. The best bit? It’s already in the air.
Airbus is the answer.
“We are focused on a process of continual improvement in the passenger experience” – Abdulaziz Al Raisi, Executive Vice President
Al Raisi says. “We make sure guest experience and we don’t that whatever we do is the best, benchmark ourselves against any irrespective of the size of aircraft.” of our competitors. Having said This attitude also extends to that, the competition for guests’ technology. In 2009, Oman Air was attention is huge, and we put a lot of the first airline to have line-fit Wi-Fi money into improving our products connectivity on its Airbus A330s: and services. While bigger airlines “We were the leaders in technology are cutting costs we’re investing.” and today, all our A330s are By not clashing with the fully fitted with internet bigger players in the and mobile phone. Our market, Oman Air is Dreamliners are also able to continue fully connected. carving out its Once you are niche as a highon-board, you can be quality service totally in touch with provider with an The year Oman Air the rest of the world, outstanding guest was founded with touch screens and experience and top all the latest Apps and guest relations - and gadgets available on-board.” it retains its own specific Al Raisi considers that the growth tactic. While it is not yet company’s best achievements thinking about expansions into are those which benefit the guest huge markets such as Australia most. Oman Air has won awards or the US, Al Raisi is open to the for excellent customer guest concept a few years down the line. service, and its seats themselves Having become well-established have achieved accolades too. in the Middle Eastern, European “We are focussed on a process and South East Asian markets, of continual improvement in the Oman is now being promoted as
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an attractive prospect in China. There has already been a good level of market interest from there; Oman Air is strategic in its business decisions, making intelligent choices rather than aggressively dominating. As well as becoming involved with China, Oman Air’s immediate plans include the building of new Airport Lounges at Muscat which will reflect the level of superiority the airline prides itself on: “These will be totally new airport lounges, within a totally new airport. They include a huge first class lounge and business class lounge belonging to Oman Air. There will be another lounge at the arrival hall. Our current airport is very small; it was built back in 1973 and easily gets congested. The new
Airport will be opened next year which will allow passengers better comfort during the entire process. “We are immensely proud of being the national carrier of the Sultanate of Oman and we make an important contribution to our nation. We make a significant economic contribution, we fly our flag around the world and we express the Omani culture in everything we do. In addition, we operate to the highest possible standards throughout the company and our commitment to quality is reflected in our cabins, catering, and branding services. We have received numerous awards and have been assessed as an Official Four-Star Airline, but we will not rest until we become the best.”
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The CVS of the
Middle East Written by Nell Walker Produced by Dennis Morales
Pharmacy One’s founder and President, Amjad Aryan, discusses the inherent challenges and subsequent success of Jordan’s first chain pharmacy
harmacy One holds the significant title of being the first chain retail pharmacy in Jordan, boasting 75 locations over just 15 years. Amjad Ayran, the company’s founder and President, grew and nurtured Pharmacy One from nothing and has his early work experience in the sector to thank for the entrepreneurial spirit which spawned his own company. “I’m a pharmacist by profession,” Aryan says. “I worked multiple jobs before starting at pharmacist school in Boston at the late age of 24, and while studying I worked for CVS. So by the time I graduated, I had five years of pharmaceutical experience. I decided that if I couldn’t build a new CVS of the US, why not build the CVS of the Middle East? It made sense to become a big fish in a small market.” Building a business Aryan started his business with just $200,000 and a vision to open 10 pharmacies. In 2001, he took this concept to Jordan and built what he calls the “pilot branch”. “I wanted to make sure the consumers understood and appreciated the big drug store concept,” he explains. “This is a pharmacy where you can browse the shopping court as well as picking up prescriptions, and I wanted
people to acknowledge the quality stores while working on perfecting of service. Then they would go out his business processes until 2005. of their way to receive that quality “During that time I was building the again, and there would always be a platform for the expansion, by which I pharmacist who could counsel them mean IT systems, trading procedures, on their medication, that would show personnel, and so on. I spent four years them how to use the medication, building that platform, and once it was and be readily available to serve.” ready, I started expanding at a rate The customer proved far of 12 new branches per year. easier to convince than “No one had done the authorities. Aryan this before so it was faced an uphill battle challenging. The against the Jordanian consumer accepted Pharmaceutical it and loved the Association idea of having The year that in attempting pharmacies with Pharmacy One to convince the the same name, with was founded historically conservative consistent availability organisation to allow of products, consistent an outsider to promote chain quality of service, and the pharmacies. Other pharmacies in ability to access the same records at Jordan are, in Aryan’s words, “mom any branch. The smaller competitors, and pop shops” and there were no threatened by the introduction of a chains despite the fact that the law big chain, began improving their own allowed them. Prior to Aryan’s arrival, quality of service; I would say we’ve that law had never been implemented. raised the bar for pharmaceutical By 2003 he had managed to open care in Jordan as a result.” the second branch of Pharmacy One, and remained with just the two Technological needs
Pharmacy Ones’s IT system was enormously important. It had to sufficiently support the customer, the company, and the community at large. Doctors and patients alike would need to be able to easily use the patient record software, and the records had to be extremely secure. A program to deal with Pharmacy One’s logistical needs was also required; the company has around 350 different suppliers, and the software orders medications automatically from the central warehouse when required, avoiding out-of-stock situations. In Aryan’s words, “inventory control is key”.
Aryan decided early on that he didn’t want to compete with his suppliers, but for them to complement each other. “We’re retailers, not agents or importers. It was a big fear that another big pharmaceutical company would come in and within a short time control a huge percentage of the market, join other agencies, and become agents for everything in Jordan. I took it upon myself to be the best retailer possible, and as I’m not in the business of importing medications or mass distribution to pharmacies, that really gives our suppliers comfort that after 15 years
“I am example of someone who came in as an unknown and was able to do something special” – Dr. Amjad Al Aryan, President & Founder
we don’t want to compete with them.” The company’s IT system is very advanced for the Middle East, to the extent that multinational companies contact Pharmacy One directly wanting to use its data to better understand the market. According to Aryan, “beautiful things come out of those relationships”. Jordan’s emergency services number is now connected to Pharmacy One Drug and Poison center, and calls that are made which refer to medication or other relevant products will be directed to Pharmacy One, where a specialist can aid the patient. Other services, like sign language
translation, have been launched at some Pharmacy One branches along with a 24 hour video calling service. Both are intended to ease communication for the hearing impaired and enable all to take advantage of Pharmacy One services. Medication instruction stickers printed with Braille are available at all branches. Through different departments led by team of professionals, Pharmacy One has managed to set new pharmaceutical standards in Jordan and the Middle East. An automated inventory and ordering solution has been developed to manage stock refill
and distribution to all branches, innovating new ideas to creatively introduce, expose, and provide different and new services. These are standardised to maintain product variety, mix and increase brands, and allow product visibility to become a standard and ongoing procedure. Pharmacy One also makes sure to continuously pay back to the Jordanian society through social responsibility projects and offerings, such as performing health service days, providing training and scholarships, supporting projects that help people in need, improving life for youths, and empowering women. Aryan is proud to add that “50 percent of Pharmacy One staff are female.”
“If I couldn’t build a new CVS of the US, why not build the CVS of the Middle East? It made sense to become a big fish in a small market” – Dr. Amjad Al Aryan, President & Founder Expansion While Aryan wishes to expand further into the Middle East, the process is complicated. “Laws here differ from one country to another,” he explains. “It’s not like in the US where federal law applies in all states. For example Saudi Arabia does not allow ownership of pharmacies for non-Saudi nationals, and UAE only allows 50 percent ownership to foreigners. It’s complicated and presents a huge challenge. So we decided to expand differently by giving franchises to Pharmacy One rather than owning branches. We can give the franchise to companies who
From Right to Left: Dr. Laral Al Abasi - Senior VP Internal Control, Mr. Farah Barghout - VP Administration , Mr. Mutaz T. Bseiso - Senior VP Innovation & Communications, Dr. Yousef Fanous - Chief Executive Office, Dr. Ezz Eldin Al Aryan - Chairman, Dr. Amjad Al Aryan - President & Founder, Mr. Mohammed Ibrahim - VP Supply Chain , Mr. Rani Abu Taha - Senior VP Retail Pharmacy Operations, Dr. Amani Abu Hilal - Senior VP Marketing & Merchandising
• Strong reputation in the market ranked within the top drug stores in Jordan. • Dedicated resources (100%) • Total Infrastructure support. • Expertise management and principals support. • Highly qualiﬁed and trained staff. Karmel Drugs House, 17 Abdulla Ghousheh Street, 7th Circle - Jabal, Amman Tel: +962 6 5826816
want it in different countries and we can expand accordingly. One place where we can expand into, however, is Palestine, which has very similar laws and consumer behaviors to Jordan.” As an entrepreneur – one who has won various Entrepreneur of The Year awards, at that – Aryan believes firmly in the power of persistence and resilience, and that his experience in the working world prior to and during his pharmacy education made him the man he is today. “There is a feeling in Jordan that you
have to be well-connected to succeed in business,” he says. “I am example of someone who came in as an unknown and was able to do something special. That’s the advice I want to give people from all parts of the world. Don’t listen to naysayers, believe in the power of ‘I can’, focus on what you can do, and ignore negative people.” Aryan has his team and Pharmacy One’s location to thank for a great deal of the company’s success. He stresses the importance of having an excellent team, and choosing wisely
when picking a place to start from: “I advise a lot of people who want to be the best in whatever sector of business they choose to come to Jordan,” Aryan concludes, “because they won’t be dealing with only the 10 million people who live here, but huge markets, smart people, and keen college graduates who can help them achieve their goals. Jordan is a great place to live and if I had to do it all over again, I’d still start from Jordan.”
Banking on Capability Written by Tom Wadlow Produced by Richard Durrant
ALLIED IRISH BANK
Allied Irish Bank is leading a technological revolution in the country’s financial sector through a series of strategic partnerships that have enhanced customers’ dayto-day banking experiences
veryday banking is no longer confined to call centres and branch visits between 9am and 5pm. Business and individuals now bank on the move, on any device and at any time. Call centres have become multichannel contact centres; branches are becoming highly automated, creating greater focus on individual customer service. Allied Irish Bank (AIB) now has over one million active online users and 578,000 mobile users, with the average monthly logins continuing to increase. 53 percent of all credit card sales are now through online channels and 76 percent of personal loans applications are through digital channels. AIB is at the forefront of this digital
transformation in Ireland, whose capital city Dublin is rapidly being recognised as a booming European technology hub. And it is by leveraging global partner talent that AIB is growing its own capabilities, driven by the end goal of making the banking experience as seamless as possible for its customers. Philip Thomas is AIB’s Group Chief Procurement Officer (CPO). Since joining the company, he has overseen the progress of the bank’s outsourcing strategy, finding the appropriate expertise within Ireland to take it to the next level. “Companies like Google, Facebook, LinkedIn have all set up European centres here of substantial scale, and while there is a strong population of
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ALLIED IRISH BANK
Philip Thomas - Group Chief Procurement Officer Philip is the Group Chief Procurement Officer with Allied Irish Banks (AIB), based in Dublin. He is an experienced senior executive, with an in-depth knowledge of strategic sourcing, transformation, technology and outsourcing, with both client and supply side across many industry sectors globally. 60
Graham Fagan - Head of IT Partner Management Graham Fagan is Head of IT Partner Management with Allied Irish Banks (AIB), based in Dublin. An award winning strategist and one of the most decorated IT transformation professionals in Ireland. Graham is a dynamic and versatile leader with 20 yearsâ€™ experience across a broad range of IT executive management roles in indigenous and global multi-national organizations, working on both client and supply side of these arrangements.
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“It’s all about the customer experience and it’s all about building that capability so we can quickly react to our customers” – Graham Fagan, Head of IT Partner Management
excellent people in Ireland, there are huge demands pulling upon this talent,” Thomas says. “For example, Google probably has up to about 6,000 people now so they, like others, are attracting a lot of technology resources out of the market, with their strong social media brands. The shortage of resources is making it difficult for businesses to recruit technology talent in the local market. “We decided that we needed to work with partners that could bring that talent to us in our market and that’s how the partnership ecosystem came about. But here lies one of the critical things in that part of the ecosystem, the fact that they had, or were willing to invest and establish delivery centres in Ireland to complement their global delivery capabilities. That was crucial.” 64
Partner power It was soon clear that to become more agile, reduce risk and align with changing patterns of consumer behaviour, AIB had to depart from a traditional in-house delivery model. The first important partnership was actually formed before Thomas joined as CPO. HCL helped to overhaul legacy infrastructure and installed a new virtual desktop, compatible with mobile and tablets across the whole organisation, from head office to bank branches. “This provided some early learnings for us around the outsourcing world and allowed us to think about the longer term strategy,” comments Graham Fagan, Head of IT Partner Management. With the HCL partnership successfully deployed, AIB set about establishing a partner eco-system to support the
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ALLIED IRISH BANK
other areas of their technology operation and digital transformation. AIB has entered into a number of similar relationships with partners that have all bore fruit. “The first agreed in the first half of 2015, was with Wipro who provide strategic infrastructure management services. They have brought in their expertise and we are working with them to build agile and adaptive infrastructure while improving the predictability and cost effectiveness of our services,” Fagan explains. Wipro also supports critical payments infrastructure in ITO and is setting up a Mainframe Center of Excellence in Dublin. AIB’s three other partners include Infosys, eir and Integrity 360. The latter handles the vital IT security function, while eir provides the communications requirements, from voice data to contact centre technology, optimising omni-channel communications between agents and customers. Infosys provides application development and management for AIB, and has invested significantly into innovation projects in Ireland, including a dedicated site to develop products, including its flagship Finacle product, a universal banking solution. “Critical to the success of the partner ecosystem is ensuring that they work as an extended part of the AIB team. The partners unanimously understood the key to successfully realising this
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ambition was to create and maintain a ‘trust centric’ partnership, where everyone worked collectively together with a ‘fix first, discuss later’ culture. There is a risk and reward mechanism in place where each of the partners put a percentage of their fees at risk to ensure collaboration is endemic across the ecosystem,” Thomas says. “Experience to date has been positive with the ‘One team’ culture prevalent.” AIB still has its own technology team, which is split into two vital component parts. The first handles running the bank’s services and driving operational excellence, led by the Chief Information Officer, Tim Hynes. The second is a digital group, driving the front end customer experience and dealing with new challenges that digital transformation presents, led by Seamus Murphy, AIB’s Chief Digital Officer. Both units leverage the expertise of AIB’s partners. “Our partners will support us developing and delivering excellence in customer service
through transformation of our technology services,” says Hynes.
Mutual benefits Thomas explains how AIB has looked at examples of many other banks and taken what he sees as the best elements of various outsourcing strategies. While cost has been a benefit, the dominating motive behind the partnership network is all about improving AIB’s capability and supporting the delivery of its ‘Simple & Efficient’ transformation programme. “Our partner selection criteria is different, depending on the service line,” adds Fagan. “For example, if you look at eir, they have a strong indigenous network. We’re not looking for a large global telecoms player to come in and just front somebody’s infrastructure. We’re looking for incountry investment and long term investment in the development and quality of the network, because that’s going to impact the experience of our customers, from a branch perspective.
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“Whereas if you’re looking at an ADM partner, you’re looking for local capability but with global strength in some respects. Wipro and Infosys both fall into that category. They have both invested and setup local delivery centres and innovation centres, as a result of the operations with AIB, and they maintain those AIB staff who transferred locally.” Fagan also explained the importance of cultural compatibility, and all AIB partners boast a strong track record and reputation with an eagerness to innovate and change with the times. “The other thing I’d add to that is their willingness to invest in the relationship because actually, we’re looking at long-term relationships, and because we are mutually beneficial to each other,” says Thomas. “Certainly, if you look at the likes of eir and Integrity 360 locally, outsourcing is relatively new to them. They are growing their businesses as a result of our partnership, so that’s beneficial to them and it’s also beneficial to us because if they grow, they provide us with better services.”
All the partners have also taken on AIB staff as part of the agreements, meaning they each have tailored knowledge of how the bank runs, and its exact requirements. This does not mean they are no longer part of the AIB fabric, however. “Their local delivery centres are almost in walking distance of the key AIB buildings, so there’s people moving back and forth,” Fagan explains. “There’s space set aside in both buildings. They dine in our canteens and there’s still a very collegiate feel, even though they distinctly work for a different organisation now. “However, we can’t lose sight of that fact. We have done a lot to maintain the collaboration and the goodwill and that, in turn, plays into the knowledge share. You create the conditions for people to share knowledge and work together and that’s something a lot of thought has gone into.” Hynes adds: “Building partnerships takes a desire, willingness and commitment from all parties to make it work,
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ALLIED IRISH BANK
our relationships are in the early stages but there is a great spirit, commitment and collaboration to build something special.”
Revitalising the bank branch AIB’s backstage work with key partners translates into a forwardfacing, modernised organisation visible on the frontline. Innovation is at the centre of the bank’s customer first ethos, no better demonstrated than in it’s innovation centre, ‘The Lab’, in Dublin’s largest shopping centre in Dundrum. Customers are able to trial new technology and provide feedback which helps to shape AIB’s agenda for its new partner-powered IT ecosystem. “Customer-led design ensures we are relevant and delivering what customers need,” Thomas adds. The partners themselves are also encouraged to innovate, using their global reach and experience to deliver proposals to the bank. “We want to give our customers choices in how they bank, while maintaining a consistent customer
experience, whether they’re online, in a branch or on a mobile device,” Thomas says. “One of things we have trialled in The Lab is a video service to our contact centre, so customers can receive instant support on things like mortgage applications, whether they start the application in the branch, with the contact centre or online the experience is consistent allowing them to change channels to gain support or advice and their application continues from the previous interaction, creating a complete, consistent and connected customer experience. “The feedback we received was excellent so we are now looking to roll this out for customers to be able to use this video technology on a much broader scale. Other such services that were trialled in the lab and are now live, allow customers to digitally upload documents, as part of a loan or mortgage applications.” Many will point towards branch redundancy as a sign of banking modernisation, however it is still very much a key component for
AIB. It is refurbishing scores of its branches to reflect the demand for more modern banking services with a personal touch, over half having been modernised by the end of 2017, and with a recent pilot of a branch in SupaValu, a market leading supermarket, where customers can avail of extended bank opening hours for staffed advisory, sales service and quick banking facilities.
“If you look at the likes of eir and Integrity 360 locally, outsourcing is relatively new to them. They are growing their businesses as a result of our partnership so that’s beneficial to them but it’s beneficial to us because if they grow, they provide us better services” – Philip Thomas, Group Chief Procurement Officer
Recognition These bold innovations have been recognised within the industry, with banks now coming to AIB to understand how it is transforming. AIB has also been formally recognised for its advances with numerous awards. International banking magazine Euromoney named Allied Irish Bank the best bank in Ireland, praising its progress in reducing non-performing loans, new lending drawdowns and pre-tax profits, driven by impressive delivery of efficiency. Most important according to Euromoney, however, was its ‘edge over its competitors in terms
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ALLIED IRISH BANK
of its digital offering’. Indeed, its app is in the top quartile in Europe. Other awards claimed include the Consumer Experience Award from EFMA and Accenture, Business2Business Awards’ Best Business Bank of the Year and Procurement and Supply Chain Team of the Year, collected at the National Procurement and Supply Chain Awards in 2015. “I think what AIB did in entering the outsourcing sphere was a very bold move,” Fagan says. “It’s taken other organisations maybe 10 years to do what AIB has done in two and a bit. There’s always a lot of risk involved in doing that, and it requires real leadership from people like Phil and other leaders to take that and be at the forefront of this type of change. These awards are good validation of the execution of the strategy, and the vision that they had at the start of this process.” Thomas adds: “External recognition of our achievements provides the teams with context for what they have achieved in this timescale. It is sometimes too easy to focus on your own tasks
and lose sight of the big picture of what we achieved as a team.”
Forward thinking Despite only being a few years into the digital transformation process, AIB is thinking long term with its partner ecosystem, beyond the five-year agreements that are formally in place. “The partners are already having strategic impact in certain areas of the business which is great for us,” Thomas says. “We’re already seeing the green shoots but I think, like any journey, the intent and ambition is there to make them even more strategic.” “This is so we can feel the presence not just in the back room, in the data centre or in the quality of our infrastructure, but also the impact that these partners have on our customer proposition, in every which way.” Fagan concludes: “It’s all about the customer experience and it’s all about building that capability so we can quickly react to our customers.”
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Sustainable approach Leveraging a winning combination that has sustainability and technology at its core, Complete Office Supplies (COS) continues to dominate in its field. As Australiaâ€™s largest family-owned office supplies business, boasting a turnover in excess of $120 million annually, its continuing growth and success boils down to one key philosophy: superior customer service rules all
Writ ten by Sarah Megginson Produced by Erika Kracer
“An overriding consideration for us as a fam understanding that we are in this game for t so decisions need to be made with a long te
OS offers an all-in-one solution for all office consumables, from paper and toner to coffee and bathroom products, for corporate and government agencies. Founded 40 years ago by Dominique Lyone, an Egyptian immigrant whose family fled to Australia after the 1967 Six Day War, its humble beginnings saw the business established first as a local office stationery business in Western Sydney. Back then,
the top selling item was typewriter ribbon. “Today, we sell more hand towels than toner,” laughs Belinda Lyone, General Manager Strategic Sourcing and Marketing at COS. Product range Hand towels are one of the company’s more unusual product lines within the office supplies space, alongside toilet paper, technology, coffee and just last year, fresh milk. Belinda says they are always tuning in to their
mily is the the long term, erm view point” customers’ needs in an attempt to deliver them convenient solutions, which is why COS added dairy produce to its extensive range of 21,000-plus products. “Traditionally, office product companies didn’t sell coffee or toilet paper, but we have learnt that we do have to keep an absolutely open mind. We’re working on new categories at the moment and the under-lining thinking is always: what is the office buying and is there any reason they couldn’t
Dominique Lyone Founder & CEO Born in Egypt and emigrated to Australia at the age of 13. Dominique is the Founder and CEO of Complete Office Supplies. COS offers an all in one solution for all office consumables to corporate and government agencies. Major product groups are paper, toner, stationery, canteen, janitorial, furniture and printing. The company employs approximately 350 staff throughout Australia in 9 Distribution Centres and sales offices. Current revenue exceeds $120 million per annum. Dominique was the runner up candidate in his category competing in the 2011 Ernst & Young Entrepreneur of the Year Award. More recently, he was a finalist in the 2014 Ethnic Business Awards. Married to Mara Lyone, they live in the beautiful suburb of Hunters Hill on Sydney Harbour together with their 12 year old son Casimir. Dominique also has 2 daughters; Belinda (37) and Amie (35). Both are married and hold Executive Positions in the family business. Dominique’s personal prime interests include family, succession, boating, fishing and golf.
Number of Employees at
be buying it from us?” Belinda explains. “Last financial year we identified that our customers were buying fresh milk every week. Initially we thought, is it something we could source competitively, so that it would make sense for the customer to get it in one delivery and on one bill?” Evidently, it was. Milk sales are shaping up strongly and have proven to deliver convenience to key customers and diversification to the business. Being a family business, sustainability is always at the forefront of the way they operate, Belinda explains. “An overriding consideration for us as a family is the understanding that we are in this game for the long term, so decisions need to be made with a long term view point,” she explains. “To this end, we have a policy to ensure that no single customer is worth more than five percent of our business, and that is about preventing a knockout punch. We don’t ever want to be in a position where if we lost a customer, we’re at risk of losing the entire business. That wasn’t always the case – we have had times where one customer could have been worth 30 percent – but going forward, this strategy serves our sustainability goals.”
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JACOBS DOUWE EGBERTS Australia has built a strong reputation by delivering consistently high standards through our product quality and service. With coﬀee as our core focus, we provide a total solution oﬀer. JDE is a leading global coﬀee player, but we’re very much in touch with the needs of the Australian market. We understand Australia’s coﬀee appreciation as we roast locally and cater to Australian preferences – continuing to serve the ‘daily joys of life’ with a coﬀee for every cup. In the world of B2B, there are diﬀerent needs for diﬀerent types of businesses. At JDE Australia, we take this into consideration as we continually innovate and deliver results for our business partners. Our main objectives when working with our business partners are to help them provide their customers with what we call ‘e ree S’s’ – Solutions, Savings and Sustainability. We achieve this through our industry expertise, tailored machine options and extensive range of products. Our brands are well known, loved, respected and continue to grow in popularity year aer year.
Delivering a solution for every cup
Family business Together with her sister Amie Lyone, Head of Operations, and the rest of the six-person executive team, COS works globally to find strategic suppliers, with an aim of selling products that help make people more productive or more
“We do place a lot of emphasis on performance and we can’t perform if our suppliers don’t perform. If they have a strong technology platform across how they manage their inventory, that does help us to deliver a better service”
healthy in the modern office. Dominique Lyone remains very hands-on as CEO and while Belinda looks after sourcing and marketing, Amie manages operations, including warehousing and distribution functions, as well as their customer support centre.“I’m responsible for the service level our customers experience and that means it’s up to me to make sure we deliver in full, on time, and that any touch point they have with the business is a positive one,” Amie says. One of the keys to COS’s success over 40 years in the industry has been its willingness to continually innovate and put the customer first, Amie explains. The introduction of technology to the product range is a prime example of this – as is its customer service team, which includes a call centre and a live chat team. As a family operation that was established in an era when customer service meant face-toface visits, Amie says delivering
S U People P P LY C H A I N Key
impeccable service remains at their core of the business. Customer service “Within our service centre today, live chat is the latest way our customers interact. That’s growing significantly in popularity. We still have customers who call and email, and occasionally we still hear a fax come through. But the majority of our conversations are happening via our website, where consumers are utilising live chat,” Amie says. “That team sits in our customer experience division and they are trained as our product experts, which means our customers are getting live interaction with a person. They know who they’re speaking to any one time. We even have a photo of the person on the screen, so they can see they’re talking to a real person.” This adds a personal touch to their ecommerce platform, which Belinda is proud to confirm is cutting edge.
Amie Lyone Executive Leader, Operations Amie is a driven second generation executive of Complete Office Supplies. Amie began her career in professional services where she quickly discovered her passion for people and process. After five years Amie stepped into the rapidly growing family business in 2004, at that point approximately 150 full time employees, with the brief to bring discipline into the people management. 11 years on with COS at 350 employees Amie’s remit has evolved to be responsible for all the operations team nationally including COS 9 distribution centres and own driver network.
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When building the digital service offering, it was “no longer about what are our competitors doing globally,” she shares, “but more a conversation about what is happening in ecommerce generally”. “Online shopping has exploded and ecommerce in the B2B environment was behind. We looked for inspiration by trying to see what are other big, successful retailers doing online, so we could make sure the customer experience of buying online at a personal level is translated into buying office supplies.” The team then took it one step further to consider the B2B aspect of ensuring reporting, approvals, progress management and business features were offered, without sacrificing the customer experience. Supplier sustainability With a large and diverse government and corporate customer base, COS takes its
Belinda Lyone General Manager, Strategic Sourcing & Marketing Belinda is a passionate second generation executive of Complete Office Supplies. Growing up exposed to the ups and downs of a private business, Belinda developed her passion early for marketing and business, completing her Bachelor degree in Economics and Masters in Marketing. Prior to joining the family business in 2003 Belinda began her career in reward marketing before spending six years responsible for marketing international spirit and liqueur brands. Over the past eleven years working in the family business Belinda has been responsible for the procurement and marketing functioning, instrumental in supporting the businesses ongoing success and growth, riding the e-commerce phenomenon, delivering the most loved website www.cos.net.au. Belinda was recently named Next Generation Achiever of the Year in the 2016 Family Business Australia (FBA) Awards.
responsibility to deliver on its promises very seriously, and this extends all the way through the supply chain. “When we’re managing suppliers and the product coming in, the main thing for us is transparency. We need to know when it is arriving so we can ensure that when we make a promise to the customer, we can deliver it,” Belinda says. “We do place a lot of emphasis on performance and we can’t perform if our suppliers don’t perform. If they have a strong technology platform across how they manage their inventory, that does help us to deliver a better service.” Promoting transparency and maintaining an ethical supply chain is also “really important to us” she adds. “As a family, we’re conscious of our impact on the planet and we keep that as a core focus. We have an ethical sourcing policy and we’re pretty clear with our expectations surrounding child
labour and the use of natural resources,” Belinda says. “Any supplier we choose to consider does have to review and acknowledge where they do and don’t comply with our policy. From a global point of view, we’re literally visiting the factories in China on a regular basis and if I see something that sets off a red flag, I’m not afraid to move on to another supplier who is more aligned with us.” It’s clear that a sustainable approach flows through every part of the business. The Lyone Foundation With family values at its core, COS established the Lyone Foundation as an initiative to support Australian people. A generous 15 percent of all profits pour into the foundation, which means that when a customer chooses COS, “they know that 15 percent of the money we make from the order is going to charity”, Amie says. In one of its recent projects, the company supported an
indigenous childcare centre in far north Queensland. “One of the challenges for indigenous children is arriving at school with literacy and numeracy skills. We were able to help fund a centre where children under the age of five can go for free, with their guardian
Million COS annual revenue
and an indigenous elder on site, to provide a fun place where they have access to pre-school learning to get ready for ‘big’ school.” Staff are invited to join the charity selection committee if they wish to be involved, and both Amie and Belinda sit on the board of
the Foundation, which primarily supports Australian causes. “We’re a success story of immigration; our dad came here from Egypt in the 60s, didn’t speak a word of English, didn’t finish school,” Amie says. “If it weren’t for charity when he arrived, we wouldn’t
have survived, as he lived off food stamps and they helped him find a house. It was really important to our dad to give back to the country that gave him his start.”
TRANSFORMING A MINING SUPPLY CHAIN Ausdrill has taken advantage of the downturn in mining, taking the opportunity to grow a culture of innovation and lean thinking: this has partly been achieved through an IT-driven, end-to-end transformation in its supply chain Written by John Oâ€™Hanlon Produced by Glen White
ounded in 1987 by Ron Sayers with just a single drill rig at Kalgoorlie, Ausdrill has grown to become one of Australia’s top 200 companies, listed on the ASX and counting the major mining companies including AngloGold, BHP Billiton, Barrick, Gold Fields and Newmont in its client list. Its rapid growth has been achieved mainly by acquisition, and today the group embraces 19 businesses located across Australia as well as major interests in Africa including a half share, with Barminco, in African Underground Mining Services (AUMS). Ausdrill has been affected in common with the entire mining services sector by the retrenchment in exploration and production following the recent slump in commodity prices. Though Africa has bounced back and Australian gold prices have firmed this year sparking renewed activity, in all its markets Ausdrill is facing greater competition. As Group Contracts and Procurement Manager Ashley Carey puts it, smaller players are desperate for any work to keep them going and
are creating a price environment that, though unsustainable, skews the market in the short term. Carey and his colleague, financial controller Renée Harrold, have taken a lead role in easing the company through some very difficult times and refining its procurement processes and culture to a point where it can take full advantage of the upturn that can’t fail to materialise in this notoriously cyclical business. As Carey says: “The downturn has been a blessing in disguise: it has brought the supply chain to the top of the agenda. Without the downturn we may not have had the traction to drive the changes we’ve made over the last two years. Bad times breed good businesses and that is very true in our case.” A case for refinement With plenty of work around, and the highest standards of customer service, there had not been the incentive to introduce what might be called joined-up thinking. There was very little communication between the businesses in the group, and
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“Without the downturn we may not have had the traction to drive the changes we’ve made over the last two years” – Ashley Carey, Group Procurement Manager
Ashley Carey Group Procurement Manager Since 2010, Ashley Carey has led procurement at the Ausdrill Group and overseas all procurement related activities, direct materials purchasing as well as sourced products and services. Ashley started out as a hydraulic engineer, working primarily in the agricultural and mining industries where he was picked up by Ausdrill to focus on cost reductions in all technical categories. In a short time Ashley had worked his way through the organisation and now sits as the head of procurement for the group which has operations in 8 countries around the world. Ashley has overseen a dramatic transformation within the Ausdrill procurement function driven primarily by the most dramatic mining industry downturn in a generation. The transformation includes the implementation of a best of breed procure to pay system, moving toward a fully centralised procurement function, large scale operational cost reductions and the completion of a comprehensive supplier rationalisation project. Ausdrill is now well positioned as an industry leader on many fronts in the procurement space and with an upturn imminent can take full advantage of its new structure.
when it came to procurement, every one of some 58 individuals scattered across Australia was entirely focused on his or her own cohort of users and suppliers. The supply chain function was entirely process driven: suppliers may have been taking advantage of that segregation and charging higher prices, and service levels were not as good as they might have been. “Our first task was to understand what we were spending money on, and look at the total global spend of the group,” he says. Not surprisingly this exercise delivered sizeable savings. It also highlighted that suppliers were not always realising the spend level they anticipated. Capturing procurement data across the group began to give insight into the supplier community.
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“Coupa is probably the most cost effective software available on the market … it is a cloud based solution that works” – Renée Harrold, Financial Cotroller But the first thing to tackle was the group-wide structure. “We started on a three and a half year project to centralise procurement,” Carey says. “We built a communication channel through a basic SharePoint based requisitioning system, and rolled that out in a small group of companies, reducing their procurement workforce
Renée Harrold Financial Controller Renée is a CPA qualified Accountant currently based in Perth, Western Australia. Having completed a degree in Accounting and Finance at Edith Cowan University she works extensively in Western Australia and throughout West Africa in the Mining Services sector. Renée takes a hands on approach when developing operational focussed financial solutions in the mining & energy services sector.
from eight to two. It was the start of something big for Ausdrill.” This was a key moment because it enabled his team to convince the board, generally conservative in attitude, of the enormous savings potential of IT – he identifies this as the point where innovation tailored to the business, as opposed to taking the cue from its large mining clients, started to be accepted as a strategy that could be applied across the group. Coupling with Coupa After 42 months, Ausdrill had a centralised procurement function, administered by thirteen people, four in Kalgoorlie, one in Queensland and eight in Perth. The workload is w w w. a u s d r i l l . c o m . a u
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$744 Million no lighter than when 58 people were needed to handle it, despite the market downturn he points out. The quest for technology-based solution was clearly essential, though arriving at the right one took some effort. The industry has a number of incumbent solutions including Ariba, Quadrem and Basware – Ashley Carey and the team embarked on a two year project to identify the best partner for Ausdrill, visiting government, private, finance sector and of course mining users to analyse exactly how these solutions integrated with their core systems and how easy they were to use. In the end, it was a bold decision to pioneer a system that had not previously been adopted by any Australian company. There was a risk to choosing a cloudbased solution when Ausdrill’s existing Pronto ERP system had not been asked to integrate with any external
Ausdrill annual revenue (12 months to 30 June 2016)
software, but in the end the US based Coupa ‘value-as-a-service’ platform ticked all the boxes including scalability, flexibility, ease of use and return on investment. “Coupa is probably the most cost effective software available on the market,” says Renée Harrold. “Since we adopted Coupa, more of the majors in Australia are looking at it. It is a cloud based solution that works.” She and Carey have been jointly project managing the phased implementation and have found it infinitely adaptable. It delivers on the original requirements – for example it took only 18 months to roll out to some 1,300 users in 18 diverse businesses, and since it takes up little bandwidth it’s ideal for field use over tablets and handheld devices – but like a mining resource ‘open at depth’ it can be expanded by its users. Phased implementation helped
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the businesses to digest the new programme gradually agrees Ashley Carey. â€œWe introduced electronic requisitioning through from a request to a purchase order. The actual receipting of goods was still
happening in our Pronto ERP and we simply matched that back in to Coupa so we didnâ€™t have to train any of our stores people on how to receipt. On the supplier side, we tried it out in a couple of larger businesses, so about
“We tell them that you can search like you do on Google and buy like you do on eBay” – Renée Harrold, Financial Controller
70 percent of the invoices for these two subsidiaries are now loaded direct by their suppliers. Part of the vendor optimisation programme we are embarking on now will look at how to integrate their systems with ours so
it takes out more manual handling.” Training was relatively straightforward, continues Renée Harrold. “Ashley and I conducted one hour sessions in rooms around Australia. We showed the team the procure-to-pay picture
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and how Coupa sat in that picture. is not limited by geography by We then presented some examples helping other Coupa users around relating to the people we were training the globe. “It’s almost like a crowd – for example with workshop fitters sourcing platform,” says Harrold we would focus on the types of parts who represented Ausdrill at the San they work with. We set up a Coupa Francisco Coupa Inspire event. “Users blog and discussion forum on our can log on and download features that intranet where people could find a they like and find useful. They can get one page ‘how to’ guide, print it into the community and influence out and put it on the wall. its future - that is how it has That was enough to get developed, by being led them started using by the users rather the system. We tell than presented as a them that you can centrally prescribed search like you do package.” on Google and buy The investment Number of like you do on eBay.” decision has been employees at vindicated, adds Carey. Ausdrill Innovation allowed “The Coupa overlay Coupa users are Coupa has been the bedrock of our developers, a fact quickly picked transformation, allowing us to refine up at Ausdrill, which won a Coupa and automate our processes. Our Innovation Award in May this year for target is 70 percent automation of the the way it has rolled out the system procurement processes, and that will and pushed out its boundaries. One only need four full time procurement of Ausdrill’s systems administrators officers, balanced by a few more James Bargerbos was declared people in the group dedicated to Coupa Community Champion for contract management and cost demonstrating that community optimisation. That is the next step in
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AUSDRILL making this a truly lean company.” Attention has now turned to a vendor optimisation programme. Here the target is to knock a nought off the current 4,000 strong vendor base, with 80 percent of the spend focused in between 50 and 80 key partners. “We are taking this journey hand in hand with these vendors because we want them to reap the benefits of cutting out manual processes and communicating effectively over systems that talk to one another. Our vision is to be able to transact seamlessly with these partners, with minimal human intervention.” The supplier community needed some convincing to get them on board. Carey and Harrold travelled the length and breadth of Australia
with a roadshow at which every vendor had the opportunity to learn at a face to face session and have their questions answered. Some reluctance was to be expected. Suppliers often have to pay fees to access client systems, and even have a percentage of each invoice passed to them. With that in mind, Coupa is free to Ausdrill’s vendors. Ausdrill has become a more dynamic company at all levels. It is more competitive. This is a business on a never-ending quest for improvement. By the end of this year all the Australian businesses should be equipped with the hardware they need to move out of paper-based requisitioning and getting used to completing a purchase in minutes
instead of hours. In 2017 Carey wants to see Coupa rolled out to the African business, something that will present a new set of issues to integrate it with the Pulse ERP used there. The system has already paid for itself, but Harrold and Carey are hungry to see it do much more. “As a global company, we need a global procurement programme.” Coupa is delivering value in ways not foreseen when the decision was made to invest in it. The data from the field is already making management information and schematics available across Australia, and further innovation in in sight. For example, in the near future Ausdrill’s field staff will be able to order purchases directly from exploded diagrams – meaning a part can be
ordered at a touch with no form filling. Coupa is just a tool, but it is one that has given all its users the ability to proactively pare down cost, save time and make processes leaner and more dependable. They will have to get used to taking more control over the outcomes of their work, but that change is gathering traction, says Ashley Carey. “Other contractors in Australia are looking at what we are doing and taking notice. The more people we can get behind us the more we can push the tool to do more things. I have no issues making the mistakes and overcoming them because I am convinced that will help us stay ahead of our competitors.”
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