Supply Chain Digital - September 2017

EXCLUSIVE INTERVIEW

September 2017

FLEX’S TOM LINTON DISCUSSES THE INDUSTRY’S DIGITAL FUTURE

www.supplychaindigital.com

TOP 10: 3PL COMPANIES

SPRINTING

AHEAD

Sprint’s Chief Procurement Officer, Mariano Legaz, reveals the secrets behind a stunning turnaround in the company’s fortunes

FOREWORD WELCOME TO THE September issue of Supply Chain Digital.

As you’ll no doubt have already noticed, this month’s cover star is Mariano Legaz, Sprint’s Chief Procurement Officer. In an exclusive interview, Legaz reveals the supply chain secrets that have helped Sprint save billions of procurement dollars over the last two years, during which time the US Telco has also reversed the trend of declining customer numbers.

A real eye-opener, it is piece that no professional working in the supply chain industry will want to miss. Turn to page 30 for more.

And continuing the trend of exclusive interviews, we are also pleased to include a one-to-one with Tom Linton, a well-known figure in the procurement world who currently holds the position of CPO and Vice President at multinational technological manufacturer Flextronics. A man with decades of experience, it is an interview no CPO in the land will want to miss.

Turning to brands that make the industry tick, we have exclusive insights into Firminech, Global Shipping & Logistics, Mai Dubai and SAP India, amongst others.

Lastly, be sure to check out this month’s Top 10, which runs down the leading companies on the 3PL space.

We hope you enjoy this bumper issue. See you again next month If you haven’t already, you can sign up to receive our weekly newsletter straight to your inbox, as well as being first to read the new publication each month. You can also follow us on Twitter Facebook and LinkedIn.

Enjoy the issue!

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F E AT U R E S

INTERVIEW

Flex’s Tom Linton and the digital supply chain

16 TECHNOLOGY

THE GREAT INDOORS 4

September 2017

08

TOP 10

TOP 10

3PL COMPANIES

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INTERVIEW

Flex’s Tom Linton and the digital supply chain Digital platforms accelerate supply chains by providing real-time visibility and increased transparency, so managers who fail to embrace these new tools will underperform versus those that do, warns supply chain expert and author Tom Linton W r i t t e n b y : M AT T S M I T H

INTERVIEW

“Supply chain managers who don't focus on the speed or the acceleration, may not be leveraging digital enough” AS CHIEF PROCUREMENT and Supply Chain Officer at California’s Flex, Tom Linton helps run a workforce of 200,000 that designs, engineers and delivers logistical and manufacturing solutions for customers in 30 countries.

A 30-year industry veteran, Linton is evangelical about digital’s ability to transform his craft and those keen to learn from his wisdom should read The LIVING Supply Chain: The 10

September 2017

Evolving Imperative of Operating in Real Time, which he co-authored with academic Dr Robert Handfield (published in August 2017).

“Digital tools allow us to operate the supply chain in real-time,” the ebullient Linton tells Supply Chain Digital. “Before the availability of these tools, it was like driving on a motorway in your car and trying to monitor and increase your speed using yesterday’s speedometer

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

information. It’s almost a cliché to say that the pace of change is accelerating, but it’s true. Digital allows supply chains to keep up and often drive that speed.”

Historically, the biggest problem with supply chains was one of visibility – you can’t fix what you can’t see – but that need no longer be the case, with digital allowing managers to understand inventory flow in real time and act immediately to alleviate

any obstacles. “Timely information is presented to people who need it so they can make real-time decisions.

When they do that, they increase the velocity of a supply chain,” says Linton.

“Faster inventory turnaround means more, free cashflow. The velocity of a supply chain is directly linked to the health of the balance sheet of a company, so a faster supply chain is a better supply chain.”

Flex’s CEO Mike McNamara has challenged its staff to remove five days a year from its supply chain. As a public company, it reports days of inventory or days of supply, which is a balance sheet measurement showing the cashflow of a company. “When you move goods you free cashflow, and you get your money back from your customers when you sell it. This is a simple concept and it’s got a very significant ROI because of the cash benefit,” says Linton. That is not the only improvement – a faster supply chain will also bolster operating margins and increase customer satisfaction.

“Customers like to receive things faster, and you can produce more revenue over the same period of time,” Linton claims. “The combination of visibility and velocity of the supply 11

INTERVIEW

The latest technologies and strategies for visibility, flexibility and speed

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Featuring 30+ supply chain leaders, including: Anita Arts

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Director Supply Chain Operations, Cisco

Phil Boyd

12

VP & GM, Supply Chain IT, Intel

Senior Director Global Advanced Planning & Center of Expertise, Merck Group

Iveta Kozlickova

Head of Center of Supply Chain Expertise EMEA, Covestro

Brigitte Peltier

VP, Global Supply Chain Academy, Schneider Electric

Thierry Gaudet

Stefano Pietroni

VP Supply Chain & Logistics, Michelin

Andreas Brock

Tim Hourihane

September 2017

VP Supply Chain, Aldo Group

Global Logistics V.P., Benetton Group

Director of Operations, HP

Lecturer for Supply Chain Management, Hochschule Fresenius Hamburg University of Applied Sciences

Craig Jones

Vice President Supply Chain Transformation EME, EstĂŠe Lauder

Group Supply Chain, VP for Network Design, Planning & Sourcing, Barilla Group

Volker Schmitz

VP Supply EMEA, HP

F L E X ’ S T O M L I N T O N A N D T H E D I G I T A L S U P P LY C H A I N

chain and its direct impact on the bottom line is understandably getting a lot of attention.

“Supply chain managers who don’t focus on the speed or the acceleration, may not be leveraging digital enough meaning they might not be as successful as those who do.”

LINTON’S BOOK SUMMARISES HIS PHILOSOPHY AS L.I.V.I.N.G. L Do you have real-time live information?

I Is it intelligent? - Are you able to connect the essential points in your network through cloud, mobile and other ways to provide the analytics you need?

V Are you moving your assets faster and with velocity?

I Is your data interactive?

– i.e. can it be accessed by common mobile technology?

N Is your information

networked? – so you can pull it together to get one view?

G

Is your network good?

These capabilities are all evident at Flex’s Pulse centres, which compile data from over 50 different information feeds into a graphic format so that staff can visualise and understand what’s happening in the supply chain more easily.

The centres feature a huge wall of interactive screens, which allow staff to engage with the information much as one would on an iPad. They can drill down into the data underneath each feed for a more detailed picture of events and then correlate data to comprehend what’s happening, or likely to happen. The system immediately alerts staff to anything going wrong.

“Much like a nurse’s station at a hospital, a nurse may be responsible for a dozen patients, but they don’t go to the room of the sick patient until an alarm goes off,” says Linton. “Then attention is given to the patient. There can be a million things happening in a supply chain, but you only want to be alerted to things that need your attention.”

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INTERVIEW Flex has built several Pulse centres worldwide; in Europe and the Middle East these are in Czech Republic, Poland, Austria and Israel.

In addition, more than 6,000 staff have Pulse software on their phones so they can react immediately.

A key tool Pulse uses is Source, which identifies the physical location of a customer’s suppliers. It then monitors Twitter feeds, fire departments, police scanners and anything relevant on the internet relating to these locations, thereby ensuring Flex will know immediately if something occurs that could disrupt supplies.

Flex has also partnered with Elementum to create new digital tools that use technology such as GPS tracking to provide real-time information on the location of goods.

Historically, visibility in transportation networks was provided through tracking numbers that trace shipments through a barcode – the product was scanned when it leaves a warehouse or lands in another warehouse. But this method only records points in the supply chain, rather than tracking something along the entire route.

The Elementum software tracks the movement of goods on ships, 14

September 2017

trains, planes and trucks so customers know precisely where things are and when they’re going to arrive; this level of transparency will be disruptive to current business models.

“You might be informed you’re going to get your box in two days, but what if you found out your box is sitting one block away in a warehouse and it’s not being delivered to you because they centralised the shipments and only deliver them once every two days?” says Linton. “That visibility changes the way you think about how fast you want something. If you know that it’s a block away, you want it today.”

Transparency can also alter working relationships within companies.

“Transparency is a one-way bridge, you can’t go back. You can’t say, ‘I want to be less transparent,’” Linton continues. “When information is no longer controlled and metered out piecemeal, we democratise it and make it easily accessible in a digestible and understandable way. Then, the company can move faster, rather than relying on this process of getting information, retrieving information, reporting information; instead we see it all in real time. ‘Live, fast, and intelligent’ is what we have to focus on.”

15

TECHNOLOGY

THE GREAT INDOORS Can indoor farming help to advance agricultural practices while also respecting the environment? We ask Tim Heydon of Shenandoah Growers, who is revolutionising modern farming…

Writ ten by: STUART HODGE

CLIMATE CHANGE IS without doubt one of the biggest issues facing global agriculture right now and in the years to come, and although there is no one-size-fits-all answer, some crop growers will be developing techniques which they hope can help fight global warming and its effects.

One such company is Shenandoah Growers, a certified organic grower of fresh flavor products using cuttingedge indoor farming technology.

The company is the United States’ market leader for fresh herbs.

The company was started in Harrisonburg, Virginia, by Mike Sarko and Ken Koehn (along with Ken’s wife Diane) back in 1989 and operated at a local level for a number of years before Ken sadly passed away in the mid-1990s. Soon after, current CEO Tim Heydon joined Shenandoah Growers as part of a student project while studying his MBA at the nearby James Madison University.

Heydon describes himself as “passionate about healthy, organic eating” and reached a deal to buy the company from Sarko in 1998. Since then it has grown from having 20 employees to employing over 1,200 people, operating at 14 locations 17

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September 2017

T H E G R E AT I N D O O R S

across 11 states. More than that, the company has always strived to innovate and learn from its mistakes and now has a crop yield that is 25% better as a result of developing state-of-the-art techniques, which break down the production process into different stages, from nursery to maturation, to safeguard quality and reduce waste.

Shenandoah Growers’ whole operation is also based around a sustainability platform which recycles rainwater and allows it to create its own nitrogen, thanks to proprietary techniques. Heydon says the root of such innovation was simply by learning from mistakes.

He explains: “The innovation came from learning by looking at the history of the company and where we’ve had the greatest problems and challenges, and really thinking outside of the box about how we can improve that.

“We run a whole gambit of different production systems: we have field production where we’re growing in organic fields; we have low-tech greenhouses where maybe we just have a plastic greenhouse covering a field.

We have hi-tech glass greenhouses, which offer a much higher level of climate control and have organic

‘Shenandoah Growers has also had to adapt its supply chain to deal with the growth in production’ grow systems to handle the plants inside the greenhouse. We have fullycontrolled, indoor, LED grow rooms.

“We have all the different tools at our disposal to grow our products throughout the year, and it’s really a matter of using the best tool in the best situation.”

Shenandoah Growers’ system and process is unique to the company and Heydon argues that each part 19

TECHNOLOGY is as vital as the next to delivering high-quality on what is a highlyperishable line of products.

He says: “Our supermarket customers and the consumers demand a product on the shelves 365 days a year, regardless of what’s happening outside – so the more we can do to control the variables of growing, the better job we can do in supplying and ensuring there is a good, fresh product on the shelf.

“There are various ways that we control our process to allow us to do that. Firstly, we make our own organic nutrients and we do that in a sustainable way. What we do is capture rainwater off the roof surfaces of our facilities and then we use it to irrigate all of our greenhouses and controlled LED rooms.

“Then we use a sustainable method to naturally make organic nitrogen. It’s a proprietary recipe that we have and it makes our LED grow rooms unique in that we have a sustainable source of organic nutrients that we then pump through the rooms to the plants.

“We irrigate the plants so that they uptake what they need and then drain back in a closed loop system and recycle that rainwater and nutrients, 20

September 2017

so it’s extremely efficient in terms of water conservation and water usage, and compared to outdoor farming it’s a dramatically lower water requirement that we need to make things grow.”

Heydon would not elaborate on how the nitrogen production happens, saying that it is ‘probably the biggest trade secret’ the company keeps, although he did hint that it was basically nature’s own nitrogen cycle happening within the company’s own system. But that’s not the only area where Shenandoah is using science to its own advantage.

Heydon continues: “We have a proprietary soil recipe that we use.

There is organic biological activity in our soil so that the plants are gaining nutrients from the soil and that’s a combination of the organic fertilizer and the soil that we’re able to grow in.

“The next piece in the jigsaw is the climate. Through a lot of that research and development, and innovation, we’ve worked out the formula climate-wise for all of our crops, so we’re able to keep the LED grow rooms at the constant and perfect climate that the plants need and that helps to make them strong.

That is also a contributing factor to

T H E G R E AT I N D O O R S

“The next piece in the jigsaw is the climate. Through a lot of that research and development, and innovation, we’ve worked out the formula climate-wise for all of our crops…”

– Tim Heydon, CEO

the water conservation because if the climate and the temperature and the humidity is right in the room, then the plants aren’t as stressed and aren’t using as much water.

“Finally, there is the mechanical element. Our cart system is our own design and we have a patent pending on that. It was designed to suit our process and it’s what we thought would work best to move the products around within our facilities and ensure the most efficient use of space.

“It’s very user-friendly and literally 21

TECHNOLOGY

works just like a docking station, with the cart sliding right into the grow stall. The system works very well for us and it’s in commercial use. We’re selling significant quantities out of it at a good margin. It’s viable, it’s working well and as a result we’re replicating it. We’ll continue building them at all of our sites across the country.”

The business’s success comes as no surprise given the effort that has been put into technological development and innovation; all to benefit the product and increase efficiency. Breaking up 22

September 2017

the production cycle, in particular, has allowed the company to move from a horizontal to a vertical plane and that’s increased capacity at each site by 50%.

With that though, comes some other additional challenges.

Shenandoah Growers has also had to adapt its supply chain to deal with the growth in production.

Heydon continues: “When we looked at expanding our production across the United States, we looked at the capital requirement to build a full facility of greenhouses, indoor

T H E G R E AT I N D O O R S

“We have a sustainable source of organic nutrients that we then pump through the rooms to the plants” – Tim Heydon rooms, infrastructure and everything.

Given the fact that the product is extremely perishable and it’s difficult to move it more than 400 miles without a deterioration in quality, we looked at ‘what’s it going to take for us to expand across the continent?’ and looked at every 400-mile radius.

“We found it was going to cost tens of millions of dollars in each case, so that at the end of the day didn’t seem feasible. With the way the LED rooms were working, we started to apply those same ideas to our logistics and our supply chain. From that, what we call our ‘finishing room concept’ was born.

Heydon goes on to explain the new innovation. “What we have now implemented and installed on several of our sites is our hub n’ spoke finishing room system. What we do is have our main infrastructure in a hub, in this case in our main headquarters in Virginia where have our greenhouses, our LED rooms and all of our main growing expertise; this

is where we start growing the plants.

We have an LED finishing room in Indianapolis for the next phase.

“What we do is we start the plants in Virginia and then we fill a full tractor trailer load of plants and send them to Indianapolis once or twice a week, where they’re then offloaded and put into inventory in the finishing room in Indianapolis, and they will then grow for up to another week.

And from that room, we have an inventory that we can sell from to that market out of that facility.

This has potentially game-changing consequences for Shenandoah, as Heydon concludes: “We’re able to expand our capacity and offload our plants in another region without building an entirely new infrastructure. With the finishing room, we’ve eliminated the need to spend tens of millions on a whole other facility, but we’ve also eliminated the alternative, which was sending them from Virginia five days a week.”

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TOP 10

TOP 10 3PL COMPANIES Third party logistics is a major market valued at $672.38bn in 2015, but who are the major players in this enormous sector? We rate the biggest 3PL companies based on gross revenue for 2016‌

Writ ten by: ANDREW WOODS

TOP 10

09 GEODIS

10

UPS SUPPLY CHAIN SOLUTIONS More than 175 countries are serviced by this division of the United Parcel Service (global revenue $45.3bn) which offers ‘transportation and freight’, ‘contract logistics’, ‘customs brokerage’, ‘consulting services’ and ‘industry solutions’. UPS SCS owns more than 500 facilities in more than 115 countries, totalling 36.6mn sq ft with a delivery fleet of 517 vehicles. In 2016, it posted a revenue of $6.793bn.

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September 2017

State-owned French logistics provider Geodis, part of SNCF Logistics (a business line of the SNCF Group), is the number one transport and logistics operator in France and ranks number four in Europe, with an international reach of 120 countries.

Formed in 1904 as Calberson, GEODIS comprises of five lines of business: supply chain optimization, freight forwarding, contract logistics, distribution and express and road transport. In 2015, GEODIS enhanced its freight forwarding and contract logistics offering in the US by acquiring OHL (Ozburn-Hessey Logistics). Its revenue for 2016 stands at $6.83bn.

3PL

08 SINOTRANS

Sinotrans is state-owned by the Chinese government and has split into three divisions since its formation in 1950: Sinotrans Air Transportation, Sinotrans Limited and Sinotrans Shipping. Sinotrans is the largest logictics company in China and its main focus is trucking and express services. It employs 66,157 staff and recently announced revenue figures of $7.046bn. It announced in September that it is quit its shipbuilding business.

07

XPO LOGISTICS Ranked as the world’s second largest supplier of freight brokerage and contract logistics services in the world, XPO also has the largest owned trucking fleet in Europe and operates the largest platform for outsourced e-fulfilment. XPO is also the leading supplier of ‘less than truckload’ (LTL) services in western Europe. The US company – with 90,000 employees – is the second largest LTL carrier in its home territory. Its current revenue sits at $8.638bn.

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TOP 10

06 DSV

Founded in 1976, this Danish company is structured into three divisions: DSV Road, DSV Air & Sea and DSV Solutions. DSV keeps its assets light and does not own any of the ships or aeroplanes it uses, although it does keep a relatively small fleet of trucks and trailers in a bid to maintain fixed costs, thus freeing it up to be able to react more flexibly to changes in the market.

DSV has offices in more than 80 countries and employs over 40,000 staff. In 2017, DSV posted a revenue of $10.073bn.

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September 2017

05

C. H. ROBINSON

Dubbing itself ‘the original 3PL,’ C. H. Robinson delivers supply chain solutions to over 113,000 customers across the world including transporting goods via land, sea and air, as well as offering supply chain consultancy. Founded in North Dakota in 1905, it currently employs over 13,000 people and has over 280 offices. It also has a focus on sustainability, and is currently working with institutions such as MIRT to measure carbon emissions while attempting to reduce its miles while using its equipment more efficiently.

As of April 2017, C. H. Robinson grossed $13,144bn.

3PL

04

DB SCHENKER DB Schenker as a whole comprises both the DB Schenker Rail and DB Schenker Logistics Business Units. The company has around 2,000 locations worldwide and the logistics branch has a presence in 140 countries with over 64,000 staff.

It grossed $16,746bn as of April 2017.

03

NIPPON EXPRESS Grossing $16,976bn last year, Nippon Express describes itself as a ‘logistics consultant’ which aims to provide ‘one-stop business solutions’ by integrating transport across air, land and sea. Though established in 1937, the original company which forms its basis has been around since 1872. It currently employees 32,094 people and while its head office is in Tokyo, it has locations in 262 cities across the globe.

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TOP 10

02 30

September 2017

KUEHNE + NAGEL Kuehne + Nagel had a gross revenue of $20,294bn as of April 2017. The business was founded in Bremen, Germany in 1890 and is now present in over 100 countries, employing over 70,000 workers. It focuses mainly on sea freight, airfreight, contract and integrated logistics, and overland transport. Kuehne + Nagel concentrates on several key industry sectors, which include aerospace, automotive, oil and gas logistics, pharma and healthcare and retail.

3PL

01

DHL SUPPLY CHAIN & GLOBAL FORWARDING With a gross revenue of $26,105bn, DHL describes itself as the North American leader in contract logistics.

Indeed, it has a recognisable logo and household name, and is present in over 220 countries. Having been founded in 1969 in San Francisco, its workforce now exceeds 350,00. It is therefore well ahead of target in its aim to be ‘the logistics company for the world’.

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Transforming

Sprint’s

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SPRINT

AS SPRINT’S CHIEF PROCUREMENT OFFICER (CPO), MARIANO LEGAZ SITS IN A VERY HOT SEAT INDEED. There’s no more competitive or cut-throat business than the US telecommunications market, in which familiar names like AT&T, Verizon Wireless and T-Mobile present figures to claim their network is the largest or fastest growing

M

ariano Legaz has inhabited the frenetically evolving world of telecoms since he joined Verizon International in Argentina in 1995, at which time he was still a student. He moved to the United States in 2000, and it’s significant that he remained with Verizon until his appointment at Sprint in April 2016.

He brought with him a deep understanding of the business, having served in senior roles in planning and engineering. He eventually became Verizon’s director of capital planning and analysis, managing an annual budget of $17bn. It was not until 2009 that he

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September 2017

put on a specifically supply-chain hat as vice president of Strategic Sourcing and subsequently VP of global supply chain services.

Legaz’s appointment was a key component in Sprint’s turnaround strategy. For 10 years, until 2015, the company had been losing customers and staff, burning cash and watching its margins dwindle. Since Japan’s SoftBank acquired Sprint in 2013 for $21 bn, and despite billions of dollars in investment by its new parent, Sprint continued to struggle and lay off employees.

“We think of 2015 as our

recovery year; last year

we call our comeback year” – Mariano Legaz, Senior Vice President and Chief Procurement Officer

Mariano Legaz Senior Vice President and Chief Procurement Officer

The transformation To achieve this, tightening up the supply chain management function was essential, and Legaz is happy with the company’s progress so far – his organization has contributed substantially to the company’s recovery, but he is the first to recognize a shared effort.

“Over the last two years or so we have made great strides and have produced significant results,” Legaz says. “First, we have started growing again. We think of 2015 as our recovery year; last year we call our comeback year because we won back business, showed growth, and became cash positive for the

w w w. s u p p l y c h a i n d i g i t a l . c o m

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Mariano Legaz is senior vice president and chief procurement officer at Sprint Corporation.

He is responsible for Sourcing, Procurement, Supply Chain management, and Real Estate operations across the organization. Under his leadership, Sprint is maximizing supplier relationships, driving operational efficiencies, and enabling their winning strategies.

Before joining Sprint Corporation, Mr. Legaz was the Verizon Wireless Florida Regional President, where he was responsible for sales, operations, marketing, distribution, customer service, and financial performance. During his 20 years at Verizon, Mr. Legaz also served as Senior Vice President, Supply Chain Services; Vice President, Sourcing; Director, Capital Planning and Analysis, as well as several other roles in the network technology organization, both in domestic and international markets.

Legaz holds an engineering degree in Electrical/Electronic Science and a postgraduate degree in Telecommunications from the Catholic University of Cordoba in Argentina. In addition, he received his EMBA in Economics from Cox School of Business at Southern Methodist University.

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Mariano Legaz – the career path to the CPO’s office • Educated at Universidad Católica de Córdoba in Argentina where in 1997 he obtained degrees in Electronics, Engineering and Telecommunications.

• Moved on to Southern Methodist University’s Cox Business School to earn an executive MBA in 2003.

• Between 1995 and 2015 worked at Verizon, progressing through director of Capital Planning and Analysis; VP Sourcing; senior VP of Supply Chain Services; and President of the Florida Region.

• Appointed Chief Procurement Officer at Sprint, responsible for Sourcing, Procurement, Supply Chain Management and Real Estate Operations. Legaz says, “My job involves enabling the business while driving operational efficiencies, reducing costs, and maximizing supplier relationships – and getting better every day!”

Lean credentials: Married and a father of three, Legaz is an accomplished distance runner and has participated in several marathons. Among his most recent achievements was a top three finish in his age group at the October 2016 Waddell and Reed Kansas City Marathon.

first time in a decade or more.”

Customer churn - the ratio of customers switching away to new customers gained - is the key indicator in this business. In 2014 Sprint lost 1.5mn (net) customers, but in 2016 it got them back and gained 930,000 (net), reversing the negative churn.

“The fact is that in two years we have gone from losing more than a million to gaining almost a million,” he adds. “Put another way, that was almost a 2.5mn-customer swing, and that is remarkable in our business.”

Sprint’s rating has improved, he

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September 2017

says, and it is rated the number-one voice network across the country.

“Previously we were losing customers at a rate of 2% a month, but in 2016 our churn fell to about 1.5% and it is still coming down.”

Just as important, brand perception surveys have raised Sprint to a four-year high, leading all competitors in places as diverse as Colorado Springs, Cincinnati, Portland and St. Louis. So much has been achieved already, and remember this is only year two of a five-year transformation program.

USA

WATCH NOW

Sprint’s Brand, 2017

Already Sprint has shown it can defy the odds and execute one of America’s most iconic turnarounds, not only in reversing its customer decline but in also now being recognized as one of the top places to work, according to The Atlanta Journal Constitution.

The value of procurement One of the pillars of the transformation was necessarily cost reduction.

Instead of the $30bn the company spent in 2013, it now spends about $22bn. “That means we’ve achieved a better than 20% reduction in our costs

during a time of growth. That is what I mean when I call it a transformation!”

Although he is not minimizing the part his organization has played in this achievement, Legaz emphasizes that it has to be a company-wide effort with every individual and every department playing its part.

“Throughout my career I was always being asked about how to validate procurement against cost savings value and efficiency. At Sprint the same questions also arise. Naturally we measure our internal productivity in light of negotiating savings and the

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SPRINT

Bottom lines

HIGHLIGHTS FROM SPRINT’S TRANSFORMATION • Fiscal year 2016 net operating revenues of $33.3bn grew for the first time in three years, including fiscal fourth-quarter net operating revenues of $8.5bn, which grew 6% year-over-year.

• Fiscal year 2016 operating income of $1.8bn and Adjusted EBITDA of nearly $10bn. o Highest operating income in 10 years and highest Adjusted EBITDA in nine years (22% growth year-over-year). o $2.1bn of year-over-year reductions in cost of service and selling, general, andadministrative expenses in fiscal year 2016. o Fiscal fourth quarter operating income of $470mn and Adjusted EBITDA of $2.7bn.

• Fiscal year 2016 net cash provided by operating activities of $4.2bn and adjusted free cash flow of $607mn.

internal processes of procurement, how we drive efficiency and the like.

But when it comes to the precise savings, I can just look at our annual report and see operating expenses going down by a billion to $2bn every year, so there is no doubt that the job is being done! Procurement is just one component of this transformation.

I do not by any means try to say we are driving all of those savings.

Clearly a lot of savings are being

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generated at the company level, and we can happily point to those efforts and say we are a part of that.”

Legaz says procurement has become an integral part of the decision-making process, a truly strategic function, embedded in the company to help balance its needs and expenses. That said, and despite his humility, in just over a year he has made identifiable and measurable improvements.

USA

MUST WATCH

#LiveUnlimited | Prince Royce, Lele Pons, Bradley Martyn, Rachel Cook, Gerard Adams “It was a surprise to me that the company didn’t have much in the way of procurement level metrics, so the first thing we did as a team was to develop a series of simple but meaningful high-level metrics to measure our productivity, our efficiency and our contribution.

For the first time in the company’s recent history, we were tracking sourcing savings at the project level and we were also tracking all the cost-reduction initiatives when negotiating new contracts.”

This also meant a change in the

“We’ve achieved a better than 20% reduction in our costs at a time of growth. That is what I mean when I call it a transformation!”

– Mariano Legaz, Senior Vice President and Chief Procurement Officer

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way Sprint acquired services or products. “We started tracking all of that at the project level,” Legaz adds. “We now have very good metrics. We can measure how much we are saving by organization, by project, and even by individual.”

Creating these metrics gave Legaz visibility over the company’s costs.

Additionally, he introduced regular meetings with key executives across the business to assess current demand, their forecasts, and the major

projects they had in hand. He strongly believes that his organization should support finance, marketing, HR and so on. Because traditional procurement is no longer a major driver of value, the relationship should be hands-off.

“The procurement process doesn’t need to be exclusively led by the procurement team – we stay in touch, but we don’t always need to get deeply involved,” Legaz

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says. He is proud of the team he has formed over the last year, taking the opportunity provided by natural attrition to refresh the talent. It is now as lean and efficient as any.

“I can put our team against comparable global teams and we will definitely come in the top quintile,” Legaz says. “With about 200 people handling procurement operations and also inventory management and logistics, we manage over $10bn of annual spend.”

Note: This does not include the real estate side of the business,

which he also oversees. It’s a very active space as the company builds new stores across the country and converts the portfolio of former RadioShack stores it acquired from the latter’s restructuring. Much of the acquisition processes involved here are outsourced as Sprint increases its high street presence in under-represented locations.

“We’re going after specific target areas to increase penetration in places we think we can do best – the market is responding really well to the quality of service we are now

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For sixteen incredible years, we’ve partnered with Sprint to help their customers make connections and share experiences all across the country.

Congratulations to

Mariano Legaz and the entire Sprint team on their exemplary success!

Please visit our website

Please visit our blog

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blog.teleperformance.com

@teleperformance

Watch us on YouTube

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/teleperformance

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THE CPO CONTRIBUTIONS TO SPRINT’S TRANSFORMATION

1

Substantial (multimillion-dollar) savings from the negotiations of Radio Access Network (RAN) equipment. By working with several vendors and internal partners, the Sourcing team was able to produce a detailed cost breakdown of RAN elements. This effort, coupled with group benchmark exercises and bundle renegotiations, allowed the team to secure savings.

3

Issued an RFP to six suppliers for Sprint’s on-site health clinic and pharmacy business. After the RFP was complete, the savings amounted to 9%. To drive further savings Sprint performed an e-Auction. During the live e-Auction vendors bid against each other, as they were able to see what the leading bid was, and decide whether to lower their bid in order to win the bid package. The e-Auction drove an additional 13% saving.

5

2

Utility Rates Optimization – the Sourcing team obtained bids and negotiated agreements with alternate energy providers in 13 states and Washington, D.C., that offer deregulated electricity. The reduced utility rates will result in a 20% multimillion-dollar annual saving with the new suppliers.

4

Recruitment Process Outsourcing (RPO). Sprint issued an RFP to find a third party to assist with sourcing and recruiting efforts related to the aggressive expansion of the Sprint retail store footprint. The RFP was issued to six RPO firms.

Negotiated a cost per hire rate, for the RPO, which is 35% lower than the internal cost per hire.

ADM Agreements. Sourcing achieved between annualized rate reductions between 5% and 10% for Sprint’s outsourced applications development and maintenance (ADM) contracts.

Savings were achieved by benchmarking the onshore and offshore rates and using the data to negotiate and improve the rates with these outsourcing vendors.

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USA

Outside view Sprint retail store

offering,” Legaz says. However, real estate that supports network and transmission towers is all managed by a dedicated in-house team.

Clarity through analysis Legaz’s team is now turning its attention to analytics as it revamps its spend analysis process, collecting, cleansing, classifying and analyzing expenditure data with an eye to cutting procurement costs further.

At the same time, they are improving efficiency and monitoring compliance.

To this end, the team is creating a new ‘spend cube’ to give great insight into the relationship between commodity, cost center and vendor.

At the beginning of 2017, Legaz pressed the button on an implementation that will, he is convinced, ensure that the new procurement strategies become firmly rooted. The existing strategic sourcing software suite was neither capable enough nor easy to use, so in June last year Sprint published an RFP to find the best replacement. In August

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“I believe in process excellence

and in data and analytics being a huge

enabler to making smarter decisions” – Mariano Legaz, Senior Vice President and Chief Procurement Officer

2016, having reviewed all the available hands-off auctions,” Legaz says. “We software - considering supplier are currently working on finalizing registration, project management, business requirements for phase two sourcing, contracting, spend analysis (contracting, spend analysis, and and supplier performance from the supplier performance). We couldn’t point of view of usability and monitor supplier performance functionality - Sprint before, so we will made its choice. now have better The solution that visibility into our combined much supplier risk and better usability performance.” than the previous The Ivalua tool with better implementation functionality is is the big Ivalua, a world-class, sourcing story Sprint’s Annual end-to-end suite of of 2017 at Sprint, Revenue procurement modules. but refining the “Our focus during the first procurement processes phase was on simplifying the user and adding analytics functionality interface from our previous tool and is a never-ending quest. As clarity on taking advantage of extra things improves, gaps are identified so it offered like a more robust auction investments are being made and setup functionality to run more people hired to fill those gaps.

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“At the same time we are launching a full-curriculum training effort to give our people better tools and to increase their capabilities,” Legaz adds. “We don’t believe in dogmatic positions though. There have to be many ways of achieving goals in a diverse business like ours. Some processes are complex and specific to the business

unit that is dealing with them; some are, well, just commodities.”

Diversity in supply Within Sprint there is clearly no bias when it comes to gender or country of origin: Legaz hails from Argentina, and Sprint CEO Marcelo Claure is Bolivian. Equal

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opportunities are at the heart of the company’s ethos, says Legaz, and he hasn’t had much to do to create a diverse sourcing policy.

It’s more of a statement of his position: “We love to provide opportunities to small or minority-owned businesses. That is important because they are the engine of the economy. Over my career I have found that such companies tend to be the most innovative – in the way they do business and find efficiencies, they are a huge generator of new employment.”

It’s very satisfying, he adds, to find that even the large technology corporations that partner with Sprint tend to be leaders in diversity, business ethics and equal opportunities. “But we at Sprint are leading the way,” Legaz states.

“Even in the tough times this company never deviated from its ethical stance or its respect for social and legal responsibility. It is comforting to be a part of such a group.”

As a provider of both telecoms hardware and networks, one very practical demonstration of this aspect of the company is the 1Million Project, which aims to provides devices and service to 1mn low-income students.

“We now have

very good metrics. We

can measure how much we are saving by organization, by project, and even by individual” – Mariano Legaz, Senior Vice Presidentand Chief Procurement Officer

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America’s students are facing a ‘homework gap.’

There are an estimated 5mn families in the United States with students who do not have access to the internet at home. With 70% of teachers now assigning internet-based homework, these students do whatever it takes to get connected. They go to hotels, restaurants and other businesses

to use Wi-Fi, wait in long lines at the library, or stand outside a school at night or early morning trying to get a Wi-Fi signal on their phone.

Through the 1Million Project, Sprint and the Sprint Foundation will provide free wireless connectivity and a free device during high school to 1mn lowincome high school students who don’t have home internet access.

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SPRINT

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“Even in the tough times this company never deviated from its ethical stance or its respect for social and legal responsibility” – Mariano Legaz, Senior Vice President and Chief Procurement Officer

Download the 1Million Project brochure to learn more, or go to the website.

Asked to summarize his philosophy, Legaz ponders for a moment before replying: “I believe in process excellence and in data and analytics being a huge enabler to making smarter decisions. A capable workforce is critical, but even more important and critical is to drive engagement and participation and the recognition for your talent. As an organization, we are committed to process excellence and customer satisfaction, but also to providing an environment where people are truly engaged and motivated.”

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CR ATING LUXURY SY N T HE T IC FURNITURE Written by: Leila Hawkins Produced by: Denitra Price

DEDON

Dedon President and Managing Director Donald Terell talks to Leila Hawkins about the company’s strive to produce luxury furniture from synthetics, backed by renowned designers such as Philippe Starck

D

edon creates outdoor furniture and prides itself on producing everything in-house, while having invented a unique fibre that stands all weathers and has been imitated the world over. Not to mention the small fact that they boast famous designers, among them one Philippe Starck.

This company’s collections include everything from stools and parasols to luxury items like hanging loungers: Swingrest and its iconic Nestrest, which President and Managing Director Donald Terell says people call a “hanging candy kiss, “ because of its resemblance to the United States’ favourite Hershey’s sweet. It’s no surprise that their customers include high end restaurants and hotel chains, such as the W South Beach hotel in Miami Beach, Florida.

Synthetic furniture Items are all manufactured in-house, and their materials are produced using technology in its headquarters in Lüneberg, Germany and then crafted by hand in the Philippines.

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One of the many things that sets don’t think of outdoor furniture Dedon apart is the synthetic fibre it to last, but ours does.” created, which is extremely hardy Even if the fibre comes into contact and can handle all elements. As with chemicals of some kind, Dedon Terrell explains, “we invented the provides customers with a heat gun synthetic fibre 30 years ago. It’s so they can smooth the fibre out patented, UV-protected and corrosion and it “self-heals”, Terell explains. resistant, it withstands almost It is manufactured at the company’s anything that nature can throw at it.

German headquarters, and in fact all “It’s used outdoors, around pools, of Dedon’s products are produced on balconies, in lobbies, in-house, something Terrell and for when people are says differentiates it from wearing wet bathing other companies in suits. Most people the same market.

DEDON Tour du Monde - an invitation to leave

DEDON Greensboro Building w w w. s u p p l y c h a i n d i g i t a l . c o m

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DEDON

“We partner with high-end designers from all over the world to develop our concepts” – Donald Terell, President and Managing Director

DEDON DEAN Armchairs and WA Table

USA

The fibre is unique to them. “It’s only us. We’ve had a lot of people copy it, but it doesn’t have the same properties. It looks similar, especially to those not familiar with it, but it’s not got the same lasting properties.

We’ve got products in many places that we’ve had for almost 20 years that are still being used every day in the commercial environment.”

Handcrafted technology As well as this unique technology, all the furniture is crafted by hand. “We have a big plant in the Philippines. Our fibre is woven, it’s really a mixture of the technology to design it and the handcraftsmanship of the weaving.”

The furniture can also be created specifically to fit client requirements, for instance the customer will give the designers an idea and Dedon will produce it. “We do customise lots of pieces. In particular we will have a lot of hotel chains that may have certain balcony sizes and we can make a product to fit their balcony, and we can change the synthetic fibres to match the colour of their logo. We can actually do

Donald Terell President and Managing Director

Prior to joining Dedon in 2010 Terrell spent time in executive leadership positions at Grass America and U.S. Airways. Terrell is best known for maximising resources and inspiring people to exceed their own expectations.

almost any colour if they give us enough time to test the product.”

Because each item is created by hand, it can take up to eight weeks to produce each one. Terell explains the importance of sourcing the best designers, one of them being Phillipe

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DEDON

DEDON Tour du Monde stops in Tulum

DEDON NESTREST Hanging Lounger

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September 2017

Starck. “We usually get really high end designers from all over the world, and we will sit down with them and come up with the concept.

“If we want a beach chair, we give them a few bullet points, and they start sketching it out,” he says.

“The majority of our designers are sketchers, they will sketch the chair out, and we have a creative team who examines those sketches and start creating what are we after, what’s our objective, who this is this going to appeal to, and what kind of function it is going to work for.”

While Dedon sells to a lot of upscale restaurants and hotels, there is no typical customer. “We sell to hospitality channels, to all high end hotel chains, to multifamilies, to corporations. The other channel is to our showrooms where we mostly sell to designers and architects that are going to work on people’s homes such as in New York, where we have a showroom. A lot of designers who are designing things in the Hamptons, say, they’ll come in and look at our products and choose one, and then we sell that, which

USA

“We hire people who love what they do” – Donald Terell, President and Managing Director

DEDON MBRACE Lounge chair

goes into the residences. There’s not a channel we don’t sell to.”

While Dedon sells to over 90 different countries, the biggest market is currently the US, particularly California and Florida because of the warm temperature all year round and the growing wealth, with more and

more people purchasing condos.

The best-selling items are the beach chairs and the Nestrest, a hanging chair that can be hung from a tree or even a cable. This is bought by a lot of hotel chains but also by consumers who place them in their backyards. “It’s seven

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feet wide and nine and a half feet tall,” Terell says. “It’s like a basket with pillows and people sit inside it. You can have as many as three people lying in it. Some customers even put a fan and a TV in it.”

Weaving through the market Terell explains that Dedon is in a fortunate position to not have much competition in the sector. “There are really not many competitors in the woven market so to speak.

They may have a sling chair or other types of materials or products for people to use outdoors, but as far as woven products

there are very few competitors, because we are considered the inventors and the best.”

In terms of staff satisfaction, Terell says employees are dedicated and passionate. “Not only the manufacturing and the design, but our culture matches that too. It’s one thing to produce something, but we match that with an open and honest culture.

“We hire people who love what they do. Ultimately you’ve got to have the right people to continue to create the right designs, processes and quality to support our growing customer base.”

DEDON ORBIT Loveseat ®

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WERC: Warehousing a nation

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T

he astounding growth in online transactions among consumers and commercial clients is the new normal. More and more exists in a digital space. For all that the cloud can contain, though, the warehousing industry is as vital as ever for the physical realities of commerce.

Michael Mikitka is the CEO of the Warehousing Education and Research Council (WERC), the only national association representing warehousing and logistics professionals. As the possibilities for online transactions grow, he says heightened consumer expectations are putting new pressures on warehousing and the supply chain.

“Whether it’s business to business or to consumer, available inventory and speed for delivery significantly defines a company’s competitive advantage.”

While WERC’s niche in the supply chain has historically been contained within four walls, Mikitka says the scope has widened to make room for new and evolving demands of warehousing.

Financial and real estate analysts estimate that e-commerce represents approximately 40% of industrial properties and requires three times more physical space than bricks and mortars retailers.

“Obviously, many factors contribute to a business’ success, but we see firsthand how warehousing and logistics is driving competition forward.”

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S U P P LY C H A I N

businessreviewusa.com

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W A R E H O U S I N G E D U C AT I O N A N D R E S E A R C H C O U N C I L ( W E R C )

Common denominators This year marked WERC’s 40th anniversary. As investments in warehouse facilities grew in the 1970s, so too did the need for a well-defined profession of managers, technicians and laborers.

Government, private or public, manufacturing, retail or hazardous materials — all types of ownership across many sectors needed warehouse infrastructure and it soon became a key element of everyone’s marketing and distribution strategies. Leaders in the field recognized the warehouse’s growing importance and sought to create common ground to support the profession.

A small but driven group assembled in 1977 to establish a non-profit organization

1,700+ Number of members at WERC

dedicated to education and research about warehousing.

In defining WERC’s role, Mikitka points to one definition of benchmarking in particular, from Charles Handy, an Irish organizational behavior and management specialist: the discipline of measuring yourself against best practice in any function or field, often in industries very different from your own; to look beyond oneself in setting standards for oneself.

“WERC creates commonalities and best practices across the board, whether it’s an automotive or pharmaceutical warehouse.

We’re a bridge that allows all corners of the warehouse world to learn from one another.”

WERC’s flagship resources include a distribution center metrics report, benchmarking and best practices guide, and

S U P P LY C H A I N

a salary and wage survey. WERC translates reams of qualitative and quantitative data into meaningful analyses that Mikitka says are central to a company’s ability to be responsive to industry trends and maintain a competitive edge.

A warehouse collective In and among the reports, webinars and online courses, WERC creates opportunities for its members to exchange experience and knowledge.

More than 1,000 warehousing professionals from across the country convened in Fort Worth, TX in May for WERC’s Annual Conference and Solutions Center.

Planning is well underway for the 2018 conference in Charlotte, NC. There are also 20 regional groups, called WERCouncils, that offer more frequent experiences on a local level.

“One of the prime benefits of being a WERC member is building a connection with someone who has similar opportunities and challenges, but comes at them with

Michael Mikitka CEO

Michael Mikitka is chief executive officer and is responsible for helping WERC live up to the commitment it has made to their members and the industry. Mikitka and his team work to ensure WERC provides its members with education, research and services to develop them professionally and to improve the performance of logistics within their organizations. WERC is headquartered in Oak Brook, IL. Mikitka joined WERC in 2000 and served as the senior director of the organization’s flagship annual conference and managed WERC’s network of chapters. In 2009, WERC’s board of directors appointed Mikitka as CEO.

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W A R E H O U S I N G E D U C AT I O N A N D R E S E A R C H C O U N C I L ( W E R C )

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S U P P LY C H A I N

an entirely different perspective,” says Mikitka. “WERC brings people out of their facilities and introduces them to innovative approaches and solutions that are working for someone else in that very moment.”

One current issue shared among many in the industry these days is labor management. E-commerce is driving the need for more and larger warehouses, but every facility needs staff. Advancements in automation add another dimension.

“With demand still growing and automation still evolving, we don’t yet know the extent of the impact on labor,” said Mikitka. “It’s most certainly a complex issue, but that’s why we need to create networks within our industry through which we can channel a healthy variety of ideas.”

Mikitka points to the numerous other benefits enjoyed by members, including access to the latest trend reports and research findings, savings on self-study and online education, and a comprehensive national member directory and career center. Beyond the tangibles, there’s also the notion of joining for the greater good.

“By being a member of WERC, warehousing and logistics professionals

Tony Ward

President, Board of Directors Managing Director – Retail, Accenture Strategy Tony Ward is a lead managing director within the retail strategy practice for Kurt Salmon, part of Accenture Strategy. Mr. Ward has more than 25 years of experience in supply chain management, global product flow, transportation, sourcing and enabling technologies. Prior to joining Kurt Salmon/Accenture, Mr. Ward was a partner at Cap Gemini Ernst & Young, Verticalnet, and Whitman Hart. During his career, he has served as a trusted advisor to some of the biggest brands in the world, assisting with their global supply chain needs and helping them achieve significant business gains.

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are in turn supporting the success of the industry as whole,” says Mikitka. “WERC is the unifier, the aggregator. It’s the expert contributions from our members that drives our industry forward and sharpens our competitive edge.”

New @ WERC WERC is currently soliciting participation for the 2017 edition of the Warehousing Salaries and Wage Report. All participants receive a complimentary copy.

The invitation to exhibit at or sponsor WERC’s 2018 Annual Conference will open in September.

All the details are at werc.org.

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Firmenich and the sweet smell of success Written by: Catherine Sturman Produced by: Charlotte Clarke

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Private company Firmenich has expanded its operations to become one of the most sustainable perfume and flavour companies in the world

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oday, consumers are drawn by the goodness of Nature, actively seeking out products that are natural, traceable, sustainable and environmentally-friendly. Increasingly they want to know where products have come from, how they are sourced, and how farmers and producers benefit from collaborating with large manufacturers.

Firmenich has a long legacy of leading its business responsibly. As an industry-leader in sustainability, the Group has set itself the most ambitious 2020 environmental goals in its industry with the vision to become carbon neutral. Advancing this objective, Firmenich is committed to sourcing the best of nature in the most sustainable way possible, to offer world-class taste and scent experiences to its customers and their consumers.

Building on his previous experience at multinational manufacturer Procter & Gamble (P&G), Corporate Vice President and Chief Purchasing Officer Bhavesh Shah seized the opportunity to join Firmenich. The possibility to contribute to

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Sourcing the scent

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FRAGRANCES ARE US

We are a producer of aromatic chemicals supplying the F&F industry with superior quality products. We make concerted effort to be responsible to our clients, employees and products, in protecting the environment and in complying with relevant government and industry regulations. We value clients who recognize and support such behaviour.

www.yinghai.com

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the company’s vision to be carbon neutral, while making a difference to the lives of hundreds of thousands of farming families confirmed his decision to join the company.

“My experience with P&G was very entrepreneurial, and I was looking for a company where I could truly make a difference,” Bhavesh says.

“The opportunity to build a worldclass, global purchasing team to support the company’s longterm vision was very exciting.”

Bhavesh has brought in a new era of purchasing excellence, introducing best-in-class, sustainable purchasing management practices to advance the company’s ambitious sustainability agenda.

Engaging his passionate team, he has successfully positioned Firmenich as a leader in naturals based on innovative partnerships at source to drive the most sustainable value chain from field to shelf. He has also established Firmenich as the number one player in the use of renewable energy across its operations by refocusing its energy purchasing strategy.

Leadership in naturals Firmenich has the broadest and finest portfolio in the industry, cutting across natural, synthetic and bio-based ingredients.

Having access to the most pristine natural ingredients is essential for Firmenich’s creators, as these ingredients are the essence of their unique olfactive signature. From jasmine sourced in India and oud from Bangladesh, to patchouli from Indonesia and vanilla from Madagascar, Firmenich’s mastery of naturals is second to none.

When you consider it takes 3.5 tons of rose petals to produce 1 kilo of rose essential oil; and 1 million roses to produce the 3.5 tons of rose petals; there is no other option than to

Sustainable sourcing

FIRMENICH

3.5 TONNES

1MN

harvest them sustainably.

“We partner with smallholder farmers around the world to harvest the earth’s most precious resources sustainably,” explains Bhavesh. “Today I am very proud that Firmenich supports the livelihoods of 250,000 farming families at the source of our 170 varieties of natural ingredients”.

Naturals Together: Driving excellence from field to shelf Firmenich is committed to operating the most traceable, sustainable and ethical value chain in the industry from field to shelf. Through its “Naturals Together” initiative,

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the company builds long-term partnerships with some of the world’s best natural producers.

Firmenich works with the producers to address pressing challenges, such as rural exodus, climate change, and access to healthcare services, education or training.

One of the most important achievements of its Naturals Together initiative is the forming of two Joint Ventures between Firmenich and Naturals Together members: one with Jasmine Concrete, the leader in Indian florals, and one with Essex Laboratories, a world-leader in natural mint solutions based in the USA.

WHERE THE WORLD COMES TO ITS SENSES

68 3 1 Berjé has strived for excellence as a supplier of Essential Oils, and Aromatic Chemicals since our early days in New York City. In those six decades Berjé has built an inventory of over 3000 ingredients that covers the esoteric to the everyday. Rigorous QC standards, comprehensive traceability programs, and our recent SQF certification have established Berjé as a top tier distributor.

With that foundation Berjé is breaking new ground on improving the industry’s standard of service. Coupled with Berjé Trakia, a European rose and lavender production facility, our global network of partners gives us the reach to sell in over sixty countries on six continents. As we further our commitment to promoting environmentally stable solutions, Berjé guarantees the quality of the past and the good sustainable business practices of the future.

Berjé Inc. an SQF Level 3 Quality Certified Supplier

+1 973 748 8980 | 700 BLAIR ROAD, CARTERET, NJ 07008 USA | WWW.BERJEINC.COM

Experience Solvay sustainable vanillin-based solutions Leading global vanillin-based solutions producer, Solvay assists Food, Flavors & Fragrances markets in designing solutions to tackle the global challenges : SUSTAINABILITY, INNOVATION, SAFETY, NATURALITY, HEALTH & WELLNESS

www.safevanillin.com

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Deep Roots: Supporting sustainable livelihoods Taking its commitment to the next level, the company’s ‘Deep Roots’ program, brings Firmenich’s entire supply chain closer together, to enhance the livelihoods of 100’000 smallholder farmers by 2020. Working with farmers, as well as distillers and suppliers, key customers and NGOs, the program focuses on supporting the sustainable livelihoods of its farming communities.

Together they explore new business models and share innovation to turn their challenges into opportunities, from the selection of crop varieties, crop rotation, soil management, all the way to irrigation technologies.

Firmenich develops sustainable financial models which enable the company to invest in projects that enhance the sustainable livelihoods of the local farming communities, from healthcare and education to hygiene and sanitation. For instance, last year, the company opened a kindergarten for 100 children in Indonesia, built a school in Haiti and established a dispensary, as well as wells for water access in Madagascar.

Award-winning naturals This sustainable, global sourcing focus has not gone unnoticed. Partnering with Indonesian manufacturing company Indesso, Firmenich supports patchouli farmers in Indonesia, who produce this signature perfume ingredient. Supplying more than 90% of the global market, patchouli oil from Indonesia is considered the highest quality in the world. Consistent with its responsible sourcing approach, Firmenich buys approximately 20% of this highly sought-after crop, working hand-in-hand with local patchouli farming communities.

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“TODAY, WE LEAD THE INDUSTRY IN RENEWABLE ENERGY WITH MORE THAN 65% OF OUR MANUFACTURING ELECTRICITY GENERATED FROM RENEWABLE SOURCES GLOBALLY.” - Bhavesh Shah - Corporate Vice President and Chief Purchasing Officer

Acknowledging the broad societal benefits of Firmenich’s work, the company recently received Indonesia’s ‘Primaduta’ Presidential Award, gifted by President Joko Widodo for its Deep Roots project in Java.

“Our vision is to have over 40 projects by 2020, impacting 100,000 farming families in a positive way,” explains Bhavesh. “This means looking at improving things like agronomy, yield factors, how producers can go to market, while providing premium pricing to secure a stable and sustainable income.”

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Partnering with like-minded visionary companies To scale up its commitment to responsible sourcing, Firmenich joined the Livelihoods Fund for Family Farming (Livelihoods 3F) in 2015, alongside founding investors Danone and Mars, Incorporated. Launched in February 2015, Livelihoods 3F aims to help companies sustainably source the materials they need from smallholder farmers, while improving their productivity, incomes, and living conditions. The fund will invest 120 million euros by

DSM Aroma Ingredients Quality, Reliability & Innovation As a reliable innovation partner to the F&F industry for synthetic and biotech solutions, DSM is proud to present its latest extension into the biotech field: Natural Valencene and Natural Nootkatone, derived from a unique fermation process.

For further information, please e-mail aroma.ingredients@dsm.com or visit www.dsm.com

Our value offerings • Reliable and sustainable supply chain • Consistent high quality • Stable price • Year-round production • Pesticide free

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2025, providing upfront financing and technical support to NGOs and farmers’ cooperatives across Africa, Asia and Latin America.

Bhavesh commented: “Vanilla is one of the most popular flavors in the world, and Madagascar represents 80% of its supply. That’s why Firmenich has been working with smallholder farming communities in Madagascar for many years to support their sustainable livelihoods.

Taking our

aims to increase farmer’s food security and triple their revenues, while providing high-quality, sustainable and fully traceable vanilla over a 10-year span. This investment comes on top of Firmenich’s longestablished presence in Madagascar, since 2005, having developed its first partnership with Authentic, a member of its Naturals Together program.

commitment to the next level, we are now innovating with a new vanilla farming model, based on diversifying farmers’ crops for more balance and security.”

Building on this partnership, Firmenich, together with Danone and Mars, recently announced through Livelihoods 3F, it is investing in a large-scale, innovative vanilla farming model in Madagascar. Involving 3,000 vanilla producers, the project

As the most sustainable, perfume and flavor company in the world, Firmenich is firmly focused on delivering its ambitious 2020 environmental goals, to become carbon neutral. For instance, by 2020, the company is committed to all of its manufacturing sites being powered from 100% renewable sources or offsets; and its absolute CO2 emissions going down by 20%.

Purchasing has been a driving

1895 The year Firmenich was founded

Advancing Firmenich’s vision to be carbon neutral

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force in enabling Firmenich to be the industry leader in renewable energy.

Most recently, Firmenich shifted its Princeton and Port Newark plants in the US to use 100% renewable energy sources. “As part of our global approach to combatting climate change, purchasing worked with a major energy supplier in North America to meet the needs of our US plants today and in the future,” said Bhavesh. “This is just one of the ways we are accelerating Firmenich’s vision of a clean and sustainable manufacturing footprint.”

“Today, we lead the industry in renewable energy with more than 65% of our manufacturing electricity generated from renewable sources globally. We have a total of seven “100%” clean energy manufacturing sites, including two plants in the US, two plants in Switzerland, one in the UK, one in Norway and one in Belgium,” adds Bhavesh.

Expanding its commitment to value chain, the Purchasing team is also embarking its suppliers on the journey. That’s why Firmenich was the first in the industry to engage its

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suppliers to disclose their climate and water performance data through the Carbon Disclosure Project (CDP) Supply Chain Program.

A recognized industry-leader in environmental management, Firmenich ranked in the top 1% of Ecovadis’ “Gold Standard” companies. The Group was also featured on the Carbon Disclosure Project (CDP) “A List” for the third consecutive year, and was named CDP’s Best Supply Chain Company in “Switzerland, Germany and Austria”, a region that counts some of the most sophisticated and sustainable industrial groups in the world.

Future growth In the years ahead, Firmenich is committed to investing in even closer collaboration between farmers, producers, perfumers, flavorists and its customers, to be able to successfully secure the most exquisite, sustainable and traceable ingredients in the industry.

Bhavesh concludes: “Building on our 122-year heritage of leading

www.indesso.com

As a responsible member of global community, Indesso has long started sustainable business practices in producing ingredients for flavor & fragrance industry. Green chemistry initiatives, sustainable sourcing, water & energy usage reduction are part of our essential activities.

Itâ&#x20AC;&#x2122;s simply because we care.

A

PARTNER

FOR YOUR CREATION

For almost 50 years, Indesso has been widely known as the world leader for clove oil and its derivatives and the key manufacturer in producing ingredients for food, flavor and fragrance industries. Starting with rigorous raw material selection, Indesso ensures that all customer get high quality products, which comply with international standards and regulations.

INDIAâ&#x20AC;&#x2122;S LEADING MANUFACTURER, SUPPLIER AND EXPORTER OF AROMA CHEMICALS. Prosperity with Orderliness.

Privi started manufacturing aroma chemicals in the year 1992 with only two products, which it gradually expanded to a range of over 35 products today, having a capacity of over 25000 tons per annum with current annual turnover of 100 Million USD & is preferred supplier to all top ten F&F houses & FMCGS. Privi also develops and produces custom-made aroma chemicals as per specific requirement of the customer. The research specialists at in-house R&D centre continuously thrive to develop new products and processes.

Tel: +91 22 27783040-41-45 sales@privi.co.in | Website: www.privi.com

WANXIANG INTERNATIONAL Established in 1992 in China, Wanxiang International have been professionally engaged into R&D and production of natural and synthetic ingredients for Flavors and Fragrances industry. Our products have been widely used in Oral Care, Home care, Personable care, Fine fragrances, Foods, Beverage, Pharmaceuticals, Tobacco, Animal feeds, etc.

Quality, Safety, Environment protection and Corporate Social Responsibility is our core value for our sustainable business growth. The qualified certificates we have obtained are ISO9001, ISO14001 and ISO2200. Also we are the member of SEDEX for international recognition of the CSR. On REACH, we have our OR in England for registration the REACH for all our products. All issues linked with REACH have been fully complied.

Having warehousing facilities in Europe and USA, we provide professional services to the local customers with on time delivery.

Wanxiang International is your reliable partner in Ingredients.

www.wxintl.com | info@wxixntl.com Tel: +86 21 6812 6648 No. 4309 Hunan Road, Pudong, Shanghai, 201318, China

our business responsibly, we will continue to invest in win-win partnerships with our farming communities, while driving the most sustainable global footprint

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possible. Not only does this enable us to offer our customerâ&#x20AC;&#x2122;s the best of nature, but it also ensure we have a lasting positive impact on the planet and society.â&#x20AC;?

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Corporate Vice President and Chief Purchasing Officer, Bhavesh Shah

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SAP: TRANSFORMATION WITHIN PROCUREMENT Written by: Catherine Sturman Produced by: Charlotte Clarke

A market leader in enterprise application software, SAP helps organisations generate new opportunities for innovation and growth, to stay ahead of the competition

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he rise of new apps, cloud services and mobile technologies has transformed the way in which consumers live and work. With increased expectations and need for businesses to adapt against ever-changing market conditions, businesses want information at the click of a button in order to gain insights how to manage spend, strengthen relationships with stakeholders and suppliers, and to look at potential processes to unlock savings.

With a GDP of $2.4trn, Southeast Asia remains the third largest population in the world, and is a significant driver behind a number of digital services. Businesses are looking for services and technologies which enable increased scalability and efficiency, providing significant value for money.

The region has seen an unprecedented rise of small and

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medium sized enterprises (SME’s).

Over 7bn people will be connected to the internet by 2020, granting businesses with the need to uncover new opportunities within procurement, and develop a robust, digitally-savvy workforce which enables technical innovation.

SAP is responsible for developing solutions, applications and services enable business and public sector customers to operate profitably, adapt continuously, and grow sustainably.

The company’s focus is to help customers transform into intelligent enterprises by leveraging the cloud and building a digital business framework. In order to execute this successfully, SAP has had to transform its procurement services.

“We’ve been focusing on adopting cutting edge technologies and solutions, and have been adopting SAP Ariba’s full suite,” explains

S U P P LY C H A I N

Regional Procurement COO Lead Deepak Gopalakrishnan.

Procurement 2025 By 2025, it is predicted that the procurement sector will become one of the most significant value creators for businesses worldwide. Consequently, SAP is placing increased focus in this area, safeguarding its future interests and enabling further business opportunities. Whilst procurement has mainly been perceived solely as

a traditional governance function, Deepak explains that â&#x20AC;&#x153;SAP Global Procurement Organization has positioned itself as a value enabler,â&#x20AC;? and focuses on outcomes, rather than solely policies and procedures.

SAP now strives to provide longterm sustainable business practices, and drive service value throughout a number of strategic and corporate objectives, communicating these goals to its stakeholders. â&#x20AC;&#x153;We have a very clear ambition to

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Being IoT ready with Bosch There are many inconspicuous components of a vehicle that are largely ignored and taken for granted. However, these parts contribute highly to the running expenses of a vehicle.

Tyres are a beautiful example of a complex and intertwined functional product. They contribute more than 25% to the fuel efficiency of the vehicle, determine comfort, speed, traction and other vehicle dynamic parameters and yet, it is the most disconnected amongst all parts. A connected tyre that predicts its own health curve, prevents its own deterioration, diagnoses its own faults and advices its own performance settings is a great example of how IoT can be leveraged for performance and cost benefits.

The necessity of building system engineering processes and employing a business case oriented approach to the Internet of Things makes Bosch a frontrunner in this space. Bosch has a proven record of reinventing business models and designing large programs that involve all round aspects of sensors, engineering solutions and accompanied software.

We offer a construct to identify IoT readiness and transformation by defining the services and solutions, the current state of the enterprise, and the layers required for transformation. Our array of IoT solutions enable companies to digitize their product development, manufacturing and supply chain processes.

If there is a key mechanical part of a vehicle or plant system that needs to be given a voice, Bosch can!

With over 20 years of experience in providing quality SAP solutions, and exclusively owning and maintaining several global templates for different customers, Robert Bosch Engineering and Business Solutions Pvt. Ltd has a unique insight into the challenges that customers face. We have been running SAP solutions in over 75 countries worldwide and provide solutions encompassing the entire SAP lifecycle spanning conceptualization, development, rollout and support.

To know more: Robert Bosch Engineering and Business Solutions Pvt. Ltd. 123, Industrial Layout, Hosur Road, Koramangala, Bangalore â&#x20AC;&#x201C; 560095, India

S U P P LY C H A I N

help our lines of business by becoming a business value enabler,” he says.

Supplier partnerships Transparency and the mitigation of potential risks remain key objectives within SAP’s procurement organisation, which extends towards its relationship with its local, regional and global suppliers. “Our suppliers have been with us for a long time and are trusted partners, bringing innovation and cutting-edge products, technologies and services to our doorstep,” comments Deepak.

Increased collaboration through Ariba Business Network will only seek to strengthen these relationships and the development of new products and services. With an understanding of each parties strengths and challenges, SAP is able to deliver value for money through new technological innovations and remain efficient and transparent throughout its procurement services, whilst remaining competitive in the markets in which it operates.

SAP Ariba Utilised by over 2.5mn businesses,

SAP’s end-to-end solutions enable businesses to successful manage its risk and supplier information through one centralised platform.

Clients are able to receive enhanced analytics, incorporating risk alerts, the delivery of supplier and performance management.

“It’s about bringing market knowledge to the table,” Deepak adds. “SAP procurement is helping the lines of business of the company to run better and how to run simple.”

“The company has always believed in pioneering in areas that it has expertise in. We’ve got a robust organisational structure which helps us drive strategic initiatives as well as operational efficiency.”

With focus on providing increased transparency and credibility, procurement teams will become adaptable to such technological shifts, where it will be essential for the industry to speak with not only suppliers and partners.

Staff development These changing shifts within

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“We have a learning development approach and actually encourage people to go cross-functional and cross-geographical, which has worked well for us” DEEPAK GOPALAKRISHNAN Regional Procurement COO Lead

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procurement will only become successful if SAP continues to house a multi-skilled workforce, with advanced knowledge in a number of business areas. To this effect, it empowers its staff through a number of training and development programs.

Exposing staff to different faces of the business is something highly encouraged within SAP’s procurement organisation.

Deepak explains: “Within procurement, we’ve always believed in calling ourselves ONE global team. We give people opportunity in crossgeographical assignments and responsibilities, which help them get maximum exposure.

Adopting a learning culture and gaining a diverse workforce, he stresses, is not just about training, but obtaining the best possible knowledge sources in the market.

“We encourage people to have a clear development plan and opt for learning opportunities that are relevant to their work Unmatched service delivery SAP continues to improve lives of people in the communities we operate in, and helps businesses run at their best. Supporting businesses in their digital transformation journeys by providing end-to-end solutions which are unmatched in the market, its endto-end supply chain solutions and exceptional

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Deepak Gopalakrishnan procurement services have led to the delivery of world-class services.

“With the fastest growing database in the world with SAP HANA, we are helping people and businesses transform digitally to intelligent enterprises,” Deepak concludes. “We are redefining the way businesses are engaging with their consumers digitally which is key to our vision to help the world run better and improve people’s lives.”

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Regional Procurement COO Lead, Global Procurement Organization, SAP APJ

Deepak Gopalakrishnan joined SAP Global Procurement team to lead the India Procurement team working closely with the Lines of Business delivering value and driving strategic alignment. Over the recent years, he has been focusing on partnering with key regional stakeholders driving strategic partnerships and alignment to help them do what they do even better.

Deepak has nearly 15+ years of experience in Procurement across various domains like Retail FMCG and IT/ITeS. While majority of his experience has been in indirect sourcing in the IT/ITeS sector, he has spent considerable time on areas like Compliance, Risk Mitigation with the last few years focused on deploying world class Procurement Solutions like Catalogs, P2P and Business Network to global customers.

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DUBAIâ&#x20AC;&#x2122;S LIQUID ASSETS WRITTEN BY: FRAN ROBERTS PRODUCED BY: HEYKEL OUNI

MAI DUBAI

BUSINESS REVIEW MIDDLE EAST SPEAKS WITH CEO JAY ANDRES ABOUT MAI DUBAI’S PLAN TO TAKE ON THE BIG THREE PLAYERS IN THE UAE’S BOTTLED WATER MARKET

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“

My first day here, I sat there drawing an organisation chart detailing what I felt the company should look like in a years’ time – brainstorming what the core values of the company should be. I was the first and we now have 765 employees,” reflects Jay Andres, CEO at Mai Dubai. “As we hired people we worked to adjust that vision and our strategies. One thing was to think about how to be competitive, how can we beat our competitors.”

After a brief period of retirement, Andres relocated from the US to the UAE to help Dubai Electricity and Water Authority (DEWA) start Mai

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Your leading SAP Business One partner in Middle East region ProCons, an accredited SAP Gold partner and Master VAR, with over 400 clients and 6 regional offices, is the leading partner in offering SAP Business One solutions to SMEs in Middle East and North Africa and one of the TOP 10 SAP Business One partners globally.

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MIDDLE EAST

Dubai. “The CEO of my first employer here, knew my former CEO in the US and was asking around for people to manage his water operation. After nearly two years there, I joined Mai Dubai. I was the first employee in January 2013, and at that point, they were a brand name with a tender for the construction of a facility and nothing else,” Andres reveals.

Having been in the business for 31 years, Andres was an ideal candidate for the position. “I came up through the sales side and progressively got bigger responsibilities, which exposed me to all aspects of business. I moved around a lot and worked through a lot of diversity and challenges,” the CEO states. “And this helps me with Mai Dubai. The US is a pretty diverse culture, not too dissimilar from Dubai and this helped me prepare for the diversity here.”

765

NUMBER OF EMPLOYEES AT MAI DUBAI

PRODUCTION EXPANSION With just a brand name and a construction tender in place, Mai Dubai took some time to launch.

“It took around 14 months from my first day to the day we sold our first bottle of water. Now we have over w w w. s u p p l y c h a i n d i g i t a l . c o m

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200 vehicles on the road. We’re exporting to 12 different countries and in the midst of an expansion that’s worth in excess of AED 600mn [US$163mn],” Andres explains.

Naturally, much of the export business is centred on the GCC. However, Mai Dubai has also sent its products further afield – to Singapore, South Africa and the UK. Continued expansion is key to Mai Dubai’s plans for the coming years.

“We intend that by 2020 we will have doubled in size” Andres adds. “The expansion will put us in a position that will allow us to compete with the three largest companies in the country in terms of production. We have to go out and sell it, not just produce it, but the expansion will help us on that.” Mai Dubai plans to expand production to 50mn units by 2020, up from 16mn last year.

THE RIGHT FORMULA With each resident drinking an average of 250 litres a year, the UAE is believed to have one of the highest rates of bottled water consumption in the world.

Understandably, competition is intense,

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“ ONE THING

WAS TO THINK ABOUT HOW TO BE COMPETITIVE, HOW CAN WE BEAT OUR COMPETITORS”

– Jay Andres, CEO

MIDDLE EAST

Mai Dubai is looking to take on the big three competitors in the UAE bottled water market

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RE-DEFINING THE ART OF PRINTING AND PACKAGING WITH COMPLETE BEVERAGE PACKAGING SOLUTION PROVIDER Future Plast Industries, part of ENPI group based in Abu Dhabi, United Arab Emirates is one of the leading manufacturers of PET Preforms and Closures with machineries from reputed suppliers Husky and SACMI offering complete packaging solutions to the Beverage Industry.

Future Plast’s products are exported to more than 30 countries globally with current capacity of 2.4 Billion units of Preforms and 3.0 Billion units of Closures with further expansion plans for the year 2018. Current range includes preforms and closures with: • 30/25 high neck finish and 29/25 neck finish for Stilled Water • 28 mm PCO 1810 and 1881 neck finish for CSD, Water and Juices As part of our service to our customers, we provide technical assistance such as process intervention, blowing process optimization, new product development, light weighting, proto typing & customization of Preforms to suit customer’s needs on turnkey basis.

For further enquiries, please contact: T: +9714 4258224 | F: +971 4 2582242. petinfo@enpigroup.com | www.futurepetme.com

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MIDDLE EAST

and Mai Dubai needed to differentiate itself in the market in order to compete with Masafi, Oasis and Al Ain. “Water is by definition supposed to be tasteless, colourless and odourless.

So, it’s difficult to differentiate. There is some nuance to taste, so we needed to get our formula right. But every decision we made was centred on how we can be different,” Andres reveals.

“One of the big points of differentiation, and we know this through feedback, is our unique packaging. The goal was to mimic glass and our bottle looks like crystal and features our iconic skyline of Dubai image.

“We asked for it in red. There were sceptics, believing that red would symbolise danger or stop, and noting that our competitors are green and blue. We used red because of that.

We have to stand out, it’s a cluttered field,” Andres continues. “Once we launched, we did very well. We asked store managers why we are doing so well, and they pointed to the fact it looks different. Customers buy it, try it and buy it again. A lot of our success comes from that branding.”

2012

THE YEAR MAI DUBAI WAS FOUNDED

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GROWING PAINS

CONTINUAL CHALLENGES

Another key factor in Mai Dubai’s success is the company’s commitment to quality. “Over the last two years we’ve received the highest quality score of any food factory in Dubai. When we opened we were very quick to gain regulatory approval and were recognised as one of the best and most efficiently run,” comments Andres. “We are trying to offer the best service and execution.

Its challenging – when you grow as rapidly as we are, you experience a fair share of growing pains.”

To combat those growing pains, Mai Dubai has worked to embed a strong corporate culture within its operations. “We’ve tried to have a culture of being the ‘Employer of Choice’. We have specific plans on how to communicate to staff, motivate, recognise and reward them.

We try in many cases to promote from within,” Andres states. “Our culture that we have created has been a true team effort, it’s given us a real competitive edge.”

Mai Dubai’s swift expansion has brought some unique challenges for the business. “Because of our rapid growth we ran out of capacity in terms of production. Therefore, we had to invest in additional machines early on,” Andres advises. “Our latest challenge is storage – we can produce the water but we need to move it out of the warehouse quickly and that causes issues in our efficiencies.”

Many of Mai Dubai’s competitors have moved into different beverage segments but the company intends to remain solely as a producer of bottled water – at least for the present.

“Right now, we are focused on water.

Many water companies deliver other liquid items, but we want to stay with our core business for now. As we start getting the brand equity and share that we want to achieve, we will look at other beverage and complementary businesses that can help the corporation grow,” Andres concludes.

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Huge quantities of Mai Dubai water is loaded onto trucks every weeks

GSL: LEADING THE UAEâ&#x20AC;&#x2122;S LOGISTICS INDUSTRY

Written by: Nell Walker Produced by: Heykel Ouni

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Global Shipping & Logistics is focused on continued success and growth, and COO Frank Courtney is at the forefront of the company’s ongoing development; he describes the many ways in which GSL holds a strong competitive advantage

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stablished in 1975, four years after the United Arab Emirates itself was formed, Dubaibased Global Shipping & Logistics LCC (GSL) has been fulfilling the supply chain needs of local businesses ever since. The business came on the scene in response to the UAE’s swift growth and development, with a view to instate itself early as a trusted logistical business.

Starting off in shipping, GSL soon became more of a freight forwarding organisation, before building its first warehousing facility in 2006.

From this point on, the number of warehouses it operates has grown rapidly year-on-year.

The company’s dedication to high quality,

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Khalid Al Shirawi CEO Global Shipping & Logistics Chief Executive Officer, Khalid Abdulla Al Shirawi, is a UAE national based in Dubai. He studied Business Administration at the University of Southern California, followed by a Master of Science degree in Management Information Systems at Boston University.

Becoming a Member of the Board of Directors for Oasis Investment Company in 1986, Al Shirawi has remained in this role, ensuring he continues to hone his expertise in logistics, manufacturing, engineering, and other vital industries whilst guiding the various companies that comprise the group.

Al Shirawi later took control of Global Shipping & Logistics as CEO, and helped lead the business in its drive to be among the UAEâ&#x20AC;&#x2122;s best and most trusted logistics companies. Today, GSL is leading the industry in Dubai.

Al Shirawi lives with his wife and five children.

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“I believe the level of sophistication that we have in the business when it comes to cold chain is unique... I understand this is where we must focus, because we’re very good at it” KHALID AL SHIRAWI, CEO OF GLOBAL SHIPPING & LOGISTICS

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customer-driven service is paying GSL began investing in ISO off; GSL now sits at the forefront of certification in 2007, and after an its industry. As part of the quest to audit in 2008, it was awarded ISO continue its success, it last year hired certificates in every category for Frank Courtney as its Chief Operating which it applied. The company is Officer, who has around 30 years currently the only 3PL business in of experience in logistics covering the Middle East with this level of air freight, sea freight, transport certification, officially proving its management, warehousing, dedication to being the safest, inventory, and everything most secure, and most in between. reliable logistics player “I was brought in the region. High into the company customer demand because GSL is outside of the UAE looking to grow,” he is now beginning to The year says. “What I found draw GSL further that GSL was when I joined was a afield, with GCC founded very professionally-run nations catching wind company that really of GSL’s reputation. integrates the ISO principles The business is allowing this and practices into their business. client need to guide its expansion.

It’s really a part of how they operate, and it’s the first time I’ve come The people across that in the Middle East.

The confirmation of GSL’s service “I believe that GSL is really unique quality is further supported by in this market, and my mission in the skilled staff it employs, and terms of joining the company is now despite the fact that Dubai has a to expand their service offering in the very transient labour force, the UAE and thereafter into the GCC.” company puts a great deal of

1975

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effort into hiring the right people.

“We would rather take longer to find the right resource than bring on somebody who’s not a proper fit,” Courtney explains. “It’s about finding people who have the same values, because at the end of the day, people are going to do what they intrinsically do. If you get the selection right, it’s a lot easier to function as a team. The first step for us is always making sure we’re bringing on people of the same fabric.

The smart way to handle goods Ensuring safe and efficient loading/unloading since 1977, with over 40,000 product installations in the UAE, ASSA ABLOY is successfully delivering a full range of industrial doors and docking solutions to the distribution and logistics segment. We thank Global Shipping & Logistics for choosing ASSA ABLOY as a trusted partner for their business needs. info.ae.aaes@assaabloy.com Tel. 048852888 assaabloyentrance.ae

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The global leader in door opening solutions

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“At GSL there’s a number of people with many many years of service, and I think that’s indicative of the culture of the company.”

The same goes for GSL’s strategically-picked partners, who are also chosen for their aligning beliefs. As is the nature of logistics – especially with a range of services as diverse as GSL has – there are peaks and valleys in demand and it isn’t realistic or profitable to hold onto assets. As such, building

strong relationships with partners is vital: “Be it additional transport or maintenance of the cooling equipment, you’ve got to get the right partner who has the same service ethic as you, because you become absolutely dependent on those people. Otherwise you’re going to disappoint clients.”

An array of capabilities The range of services GSL offers

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Q&A with Khalid Al Shirawi, CEO of Global Shipping & Logistics How do you ensure the entire company follows your vision of personalised care for clients?

We have socialised the vision into the business at all levels. It is not a line on a wall – it is part of our ethos, the way we do things. This is done though communication and incentives/rewards in the business to encourage the desired behaviour. Having the understanding and buy-in of the team is paramount to ensuring the entrenchment of the requisite practices and behaviours. Through real time measurement of the critical control points we ensure that we have immediate visibility and control of what is happening throughout the business.

What, in your own words, makes GSL’s cold chain service unique?

Our people and our culture. All companies have the same opportunities to purchase the same equipment and facilities. The differentiation comes from the orchestration of all the assets in our business to produce harmonious results. How our team interacts with our suppliers, our systems and our clients is where the magic happens. That intersection is what makes our service unique.

Do you believe your ‘boutique’ logistics offering will ensure GSL is set apart from competitors for years to come?

We are working to delight our customers, not to be different from our competitors. They may try and copy our boutique logistics offering, but customers will stay with GSL for what GSL does. In a fragmented market like logistics there are few game changing initiatives but many ways to achieve small advantage. What GSL needs to do is focus on continuously evolving to meet our clients personalised requirements, exceeding their expectations at every opportunity will guarantee a fruitful longstanding relationship with GSL. 138

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allows it to specialise in more than one area, but a focus for Courtney is highlighting the company’s cold chain expertise: “I believe the level of sophistication that we have in the business when it comes to cold chain is unique and that is hard to replicate,” he states. “I understand this is where we must focus, because we’re very good at it.”

This sophistication is a given for GSL, as its high levels of technological capability further cements its status as an industry leader. As a technologically-enabled business, GSL has an inherent competitive advantage, but it isn’t just about having the best resources.

“There’s a lot of technology that companies implement which aren’t used fully,” Courtney explains.

“One of the things we drive really hard is that if we invest in a piece of technology, it’s fully utilised. You hear a lot of stories about businesses spending huge amounts of money on implementing a fancy ERP and then only using 10 or 20 percent of its functionality. We prefer to

take small bites and fully utilise each bite, and when we review our technologies, any investment is from the point of view of what value it adds for the customer and for us.”

Courtney believes that even if multiple companies all owned the same state-of-the-art equipment, they wouldn’t provide the same services, because it is the people and how they interact with customers and equipment that enables a business to differentiate itself.

“Having this team and the stability of this team is what gives GSL that extra edge,” he says.

“An old facility might give sublime service, and a new facility might give absolutely rubbish service.

It’s about how your people operate as a team, and about leadership.

If the leadership is clear on what it’s trying to achieve, the rest of the company can align itself to that.”

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