Supply Chain Digital magazine — August 2018

www.supplychaindigital.com

A U G U S T 2 0 18

EXCLUSIVE VIDEO INTERVIEW

INNOGY

TOP 10

Air Freight Carriers

BRINGING PROCUREMENT TO THE FORE

Middle East Broadcasting

Picture-perfect procurement

Transformative procurement practices at the City of London Corporation

TELEKOM MALAYSIA

redefining procurement for supply chain success

JDA Software

Driving the supply chains of the world’s leading companies

Supercharging procurement’s business value September 13-14, 2018 Venue Six10, Chicago

150

45

senior procurement professionals

US states represented

40

speakers & facilitators

85

unique companies represented

7+

hours of networking opportunities

A two-day event dedicated to improving stakeholder collaboration, delivering business value and creating competitive advantage Headline Partner

Insight Plus Partners

plagilityforum.com

Insight Partners

Engagement Partners

#PLForum

FOREWORD

ello and welcome to the August edition of Supply Chain Digital, the must-read publication for professionals working across the supply chain, procurement and logistics industry sectors.

As you’ve come to expect, we have a jam-packed issue for you, cutting through the noise to provide razor sharp industry insights, exclusive company reports and the broadest selection of interviews from executives from around the world.

Adorning our cover this month is the City of London Corporation. We speak to Christopher Bell, a man with more than 20 years’ experience in leading procurement and commercial functions.

Two years ago, Bell was appointed as the organisation’s first Commercial Director and has since been named CIPs Procurement and Supply Chain Management Professional of the Year, having achieved £23mn in savings over the period.

It is truly a procurement transformation story; in which he tells Supply Chain Digital how he and his team are working to support and promote London as one

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of the world’s elite global business centres. Jump to page 8 to read the piece now – it is not one to be missed.

We also got a cracking piece from Innogy, with its CPO Ulrich Piepel discussing the importance of the right staff at renewable energy giant, in an exclusive video interview this month.

As well as a motivated workforce, embracing automation and placing procurement strategy at the fore are vital to making a splash in the energy world, says the CPO. The theme of agenda setting interviews continues with Girish Rishi, CEO of JDA Software, which has made waves with a number of announcements in 2018. An important component of many of the world’s most valuable supply chains, Rishi talks digital disruption, company transformations and the future of tech in an eye-opening chat.

With that and much more included this month, we hope you enjoy August’s Supply Chain Digital. Please get involved with our online community on Twitter, LinkedIn and Facebook.

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CONTENTS

08

CITY OF LONDON CORPORATION

Revamping government procurement practices at the City of London Corporation

28 JDA Software Driving the supply chains of the world’s leading companies

38

Redspher Think global, ask local

50 TOP 10 Air Freight Carriers Worldwide

60 EVENTS & ASSOCIATIONS

CONTENTS

90

66 INNOGY:CREATING SUSTAINABLE VALUE THROUGH PROCUREMENT

Where transforming an enterprise starts with transforming business communications

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112

90

Takeda

UCSF

Championing leading supply chain practices at UCSF Health

Enhancing patient lives thanks to proficient procurement

126 TELEKOM MALAYSIA redefining procurement for supply chain success

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Constance Hotels

Delivering supply chain innovation

158 Openserve:

The beating heart

of

connectivity in South Africa

200 Easa Saleh Al Gurg Group LLC

Staying ahead through digitisation

180 MIDDLE EAST BROADCASTING GROUP

Procurement excellence for the small screen

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Cervecería Nacional

An Undisputed Part of Ecuadorian Identity

228 SMU A solid organisation committed to the Chile’ society

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Revamping government procurement practices at the City of London Corporation

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WRIT TEN BY

L AUR A MULL AN PRODUCED BY

RICHARD DURR ANT

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C I T Y O F L O N D O N C O R P O R AT I O N

Nearing the end of its ambitious 2015-2018 procurement strategy, City of London Corporation is cutting through the noise with best in class procurement practices he City of London Corporation may be over 800 years old but it has developed an innovative procurement strategy that is firmly rooted in today’s business world.

City Procurement plays a vital role in how the City of London Corporation buys and pays for the goods, works and services that it needs. Recognising this, it has embarked on an ambitious 2015-2018 procurement strategy and, with delivered efficiency savings of £23.4m since 2015 alone, it seems it has been a roaring success.

Through this strategy, City Procurement has helped to close the organisation’s budget gap and protect frontline services, all whilst leaving a positive footprint in London communities and beyond.

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Around two years ago, Christopher Bell became the City of London Corporation’s first Commercial Director, signalling the changing requirements within procurement and commercial activities. Since then, he has been named CIPS procurement and supply chain management professional of the year, and his team has helped to generate over £23mn in savings for the organisation.

“The award is in recognition of the hard work the whole team has put into this strategy with the support of the organisation to change things here at the City of London Corporation,” comments Bell. “Procurement, commercial activities and working in partnership with suppliers are fundamental to any business and I think it's fair to say that,

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Bloom: opening up procurement.

C I T Y O F L O N D O N C O R P O R AT I O N

Supporting transformation with professional services through NEPRO.

11% to 19%

As delivery partner for NEPRO, the neutral vendor approach to professional services since 2015, Bloom has created a community. It includes public sector buyers and high-quality suppliers to help the public sector achieve better outcomes from their professional services procurement. As a managed service provider, Bloom assures delivery and adds value as experts in professional services projects, delivering better outcomes much faster than traditional routes.

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savings

4,000+

suppliers in a pre-accredited supplier community

City of London Corporation first came to us with a challenge; help transform their approach to professional services. Our first projects together centered on supporting ongoing evolution in business change and strategy necessary to deliver the organisation’s vision of a vibrant and thriving City, within a globally-successful UK. Bloom was able to assist by widening the potential pool of suppliers to bid and provided a single source of guidance and management information on spend.

Bloom is working with around 200 public sector buying organisations and over 4,000 suppliers to achieve savings of between 11% and 19% on average. Traditional procurement routes can take as much as 100 days to get consultants on site, but Bloom can have consultants in place and ready to deliver in as little as a fifth of that.

Recently, for a children and social care project for Cardiff Council, proposals were received from several suppliers and ready for review within just 10 days.

Bloom supports public service delivery faster, reducing unnecessary costs and accelerating benefits for Contracting Authorities and payments to suppliers.

Bloom has been asked to manage over 3,000 projects by around 200 organisations across the public sector and the 19 NEPRO categories. That’s more than triple the number 3 years ago, with in excess of £170M of professional services being successfully delivered.

100%

available accross the public sector

NEPRO, owned by NEPO, was designed to deliver an innovative alternative that remains OJEU compliant. Steven Sinclair, Head of Procurement for NEPO reinforces the success of the approach “We recognised Contracting Authorities wanted value for money and better control and transparency in the Specialist Professional Services category; NEPRO delivers all of this plus the peace of mind that the pre-vetted suppliers can be selected and utilized to support social value ambitions”.

The Bloom supplier community provides access to unlimited choice; offering the latest innovations.

Suppliers are carefully checked before being awarded accreditation, but the process is free and more efficient for suppliers than a traditional e-tender portal or lengthy and repeated PQQs. Suppliers are only charged when they have won and delivered work. they have won and delivered work through them.

020 3948 9400 AUGUST 2018

hello@bloom.services

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in the last four years, there's been a growing appreciation of how important it is here at the City Corporation,” he adds.

“We are now in a place where the organisation understands, respects and knows it is an important part of ensuring that we have the best suppliers and partners in place to deliver services to London.”

The City of London Corporation is a unique body. It has responsibilities for delivering local authority services, such as social care, roads and highways and waste collection, but it also has a wider remit.

“We are here to support and promote London as one of the premier cities to do business in and be located in,” notes Bell. “We also have City Bridge Trust, our charitable arm which gives around £20m a year in grants to London’s charitable organisations. So, it’s like a three-in-one business whereby we're all aiming to benefit the people of London.”

Through its ambitious strategy, the City Corporation has reiterated its goal to become a leader in innovative, sustainable and modern procurement practice in the public sector. But with such a far-reaching remit, this was, by 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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no means, an easy task.

“We had to learn to crawl before we learned to walk before we learned to run,” Bell reflects.

“We had to get the basics right, grow the confidence of the organisation, and then very quickly start to grow our ability to become leading class in procurement.”

City Procurement prioritised four strategic themes to deliver this strategy: operational excellence, value for money, corporate social responsibility, technology and innovation.

Through its first cornerstone, the organisation zeroed in on operational efficiency by establishing procurement governance and clear processes, refreshing procurement regulation, training and developing staff and more.

“I think to create the foundations of operational excellence you've got to start by establishing good governance,” Bell explains. “That begins by getting the leadership on board, so finding key stakeAUGUST 2018

“ We are here to support and promote London as one of the premier cities to do business in and be located in” — Christopher Bell, Commercial Director

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holders and having a mandate from the top of the business to support the transformation.

“That meant a lot of stakeholder engagement, presenting at different committees and getting people to support the aims and understand the journey that we were going on.

“We also established a procurement steering group, which meant that senior parts of the leadership were part of shaping that journey, supporting the messages and driving the change.

“Additionally, we established seven category boards across the organisation to look at areas of the business that had the most spend and to bring together stakeholders from the business who had a commonality of spend,” he continues.

“This allowed them to own and be a part of shaping the strategies. It allowed us to see how we could do things differently and really challenge the status quo. Those category boards were pretty much 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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C I T Y O F L O N D O N C O R P O R AT I O N

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engine rooms of the transformation.”

On top of this, the organisation also introduced No Purchase Order (PO), No Pay, to allow for easy order tracking, timely supplier payments and increased visibility of spending. In fact, whilst the organisation used to have around 60% compliance with No PO No Pay, it now has around 97% compliance.

Yet, of course, perhaps most importantly it is the people who contribute to operational excellence. As such, the City of London Corporation has made significant efforts to upskill and train its team. The body also underwent a complete restruc-

turing which ensured its team had a greater balance of skills and qualifications.

“We significantly invested in training. So, when I first joined the organisation there were around three or four CIPS qualified employees – today there's around 17 with another five or six training,” said Bell.

“On top of this, we also deveoped a soft skills programme called Impact and Influence, because not only do we need the core procurement skills, we also need people with right soft skills.

“Procurement is about getting stakeholder buy-in, having people take risks, considering new ways of doing things, being able to negotiate and being able to deal with pushback.

“So, we developed a course and that's really helped people become confident in how they deliver orally and in a written way, and we also went out to the market and tried to hire the best people which is not easy in a competitive marketplace.” 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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The second pillar of the City Corporation’s procurement strategy – value for money – is an equally important one for the group. By introducing the City of London Corporation Savings and Efficiency handbook and setting ambitious targets, it has driven savings whilst continuing to deliver quality services to the community it serves.

“To provide value for money we asked ourselves ‘could we do things differently?

Can we find efficiencies and commonality in spend? Who should we be collaborating with?” Bell says. “We really challenged the accepted norm about how we procure goods and services.”

Corporate social responsibility has, of course, been integral to City Procurement’s strategy and, as a result, the body has worked diligently to maximise the economic, social and environmental benefits from every pound that is spent.

It has pledged to reduce CO2 emissions and waste and promote biodiversity and nature conservation. Additionally, it has also vowed to procure locally where possible, to engage with SME’s and social enterprises, deliver the real living wage and more.

“Underpinning our strategy is a sense of corporate social responsibility which we have established as a ‘golden thread’ across AUGUST 2018

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“ Underpinning our strategy is a sense of corporate social responsibility which we have established as a ‘golden thread’ across everything we do” — Christopher Bell, Commercial Director

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C I T Y O F L O N D O N C O R P O R AT I O N

LAYING FOUNDATIONS FOR THE SMART CITIES OF THE FUTURE As an award-winning UK construction company, Gilbert-Ash is at the forefront of delivering innovative projects across the globe. With offices in London and Belfast, our work spans the UK skylines and beyond, with high profile projects in 43 countries worldwide; from Poland and Bahrain to China, Japan and Australia.

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Regardless of sector; from arts and culture to workplace, hotels and leisure, science and technology, our unique combination of insight and intelligence, vision and talent is shaping the urban landscapes of the future.

Smart Cities Require Smart People At Gilbert-Ash, a belief in the power of teamwork underpins everything that we do. Over 180 employees work in collaboration with us across our supply chain. We focus on collaborative working relationships with internal and external stakeholders, to create a working atmosphere with mutual respect for different disciplines and professions.

Designing and Building the World’s Best Buildings Needs A Collaborative Approach At Gilbert-Ash we want to be a partner of choice. We recognise the value of building a strong diverse supply chain by working with like-minded companies. Our Supply Chain Charter clearly sets out what we expect from our supply chain members, and in turn what our supply chain members can expect from us, thereby helping to build mutually beneficial relationships and enable true collaboration across our entire project teams.

For more information, visit gilbert-ash.com AUGUST 2018

Digital Transformation is Shaping the Future of Construction

Many Gilbert-Ash projects are iconic buildings with significant historical relevance. Delivering these ‘Landmark Landscapes’ requires a commitment to excellence from the ground up.

Harnessing our business intelligence effectively is core to embedding quality across our supply chain.

Our project teams utilise unique software to drive performance across the areas of sustainability, safety, quality, health and well-being, ensuring that we work with the top performing suppliers across the globe.

Intelligent Buildings Set the Scene for Future Skylines There is no doubt the emergence of new technologies and a world in which everything connects will have a profound impact on our industry. With the right people, processes and technology, the construction industry is in prime position to shape the world’s future urban economies. And with projects including the National Army Museum, Barlett School of Architecture, University College London, IET Savoy Place, City of London Freeman’s School swimming pool, The Royal College of Music and the Everyman Theatre, winner of the prestigious Royal Institute of British Architects’ Stirling Prize, we believe Gilbert-Ash is demonstrating a commitment to leading by example.

Follow Us:

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everything we do,” Bell says. “There were clear ambitions in the corporation about certain strands of responsible procurement, but we wanted to build that all together and have a focus on social value, environmental wellbeing and ethical sourcing in everything that we do.”

Technological innovation has taken the procurement discipline to new heights and, not one to be left behind, City Procurement has made it the fourth and final pillar of its strategy. Enhancing efficiency across its sourcing, City Procurement has implemented e-procurement, e-invoicing, purchasing cards and accounts payable forensics to

work in a more innovative way.

“We introduced more and more innovation and technology and this was growing in line with the maturity of our procurement function. For example, we worked with Lloyd’s Bank to bring in purchasing cards which helped to drive better process efficiency and value for money.

“We also worked with Bravo Solutions and Basware to introduce an e-tendering solution and create an e-catalogue and e-invoicing regime which have been great partnerships.”

A strong procurement team is nothing without sincere relationships with suppliers and partners alike. At the City of London Corporation, Bell says that its strong reputation and eye for continuous improvement has helped its procurement function grow.

“I think suppliers just like to be told and be advised what we're trying to achieve. We had a supplier day two weeks ago 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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C I T Y O F L O N D O N C O R P O R AT I O N

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where we had 150 suppliers turn up for our major works contract, which is not out in the market as yet. That would have just been unheard of four years ago,” notes Bell.

“We are seen as a prestigious organisation. We are fair to suppliers, supplying them with the right information to tell them what we’re trying to achieve and that’s been key. We have also partnered with other organisations who are perhaps stronger in more specialist areas to bring in new knowledge and expertise.

“During my time at the City Corporation, one of the more specialist, challenging and iconic projects has been the building of a new swimming pool at our Freeman’s School,” adds Bell. “Finding a construction delivery partner with the correct experience and willingness to work in a live school environment was key. Gilbert Ash proved to be this and more, delivering an outstanding facility that has been a worthy winner at design awards across the country recently.

“Our organisation has a wide and varied range of services it provides. In an ever-changing environment with a need to transform, having access to consultants in a competitive arena is key. Partnering with companies such as Bloom offered us an advantage.”

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BIO

Christopher Bell, Commercial Director Bell has over 20 years’ experience in leading procurement and commercial functions specialising in business transformation, outsourcing and category management development. Currently, he is the first ever Commercial Director in the unique surroundings of the City of London Corporation, existing for over 800 years with responsibility for the Square Mile and the City of London Police, the Barbican Centre, Tower Bridge and Hampstead Heath. Bell leads a 60-person strong department with responsibility for Category Management, Procurement Operations, Policy and Compliance, Accounts Payable, Contract Management, Commercialism and Responsible Procurement. This follows on from positions held at Accenture, London 2012, BiP Solutions and a range of Local Government positions in Scotland.

Bell is very much a results-driven leadership professional that leads from the front, he sees people as they key component of any successful operation and is a firm sponsor of mentoring, personal development and apprenticeships. The transformation of City Procurement has seen him being named as the Chartered Institute of Procurement and Supply (CIPS) Management Professional of the year 2016.

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C I T Y O F L O N D O N C O R P O R AT I O N

FACT

The City of London Freemen’s School Swimming pool The City of London Freemen’s School Swimming pool, won three major design awards last night at the RIBA South Eastern awards ceremony held in Brooklands, Surrey. The Pool was shortlisted at the beginning of the year and was competing against 14 other nominated buildings.

Design team consisted of: 24

Architect Hawkins/Brown Structural Engineers Eckersley O’Callaghan M&E Engineers Skelly & Couch Contractor Gilbert Ash The three category wins were: RIBA – Building Award Winner RIBA – Sustainability Award and the school was awarded RIBA – Client of the Year

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With cost savings in the millions, Bell says his team can be very proud of the transformation at the City of London Corporation. Today, the organisation has a robust procure to pay (P2P) service, one which has been recognised by both the leadership and external bodies alike.

“We are responsible for the full P2P cycle so we own the whole relationship from end to end,” explains Bell. “That gives us a unique position to manage, change and shape ourselves so that we can continuously improve.

“I think it's fair to say that what was a really tough challenge has snowballed into a really successful fast-paced transformation.

It has even surprised me at times, how well we've progressed and how far we have come in such a short space of time.

“This could only be done with the right people and the right skills that we have brought in to the organisation,” he adds.

“We have a very hard working committed professional workforce and that's the game changer because that's the bit that you can't guarantee. We're fortunate that we've built an exceptional team here.”

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30+ SPEAKERS

INCLUDE

BENEDICTE CROSNIER Director Global Supply Chain Operations Alstom

ERNESTO SCHROEDER ROSAS Global Supply Chain Director Deoleo

IMAD MANZOOR Supply Chain Director Duracell UK & Ireland

KERSTIN GLINIORZ Vice President Supply Chain EMEAI Archer Daniels Midland Company

MARION MATTHEWMAN Head of Global Logistics Syngenta

DR OLIVER PHILIPP Director Supply Chain Strategy Panasonic Europe Ltd.

PHILIPPE LUSSERT Vice President Supply Chain, Danfoss RAC Danfoss

DR SANDRINE TORANDELL Supply Chain Director L’Oréal

VALERIO DAL MONTE Vice President Procurement & Supply Chain Alitalia

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THE LATEST TECHNOLOGIES & STRATEGIES FOR VISIBILITY, FLEXIBILITY AND SPEED

LEADERSHIP

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Driving the supply chains of the world’s leading companies WRITTEN BY

JAMES HENDERSON

JDA Software is following a record 2017 with another stellar year, under the stewardship of CEO Girish Rishi

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LEADERSHIP

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30

months into the job, JDA

I had anticipated, and our customers

Software’s CEO Girish Rishi

have been very quick to respond.

is in a bullish yet reflective

It’s true that supply chains have been

mood. Sitting in the Spectrum Lounge

considered conservative areas of

of the Park Plaza County Hall – a recently

business that happen in the back-

completed luxury hotel in located in

ground – they are not to be messed

London’s popular South Bank area –

around with,” he says.

Rishi is in the midst of a whistle-stop

“But that has changed dramatically;

European tour, which will be followed

we see companies willing to take really

by a trip to Asia, meeting some of JDA’s

bold moves in a bid to disrupt their

4,000+ customers, briefing staff and

approaches to business. We hear the

overseeing what feels like a rapid

word disrupt a lot, but I think what we

period of growth.

mean is to reconstruct. Companies

The company’s client portfolio reads

are looking at their operations and

like a ‘who’s who’ of the business world,

considering how they would struc-

featuring Nike, Unilever, Walt Disney,

ture their supply chains if they were

Mercedes Benz, Samsung, Macy’s and

starting over.”

Sprint to name but a few. It’s Rishi who,

Rishi offers Michelin as a prime

ultimately, must meet and exceed their

example of a business with the desire

expectations – no easy task.

to ‘re-layout’ its supply chain. Whereas

Following a decade as Senior Vice

the company used to take a one-size-

President at Motorola Solutions,

fits-all approach to its customers, it

followed by a close to two-year stint as

has separated its client base into four

Executive Vice President of security

separate areas, so that it can serve its

specialist Tyco International, Rishi took

high-value clients in one silo, its winter

the JDA hotseat in January 2017. An

customers in another, and so-on.

experienced head he may be, but he

“We are seeing this type of phenom-

admits there were certain elements

enon all across the world,” says Rishi,

of the business that surprised him.

“it’s not something that is limited to

“The market is moving faster than AUGUST 2018

geography,” Rishi adds.

“ We hear the word disrupt a lot, but I think what we mean is to reconstruct. Companies are looking at their operations and considering how they would structure their supply chains if they were starting over”

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— Girish Rishi, CEO of JDA Software

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LEADERSHIP

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“ Historically JDA has built its products itself. But a big internal initiative is something of a statement of humility which is to recognise that we cannot do everything on our own” — Girish Rishi, CEO of JDA Software

AUGUST 2018

Recognising the shift, JDA has made a concerted effort to bolster its high-end tech offering, encompassing the IoT, machine learning and AI tools that its clients increasingly demanding as part of their supply chain management suite.

To this end, JDA Software recently announced an agreement to acquire Blue Yonder, one of the leading businesses offering AI solutions for retail. It is a move that builds on JDA’s strategy of developing cognitive and connected solutions to power digital transformations for companies seeking to create a competitive advantage for their supply chains.

“Major digital transformation of supply chains is underway and the ability to quickly access intelligent, actionable data and insights will determine the future winners and losers,” comments Rishi. “JDA’s end-toend solution portfolio, coupled with Blue Yonder’s leading AI/ML capabilities, will enable customers to deliver more autonomous, profitable business decisions throughout their extended supply chains, unlocking the full business impact of intelligent data.”

In a bid to accelerate its clients’ supply chain transformations, JDA Software has formalised a strategic alliance with KMPG – one of the world’s ‘Big Four’ accounting firms. Having worked together on a number of successful projects, the alliance combines KPMG’s leading design, change management and testing capabilities with JDA’s advanced demand-driven, integrated manufacturing supply chain technology.

The companies say the transformational improvements and real-time information help manufacturers 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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LEADERSHIP

“ Major digital transformation of supply chains is underway and the ability to quickly access intelligent, actionable data and insights will determine the future winners and losers” — Girish Rishi, CEO of JDA Software

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reduce costs, increase asset produc-

“That’s something we take really

tivity and improve cross-functional

seriously, and we won’t just make

planning and execution across their

alliances for the sake or alliances –

agile supply chains.

regardless of how big the companies

Rishi says the agreement is some-

are. We’ve had large integrated organi-

thing of a sea change for the organi-

sations come to us with a view to

sation: “Historically JDA has built its

partnering but we take each possibility

products itself. But a big internal

on its own merit and if we feel the

initiative is something of a statement

partnership is not mutually beneficial,

of humility which is to recognise that

then it’s something we won’t do. A lot

we cannot do everything on our own

of work, communication and delibera-

– so our aim is to build out a powerful

tion goes into a partnership like the

ecosystem of technology partners.

one with KPMG.”

AUGUST 2018

On the specifics of what KPMG can offer, Rishi comments: “KPMG has great capabilities in the North American and Japanese manufacturing sectors.

They are positioning JDA as the bedrock of its supply chain solutions and investing in the relationships, which is exactly what we want.”

Rishi’s enthusiasm for collaboration and bolstering the company’s capabilities is clear: since the interview, he has spoken of a $500mn war chest for acquisitions, while also expressing his determination to grow JDA’s revenue

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to $10bn a year by 2025 – the equiva-

to customer requirements. Secondly,

lent of 31% growth a year. He has also

we have to increasingly recognise the

overseen the development of Customer

importance of innovations and learning.

Innovation Centres and Centres of

For JDA, learning is a value that we need

Excellence to help in the continuing

as it leads to innovative thinking and value

effort to hone and encourage new talent.

creation, to the extent that I set aside

But his first mission is to follow 2017’s record financial year – in which JDA achieved revenues of around $1bn – with another in 2018.

time each week to learn new things and publish them to the company.

“But just as important is the culture of the company, I believe in creating

“We need to be breaking down silos

a culture, not just a company, and that

and working across functions a lot,” he

has to continue to flourish. We wear

says. “As a company we need to ensure

that as a badge of honour at JDA, and

that we’re obsessed with creating value

that is part of building a company that

for our customers, so we have to create

can succeed for an extended period of

a sense of urgency around responding

time, not just from quarter to quarter.” w w w. s u p p l y c h a i n d i g i t a l . c o m

TECHNOLOGY

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AUGUST 2018

Redsp Redsp Redsp Redsp Redsp Redsp

pher pher pher pher pher pher Think global, ask local We spoke with Redspher CEO Phillipe Higelin about how the European transport and logistics group is utilising an open platform approach to facilitate and simplify on demand delivery WRITTEN BY

DAN BRIGHTMORE

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TECHNOLOGY

Phillipe Higelin, CEO

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can’t afford production line disrup-

R

tions, premium freight is a flexible edspher was born out

and time critical solution to overcome

of Flash Europe

any unforeseen issues. With premium

International which was

freight, companies can tense their sup-

established in Metz in 1981 as

ply chain, producing on demand. “We

a courier service for urgent

started our digital revolution in 2013

transport. It grew in line with

and have been working hard to ensure

the rise of lean manufacturing

we can support these companies with

and supply chain methods,

an efficient platform for time-sensi-

which was the company’s core

tive on demand delivery,” confirms

business when it was known as

Redspher’s CEO Philippe Higelin.

Flash, and last year increased

Higelin maintains since 2015 the

its turnover by 50% to €285m.

company’s motto has been: “We want

Today, when companies want to minimise their stock but AUGUST 2018

to be the disruptor, not the disruptee.”

He adds: “To digitise our business we

41

“ More than a freight forwarder, we provide tools, teams and access to the largest fleet of small vehicles. We also offer more than premium freight with on demand delivery for all non-regular shipments whether urgent or not. We are a taxi company for the same day delivery of goods” — Phillipe Higelin, CEO, Redspher

incorporated one IT system, with one bidding tool, for the whole group. On top of digitising our existing process, we incubated our own startups, with agile development to further disrupt the market. Some are directly related to transport while others act as enablers, facilitating the cooperation between entities or adding further value to our services.

“Flash is the freight forwarder and Redspher is the platform,” explains Higelin, who pledges Redspher aims to provide its customer with the best solutions for on demand delivery derived from a group of companies under the Redspher banner. Alongside Flash these include: Schwerdtfeger Transport (German time critical specialists), w w w. s u p p l y c h a i n d i g i t a l . c o m

TECHNOLOGY

Easy4Pro (ad hoc transport manage-

then Redspher, is successful because

ment), Roberts.eu (for online access

we combine technology with years

to the biggest European fleet of small

of experience in the transport busi-

vehicles), Easy2Go (online customer

ness. You need a deep understand-

logistics support), Upela (worldwide

ing of your client’s needs to ensure

shipping tool), Easy2Trace (app to

you spend time and money on the

monitor vehicles and shipments),

right solutions. Flash developed a

GeniusAcademy (the online train-

neuronal algorithm to compress the

ing centre) and YOCTU (IT tools).

data. This patented lane mapping tool

“More than a freight forwarder, we

allows us to process the data to have

provide tools, teams and access to the

a time responsive map about all cur-

largest fleet of small vehicles,” explains rent shipments. We now have data

42

Higelin. “We also offer more than pre-

and efficient tools to process it, in

mium freight with on-demand delivery

order to support our employees and

for all non-regular shipments whether

give them easy access to that data.”

urgent or not. We are a taxi company

Among these tools, Snapshot helps

for the same day delivery of goods and

satisfy market needs by forecasting

like Uber have digitised our business

them – it’s able to forecast the need

with tools to enhance the user experi-

for vehicles in 450 cities, and cross

ence for all our customers. In 2016 we

with availabilities, to create a market

launched these startups to support

value for each shipment, shown in the

our current strategy: the platform ap-

form of a heatmap. “Our tool predicts

proach. We take advantage of syner-

the area from which it’s going to be

gies within the platform and add new

easy to find a shipment back,” adds

partners - either to expand our range

Higelin. Way Finder also makes fore-

of services or improve their quality.”

casts to reduce the distance of each

Redspher aims for on-demand

delivery, he explains: “The creation

delivery with nothing forecast – the

of line hauls/shuttles in real time is

customer just asks for what they want.

achieved by the use of cross-docks

To get to this point it’s not only about

(using a metaheuristic method) al-

technology, reveals Higelin. “Flash, and lows the partial sharing of a delivery AUGUST 2018

43

Click to watch: Easy4Pro – more than a TMS (Transport Management System)

TECHNOLOGY

a run. We choose the best routing based on an automatic learning system. This is collective intelligence sharing. Trucks and vans are not always driving fully loaded. But there are some major transport corridors on which we can optimise the use of vehicles thanks to a network of warehouses.”

Allied to this, Redspher’s Solution Finder software analyses the routings to propose solutions for a given shipment. It will look between availabilities, on-going shipments and suppliers’ databases. “We can analyse flows in a new way, seeing much more than 44

a pick-up or delivery,” assures Higelin. “This helps us to plan positioning of cross-docks, establish chances of co-load, study balances and much more with tools like Easy Trace – a fleet management app with E-CMR and GPS tracking for communication with the driver and relaying special instructions.”

It’s currently a booming market for ondemand delivery driven by the consumer and connected to the rise of lean manufacturing to minimise stocks. Higelin believes the interconnection between systems providers and customers is key: “Machine to machine communication is now prevalent as we work towards more seamless solutions supported by key data. The market is fragmented but companies would rather deal with one inAUGUST 2018

“ Digitisation helps us overcome the disadvantages of a fragmented market by allowing us to reach more and more carriers in an efficient way.

Thanks to the platform approach, we can think globally but act locally with a global platform connecting local players with global shippers” — Phillipe Higelin, CEO, Redspher

termediary. Digitisation helps us overcome the disadvantages of a fragmented market by allowing us to reach more and more carriers in an efficient way. Thanks to the platform approach, we can think globally but act locally with a global platform connecting local players with global shippers.”

Redspher is also developing automation through the implementation of EDI (Electronic Data Interchange) and API (Application Programming Interface), reducing the barriers to the order process and allowing staff to focus on more critical matters. “This move towards a more seamless operation is a major trend among big shippers,” recognises Higelin. “Improved data analysis gives a better understanding of the market and its evolution, allowing us to predict requirements. If, based on our analysis, we know a certain client is most likely to have increased needs for urgent transport around a certain time of the year, it enables us to better manage our carriers and provide a better service to the customer. Our continued goal with the platform approach is to standardise our data intelligence system to be able to collaborate with more companies around gaining meaningful insights from that data.”

Redspher is open to developing new partnerships as it builds a worldwide platform. w w w. s u p p l y c h a i n d i g i t a l . c o m

45

TECHNOLOGY

Higelin concedes they can’t do this by themselves so alliances are essential, not just for on-demand delivery, but as enablers to help support the Redspher ecosystem. This is where Easy4Pro comes into its own for Redspher, says Higelin: “It’s a web-based solution to manage all ad hoc transports – as a meta-searcher it’s much more than a TMS (transport management system). It allows us to add any new partnerships to the platform and 46

strengthen our working relationships.”

What sets Redspher apart from other 3PL operators in the market?

Why should businesses embrace this platform? “We can provide our custom-

dedicated safety procedure coaching

ers with multiple options for turnkey

for drivers. Allied to this Easy4Pro can

solutions for on-demand delivery,”

be utilised along with Upela to create

confirms Higelin. “We have competi-

one transport management system

tors in many markets – critical, express

to compare worldwide shipping and

etc. – but I don’t know of any our

tracking solutions for parcels, fur-

competitors providing a full package

ther enabling on demand delivery.”

of solutions for on demand as we do.

Higelin cites Easy4Pro as one of

Our solutions are tailored to our client’s

the secrets of Redspher’s continu-

needs using the synergies from our

ing success in Europe (with a focus

companies. We could use one of our

on the automotive industry now

companies to GPS track the vehicles

broadening to target machinery and

and our online training centre to set up

aerospace), while also a big driver in

AUGUST 2018

he says. “We predict the new trend will play to our strengths with a platform approach allowing us to offer one solution while combining the skills of smaller players and helping us consolidate the market. We’re focused on the mantra: ‘Think global, ask local.’ There’s a great opportunity to link digitally worldwide, while locally you can focus on efficient shipment and last mile delivery.

Just like Uber you can have the same interface everywhere. We’re trying to create new standards like this with our platform approach as each company is trying to optimise their operations, minimise dead miles and empty kms, its US expansion and plans to build

so there’s a real need for these stand-

the platform further into Mexico

ards and cooperation between compa-

and South America. “We’re react-

nies to renew the transport industry.”

ing to requests from our customers

Looking to the future, Higelin wants

to provide our services in different

the Redpsher group to draw on its

continents,” he says. “It’s a sign of our

strengths and meet the challenge of

success that they trust us to support

further developing and interconnecting

and help them expand their own busi-

its own businesses. “We aim to

nesses as we in turn expand ours.”

develop cross-selling between our

What are Higelin’s predictions for the

brands to deliver a more seamless

logistics industry? “Currently it’s a frag-

experience for our current and future

mented market with a lot of small play-

customers across the globe.”

ers who favour one logistics partner,” w w w. s u p p l y c h a i n d i g i t a l . c o m

47

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T O P 10

50

AUGUST 2018

Top 10 Air Freight Carriers Worldwide W RI T T E N BY

HARRY MENE AR

The global air freight market has grown by almost $40bn since 2004, according to Statista. With the demand for air freight rising by 9% in 2017, the strongest growth since 2010, the industry is becoming increasingly vital to the operation of increasingly dynamic and robust global supply chains. This article examines the world’s top ten air freight carriers, according to the previous year’s Freight 50 ranking provided by Air Cargo World

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

51

T O P 10

09

Korean Air Headquartered in Seoul, Korean Air provides cargo and passenger services to over 100 destinations in 44 countries. The carrier fell from eighth place in the previous year’s rankings, with a total FTK of 7.66 bn, representing a 7.1% decrease year-over-year.

Korean Air reported a net revenue of $10.7bn in 2017, also reporting a return to profitability for the first time in five 52

10

Cargolux Group The Luxembourgish freight carrier Cargolux Group (comprised of Cargolux Airlines and Cargolux Italia, established in 2008) remained in the number 10 spot, with a total reported FTK (Freight Tonne Kilometer) equaling 7.45 bn, which represents a 7.7% expansion year-over-year. The carrier group currently operates a fleet of 30 aircraft (26 through Cargolux Airlines and an addition four through Cargolux Italia), primarily variants of the Boeing 747. www.cargolux.com

AUGUST 2018

years, according to Forbes. www.koreanair.com

07

Qatar Airways Qatar Airways, the nationally owned airline of the Kingdom of Qatar is based in Doha, and ascended two places in the Freight 50 rankings, with a total FTK of 9.22 bn, representing a 19.6% increase in comparison to the previous financial year. The carrier’s Cargo division recently launched facilities at its hub in Doha to provide a “Seamless Cool Chain”, comprised of a “2,470 square metres Climate Control Centre situated at the airside…

08

Air France-KLM

equipped with segregated temperature-controlled sections for storing pharmaceuticals and perishables.”

This end-to-end supply chain control

The Air France-KLM freight carrier

is expected to further improve Qatar’s

group was founded in 1947. The group

standing as a leader of Middle Eastern

is comprised of Air France, KLM,

air freight. www.qrcargo.com

and Martinair, and is based in Paris, France. Falling from seventh place in the Freight 50 rankings, the carrier reported a total FTK of 8.13 bn, which represents a 9.2% decrease in traffic year-over-year. The group reported a net revenue of $29.08bn at the end of 2017 and is ranked #28 on Forbes Magazine’s list of Best Employers. www.klm.com

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

53

T O P 10

05

Cathay Group cathay.com.tr The Cathay Group (composed of Cathay Pacific Airlines and Dragonair) is headquartered in Hong Kong and its Cargo division accounts for 21% of the airline’s total revenue. The company’s first dedicated cargo flight between

06 54

Hong Kong, Frankfurt, and London, was established in 1981, according to

Lufthansa Group

the official site. Now, Cathay Pacific’s

www.lufthansagroup.com

nations worldwide. The carrier fell

Based in Cologne, Germany, the

from the fourth position on the Freight

Lufthansa Group (comprised of

50 ranking, as its total FTK fell by

Lufthansa, Swiss, Austrian, and

3.6%, to 10.21 bn. According to Forbes,

Brussels Airlines) fell from the fourth

Cathay Pacific experienced a second

position in the Freight 50, with a com-

year of unprofitability, although the air-

bined FTK of 9.46 bn. While this

line’s asset portfolio reached a record

represents a 1.6% increase in traffic,

high in 2017, with a net value of $24.1bn.

year-over-year, the carrier was forced down the list by drastic growth from other German freight company, DHL. According to Forbes, Lufthansa’s revenue and net profits ($41.5 bn and $2.78 bn, respectively) in 2017 are both the highest reported by the company over a ten-year period.

AUGUST 2018

Cargo Division services over 47 desti-

03

UPS Airlines www.ups.com/aircargo Headquartered in Atlanta, Georgia, UPS Airlines is part of United Parcel Service, Inc. Founded in 1908, UPS is the oldest company in the Top Ten, and retained third place in the Freight 50 rankings, with a total FTK of 11.26

04

DHL Express Group

bn. This represents a 3.9% increase year-over-year. The Company as a whole reported a net revenue of $67.7 bn, according to Forbes, representing a continuation of a ten-year trend of

www.dhl.com

continuous growth. Forbes also ranks

Operating as the largest European

UPS among the world’s top 100 most-

carrier group, DHL Express Group

innovative companies, and the world’s

(composed of DHL Air, DHL Interna-

top 50 most-valuable brands.

tional, Air Hong Kong, Polar Air Cargo, ABX Air, Southern Air, Aerologic, and EAT Leipzig) rose two positions in the Freight 50 rankings. The carrier reported a total FTK of 10.56 bn, which represents an increase of 15.1% yearover-year. In 2018, at the Farnborough Air Show, DHL Express announced the purchase of 14 Boeing 777s, part of a new strategy to modernise its fleet.

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

55

T O P 10

56

02

Emirates Skycargo www.skycargo.com The state-owned air freight carrier for the UAE, Emirates Skycargo remains in second place on the Freight 50, with a total FTK of 12.27 bn, representing a 0.4% decrease year-over-year. The carrier’s central hub in Dubai allows its 259-strong fleet to reach over 1.5 bn consumers in under eight hours. Current purchasing plans are underway for Emirates Skycargo to almost double its fleet size. According to Albawaba, “In response to increasing demand from its customers, Emirates SkyCargo introduced a range of air transport solutions specific to industry verticals including Emirates Pharma, Emirates Wheels and Emirates Fresh.” Emirates Wheels has transported close to 150 cars per month since the program’s inception.

AUGUST 2018

57

01

FedEx Express www.fedex.com Founded in 1998, FedEx Express is both the youngest and largest air freight carrier worldwide, with a total FTK of 15.71 bn. Haulage decreased by 0.9% year-over-year, while revenue increased to $60.5 bn in 2016, and again to $63.8 bn in 2017, continuing an eight-year growth trend. FedEx employs 395,000 members of staff, with FedEx Express operating across twelve transport hubs globally. The carrier purchased an additional 24 Boeing 777 variants in 2018, maintaining their company’s position as the largest airline in terms of cargo haulage.

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

EVENTS & A S S O C I AT I O N S

The biggest industry events and conferences WRITTEN BY ANDREW WOODS from around the world

04–07 SEPT

Supply Chain Insights Global Summit [ PHILADELPHIA, USA ]

This supply chain manage60

ment conference is a unique event designed for supply chain leaders and features two tracks: Cognitive Computing

11–12 SEPTEMBER

North American Supply Chain Executive Summit

& Machine Learning Work-

[ CHICAGO, USA ]

shop and Blockchain &

The North American Supply Chain Executive Summit

Bitcoin Workshop on Day

series has grown to become the most senior and diverse

1, with networking, activi-

gathering of supply chain executives anywhere in the

ties, speakers, case

world. Based on an ever-growing network of referrals and

studies, and much more

recommendations, the North American Supply Chain

woven throughout the four

Executive Summit is designed and built by Executive Plat-

days. This event is limited

forms to bring together the right people from across a

to 35 technologists, con-

number of different industries to network, benchmark,

sultants, and 3PLS.

learn, and share with one another.

Click to view website

Click to view website

AUGUST 2018

12-14 SEPTEMBER

Indonesia Transport, Supply Chain & Logistics 2018 [ JAK ARTA, INDONESIA ]

Indonesia Transport Supply Chain and Logistics (ITSCL) is an international event for players in the logistics, transport and

23-25 SEPTEMBER

help businesses develop, increase visibil-

Gartner Supply Chain Executive Conference

ity and strengthen their presence in

[ LONDON, UK ]

Indonesia. ITSCL aims to create a world-

Gartner Supply Chain Executive Confer-

wide community for transportation and

ence is the world’s most important

logistics, building up business networks

gathering of supply chain leaders, dis-

and promoting knowledge sharing.

cussing how disruptions large and small

The event is set to include over 350 major

confront today’s supply chains on a daily

logistics companies, solutions providers,

basis and how ‘organisational survival

transport providers across land, sea and

depends on the ability to anticipate,

air, and facility vendors. Industries set to

adapt, and transform supply chains to

appear include automotive, chemicals,

deliver reliability and performance’.

construction, energy, food, pharmaceuti-

Click to view website

supply chain sectors. The event aims to

cal, retail, oil, mining and many more.

Click to view website

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

61

EVENTS & A S S O C I AT I O N S

30 SEPT–03 OCT

CSCMP EDGE 2018 [ NASHVILLE, USA ]

Discover over 100 forward-thinking sessions covering real world strategies implemented to maximise and transform 62

supply chains and learn from some of the brightest academics and practitioners in supply chain today. ‘The Council of

02–04 OCTOBER

10th Cool Logistics Global Conference [ ANT WERP, BELGIUM ]

Supply Chain Management Profession-

The 10th anniversary Cool Logistics

als (CSCMP) hosts the must-attend

Global Conference & Exhibition provides

supply chain event of the year — CSC-

a fantastic opportunity to connect per-

MP’s Annual Global Conference, EDGE.

ishable cargo owners with cold chain

From leading-edge content to cutting-

logistics and transport professionals

edge supply chain solutions, EDGE

from around the world to assess key mar-

reflects the unparalleled resources

ket trends and operational best practice

CSCMP offers today and symbolises

for the international movement of chilled

our unwavering commitment to supply

and frozen cargoes by air, land and sea.

chain in the future.’

Click to view website

Click to view website

AUGUST 2018

15–17 OCTOBER

MHI Annual Conference [ FLORIDA, USA]

MHI Annual Conference will focus on key themes identified by the US Roadmap for Material Handling & Logistics and the MHI Annual Industry Report including: • Industry 4.0 • Building the Future Supply Chain Workforce • The Current and Future State of Distribution Center Technology

63

31 OCTOBER

CIPS SM Awards [ LONDON, UK ]

• Marketing in the Supply Chain Industry

Chris Bell FCIPS, Commercial Director –

You’ll learn how to incorporate these

City of London Corporation, one of this

trends and innovations and seize new

year’s judges, and winner of the ‘Pro-

opportunities that produce tangible

curement and Supply Management

results. You’ll also have the opportunity to

professional of the year 2016’, will chair

participate in product group and our

the day while presenters from the vari-

solutions community meetings that help

ous winning organisations will deliver

shape the future of our industry. The con-

case studies.

ference will feature four keynotes and six

Click to view website

conference tracks.

Click to view website

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

ADDING VALUE OF DIVERSITY & INCLUSION IN SUPPLY CHAINS THE UK’S LARGEST SUPPLIER DIVERSITY CONFERENCE For over 10 years, MSDUK have been dedicated to improving diversity in entrepreneurship and driving inclusive procurement. We believe that supplier diversity is an economic and moral imperative. Innovation comes from a diversity of perspectives, so when we limit who can contribute, we in turn limit what problems we can solve.

Diversity within supply chains can not only bring new ideas and solutions to any organisation, but it also brings competitiveness, and boosts market growth. Beyond these commercial benefits, there is the BIG social value supplier diversity brings - reducing socio-economic inequality and creating stronger, more stable communities.

MSDUK welcomes a global audience to the 2018 Conference & Awards in Birmingham. The twoday event is a must-attend conference for Ethnic Minority Businesses (EMBs) and Corporations looking to drive inclusive procurement and connect with diverse like-minded businessmen and women. Join our conference of diverse entrepreneurs, supply chain leaders, thinkers and doers and realise the power of differences.

HIGHLIGHTS • Full Day Business Exhibition with break-out meet the buyer and silent workshops by industry experts.

• Knowledge Forum with stimulating panel sessions, fire-side chat with inspiring entrepreneurs and interactive workshops around supplier diversity and business growth.

• Eagerly awaited finale of MSDUK 2018 Innovation Challenge bringing 10 most innovative entrepreneurs pitching their ideas to investors and supply chain experts • Glittering Business Awards night celebrating supply chain diversity and best of ethnic minority businesses combined with food and entertainment from all across the world proactively look for ways to bring different voices to our team and into our decisions.

Join over 600 delegates from all across the world, including Chief Procurement Offices, senior sourcing professionals, global diversity and inclusion leaders, policy makers, academics and hundreds of inspiring, innovative and successful ethnic minority entrepreneurs!

FIND OUT MORE AND REGISTER AT CONFERENCE.MSDUK.ORG.UK

INNOVATION | KNOWLEDGE | PROCUREMENT | BENCHMARKING BIRMINGHAM 25-26 SEPTEMBER

66

INNOGY:CREATING SUSTAINABLE VALUE THROUGH PROCUREMENT We caught up with Dr. Ulrich Piepel, CPO at European renewable energy giant innogy, to find out why procurement is such an important part of the company’s strategy WRIT TEN BY

OLIVIA MINNOCK PRODUCED BY

RICHARD DURR ANT

AUGUST 2018

EUROPE

67

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

INNOGY

P

rocurement is all about the right players, says Ulrich Piepel, choosing a football analogy

during World Cup 2018 from his office overlooking Borussia Dortmund’s Signal Iduna Park, where he regularly attends matches.

Since drafting in Piepel in 2003, innogy has transformed procurement into an important strategic function which adds significant value and innovation to the organisation – and together with the right players and partners, the procurement function has been instrumental in transforming innogy into one of the largest providers of renewable energy in Europe.

68

A RENEWABLE FOCUS RWE is a major European energy company dating back over 100 years; in 2016 amid policy and market changes, RWE decided to split the generation part of its business from the rest of the company, making innogy (innovative energy) a separate entity. “innogy has everything besides conventional power plants,” explains Piepel, adding RWE itself still owns gas, lignite, coal and nuclear, as well as mining. “All of the rest of the company – roughly 2/3 of the people, volume and revenue – is now innogy.”

This actually makes the subsidiary bigger than RWE, and it owns retail operations across Europe, including the UK, Germany, the Netherlands, Czech Republic, Poland, Hungary, Slovakia and Austria. “Our renewables business is solar, onshore and offshore wind, as well as some biomass energy production. There’s also some new business because the energy market is changing AUGUST 2018

Click to watch: talks Renewable

: ‘Innogy CPO Ulrich Piepel e Energy’

EUROPE

69

rapidly and we’re seeing developments like electric cars and smart homes,” Piepel adds.

PROCUREMENT TO THE FORE “Let me ask you a question. If you had €50,000 to invest, would you give that to someone who isn’t capable, and lacks a degree or expertise in spending or investing money?” Of course not – but Piepel argues that’s exactly what many companies are still doing when it comes to procurement.

“Decades ago, procurement wasn’t seen as an important function. Perhaps in retail it was known that making the right price point was vital for w w w. s u p p l y c h a i n d i g i t a l . c o m

Dr. Bernd Schönwälder Mercateo Executive Boardmember

»

Digitisation is definitely a cool universal technology to connect people for business.

This opens up enormous opportunities for purchasing.

That’s what we believe in at Mercateo.

«

Find out more →

INNOGY

success, but other industries didn’t pay attention, meaning a large chunk of costs weren’t managed professionally. In the 80s when I left university, procurement was the fifth wheel on the wagon.

It was just transactional work.”

Heading up a large organisation means being able to transform this process through procurement engineering. “If you don’t have the right organisation, you cannot become a successful value creator bringing lots of money to the company. You must create a larger, centralised procurement organisation including the right people. You have to engineer the right organisation and all procurement processes.”

‘Procurement engineering’ for Piepel involves bringing together processes, measurements and set-ups to go through one department.

“This helps you make sure your organisation is following the best in 72

class processes, with the same set of KPIs,” he says. Perhaps unsurprisingly, the most important KPI at Innogy is return on investment. “In the past, when procurement was transactional, people only looked at the cost involved. You have to keep that in mind, but the most important thing is to establish RoI as a key factor to ensure we’re saving a multiple of what we’re spending. This is long-term added value.”

Procurement is so vital in value creation that it’s hard to imagine how innogy functioned without this strategic department. Piepel is

AUGUST 2018

EUROPE

“ You have to make the organisation aware of your bottom line savings.

This helps senior management and the board understand how important procurement can be” — Ulrich Piepel CPO, Innogy

73

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

Eberspächer transformed their supply chain payments with Tradeshift The Eberspächer Group, headquartered in Esslingen, is one of the world’s leading system developers and suppliers of exhaust technology, vehicle heaters and bus air conditioning systems. The company is active in 60 locations across 25 countries, and it processes over half a million paper invoices annually from international suppliers of all sizes. To conduct its accounting processes more efficiently, the global automotive supplier realized it needed an electronic invoicing system, and for them Tradeshift was the clear choice.

Discover how Tradeshift can transform supply chain payments for your company at Tradeshift.com

Inefficient invoice processes Until the introduction of Tradeshift, Eberspächer processed invoices semi-automatically based on a scanning technology. A key challenge was to map the e-invoicing process to all relevant global markets and, knowing the importance of adoption, motivate suppliers to participate.

Other needs were to reduce the workload for the Eberspächer team with less manual processes, allowing them to refocus resources on other areas of the company, and to standardize the interfaces that link partners within the supply network. Eberspächer required a solution that could enable automatic global processing for all incoming invoices, with an extremely high availability across the globe.

The solution needed to be compatible with the IT systems of all Eberspächer suppliers— supplier onboarding and ease of use were paramount. The company analyzed solution criteria that went beyond functionality and cost, including expandability, industry knowledge, and supplier integration.

“We chose Tradeshift’s open B2B platform as they met our requirements in full—it’s free for our suppliers and is already prepared for, and tailored to, the legal regulations of most countries,” Dr. Oliver Frille, Vice President of Procurement & Supply Chain management for Climate Controls Division within the Eberspächer Group.

“In addition, Tradeshift allows us to be flexible.

With their extensible platform, we can easily extend our business applications to best suit our requirements and business.” The implementation of the Tradeshift platform launched in March 2016 at two sites with an initial 700 invited suppliers. In June 2016, the solution was rolled out at two additional locations and to another 70 strategic suppliers.

The successful onboarding of suppliers was an important linchpin in the implementation of Tradeshift. With Eberspächer’s input and approval, Tradeshift employed email campaigns to help engage suppliers and guide them through registration.

The automated onboarding required only a few clicks to connect suppliers to Eberspächer by establishing a Tradeshift account.

Automated invoice receipt, lower costs and higher data quality With Tradeshift, suppliers can now provide electronic invoices to Eberspächer in different ways and collaborate and communicate more easily. Of the 700 selected partners of the pilot project, one third have now switched to Tradeshift, and about 40 percent of them regularly send invoices through the platform. In addition to the automatic onboarding campaigns, Tradeshift’s integration as a service helped Eberspächer quickly integrate its top suppliers. One of the key benefits according to Eberspächer are Tradeshift’s automated validation rules. A supplier, forexample, that mistypes an electronic catalog order number, will be notified and can correct it easily and resubmit. The delays and unnecessary inquiries that come with paper invoices are a thing of the past. Tradeshift CloudScan, an application that allows PDF and paper invoices to be transferred into Tradeshift, digitizes documents automatically and performs various validation tests.

Eberspächer can now ensure that only high-quality data reaches the company’s internal IT systems.

SHAPING THE FUTURE. TOGETHER. BCG provides end-to-end procurement solutions. Our focus is on delivering sustainable value and efficient operating models. With digitization becoming real, we partner with companies to develop a customized and comprehensive digital portfolio comprising ready-tomarket offerings, such as AI-based negotiation coaches, tail-spend management software, supplier collaboration and contract platforms, and robotics to push the value envelope in procurement even further.

For more information about BCG’s procurement offerings, please contact: Robert Tevelson (Global Leader, Procurement) tevelson.robert@bcg.com Daniel Weise (Procurement Leader, Europe) weise.daniel@bcg.com

bcg.com

EUROPE

77

adamant that procurement savings must

solutions, services and products to bring

be recognised as vital to profitability. “If

them into the business.”

a salesperson made 30% more sales, they would be seen as the hero of the company,

PROCURING ACROSS EUROPE

but if procurement makes savings with the

With Innogy operating across a multitude

same effect, which will also be sustainable

of locations, it’s important to ensure

over the next year, nobody really notices.

procurement organisations are independ-

You have to make the organisation aware of

ent parts of a well-run whole. “We structure

your bottom line savings and innovations

procurement not according to countries

from suppliers as well. This helps senior

but according to categories across a global

management and the board understand

market,” Piepel explains. “We allocate

how important procurement can be. And in

experts to each category who may work in

the age of digitisation, it is our job to scan the

different countries, but the negotiation and

world market for disruptive and digitised

strategy can be done centrally. You can w w w. s u p p l y c h a i n d i g i t a l . c o m

EUROPE

Click to watch: ‘Innogy CPO on the role of Procurement. Ulrich Piepel’ 79

then apply the same best-in-class process

as you can. We need these experts who

whether in the UK, Germany, the Nether-

focus on a few product groups, rather than

lands or elsewhere.”

covering many categories in a decentral-

The energy giant deals with a variety

ised organisation with little knowledge.”

of product groups, and Piepel has worked to centralise these in order to make the

WORLD-CLASS PLAYERS

most of resources, thus increasing the

Experts are indeed vital in procurement if

knowledge within each category dramati-

it is to cease being an add-on or ‘fifth wheel’.

cally. “In the past, we had maybe 15 buyers

“We just had the World Cup, for example:

for cables for example, but why not

at the highest level, you need great players.

concentrate this to a single buyer with the

If you want to have great players, you need

right knowledge of markets, suppliers and

to pay, educate and motivate them. Attract

cost points? To create a great organisation,

them, even, as a large organisation with

you must centralise procurement as much

a lot of spend and leverage. Nowadays, w w w. s u p p l y c h a i n d i g i t a l . c o m

INNOGY

procurement is one of the most complex jobs you can have – you need to understand the business, processes and the latest innovations in an increasingly digital world. You need to understand the products and costs involved, compliance, purchase-to-pay processes, even health and safety and data security,” says Piepel.

Amid rapid digitisation and transformation, roles can change quickly so it’s not always about employing those with the best ‘technical’ skill or the most specific qualification. “It’s important to have the right people with the intellectual capabilities to adapt to new situations. You need 80

smart people – it’s about brains and, very importantly, passion. We then try to give the highly skilled people freedom and trust. A buyer has to have room to negotiate, find new and innovative suppliers worldwide and interact with technical departments. You also have to reward staff, recognise who is doing a great job and encourage them to be braver, even get into arguments with technical people because they may have a better and more digital solution.”

AUTOMATION – GETTING DOWN TO BUSINESS Procurement involves a number of processes in any company, and as innogy was quick to recognise, automating as much as possible means more time is freed up for staff to make the most of their talents.

AUGUST 2018

“ To create a great organisation,you must centralise procurement as much as you can.We need these experts” — Ulrich Piepel CPO, Innogy

EUROPE

“Take tendering for example,” says Piepel.

“Previously, people would mail out tonnes of paper to the suppliers, and time was wasted when files came back to do research, comparison and benchmarking. Now, we do most of our tendering electronically with software like myFUTURA, which has helped us reduce cycle time and become way more efficient.” MyFUTURA allows for automatic comparison of various quotes and price allocation, and is a fully compliant with innogy’s back end systems, as well as being faster and easier for buyers to use, according to Piepel.

More surprisingly, negotiation can also be automated through electronic auctioning tools.

“Electronic auctioning brings us way more savings because we take away the personal element between supplier and buyer, which isn’t always needed when talking about facts and figures.”

While this was a challenge to introduce to some staff who felt negotiation was their biggest strength, Piepel persevered. “Now, people love it.

We’ve done thousands of e-auctions, and have in some areas up to 80-90% of our spend going through e-auction tools. It’s been a big boost, but also one of the toughest things to introduce, as there was resistance from buyers, technical departments… and suppliers who know it’s tough.

Call-offs notoriously involve a lot of paperwork which can be a huge drain on time and resources.

“We needed tools, like catalogues, which cover w w w. s u p p l y c h a i n d i g i t a l . c o m

81

INNOGY

75-80% of our orders. We implemented

a successful and powerful organisation,

catalogues around 12 years ago and then

you can’t do it alone,” Piepel continues.

found we shouldn’t do the hosting and

“We have ideas, but need strong and inno-

management ourselves, but give this to

vative partners to follow these through

someone who is even more capable than

with. You can develop things better as

us. We therefore invited Mercateo to join

part of a partnership rather than looking

our procurement transformation journey

for a specific tool. We have also been

– we were one of their first customers so

working with many consultants which

were really able to help them grow their

specialise in procurement for the last few

platform, and now Mercateo is a major

years, for example Boston Consulting

company in electronic catalogue handling.”

Group, which has helped us shape our ideas, strategy and cost savings. It is

82

RELATIONSHIPS BUILT TO LAST

fundamental that we benchmark with

Mercateo is one of several partners that

each other, as they know what is going

Innogy sees as vital to success and

on in the market.”

growth. “When you want to create such

AUGUST 2018

Call-offs have also been supported

EUROPE

by software giant SAP. “We now have, with

mining, which utilises big data to help us

SAP, a supplier and procurement platform

see where our processing is not accord-

to cover all countries. SAP enables us to

ing to standard. This tool made us even

create call-off orders automatically, which

better in streamlining processes and

we call ‘no touch procurement’. All

becoming leaner, faster and more agile.”

contracts with all details are entered and

Tradeshift’s platform has also filled gaps

stored within the system, so people in the

in innogy’s purchase-to-pay process,

business can now call off without even

freeing up time and skills. “We do a lot of

involving procurement. This takes most

self-billing where possible, but found out

of the transactional work out of your

that we still receive a lot of invoices which

organisation and pushes this capacity into

aren’t up to standard for us to process.

the more strategical, value-creating

Tradeshift is an effective, fast-growing tool,

procurement work. We also have a lot of

which helps us to automate complex

processes in our organisation which is

paper invoices. The software automati-

tough to subtract the data out of, so we

cally reads all invoices and reduces

have implemented Celonis process

transactional work significantly.”

“ When you want to create such a successful organisation,you can’t do it alone.We have ideas, but need partners to follow these through with” — Ulrich Piepel CPO, Innogy

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83

INNOGY

PA R T N E R S H I P S

A decade-long partnership

84

innogy has enjoyed a 10-year partnership with Mercateo, with the procurement platform being instrumental in time and cost savings. This long-standing collaboration has enabled Mercateo not only to develop suloutions that are specifically adapted to the needs of the energy giant, but also over time to develop into one of Europe’s leading platform providers. “We’re proud of contributing to the hugely successful innogy story,” says Dr. Bernd Schönwälder, a member of Mercateo’s executive board. “innogy was an early and rapid mover in introducing process digitisation.”

The partnership has allowed this digitisation to be accepted by users despite the initial resistance recalled by Piepel. “It was a fascinating step into a new arena,” says Schönwälder, “but today many procurement managers see Mercateo’s solution as a kind of

AUGUST 2018

‘dial tone’ in e-procurement – they connect, pick up the receiver as it were, and have access to millions of items. It’s crucial to see how users find the platform useful.

This was a really strategic step for us with innogy.

“It was a co-creative process,” he recalls. “innogy has always had a clear vision and the partnership has contributed a lot to our innovation. Innogy should be proud of how they helped improve our solution and brought this value to a broader market.”

Initially, Mercateo onboarded innogy’s existing suppliers with its B2B network, and users began to accept the platform as a way to get their suppliers all on the same solution. “We had a mashup from the marketplace, an ocean of products, and the very specific products that every single user needed each day. This was groundbreaking in terms of acceptance,”

EUROPE

Click to watch: ‘Innogy and its Partners featuring Chief Procurement Officer Ulrich Piepel’

Schönwälder explains.

Will the partnership span a further 10 years? Its success so far certainly inspires confidence in both parties. “It’s always hard to tell the future,” allows Schönwälder, “but looking back at our stable partnership which has always evolved, I have no doubt we can build on this partnership where we each know what the other side can use, what their world looks like, and how to adapt.”

innogy and Mercateo clearly share a vision of the future where digitisation can only add to the journey. “I deeply believe we will find digitisation to be a tool to bring people closer together and improve communication: enrich it, make it more efficient, more transparent.

Procurement has a lot to win, from process cost saving to free time to do more valuable things,” Schönwälder concludes.

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

85

INNOGY

Automation has been crucial in removing

an ongoing commitment to maintaining

transactional work over the years, says

partnerships, automation and digitisation.

Piepel, especially if the procurement

“We have two main strategic directions:

department is to lead by example. “You

digitisation of procurement and digitisa-

cannot add a couple of hundred people to

tion of the business,” Piepel outlines. “In

procurement and add this to costs. You

procurement, we are investing in evolving

have to transform to ensure all costs are

tools such as data transparency with

under control – automation transforms

artificial intelligence and will also imple-

transactional work into space for strategic

ment a highly strategic digitised source to

work,” comments Piepel.

contract software solution. With these tools we will support our buyers through

86

THE FUTURE

decision making, and to make the process

Innogy’s transformation looks set to

faster and more transparent. In a global

continue, with the company showing

market, it’s tough for buyers to see what’s

innogy smarthome

AUGUST 2018

EUROPE

BIO

Dr. Ulrich Piepel qualified as a mechanical engineer at the University of Dortmund, Germany. He then started his career at the Fraunhofer-Institute for Logistics and Material flow. At the age of 30, he made his dissertation at the Fraunhofer-Institute in the field of robotics. After this, he joined the headquarters of Krupp in Essen, Germany for 3 1/2 years. He then took over responsibilities for logistics and production planning as well as for distribution in a Krupp subsidiary named Widia. After Widia merged with a US-based company named Valenite, Dr. Ulrich Piepel was responsible for the global procurement & supply chain of WidiaValenite.

In 2000, Dr. Ulrich Piepel left Widia to become COO of Maxdata, a major manufacturer of servers, PCs and laptops as well as the market leader for computers monitors in Europe. In 2003, Dr. Ulrich Piepel became CPO of RWE, the main German utility group for energy, gas and water. He is responsible for an annual purchasing volume of â‚Ź 10bm.

Since October 2008, Dr. Ulrich Piepel has been promoted to managing director of RWE Shared Service Center, the RWE Service GmbH. Since Feb. 2014 Ulrich Piepel has been promoted to directly manage all procurement activities within the RWE group, now reporting directly to the RWE board and having solid lines of all buyers if RWE worldwide.

In September 2016, Dr. Piepel became CPO of the new innogy SE, which has been the created as the renewable energy company from former RWE. He reports to the CEO.

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

INNOGY

88

“ We must continue to push digitisation, even if there is some resistance — we must make people understand it’s not threatening their job,just changing and maybe even supporting it.”

— Ulrich Piepel CPO, Innogy

AUGUST 2018

EUROPE

happening in Israel or China for example, so they must be supported by digital tools with AI elements.”

It is also very important to ensure buyers understand the digitisation of the business itself – and indeed, the renewable energy industry.

“Our buyers need to understand the needs, developments and innovations of the market,” says Piepel.

“They have to challenge the business sometimes, or support it with these kinds of tools and digitised, disruptive solutions.”

We can expect to see constant improvement across innogy, led by a strategic procurement department. “We want to learn from other organisations and develop an even greater network of buyers. We must continue to push digitisation, even if there is some resistance – we must make people understand it’s not threatening their job, just changing and maybe even supporting it.

Mainly, we are looking at all the latest trends and getting the best people on board.”

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

89

Where transforming an enterprise starts with transforming business communications WRIT TEN BY

L AUR A MULL AN PRODUCED BY

ANDY TURNER

Creating superior customer experiences with artificial intelligence and machine learning, Avaya is ready for the digital age of communications

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

AVAYA

W

ith audio conferencing, web conferencing, video conferencing, instant messaging, and more

entering the fray, there are now many ways for businesses to communicate.

Needing to simplify this proliferation of new technologies, enterprises of all sizes are now turning their attention to new, innovative approaches like unified communication.

By allowing employees to send messages through one medium and receive the same communication on another medium, this integrated way of communicating aims to improve employee efficiency, effectiveness, 92

workforce mobility, customer service and, ultimately, competitiveness.

Carving its path as a global leader in digital communications services, Avaya is all too aware of how technology can transform both communication and the customer experience alike.

With a far-reaching offering, the company strives to break down the barriers between disparate systems and seamlessly connect business stakeholders and customers.

Avaya’s product portfolio can be divided into three core areas – unified communications, cloud solutions, and customer experience and contact centers – and it’s clear they’ve been a hit, with Avaya solutions being used by 95% of all Fortune 500 companies.

AUGUST 2018

TECHNOLOGY

93

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

Extraordinary customer engagement powered by AI. Nuance combines the best of automated and human-assisted customer service powered by AI to help companies provide meaningful interactions that maintain context as customers move between devices and channels – from IVR to SMS, virtual assistant to live chat – while informing agents about previous engagements.

- Conversational IVR that can understand callers and respond intelligently - Biometrics security and fraud prevention to authenticate users - Virtual assistants for guidance on digital channels - Proactive outreach to notify or remind - Live chat/live agent support when a human touch is needed When customer service is done right – the benefits are loud and clear. You get reduced costs, increased revenue, exceptional customer satisfaction and unwavering brand loyalty.

Learn more.

Or contact us – cxexperts@nuance.com.

Nuance and the Nuance logo are registered trademarks or trademarks of Nuance Communications, Inc. or its affiliates in the United States and/or other countries. All other trademarks referenced herein are the property of their respective owners. July 2018/3575

TECHNOLOGY

Jean Turgeon, Vice President and Chief Technologist, says that the firm’s cutting-edge digital platform as well as its ability to integrate new technologies is helping it streak ahead of its competitors.

“We deliver an automated digital framework, which I describe as a puzzle with different pieces inclusive of an innovative communications

‘ Avaya can respond to events detected

by IoT technology and notify the right people in real-time” — Jean Turgeon, Vice President and Chief Technologist

platform,” explains Turgeon. “So, we have to take different technology

still keep up-to-date with the latest

innovations and we bring them all

industry trends.

together to be able to transform and deliver a digital experience.

“We have a delivered an open

“It doesn’t make a whole lot of sense for customers to build a next-generation digitally enabled platform that

architecture bringing together unified

doesn’t unify communication technolo-

communication portfolio, a contact

gies and have the ability to integrate

center portfolio, automated workflow

new technologies such as the internet

capabilities with a high degree of

of things (IoT), AI, analytics and/or

sophistication, and we’ve demonstrat-

taking advantage of blockchain

ed our ability to take other technolo-

technology,” he says.

gies, such as CRM from Salesforce,

With research showing that the next

AI with Afiniti and more, tightly

decade will be marked by record IoT

integrated within our ecosystem.”

growth (some firms predict revenue

Taking its cutting-edge portfolio

will break into the trillions), Avaya is

further, Turgeon says that Avaya’s

leveraging this innovation through its

ability to integrate new technologies

work in workflow automation.

gives it a unique competitive edge as customers can use the portfolio but

For instance, by integrating with IoT technologies, Turgeon believes 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

95

AVAYA

system could successfully alert authorities to the breakout of a fire.

“We can connect our portfolio very easily to IoT platforms, so that when IoT platforms trigger events that we can automate workflow to notify the right people in real time.

This creates a huge level of differentiation; by having this automated digital platform and the flexibility to integrate various technology altogether, it puts Avaya in a very good position from a competitive point of view.”

Using its communication services, Avaya can respond to events detected by IoT technology and notify the right people in 96

real-time. This means that, with its API integration, Avaya can make IoT data actionable, and holistically solve business problems for customers.

“ Anything other than real-time or near realtime communication is just not good enough anymore” — Jean Turgeon, Vice President and Chief Technologist

AUGUST 2018

TECHNOLOGY

97

With virtual reality, chatbots and

time contextual information to let you

augmented reality becoming the norm,

know that it’s not a good idea to

artificial intelligence (AI) and machine

establish a video call with me.

learning have also become a common expectation for customers.

Turgeon says that AI will soon play

“Today we leave it up to the caller to make the decisions about how they should contact you. Artificial intelli-

an integral role in communication

gence is going to become a key

services today.

component in communication

“You and I are communicating at

technologies, allowing systems to

this moment,” he tells me. “But if I

automatically determine what is the

was in my car, driving 70 miles per

best modality of communication at

hour on a highway, the system

a particular point in time.

wouldn’t able to retrieve any real-

“You no longer leave it to the caller. w w w. s u p p l y c h a i n d i g i t a l . c o m

AVAYA

98

“We deliver an automated digital framework, which I describe as a puzzle with different pieces inclusive of an innovative communications platform” — Jean Turgeon, Vice President and Chief Technologist

Now systems can blend that intelligence with machine learning capabilities, consuming all of this data and contextual information, and makes sense of that in real time.”

Artificial intelligence could also help contact centers use real-time coaching capabilities, whereby a skilled and experienced employee’s historical data can be used to give immediate feedback to another worker.

“If a customer is on a call and is unsatisfied we’re able to provide assistance to a contact center agent in real time based on our sophisticated speech analytics platform,” describes Turgeon. “This allows the ‘machine’ or a supervisor if escalated to be able to both give information to the agent, suggest other ideas on how to handle the situation, or even trigger an event to a supervisor to come and assist you.”

By combining its communication services with APIs, the opportunities for Avaya are

FACT

For the 2017 fiscal year, Avaya reported revenue of $3.272bn

endless. This is not only beneficial for the company’s bottom line but it could also help transform people’s lives.

Fraudulent calls and scams are a dark cloud for many customers and businesses alike but Turgeon believes Avaya is pushing the envelope with its latest innovations.

As part of the Avaya Mobile Experience, the company is working on Identity-as-a-Service (IDaaS) which will reduce the risk of

AUGUST 2018

TECHNOLOGY

Click to watch: ‘Accelerate the speed of your business communications with Avaya Equinox’ 99 identity fraud by using contact centers

other incidents – time is critical. There-

to verify the customer’s validity through

fore, the real-time nature of Avaya’s

the use of biometrics.

portfolio is one of its fundamental traits.

“I can eliminate the three to five

“If you’re unhappy with your service

security questions that someone may

at a hotel, for example, and you tweet

ask to determine your identity if the

about it it’s better if the business is able

confidence factor is high,” Turgeon

to react immediately,” notes Turgeon.

explains. “That’s time wasted by the

“Anything other than real-time or near

agent. We’re hearing from various

real-time communication is just not

industries that they’re spending around

good enough anymore.

40 to 75 seconds on average just trying

“So, we have to start leveraging much

to identify the caller. This really helps to

more sophisticated capabilities to be

improve the customer experience.”

able to transform the experience right

In many of the real-life cases Turgeon

now. You don’t want to lose a customer

discusses – resolving customer com-

who could contact a different organiza-

plaints or alerting people to fires and

tion to do business with. I have to react w w w. s u p p l y c h a i n d i g i t a l . c o m

AVAYA

“ It’s about connecting the world in real time, with the right data” — Jean Turgeon Vice President and Chief Technologist

to any issues immediately in real time.

“By the same token, if someone is having

100

that is most likely to help them.”

In the digital era, every

a heart attack or there’s an incident such as

interaction, whether direct or

a fire or a gas leak, time is of the essence. The

indirect, represents an oppor-

real-time aspect of a next-generation digital

tunity to deepen customer

platform that integrates real-time contextual

relationships. By diving into

information is extremely important, regard-

ground-breaking innovations

less of which use cases you look at.”

and offering seamless commu-

Building on its current platforms and

nication experiences, it seems

exploring recent improvements in AI and

Avaya is making sure that every

machine learning, Avaya is working to

opportunity counts.

bolster the AI ecosystem with its new initiative, A.I Connect.

Bringing technology vendors and strategic

“From my viewpoint, some of the use cases of our technologies are helping businesses be

partners together, the forum aims to speed

more attractive and profitable,

up the development and application of AI

whilst others are tied to trans-

technologies in contact centers and unified

forming cities, communities, and

communications for Avaya customers.

the type of services that they

“Through A.I Connect we have collaborated with companies such as Salesforce, who is a global leader in CRM, as well as other

can offer to their community,” notes Turgeon.

“It’s about connecting the

companies like Afiniti,” adds Turgeon. “Afiniti

world in real time, with the right

offers AI assisted pairing between the

data, and I think this is the tech-

customer and the agent to make sure that

nology that we will continue to

the customer is redirected to the person

invest in.”

AUGUST 2018

TECHNOLOGY

101

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

Championing leading supply chain practices at UCSF Health With robotics, automation, new processes and more, UCSF Health is setting new standards for healthcare with its innovative supply chain WRITTEN BY

LAURA MULLAN

PRODUCED BY

DENITR A PRICE

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

U C S F H E A LT H

U

CSF Health is at the forefront

repetitive tasks – that’s when

of healthcare innovation but,

he realized how transformative

behind the scenes, the group’s Medical Center supply chain team are keep-

“I found myself doing the

ing the cogs turning so it can focus on

same set of rote and rudimen-

delivering the state-of-the-art care it

tary tasks every day,” he notes.

is known for.

“I began to realize that with the

UCSF Medical Center was recently

104

technology could be.

help of our Materials Manage-

named among the nation’s premier

ment Information Systems

medical institutions for the 17th

Team (MMIS Team) we could au-

consecutive year, standing as the fifth

tomate a lot of the procurement

best hospital in the country and the

activity I was encountering.”

top-ranked hospital in California, ac-

Automation has become

cording to U.S. News & World Report’s

a prevalent trend in the supply

2017-2018 Best Hospitals survey.

chain field and it hasn’t gone

In the back-end, its supply chain

amiss at UCSF Health. In 2009,

team is responsible for a comprehen-

Limbert and his team partnered

sive set of services that continually

with Global Healthcare Ex-

strengthen the scope of its patient care.

change (GHX) to develop tools

The organisation provides access to a

that allowed his team to on-

broad range of medical-surgical prod-

board vendors who would then

ucts, and consistently seeks to reduce

receive their purchase orders

supply chain waste and expenses but,

(POs) in a highly-automated and

above all else, it is committed to deliv-

accurate fashion.

ering quality customer service, which enables premium care.

“A requester at the hospital could scan an order or put

When he began as a buyer in pro-

through a request and that would

curement almost 16 years ago, Jake

queue up a requisition that would

Limbert, now Director of Supply Chain

be turned into a purchase order

Operations, did many menial and

automatically without any buyer

AUGUST 2018

USA

105

FACT

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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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USA

“ If we can empower our clinicians to provide better care then we can also grow with them in a way that’s meaningful” — Jake Limbert , Director of Supply Chain Operations

Since then, Limbert and his team have continued on an upward trajectory thanks to new and improved technological innovations. In 2015, the UCSF Medical Center at Mission Bay opened, aiming to set new standards for healthcare in the 21st century.

The 289-bed complex features three separate hospitals, specialized in serving children, women and cancer patients.

intervention,” explains Limbert. “We call it ‘

With such a mammoth operation,

no touch POs.’

Limbert and his team wanted to

“We were able to do that on a fairly large

focus on automation and stream-

scale. We have about 600 POs that go out

lining operations where possible.

every day and so we were really able to take

With the latest wave of in-

our PO activity and just turn it into an auto-

novation, it seems robotics

mated process. At that point, we could also

are redrawing the healthcare

hard code shipping and logistical standards

landscape. Keen to tap into this

with all of our vendors so they knew that

emerging trend, UCSF Health

UCSF had an exact and predictable time-

teamed up with Aethon to use its

frame to deal with.”

autonomous mobile TUG robots.

Building on this partnership, GHX then

These new-generation robots

built Registration Center, otherwise known

allow UCSF Health to distribute

as ‘RegCenter’ which allowed UCSF Health

items easily and reallocate their

to onboard its own vendors. As a result of

workforce so team members

its efforts, UCSF was later recognized by

can focus on value-adding tasks

GHX in 2011 with their first every Industry

rather than repetitive jobs.

Impact Award.

“This was revelatory as it alw w w. s u p p l y c h a i n d i g i t a l . c o m

107

U C S F H E A LT H

lowed us to reallocate our full-time equivalent (FTE) resources,” said Limbert. “We also utilize the TUGS for our soiled linen pickup which helped us reduce employee injuries because, given census and patient volumes, these linen carts are becoming increasingly unwieldy. Thanks to robotics we’ve been able to keep our employees in an area where they’re most effective and appreciated.

They’re able to further support clinicians.”

Like many in the supply chain discipline, UCSF Health has worked to streamline and standardize its processes, so that the medical professionals can focus on what matters 108 — patient care. Every patient’s healthcare needs are unique and highly personalized.

Therefore, Limbert and his team worked closely with clinicians to establish their needs and maintain the unparalleled, innovative care UCSF is known for. In doing so, the group has worked to strike a balance between streamlined, cost-effective supply chain processes whilst meeting the individualistic needs of the clinicians and patients alike.

“If they’re able to interact with

Click to watch: ‘UCSF Our Stories: Rite of Passage — A Hospital Prom for Teen Patients’ AUGUST 2018

clinicians in a meaningful way then that allows us to again, gain

USA

FACT

The UCSF Medical Center is the fifth best hospital in the county and the top-ranked hospital in California

their trust,” explains Limbert. “We just

resources for the customers, not just

don’t want people stocking shelves,

inventory technicians.

we want people to engage the clinician

“The real product for us is patient

and figure out their needs so we can

care. Every patient has a different

make sure they are enabled to deliver

set of needs and a clinical path unique

the highest quality of care.”

to them.

“There’s a certain level of expecta-

“We are able to engage the end user,

tion that our clinicians demand and

the clinician, and say, ‘These are our

I think we are able to provide that

schematics and this is our framework.

by empowering our employees to

Does this synch with your needs?’

resource and make decisions on their

Almost like a switchboard, we plug and

own. We call them our ‘supply chain

slot them into our order of business.

ambassadors.’ We want them to be

“Alternatively, they might say, ‘Well w w w. s u p p l y c h a i n d i g i t a l . c o m

109

U C S F H E A LT H

that’s not really going to work because our cases start at 7:00 a.m. so we need product replenished by 5:00am,’ for example. In that case, we are able to scale it and tweak it for them.

“That is a challenge, however, it’s also something that we relish. Every patient is unique and they are our number one priority.

I think we have to be mindful of where we can standardize and where we can’t.”

The opening of the UCSF Benioff Children’s Hospital at Mission Bay was not only a key milestone in the institutions’ history, but it also gave Limbert and his team a fresh

110

slate to drive efficiencies and cost savings. In doing so, the team had two focuses: the first

“Every patient is unique and they are our number one priority” — Jake Limbert , Director of Supply Chain Operations

was the customer and the second was generating operational data.

“First, we determined, having learned from previous successes and failures, what the customer expected from us and what they needed in order to deliver the quality care that our patients deserve,” explains Limbert. “We were able to listen and figure out what worked and didn’t in the previous care area and then adapt and create new workflows, meaningful periodic automatic replenishment (PAR) levels and service level agreements (SLAs).

“Secondly, we built a very robust and intricate set of data,” he continues. “In order to

AUGUST 2018

USA

achieve the previously established au-

the biggest challenge is sustaining

tomation, we had to engage MMIS and

this growth.

our vendors to ensure the efficiencies would be mirrored in another facility.

“We devised new shipping locations

“It’s a good problem to have in that the healthcare environment in the Bay Area is very competitive but if we can

and schedules aligned with our new

empower our clinicians to provide

docks for optimal transport up to the

better care then we can also grow

unit. For example, right now a techni-

with them in a way that’s meaningful,”

cian will transmit an order and in less

notes Limbert.

than 12 minutes the vendor will have

“Allowing our ambassadors and

it. They can pick it and then it will show

staff to feel ownership over the care

up the next day at that room in fewer

that we’re providing is vital. If you

than 24 hours.”

can illuminate their piece within this

With 78mn products delivered annu-

dynamic jigsaw, it helps them feel

ally at UCSF, its supply chain opera-

more engaged and proud to provide

tion is mammoth in scale. Now, as the

a crucial piece in the patient care

organization expands, Limbert says

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

111

Enhancing patient lives

thanks to proficient

procurement

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AUGUST 2018

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JAPANESE PHARMACEUTICAL GIANT TAKEDA IS REALISING THE BENEFITS OF A REORGANISED SUPPLY CHAIN. BERNADETTE MAIER, HEAD OF PROCUREMENT FOR EMERGING MARKETS, REVEALS HOW SHE PLANS TO KEEP UP THE MOMENTUM WRITTEN BY

TOM WADLOW PRODUCED BY

CHARLOTTE CLARKE

113

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

N

o company survives 237 years without a degree of forward thinking. For Japanese pharmaceu-

tical firm Takeda, this has been no more apparent than in the past four of these years.

An institution in Japan, Takeda’s rich journey spanning more than two centuries has exponentially gathered pace during the last decade thanks to a series of acquisitions.

However, in order to make such growth sustainable for the long term, CEO Yasuchika Hasegawa decided in 2014 that a new, globalised approach was required.

Fast-forward to 2018, and a centralised 114

procurement function is responsible for more than $6bn of Takeda spend – the engine room driving the company’s expansion in existing and new markets.

Bernadette Maier is Takeda’s Head of Procurement for Emerging Markets.

Based in Singapore, she joined the firm in December 2016, lured by a combination of a legendary heritage and the chance to play a leading role in new market entries.

Her mission? To utilise and develop Takeda’s post-transformation procurement setup and generate value for both business and patient.

“The vision which goes across all Takeda procurement is really being inspired by the patients we serve,” AUGUST 2018

ASIA

she says. “The function really is working in partnership, and I think that is the key word here. We are working in partnership to create competitive, sustainable procurement capable of delivering exceptional value for Takeda and improving the lives of patients.”

FACTS

The Japanese firm is ranked 12th in the world by prescription sales and enjoys a particularly strong presence in North America, Asia and Europe

A ROOT AND BRANCH TRANSFORMATION The work undertaken prior to Maier’s arrival laid the foundation that she works from today.

Before 2014, Procurement was organised in seven fragmented silos which individually held little strategic influence in the company as a whole and only delivered minor cost savings per annum (approximately $60mn).

In just two years, owing to a concerted effort unanimously backed by company leaders, Takeda’s procurement function transformed into a global, category-based w w w. s u p p l y c h a i n d i g i t a l . c o m

115

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ASIA

“ THE FUNCTION REALLY IS WORKING IN PARTNERSHIP, AND I THINK THAT IS THE KEY WORD HERE. WE ARE WORKING IN PARTNERSHIP TO CREATE COMPETITIVE, SUSTAINABLE PROCUREMENT CAPABLE OF DELIVERING EXCEPTIONAL VALUE FOR TAKEDA AND IMPROVING THE LIVES OF PATIENTS” — Bernadette Maier, Head of Procurement for Emerging Markets

organisation which now holds a place

busy with our internal activity

at the top table of decision making.

rather than being there with our

Maier highlights the importance

business partners, at the table

of a partnership culture, driven by

early on to see what their needs

teams which work collaboratively

are and understanding what they

to achieve goals.

need to be successful.

“In the past I think we were very

“We also needed to be speak-

much transactional and operational

ing their language. I think this is

orientated,” she explains. “We were

the key that we have now – a prow w w. s u p p l y c h a i n d i g i t a l . c o m

117

Takeda Berlin

118

curement team on the ground

FACTS

who also understand our business partners' language.”

This holistic approach has already reaped reward to the tune of almost $1bn in savings made in the financial years 20142017, with Takeda awarded a Procurement Leader’s World Procurement Award for Internal Transformation.

For Maier, now is the time to stabilise and build on this success. “A lot of people tend to AUGUST 2018

Among Maier’s key emerging markets include Russia and former Soviet countries, Latin America and China

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forget how important stability is. There is

TRUST AND TALENT

a balancing act we need now, especially

Maier’s leadership revolves

when it comes to emerging markets like

around a strong faith in her team

Russia and China.

of 23 professionals based in vari-

“Another key challenge and priority is making

ous sub-regions on the frontlines

sure we win the battle for talent. We want to be

of delivery. Whether in Sau Paulo

recognised as a very attractive employer, with

or Dubai, she has empowered her

Procurement seen as an attractive place to be.

leadership to make decisions for

“Finally, the fundamentals. The core is that

the best interest of the business

we deliver value and, ultimately, enable the growth and research and development we

and end user.

Many of these regional leaders

need in order to benefit the lives of our

are fellow women, another cultural

patients. It all goes back to the patient again.”

feature that makes Takeda stand

ASIA

out in the realm of procurement. Across the whole Procurement organisation there is a 50-50 male to female leadership split.

“From a recruitment point of view, it is attractive to see that women can develop a career here in Procurement, “says Maier. “There is space for women, which I think also makes Takeda a very successful brand. We don’t have that problem you see in so many industries where the higher up you go, the fewer women you see.”

Maier has just returned from Boston in the US where she 121

“ LOOKING AT EMERGING MARKETS, THERE ARE SO MANY PATIENTS OUT THERE WHO NEED OUR PRODUCTS. I STRONGLY BELIEVE THAT TAKEDA CAN BRING GREAT THINGS TO THE PATIENT AND TO SOCIETY, AND THIS WHY I AM EXCITED DAILY TO WORK HERE” — Bernadette Maier, Head of Procurement for Emerging Markets

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

helped lead a procurement talent workshop for the company. Succession planning is a key part of her job in ensuring that Takeda attracts and keeps hold of valued staff, and the ability for employees in Procurement to travel and take on special projects helps make it an attractive organisation to work for.

She also elaborates on Takeda’s ‘Procurement Academy’: “This is our internal learning programme, an online portal for all 122

procurement employees. There are around 100 different programmes, from negotiation training to finance programmes

feature. Communications have also

for procurement. So, whatever

been transformed, with channels

their needs are, they can tap in.”

such as Yammer, e-newsletters and video all utilised to boost engage-

AN INNOVATION FOUNDATION

ment across the company’s 350

Technology is another important

procurement professionals.

draw for Procurement employees, according to Maier.

A vital element of company’s the

“We recently launched a ChatBot, “TakiSan”, for Takeda Procurement,” Maier adds. “This

2014-2016 procurement transfor-

ChatBot is learning our languages.

mation was the introduction of a

It's learning how to identify cost-

new suite of technology which

packages on accounts in order

underpins the centralised model,

to answer questions from the busi-

with self-service tools being a key

ness. We are very much looking into

AUGUST 2018

ASIA

FACTS

Takeda is the largest pharmaceutical company in Japan and commercially present in more than 70 countries, with products and innovations predominantly covering areas of metabolic diseases, gastroenterology, oncology, cardiovascular health, CNS diseases, inflammatory and immune disorders, respiratory diseases and pain management.

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

123

what artificial intelligence can mean for us in the future."

“We also have large projects going on to harmonise our system landscape we have in place. For example, we are really strong on the use of Ariba. All of this shows me that I'm in the right place with my leadership team, with my peers, having this vibrant conversation on the impact

“ THERE IS SPACE FOR WOMEN, WHICH I THINK ALSO MAKES TAKEDA A VERY SUCCESSFUL BRAND. WE DON’T HAVE THAT PROBLEM YOU SEE IN SO MANY INDUSTRIES WHERE THE HIGHER UP YOU GO THE FEWER WOMEN YOU SEE”

of Procurement going forward.”

The importance of Takeda’s

— Bernadette Maier, Head of Procurement for Emerging Markets

procurement function cannot be understated when it comes to the 124

firm’s pioneering output of medical treatments.

Maier cites Takeda’s recent efforts with its dengue vaccine candidate, which remains a key area of focus to help tackle this significant mosquito-borne viral disease that threatens 40% of the world’s population.

And it is this end output and potential to transform lives that ultimately motivates Maier on a daily basis.

“Looking at emerging markets, there are so many patients out there who need our products. I strongly believe that Takeda can bring great things to the patient and to society, and this why I am excited daily to work here,” she concludes.

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

T 126

AUGUST 2018

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TELEKOM MALAYSIA redefining procurement for supply chain success WRIT TEN BY

DA LE BENTON PRODUCED BY

CHARLOT TE CL ARK E

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

127

T E L E K O M M A L AY S I A

Through a full-scale transformation journey, Telekom Malaysia redefines its procurement function

H 128

istorically, procurement has

business needs and strengthening

always been perceived as

supplier relationships to deliver shared

a support function. Over the

value to the organisation,” says

last decade however, there has been

Mohamad Mohamad Zain, Chief

a considerable shift as more and more

Procurement Officer, TM.

businesses around the world are

With a career spanning over 20

investing heavily to create greater

years, working in a number of roles

alignment between procurement and

within TM from insurance management

the strategic direction of the company.

to enterprise risk management,

For Telekom Malaysia Berhad (TM),

Mohamad has seen first-hand the

Malaysia’s Convergence Champion,

changing role of procurement and feels

procurement has evolved far beyond

his experience finely positions him to

its traditional function and is now

lead TM’s transformation journey.

pivotal in the success and future growth of the business.

“Procurement has indeed played

Procurement was identified as one of the key pillars to the company’s Performance Improvement Plan (PIP)

a pivotal role in ensuring speed to

3.0, which focuses on delivering value

market, improving customer stickiness

via total cost ownership savings,

via quality products and services while

increased speed of procurement

also assuring supply sustainability to

process to support speed to market

support all year-round dynamic

and be more responsive to the

AUGUST 2018

ASIA

“The Group Procurement vision is to optimise productivity,” says Mohamad, “while also building an organisation that has a sustainable competitive advantage towards “Procurement Made Easier” with stable, effective and efficient sources of supply” — Mohamad Zain, Chief Procurement Officer, TM

129

dynamic business needs across the wider TM Group.

“The Group Procurement’s vision is to optimise productivity,” says Mohamad, “while also building an organisation that has a sustainable competitive advantage towards “Procurement Made Easier” with stable, effective and efficient sources of supply.”

Through his role, Mohamad is 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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w w w. s u p p l y c h a i n d i g i t a l . c o m

T E L E K O M M A L AY S I A

“ We are expecting the Industrial Revolution 4.0, and so the future of procurement will largely dependent on technology, robotic and Internet of Things (IoT).

Through our journey, we are laying the foundations in order to be ready for this future�

132

— Mohamad Zain, Chief Procurement Officer, TM

AUGUST 2018

BIO

Mohamad Zain Chief Procurement Officer, TM Mohamad, 54, gained vast experience in insurance services while serving a UKbased insurance company for six years, including as Officer in charge for agency and direct client underwriting, claim management and re-insurance, designing insurance for credit card company and bank assurance, serving both domestic and Multinational Corporation clients.

He joined TM in 1993 as an Assistant Manager and has been tasked with managing the corporate insurance programme and implementing the Enterprise Risk Management programme for TM in 2001. In 2007, he was appointed GM entrusted with an expanded portfolio of Group Business Assurance covering Enterprise Management, Revenue Assurance, Fraud Management, Insurance Management, Credit Management Policy & Monitoring, Corporate Compliance, Business Continuity Management and Enterprise Business Management. He was promoted to VP, Group Business Assurance, a position he held from 2011 until his appointment as Chief Procurement Officer on 1 September 2014.

ASIA

part of the senior management committee, something he feels enables him to change the perspective of procurement. One of the key changes that he has implemented, in order to measure the success of this strategic transformation, is the addition of optimising the supply chain and procurement management as the Group’s key performance indicators.

What this does is present a challenge that Mohamad must continue to overcome; continue to demonstrate to stakeholders the

133

true value of the new procurement

understanding the already identified gaps in the

model in contributing positively to

Company’s basic procurement function.

the Group’s profitability.

“I need to continue to show how

These gaps allowed TM to anchor its transformation with three key pillars; value creation and

procurement can assist our

expansion, responsive to business dynamics and

marketing team on speed to market

speed in procurement process and execution.

with competitive product and

The pillars will enable TM to implement

services,” he says. “This can then

a best-in-class procurement model, but any

ensure that our suppliers can fully

transformation journey is not without challenge.

apprise on the overall objective of our new procurement model.”

TM’s transformation journey

For Mohamad, he views challenge as an opportunity to continue pushing forward.

“I look across our transformation to date, the

began in 2013, overseen by

results that we can point to, and it gives me the

Mohamad’s predecessor. Moham-

additional adrenalin I need to keep on pushing for

ad took over in 2015 and immedi-

better results,” he says. “Whilst we have success-

ately worked across the Group on

fully established a cross functional category w w w. s u p p l y c h a i n d i g i t a l . c o m

C O M PA N Y N A M E I N C O R P O R AT E C O L O U R

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134

FiberHome Group Add:No.6, Gaoxinsilu, East Lake High-Tech Development Zone, Wuhan, Hubei, P.R.China 430205 Tel:+86-27-81618829 | Fax:+86-27-81618977 Email: marketing@fiberhome.com Wuhan FiberHome International ( Malaysia) Sdn. Bhd. Add:Level 43 South Wing, Menara TM, Jalan Pantai Baharu, 59100 Kuala Lumpur Tel: +603 2241 5780/4818/4808 | Fax:+603 2241 4770

MONTH 2018

Sales Directot: Aslan Zhou Email: zhoujun@fiberhome.com

www.fiberhomegroup.com/en

ASIA

management team, improved

But Mohamad is a firm believer in not standing still

governance to allow speed of

and is already looking at the next step in order to

procurement approval, and

continue to improve, with technology and

strengthened supplier relationship

embracing digital procurement a clear goal.

management, there is still room

While Mohamad looks to the future

for improvement, including

of technology, that’s not to suggest that technol-

embracing technology.”

ogy hasn’t played a defining role in this transfor-

The transformation by its very nature is defined by improving

mational journey.

“To support the procurement transformation,

performance. Mohamad’s

technology has and will be fundamental in the

sentiment of continuous learning is

delivery of speed and efficiency in our processes,”

shared across the Group. Four

he says. “As such, we have embarked on PINTAR

years into this journey and TM can

project, designed to provide data analytics on

already point to RM1.0 billion

spend analysis for our category managers.”

(USD250 million) TCO savings

PINTAR, or the Procurement Institutionalisa-

through the expansion of value

tion of Technology Applications and

creation, as well as expanding its

Resources, specifically enables greater

strategic vendor portfolio and

efficiencies across spend analysis, online tender

improving overall governance and

and quotation, supplier performance manage-

control in order to achieve faster

ment and contract management and repository,

procurement process.

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

135

T E L E K O M M A L AY S I A

With technology redefining industries all around the world this brings upon a challenge that is not unique. The global technology conversation is defined by Artificial Intelligence, Automation, Big Data, but are these terms simply turning into buzzwords? What work does Mohamad and TM do to ensure that the Company is implementing the right technologies for the right reasons and not just following trends?

“As a technology company, technology and digitalisation have been part of our business DNA from the very start,” says Mohamad.

“TM has its own R&D team, Network & IT Technical Committee and Chief Digital Officer 136

that continue to provide advisory across the Group on new technology and digitalisation plan.

At the same time, we also benchmark with peers across the globe and in some instances securing advice from our key suppliers who have implemented robust supply chain management system.”

As a supply chain and procurement function, having a strong supplier network is crucial. In the journey of implementing a new procurement model, that supplier network proves more vital than ever.

Mohamad admits that a transformation of this scope is not one that can be completed alone, with the strengthening of supplier relationships in itself a core pillar of the journey. TM has redefined how it approaches supplier and vendor management, with expanded collaboration with mega AUGUST 2018

ASIA

“ Whilst we have successfully established a cross functional category management team, improved governance to allow speed of procurement approval, and strengthened supplier relationship management, there is still room for improvement, including embracing technology.”

— Mohamad Zain, Chief Procurement Officer, TM

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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T E L E K O M M A L AY S I A

suppliers (foreign and domestic) and those local vendors nurtured via its Bumiputera-Vendor Development Programme (BVDP).

To date, we have over 9,200 vendors registered with us with close to 4,400 Bumiputera vendors. At TM, we have a robust and transparent procurement process; and we adhere to industry’s best practices. We are committed to maintaining the highest degree of integrity, transparency and accountability in the conduct of our business and operations. At least 42% of our projects are based on tenders and we also award projects that require economies of scale to our long term and strategic partners.

138

The BVDP is designed to stimulate the activity and involvement of local suppliers across Malaysia in tenders and other procurement activities. These activities can be stand-alone or through collaborating with foreign partners, with the goal of sharing technology and knowledge to the local suppliers in order to develop the capabilities of the local supplier network.

“This programme will not only support the capability building of local vendors who will then be able to compete for regional business needs through tenders,” says Mohamad. “For TM, based on our BVDP framework, the entry level would be the Entrepreneur Development (ED) and Blue Lane (ED programme specific for ICT-based or start-up technology company companies) levels. Once the vendors show AUGUST 2018

ASIA

improvement in their processes and capabilities, they will then be upgraded to Strategic Partners, and then elevated to become a Corporate Champion and finally to a National Champion.

This journey may take three to five years.”

TM has already amassed a strong portfolio of both foreign and local strategic suppliers such as Huawei, Fiberhome, Nokia as well as Opcom, Dura Mine and Lite Cable.

As the title implies, this procurement journey is one of continuous improvement. Procurement as a function will continue to change and evolve and TM must continue to evolve with it in order to continue to deliver success.

“The future will see TM begin to better embrace new technology, organisational and process redesign, and continue to push for cultural change in supporting this changing space,” says Mohamad.

“We are expecting the Industrial Revolution 4.0, and so the future of procurement will largely dependent on technology, robotic and Internet of Things (IoT). Through our journey, we are laying the foundations in order to be ready for this future.”

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

139

140

Delivering supply chain innovation WRIT TEN BY

CATHERINE S TURM AN PRODUCED BY

ARRON R A MPLING

AUGUST 2018

AFRICA

141

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

C O N S TA TANNCCEE HHOOTTEELLSS AANNDDRREESSOORR TT SS

142

With a passion for hospitality, Gilbert Chetty, Group Supply Chain Manager, discusses how his team works to provide its customers with an unforgettable experience

T

he hotel industry remains

business prides itself on delivering

a fierce platform for budding

world-class experiences in surroundings

entrepreneurs and long-stand-

of pure beauty, instinctively unlocking the

ing corporations. The rise of budget hotels and new business models, like that of

potential of each location.

Responsible for the company’s supply

Airbnb, have fully disrupted the way in which

chain operations in the Seychelles, the

the sector seeks to attract new customers,

Maldives, Mauritius, Madagascar and

whether it be through cost-effective

Zanzibar, Gilbert Chetty has witnessed the

pricing, adrenaline focused activities or

brand’s growing popularity across Africa.

the guarantee of timeless experiences.

With the support of his six-strong team,

Providing exceptional services to its

Chetty strives to procure and deliver

guests, Constance Hotels & Resorts

goods at the best value in order to fully

oozes luxury. Situated at a number of

satisfy the needs of its customers.

stunning locations across Africa, the AUGUST 2018

“I am lucky to work with such a talented

AFRICA

“ We trust our people, treat them as collaborators, and try to apply the values of the company with them. These are generosity, sincerity and to demonstrate excellence, implementing a blend of innovation and creativity” — Gilbert Chetty, Group Supply Chain Manager 143

group of people who understand our procurement requirements. We trust our people, treat them as collaborators, and try to apply the values of the company with them. These are generosity, sincerity and to demonstrate excellence, implementing a blend of innovation and creativity,” he says.

Enabling teams in charge of purchasing at specific regions to source the best prices within a particular region, the team works to negotiate the optimum deals with regards to corporate items. For example, by adopting a linen tender, the Group has standardised the bed and bath w w w. s u p p l y c h a i n d i g i t a l . c o m

C O N S TA N C E H O T E L S A N D R E S O R T S

linen at an agreed price for a specific period of time.

“There are also other group of items that we negotiate for the group. For example, umbrellas, slippers, types of papers to be used for our printings etc.,” notes Chetty.”

“We therefore try to combine both decentralised and centralised purchasing for the advantage of our stakeholders.”

Technological shift The Group’s enduring ambition to be an essential figurehead for human scale luxury hospitality has factored into its goal to grow from 9 to 20 hotels , whilst ss its operations. Consequently, the business is set to launch a 144

second brand later this year in the upper-scale segment.

“With expansion of the Group and the creation of this second brand situated in different locations worldwide, our procurement will need to adapt to different culture and laws, analysis of the market and eventually consider new sources,” explains Chetty.

Situated at the business for over ten years, Chetty has been central to the dynamism which runs through the supply chain operation at Constance, where he has sought to maintain and uphold all required processes, adhering to all compliance laws, as well as remaining consistent with ethical, social and environmental standards. His vast expertise has therefore seen its procurement and supply chain operations become fully transformed, particularly as a result of new technologies.

“Technology is now the heart of supply chain management. The business of the industry is problemAUGUST 2018

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“ With expansion of the group and the creation of the second brand, our procurement will need to adapt to different cultures and laws” — Gilbert Chetty, Group Supply Chain Manager

145

solving. New technologies can help personnel to better understand the equipment, manage the decision-making process more efficiently and drive costs down,” he says.

“For example, supply chain networks are built on customer demand and cost optimisation. The usage of analytics helps personnel understand behaviours to react quickly to rebalance inventory and adjust transportation. Supply chain management has therefore evolved into a technology-led, customer-driven industry.

“To take advantage of this shift, the focus can’t be on just the technology. The right talent equips supply chain management companies w w w. s u p p l y c h a i n d i g i t a l . c o m

C O N S TA N C E H O T E L S A N D R E S O R T S

with the resources they need to fully leverage connected technologies to improve their business processes.”

Harnessing software which will enable the business to utilise multiple foreign currencies, Constance has also adopted cloud technology and blockchain, which will bring the highest degree of accountability to the business.

“There will be no more missed transactions, human or machine errors, or even an exchange that was not done with the consent of the parties involved due to the use of 146

blockchain,” he adds.

“ There will be no more missed transactions, human or machine errors, or even an exchange that was not done with the consent of the parties involved due to the use of blockchain” — Gilbert Chetty, Group Supply Chain Manager

AUGUST 2018

Click to watch: Corporate video for Constance Hotels and Resorts

AFRICA

147

Collaboration

& New Zealand can be included, as

Dealing directly with suppliers in both

Constance Hotels and Resorts’ Group has

local and international markets, the Group

the largest wines cellar in the Indian

has partnered with two renowned

Ocean, namely at Constance Prince

forwarders in the importation and

Maurice, situated on the eastern side of

exportation of various goods. At each

Mauritius island.

location, the business has also appointed

“Additionally, we have a number of

a number of local suppliers to deliver

strategic partners who sponsor the MCB

goods to its hotels.

Tour Championship, a men’s senior

“Our freight forwarders, corporate

professional golf tournament, who also

suppliers in terms of wet and dry ameni-

sponsor each December our annual golf

ties can be considered as our main

tournament which is held on our Con-

strategic partners,” explains Chetty.

stance Legend course.”

“The wine sellers of France, South Africa

With this in mind, Tyre World has 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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“ Constance Group has the largest wine cellar in the Indian Ocean, namely at Constance Le Prince Maurice, situated on the eastern side of the island” — Gilbert Chetty, Group Supply Chain Manager

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C O N S TA N C E H O T E L S A N D R E S O R T S

FACTS

Situated at a number of stunning locations across Indian Ocean and Africa, CHRG prides itself on delivering worldclass experiences in surroundings of pure beauty, unlocking the potential of each location.

150

Chetty strives to procure and deliver goods at the best value in order to fully satisfy the needs of customers, as well as adhere to company standards.

Later this year, the business is set to launch a second brand later in the upper scale segment The Group has adopted cloud technologies, as well as blockchain, to bring the highest degree of accountability.

The Group works tirelessly to eradicate child labour from across its supply chain, and regularly undertakes audits, surveys and site visits to guarantee all practices are sustainable Awarded the Green Globe Certificate, the world’s most recognised global certification for sustainable travel and tourism for four consecutive years AUGUST 2018

AFRICA

become a key strategic partner for the business, providing tyres and high-quality buggies for its golf courses.

“We have been working with Tyre World for years and have always been satisfied in terms of the products and services offered, mainly after-sales services,” says Chetty.

“The company is always prompted to consider new avenues to improve in terms of products offered, as well as in terms of payments and competitive pricing and sponsoring the different events in our group of hotels.”

Sustainable practices While the supply chain consists of not only sourcing services and products at competitive prices, the Group has worked tirelessly to eradicate child labour from across its supply chain and regularly undertakes audits, surveys and site visits to guarantee all practices are sustainable.

“One of our key challenges is to become a customer of choice for our suppliers, so that even in difficult moments, such as a cyclone, incorrect forecasting, or any other situation which could impact our operations, we are not faced with any kind of shortage and count upon their prompt reaction,” observes Chetty.

“Supplier innovation is more likely if we become a customer of choice. Innovation is a two-way process; however, so we believe that it is not only about writing it in a contract and expecting 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

151

C O N S TA N C E H O T E L S A N D R E S O R T S

“ New technologies can help personnel to better understand the equipment, manage the decisionmaking process more efficiently and drive down costs” — Gilbert Chetty, Group Supply Chain Manager

152

RELIABILITY GETS A PREMIUM UPGRADE.

info@tyreworld.mu

Tel: (230) 5941-2831

@TyreworldMauritius

AFRICA

153 best ideas from suppliers. The most

ment and operation of its properties

successful approach is to abide by

in terms of logistics management,

agreed payment terms and

as well as inventory management,

demonstrate a partnership

information technology, procure-

approach by listening and respond-

ment and distribution, lean and

ing to suppliers’ ideas.

green supply chain practices.

“We want to trust and consider suppliers as a centre of excellence in

An authentic passion

terms of inventiveness, reactivity or

Awarded the Green Globe

rather proactive in terms of sourcing,

Certificate, the world’s most

proposing alternatives goods which

recognised global certification for

are in lines with the concept and

sustainable travel and tourism for

standard of our properties.”

four consecutive years, the Group’s

The company’s supply chain team has also focused on the manage-

unwavering commitment to sustainability has increased the its w w w. s u p p l y c h a i n d i g i t a l . c o m

C O N S TA N C E H O T E L S A N D R E S O R T S

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“The usage of analytics helps personnel understand behaviours to react quickly to rebalance inventory and adjust transportation” — Gilbert Chetty, Group Supply Chain Manager

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C O N S TA N C E H O T E L S A N D R E S O R T S

global recognition and attracted new and existing customers.

As it continually reviews and improves

“It’s no longer good enough to simply engage with tier-one suppliers. Emphasis needs to be paid to controlling the

its four pillars: environmental, socio-eco-

approach taken with tier-two suppliers,

nomic balance, quality of service and

ensuring that the necessary obligations

health and safety, the procurement team

are passed down to subcontractors,”

at Constance routinely mitigates any

concludes Chetty.

potential risks, looking at its suppliers’

“Our DNA is all about the genuine

financial status, followed by health and

enthusiasm we have for hospitality; as a

safety and industry practices.

matter of fact, it’s where we come from, i.e.,

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our Mauritian heritage. We believe that our

ity market. Our generosity delivers a great

passion allows us to create emotions.

return on investment, as treating guests

“Our personality sets us apart, as our guests like our ‘un bon vivant’ style. People

generously repays more in satisfaction, with loyalty then following.”

who come as guests leave as friends. This family spirit spreads from our team to our guests, and our attention to them makes them want to come back.

“I sincerely believe that we are changing the nature of relationships in the hospital-

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Openserve:

The beating heart

of 158

connectivity in South Africa

WRIT TEN BY

L AUR A MULL AN PRODUCED BY

ARRON R A MPLING

AUGUST 2018

AFRICA

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OPENSERVE

Openserve is Telkom’s redesigned wholesale partner and is a division of the Telkom Group. It is South Africa’s largest telecommunications infrastructure provider with the biggest broadband network

W

hether you’re downloading a report for your business, browsing the internet, or streaming your favourite songs,

connectivity has become a key building block in our day-to-day lives.

Championing this technology-empowered, connected future, Openserve has laid down 160

approximately 150,000km of fibre optic cables and connected over 81,000 homes to fibre, making it the largest telecommunication company in South Africa.

Though you may not have noticed they were there, Chief Procurement and Contracts Officer, Benjamin van Zyl, believes that it’s often the companies behind the scenes, like Openserve, that are having a big impact in the country.

“Openserve is a division of the Telkom Group and it has been instrumental in enabling connectivity across South Africa and its borders,” explains van Zyl. “Our mission is to be the connectivity provider of choice and enable a data-driven ecosystem. For us, it’s been important to drive a performancebased culture where ‘doing what’s right’ for the AUGUST 2018

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Our Vision & Mission: Bring digital to every person, home and organization for a fully connected, intelligent world

4K/8K TV

Schools

Government

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Build ubiquitous connectivity

Develop open, trusted cloud platforms

ICT Infrastructure Intelligent Devices

Create a better experience with broadband

Build an experiencecentric device ecosystem

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Huawei’s end-to-end portfolio of products, solutions and services are both competitive and secure. Through open collaboration with ecosystem partners, we create lasting value for our customers, working to empower people, enrich home life, and inspire innovation in organizations of all shapes and sizes.

www.huawei.com/za

OPENSERVE

“ Openserve is a division of the Telkom Group and it has been instrumental in enabling connectivity across South Africa and its borders” 164

— Benjamin van Zyl, Chief Procurement & Contracts Officer

client, customer and the company takes precedence over anything else. I am proud to say that we have created a strong foundation to build on.”

As the largest fixed wholesale operator in South Africa, Openserve operates across global, enterprise, carrier and consumer market segments. This, of course, means that the company has multiple competitors.

Van Zyl says he welcomes the rivalry as it drives the firm to improve and compete with rigour and perhaps nowhere can this be seen better than Openserve’s approach to cost-efficiency.

“To survive in a world where the cost of infrastructure is expensive and the price the client is willing to pay is continuously coming down, cost optimisation has been weaved into our business strategy,” notes van Zyl. “Openserve has been very successful over the last few years in reducing costs through workforce optimisation, consolidating the supplier base, reducing the onerous specifications in our contracts and tightening our controls to avoid cost leakage and unnecessary spend.

“In all these initiatives, strategic sourcing and contract management play a key role, but it remains a cross-functional team effort to deliver the benefits. Our focus now is on improving our return on investment (ROI) by reducing the capital cost of the value chain in our Metro Ethernet and Fibre to the home (FTTH) deployment.”

AUGUST 2018

INNOVATION FOR TOMORROW In today’s fast paced world, companies need to innovate and adapt to ever changing market needs. At CBi Telecom the development of new products and services are driven by technology trends, the evolution of customer requirements, changing advancements and new market applications.

www.cbitele.com Sales: +27 (0) 12 381 1668 Email: sales@cbitele.com

OPENSERVE

Click to watch: ‘How to set up Huawei B315LTE router’

166

In today’s supply chain sector,

would be in our network build environ-

improving visibility continues to rank as

ment, where we are busy creating a

one of the most necessary but

supplier interface portal to manage the

challenging tasks facing procurement

supplier build capacity per region and

professionals today.

ensure optimal work allocation.”

As a listed company, van Zyl believes

Understanding that today’s new

that improved visibility is “absolutely

technologies could be obsolete

critical” to driving efficiencies and

tomorrow, Openserve prides itself on

managing risk.

being agile and unafraid of change. As

“When I joined Openserve, I created a

such, it has spearheaded digital

control tower capability to create

transformation across the company to

visibility in our supply chain, do analytics

remain one step ahead of its competi-

and identify opportunities to drive

tors. Zeroing in on its network and IT

efficiencies,” he notes. “An example

platforms, van Zyl describes how the

AUGUST 2018

AFRICA

BIO

Ben van Zyl has built his expertise as a procurement leader over a twenty-year career; spanning strategic sourcing, procurement and supply chain management for leading financial institutions such as Merrill Lynch, Absa and telecommunications organisations such as Telkom and Openserve. He is an expert in international outsourcing and has used this to ensure the sustainable success of the organisations he’s worked for. His experience covers many disciplines within the purchasing and contract management profession including outsourcing call centres, end-to-end supply chain, facilities management, real estate asset management, shared services, and system maintenance.

During outsourcing projects, van Zyl controls the process from business case development and supplier selection to SLAs, contract negotiations and negotiations with unions.

The results are significant cost savings coupled with excellent levels of

service. To consolidate his business strategies, van Zyl builds high-performance specialist teams who execute large and complex contracts to specification and within budget and deadline. He thrives in enterprise transformation environments where he translates business aims into a sourcing strategy that delivers the most cost-effective solutions. Van Zyl is currently Chief Procurement and Contracts Officer and he oversees the Supply Chain, Strategic Sourcing, Procurement operations, quality management, Supplier development and contract management for Openserve.

He holds a BCompt Degree from the University of South Africa and an MCISP Diploma from the Chartered Institute of Purchasing and Supply.

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Services FTTH • FTTB • FTTX PLANNING • METRO ETHERNET • MSAN MICROWAVE VSAT • ITMB CIVIL CONSTRUCTION • TRENCHING • HAULING FLOATING • SPLICING • MAINTENANCE

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MIDDLE EAST

“ People see digitalisation as a threat as they translate it to job losses, but I see it as an opportunity where it can make our jobs easier, better, faster and more fulfilling” — Benjamin van Zyl, Chief Procurement & Contracts Officer

169

firm aims to create a ‘holistic’

optimise inventory and reduce

approach to digitisation.

working capital. On top of this, it has

“We have introduced digital

also created an innovative control

touchpoints that enable us to monitor

tower to improve supply chain

and secure our network,” he says.

visibility, conduct analytics and

“The Telkom Group is working with

improve efficiency in its supply chain.

SAP Ariba to digitalise the source to

With a next-generation fibre

settle process to free up resources

network, Openserve has provided a

from tactical work. We are also

gateway for communities to

exploring the use of robotics to

connect. However, the company

automate various processes.”

doesn’t underestimate the potential

The South African firm has also

of emerging technologies like

implemented a forecasting and

robotics, machine learning, artificial

planning tool to improve delivery,

intelligence (AI) and automation. w w w. s u p p l y c h a i n d i g i t a l . c o m

OPENSERVE

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“The Organisation for Economic Co-operation and Development (OECD) clearly warns that the digital divide will only widen if developing markets don’t seize the opportunities that digitisation will bring. We are therefore excited, but also understand that we must get this right” — Alphonzo Samuels, CEO, Openserve

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

OPENSERVE

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The company’s CEO, Alphonzo Samuels, highlights that making the region more connected and digitally-enabled is not only beneficial for Openserve, it could also help to revitalise the economy and improve the region’s quality of living.

“Enabling the fourth industrial revolution is something that developing markets absolutely need to get right,” he says. “The Organisation for Economic Co-operation and Development (OECD) clearly warns that the digital divide will only widen if developing markets don’t seize the opportunities that digitisation will bring. We are therefore excited, but also understand that we must get this right. It’s a call to action that is founded on our desire to develop Africa.”

To remain agile and adaptive, Openserve has not only invested heavily in its network infrastructure

“ For us, it’s been important to drive a performance– based culture where ‘doing what’s right’ for the client, customer and the company takes precedence over anything else.

I am proud to say that we have built a strong foundation to build on” — Benjamin van Zyl, Chief Procurement & Contracts Officer

– it has also created long-lasting partnerships that have helped it meet the needs of today’s digital world.

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OPENSERVE

In the past two years, the South African giant has joined forces with companies such as Huawei and Nokia to help provide a high-speed fibre packet and optical transport network.

“Under the leadership of our Chief Technology and Systems Officer, Hugo van Zyl, we are implementing an IP-enabled optical transport network – we call it POTN (for Packet and Optical Transport Network),” explains van Zyl. “The POTN establishes an IP enabled optical transmission capability that can scale to meet the demands of the fourth industrial revolution, catering for higher speeds, increased capacity requirements, lower latency requirements and 174

digitalisation of the network fabric.

“Fibre deployment remains a key future enabler for end-user connections, as well as small cells in

“To survive in a world where the cost of infrastructure is expensive and the price the client is willing to pay is continuously coming down, cost optimisation has been weaved into our business strategy” — Benjamin van Zyl, Chief Procurement & Contracts Officer

mobile networks. Huawei’s contribution is important, providing this state of the art technology in a dual-vendor scenario.

“We also have a long-standing relationship with Mthiyane Construction. They are part of a panel of sub-contractors doing build, maintenance and repair work in different layers of the network.

They are important as we need

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175

experienced service providers in all parts of the country to build a high-quality network.”

Partnerships have also been integral to areas such as supply chain – with Bidvest Fleet, for example, supplying and maintaining over 4500 vehicles used by the company’s technicians. It’s clear that this rich ecosystem of industry partnerships has been integral, w w w. s u p p l y c h a i n d i g i t a l . c o m

Smart Supply Chain Solutions

Create, Digitise, Connect, Secure Fibre and other networking technologies ensure that more and more African people and businesses are experiencing world-class connectivity.

Etion Connect (previously Tedaka Solutions) plays a pivotal role in ensuring that this growth can continue unhindered, thanks to an array of products and solutions which cater to the entire digital value chain.

From data centre to end user, we ensure that our customers can build a network that is efficient, reliable, and stable. With our help, installations are faster and more cost-effective, allowing these customers to rest easy in the knowledge that their return on investment (ROI) is secure.

The solutions provided by Etion Connect include: • Outside plant closures • Inside plant high density optical distribution frames • Plug and play solutions for harsh environments • Customer end user connectivity • Classroom and in-field training and education In the age of interconnectedness, it is imperative that organisations’ communication systems are stable and effectively connect the value chain.

Through its products, solutions, and services, Etion Connect allows organisations to achieve this stability and effective connections.

Etion Connect is a part of the Etion Group, which also includes Etion Create, Etion Digitise, and Etion Secure. While each of these units provide distinct services, they are all complementary and capable of providing technology to each other.

www.etion.co.za

AFRICA

2015

Year founded

10,000+ Approximate number of employees

177

helping to ensure that Openserve can

mix is seldom seen and I am excited about

continue to provide a connection,

the unique blend that will take this

wherever its customers are.

company forward.”

Celebrating the company’s collaborative

Openserve has embarked on a radical

approach, van Zyl is also keen to highlight

procurement function and embraced

the efforts of his team, citing their passion

technological innovation. To cement this

as critical to the company’s success.

new-found change, van Zyl outlines how

“What’s unique about Openserve is its people,” he says. “We have highly talented individuals with institutional knowledge as

the company has seen a cultural transformation as well as a digital one.

“Transformation always involves a

well as young talent with the zeal to take

change in human behaviour and people

risks and try innovative solutions. Such a

resist change when they cannot see its w w w. s u p p l y c h a i n d i g i t a l . c o m

OPENSERVE

value,” he says. “People see digitalisation as a threat as they translate it to job losses, but I see it as an opportunity where it can make our jobs easier, better, faster and more fulfilling. However, you need to be willing to make this culture change as digital transformation involves new skill sets with millennials and baby boomers responding differently to this learning process. Unless our managers, employees and support staff embrace the change of digital transformation, it will fail.”

With this cultural change in motion, Openserve is not resting on its laurels. In fact, today it is now striving to become the largest open-access infrastructure 178

connectivity company in South Africa.

“We are clear that we want to transform into a Digital Service Provider (DSP) that is able to expose the network as a service through open Application Programming Interfaces (APIs),” explains van Zyl. “This is enabled through the ongoing virtualisation of hardware through NFV (Network Function Virtualisation) and managed through the concept of Software Defined Networks (SDN), truly digitalising our network.”

With a rigorous, digitally-enabled plan underway, the South African firm is preparing for the next chapter of its journey. But regardless of any changes, it seems Openserve will unwaveringly remain at the heart of connectivity in South Africa.

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FACT

0penserve has supplied over a million DSL connections, laid down over 147,000km of fibre optic cables and connected over 81,000 homes to fibre.

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MIDDLE EAST BROADCASTING GROUP (MBC)

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Procurement excellence for the small screen WRIT TEN BY

JA MES HENDERSON PRODUCED BY

HEYKEL OUNI

AUGUST 2018

MIDDLE EAST

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MIDDLE EAST BROADCASTING GROUP (MBC)

MBC’s procurement division is driving real value for the flourishing Middle Eastern broadcaster

A 182

s the first broadcaster

the last decade. When Lorraine Black joined MBC in 2007 – as the company’s new Head of Procurement, she helped build a team numbering just four which was very transactional in its nature.

to provide a satellitebased free-to-air

Changing perceptions

24-hour television network

“There were no specific pro-

across the Arab world, The Mid-

cesses, it was a basic operation,”

dle East Broadcasting Center

says Black, who led and man-

(MBC) holds a unique place in the

aged the process of CIPS

region’s “Media & Entertainment”

Organisational Certification,

industry. Established in 1991,

which resulted in MBC being the

MBC now offers 16 channels,

first company in Dubai, UAE to

broadcasting a varied line-up of

achieve CIPS certification of

programs and series, including

excellence of its purchasing poli-

flagship shows such as: ‘Arab

cies and procedures in 2008 (a

Idol’, ‘Arabs Got Talent’, ‘theVoice’,

number of MBC’s team are work-

‘theVoice Kids’, and ‘Project Run-

ing on achieving their CIPs

way ME’… among many others.

certifications currently).

MBC is a premium content-

An analysis of the department

centric, audience-focused

was undertaken to understand

company whose success has

the skills of the existing staff and

been underpinned by a procure-

pinpoint gaps that needed to be

ment team that is setting new

filled to create an effective and

standards in the MENA region -

valuable procurement function

thus proving itself to be of real

for the business. An enterprise

added-value to the business, over

resource system (ERP) was

AUGUST 2018

MIDDLE EAST

“ The main challenges we faced was shifting the mind-set of our key stakeholders. Now, we work closely with all of our stakeholders, understanding the business and demonstrating where we add value” — Lorraine Black, Head of Procurement, MBC Group

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MIDDLE EAST

implemented, processes and procedures introduced, and skills added, gradually building a well-rounded team.

As all procurement professionals know, the support of key stakeholders in the business – especially in the C-Suite – is vitally important, and Black says MBC is no different.

“The main challenges we faced was shifting the mind-set of our key stakeholders. Now, we work closely with all of our stakeholders, understanding the business and demonstrating where we add value.

“We also got support from MBC CEO office which made it a lot easier to drive our ideas forward and get buy-in from the company’s senior management. That’s been really important in working with various departments in a collaborative way, rather than as a standalone function. After we showed that we can add value and leverage our relationships with suppliers, the decision was taken that departments would stop getting quotations without the support and involvement of the

“ Our revenue is largely derived from advertising, and as we have little direct control over regional ad market fluctuations, it is critical to keep our costs under control. That makes Procurement strategic to our long-term profitability and success.

Their support has been essential to our migration from in-house systems to outsourced cloud services as part of our digital transformation efforts” — Joe Igoe, Group Director of Operations, MBC Group

procurement team. This has been a real positive shift,” Black concluded.

But don’t just take the procurement team’s word for it; Joe Igoe – Group Director of Operations, comments: “Our revenue is largely derived from advertising, and as we have little direct control over regional ad market fluctuaw w w. s u p p l y c h a i n d i g i t a l . c o m

MIDDLE EAST BROADCASTING GROUP (MBC)

SERVICES

THE TECHNOLOGY DRIVING A PROCUREMENT TRANSFORMATION AT MBC

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Business Intelligence Reports Business Intelligence reports have been the ERP solution to monitor spend managed through Procurement. The various dashboards are utilised for monitoring the compliance, category and contractual spend, procurement KPIs, procure-to-pay cycle, and supplier delivery performance.

This data analysis has been utilised by the procurement team for further discussions on process improvements/potential opportunities for savings and value addition.

E-Procurement The procurement team rolled out the E-Tendering system to modernise the procurement strategic sourcing activities. The use of this system has given a 360-degree view of the complete tendering process to all engaged parties.

Automating the system which provides quick comparison tools and reduces the scope for human AUGUST 2018

errors has helped create a more efficient sourcing platform with reduced human effort.

Contract Management System Effectively managing and monitoring the financial and operational performance is critical to every organisation. Bearing this underlying factor in mind, the manual contract administrative and management process was assessed and an in-house Contract Management System was customised and developed to meet our requirements. This system has been effective and efficient in: Automating and accelerating the contract administration and management; managing all procurement contracts and related milestones; Strengthening governance/compliance; stakeholder engagement and collaboration; better visibility through reports; and complete transparency of contract process.

MIDDLE EAST

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MIDDLE EAST

Click to watch: Middle East Broadcasting video: Studio City 189

tions, it is critical to keep our costs

understand and drive forward efforts

under control. That makes Procure-

to grow the business sustainably.

ment strategic to our long-term

These included: spend analysis across

profitability and success. Their support

the group, encompassing various cat-

has been essential to our migration

egories, supplier segmentation using

from in-house systems to outsourced

the Krajlic Model, assessment of pro-

cloud services as part of our digital

curement technologies and the

transformation efforts.”

alignment of MBC’s corporate and business strategy with that of the pro-

Driving growth As part of its effort to shift attitudes

curement department.

On the benefits of the thorough

about the role of procurement, the

research and planning that has been

team at MBC carried out detailed anal-

undertaken, Black comments: “With the

ysis of key strategic activities to

development of the procurement techw w w. s u p p l y c h a i n d i g i t a l . c o m

MIDDLE EAST BROADCASTING GROUP (MBC)

“ As a team we were at the centre of a lot of conflict resolution, so we had to be skilled at providing solutions for the site. It took all of our expertise to make the project a cohesive one, pulling everybody together, making sure that all of the elements and all of the pieces of the puzzle actually fell down at the right time, in the right location”

190

— Durdana Farid, Procurement Manager at MBC Group

AUGUST 2018

MIDDLE EAST

nologies, we have been able to cater for

invaluable on some major projects,

the growing needs of business and ena-

notably MBC’s $20mn facility in Dubai’s

bling the shift from the cost only to the

Studio City district.

cost-plus-value model.

Completed in May 2017, the state-of-

“Efficient use of technology through

the-art studios used for programming

effective collaboration with stakehold-

for MBC’s satellite network, primarily

ers has been leveraged for operational

MBC1 and MBC3, and online portals,

excellence and alignment of strategies,

complement its headquarters in Dubai

while collaborative negotiation plans

Media City. At least seven shows are

have brought the best of industry

produced at the studios, which the

knowledge and commercial leverage

company says are key to being able to

on the table enabling multitude of bene-

attract top talent, the right expertise,

fits in securing interruptive value

and bright, creative minds of the vari-

propositions.

ous disciplines that are related to the

“In addition, supplier value management is imperative to the success of

creative and production fields.

The nature of TV schedules meant

procurement. So, a 360 degree view of

that the deadline was tight, with a pleth-

supplier positioning and business per-

ora of stakeholders to manage. In the

spective has been used to align our

absence of a contracting consultant,

critical suppliers with business strategy

the procurement team worked to

and growth.”

ensure all the elements that were needed to being the project in on time

Building the future With the company fully bought in to the

were in place.

“A lot of the detail on a project like this

value offered by a skilled and dynamic

are small, but really important to its suc-

procurement function, the team has

cess,” says Durdana Farid, Procurement

grown, and now numbers 26 profes-

Manager at MBC. “The timeline was

sionals across MBC offices.

very demanding, and to hit our tight

As well as the best-and-braces work

deadline we had to ensure we were

the department oversees, it has proven

accurate with all of the detail, such as w w w. s u p p l y c h a i n d i g i t a l . c o m

191

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MIDDLE EAST

ensuring all elements of the project were compliant to their timelines, from authority approvals to contractors meeting their milestones, to the equipment being delivered on the right time and all the way down to the carpet and furniture for the studios.

The deadline – four months, to be exact – meant that the procurement team had to be a highly effective conduit to bring together all stakeholders working on the project.

“There was a lot of back and forth; and a lot of input from the procurement department,” Farid continues. “As a team we were at the centre of a lot of conflict resolution, so we had

193

to be skilled at providing solutions for the site.

It took all of our expertise to make the project a cohesive one, pulling everybody together,

the contractor bring down costs

making sure that all of the elements and all of

and hit the budget target. We

the pieces of the puzzle actually fell down at

spoke to hundreds of parties, lev-

the right time, in the right location.”

eraging the relationships we have

The procurement department’s established

built over the years, both within

relationships with suppliers that have been

the company and with external

developed and nourished over the years were

partners, and were able to bring

critical to the project’s overall success.

them together to agree on really

“The budgets were very tight, with minimum contingency,” says Farid. “So, despite of the

important issues for the good of the project.”

fact that we had contracted system integrator and contractors, we went to each manufac-

Procurement never sleeps

turer, we have built relationships with and

The business of round-the-clock

negotiated with them directly, which helped

television means MBC’s procurew w w. s u p p l y c h a i n d i g i t a l . c o m

MIDDLE EAST BROADCASTING GROUP (MBC)

194

AUGUST 2018

MIDDLE EAST

195

“ We’re not working in a manufacturing plant, or for a bank; we’re working in a fast-paced and competitive creative industry. It means we have to be really dynamic, versatile and slick at what we do” — Lorraine Black, Head of Procurement, MBC Group

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

MIDDLE EAST BROADCASTING GROUP (MBC)

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MIDDLE EAST

Chef have to be first-class, so on one hand we have our budgets and ensuring we’re onboarding the correct partners and suppliers, and we also know that we

1991

Year founded

have a duty to make sure the end product is a high-quality one.”

Again, says Farid, the work that the procurement team has put in

1,800 Approximate number of employees

over the years to build relationships is paying dividends. “We often work in a live environment, so we need people who we can call in to come in and fix an issue at 2am, or ensure a delivery is made in the middle of the night.

ment team is not perhaps typical of those

We need to have that flexibility and

working in other industries.

that’s when we need something

As Black puts it: “We’re not working in a

to be free of charge or if some-

manufacturing plant, or for a bank; we’re

thing goes wrong and we need a

working in a fast-paced and competitive crea-

new camera, so it’s important our

tive industry. It means we have to be really

suppliers understand our needs.

dynamic, versatile and slick at what we do.

“We cannot have suppliers that

“Procurement in this region can often be

we don’t have that kind of relation-

very fast, transactional and functional, so it’s

ship with, because the outcome

often about pricing structures and cutting

or the effect that it could have on

costs. But, we work in an environment where

one of our shows on the commer-

the content and quality that we put on-screen

cial impact it could have could

has to be good. The production values on

be huge. So, we ought to be very

shows such as Arab Idol, The Voice and Top

careful when we deal with our w w w. s u p p l y c h a i n d i g i t a l . c o m

197

MIDDLE EAST BROADCASTING GROUP (MBC)

198

“ M BC procurement team has not only saved us a lot of money in a challenging market, but has helped us get closer to our most important suppliers and partners, at a time of major industry changes” — Sam Barnett, CEO, MBC Group

AUGUST 2018

MIDDLE EAST

suppliers, that we are getting

if we want to continue to add

suppliers who actually under-

real value,” she says.

stand our business and what our requirements are.”

“Even with the big productions, we need the buyer there so they

The efforts have been recog-

understand any problems and

nised across the company, right

are able to resolve issues. That

to the very top, says MBC’s CEO,

relationship with the supplier on

Sam Barnett, who comments:

the ground is really key.

“Our procurement team has not

“As a department, our people

only saved us a lot of money in

have to be versatile and have

a challenging market, but has

really good communication skills.

helped us get closer to our

We can teach buying skills and

most important suppliers and

negotiation, but the ability to

partners, at a time of major

adapt to situations and communi-

industry changes.”

cate effectively is what we want.

It is a strategy that appears to

Buying power

be paying dividends, says Farid:

In a bid to improve the procure-

“I deal with a lot of suppliers

ment function yet further,

and one constant feedback

Black says MBC is changing the

that we always receive is that

behaviour of its buyers to ensure

MBC procurement is one of the

they are recognised as influenc-

most engaged procurement

ers within the business. The

departments in the industry.”

days of buyers sitting at their desks, removed from stakeholders, are gone – it’s all about engagement and interaction.

“We need our buyers to be on the ground and understand the dynamics of the business

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

199

200

AUGUST 2018

MIDDLE EAST

Staying ahead through digitisation WRIT TEN BY

CATHERINE S TURM AN PRODUCED BY

HE Y K EL OUNI

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

201

EASA SALEH AL GURG GROUP LLC

Key executives at the Easa Saleh Al Gurg Group LLC discuss how introducing a world-class supply chain has made the business a leader for the future

E

stablished alongside the evolution of Dubai, the Easa Saleh Al Gurg Group LLC (ESAG) has grown organically to become one of the leading business houses in the UAE. Now

commercialised into various necessities, it has tapped into key areas of progression in the Mid-

202

dle East, such as infrastructure and services, manufacturing and retail, housing six joint venture partners across a number of divisions.

Representing 27 companies, the diverse business encompasses a consolidated structure in the management of its finances, legislation, corporate governance and IT operations. While businesses are able to rule independently alongside its robust framework, as well as developing their own business strategies, the business has sought to consolidate a number of areas, such as its purchasing, finances and legislative operations, believing that its true strength lies in numbers.

Using innovative, sustainable and progressive practices, ESAG aims to remain at the forefront of changing market and industry trends, ensurAUGUST 2018

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203

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

EASA SALEH AL GURG GROUP LLC

ing that its product and service offerings

ing ways to reduce costs, but drive higher

meet the needs of its customers and are

quality across its operations.

aligned with Dubai’s Smart City vision.

To unlock further business growth,

“Five years ago, supply chain was not managed systematically at ESAG. Our

ESAG decided to undergo a deep dive

Chief Financial Officer, Werner Flaig,

into its supply chain functions in order to

introduced the concept of supply chain to

drive increased value across the business

the firm. When I came on board, the first

and remain competitive against new play-

priority was to understand different busi-

ers in the market.

nesses and add value into these

A family owned business, Abdulla Al

diversified units which would make us

Gurg has sought to build a business in

unique,” explains Irfan Kapadia, Group

alignment with Dubai’s 2020 vision, with

Head of Supply Chain.

the aim to make ESAG’s operations increasingly efficient, with a focus on find-

With 97 individuals situated across the supply chain, carrying out procure-

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MIDDLE EAST

ment, logistics, demand planning,

Strength in consolidation

inventory planning and warehouse

In order to remain competitive, ESAG

management operations, ESAG’s

has adopted strategic sourcing as part of

diverse supply chain structure also

its cost structure and has formalised the

encompasses three individuals at Cor-

way it seeks to gather information. This is

porate Office undertaking its supply

then used to consolidate its require-

chain planning and governance activi-

ments, providing economies of scale

ties, as well as an operational team

when negotiating with suppliers.

under Kapadia’s leadership.

“Companies are increasingly using

“We don’t just focus on local vendors or those based in one part of the world but

their supply chain to compete and gain

try to have multiple sourcing avenues

market share,” adds Kapadia. “Supply

globally. If I have two suppliers, we try

chain excellence is more widely

to have another two from the farthest

accepted, and we are no exception to it.”

regions so it does not affect the supply 205

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

EASA SALEH AL GURG GROUP LLC

BIO

206

Abdulla Fareed Al Gurg Group CEO, Easa Saleh Al Gurg Group LLC Abdulla Al Gurg is the Group Chief Executive Officer of Easa Saleh Al Gurg Group LLC, a multidivisional conglomerate with 27 companies.

The Group’s diverse product and business interests predominantly include retail, building and construction, industrial, real estate and joint ventures.

Under his tenure the Group has expanded its footprint in the GCC region; in the Sultanate of Oman, Iraq and the Kingdom of Saudi Arabia. Abdulla has also been instrumental in leading the activation of a Treasury Management System, helping establish the first in-house Bank in the GCC region.

He is also an active Board member within the Group’s joint ventures, namely Al Gurg Fosroc LLC, Siemens LLC, Al Gurg Smollan and Al Gurg Unilever, Akzo Nobel Decorative Paints LLC and Siemens Healthineers. Abdulla is also on

AUGUST 2018

the Board of Directors for Drake & Scull International.

Abdulla‘s leadership has enabled the Group focus on encouraging a learning environment through a dedicated Learning & Development Centre. His views on entrepreneurship and family businesses are constantly sought out in leadership forums.

Abdulla is a member of the Board of Directors of the Easa Saleh Al Gurg Charity Foundation. In recognition of the Foundation‘s charitable efforts, he was the Lloyds TSB Torchbearer for the London 2012 Olympic Torch Relay.

MIDDLE EAST

207

chain. The same goes for our local

procurement activities. We know the

suppliers,” explains Kapadia.

shortest logistics time window and can

“We have streamlined a lot of our pur-

optimise cost. This gives us an advantage

chasing where we have received over

for the future to be competitive in markets

30% savings in many of our companies

which are rapidly changing in this region.”

because of our consolidation. This all

Additionally, with a number of suppliers

adds up into our supply chain savings,”

utilising different systems, ESAG has had

observes Abdulla Al Gurg, Group Chief

to become increasingly agile.

Executive Officer.

“This has provided a number of advantages,” adds Flaig.

“Automatically, we manage compliance and speed in the supply chain and our

“There are certain parameters which we set for supply chain, which enables us to build our strategy and adopt more towards external parties. It’s been a learning experience for us” says Al Gurg. w w w. s u p p l y c h a i n d i g i t a l . c o m

EASA SALEH AL GURG GROUP LLC

208

BIO

Irfan Gafur Kapadia Group Head – Supply Chain Easa Saleh Al Gurg Group LLC Irfan is a procurement & supply chain strategist with over 15 years of global experience in diversified industries ranging from Manufacturing, Trading, FMCG & Retail offering senior level expertise in strategic sourcing, supply chain transformation, supplier relationships and change management

AUGUST 2018

with companies based in USA and UAE. He has driven processes, developed systems and established centralized supply chain & procurement departments for the companies he has been associated with.

Currently working as Group Head of Supply Chain in ESAG, he has transformed procurement department from a clerical function to become the integral part of execu-

MIDDLE EAST

The use of data

Taking a measured and deliberate

In the age of digitally savvy and

approach to investing in its transfor-

empowered customers, ESAG are

mation journey, the company has

known as pioneers in adopting new

assessed numerous factors, such

technologies, exploring opportuni-

as its existing resources, readiness

ties to enhance interactions with its

and how enhancing key operations

customers across all touch points.

and processes contribute to its

The business became the second company in the region to adopt SAP’s

overall business objectives.

“We were one of the early adop-

full suite back in 2006 and it was the

ters of a Treasury Management

first in the UAE to migrate on SAP ECC

System, the first in-house virtual

on HANA technology. The company

bank in the region, as well as new an

was also amongst the few to imple-

ERP system, SAP’s Business

ment ReFX (a Real Estate Module of

Objects and more. We have also

SAP), Open Text and VIM for docu-

invested in a new customer rela-

ment filing and invoice management.

tionship management (CRM)

tive management designing business strategies and adding value into business processes across the group. He is currently managing supply chain operations with planning of procurement, international freight forwarding, transportation, warehousing, inventory control and distribution for effective functioning of various business units of ESAG. Irfan is very passionate about achieving excellence in supply chain

and has featured as key note speaker at various procurement and supply chain forums and continuously works to enhance the reputation of procurement and supply chain functions.

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

209

EASA SALEH AL GURG GROUP LLC

system and a point of sales (POS) system,” notes Al Gurg.

“We brought SAP Ariba on board last year and have deployed its upstream module to streamline our supplier registration, sourcing and contracts to automate our Procureto-Pay processes,” adds Kapadia.

“We are looking into data analytics in demand planning and digitise our in-bound and last mile logistics.

We work to make sure that whatever technologies are available, we assess them and see how it will ben210

efit the business, grow our top line, save cost and improve efficiency.

Working to capture all moments

“We have really streamlined a lot of our purchasing where we have received over 30% savings in many of our companies because of our consolidation.

This all adds up into our supply chain savings” — Abdulla Al Gurg, Group Chief Executive Officer

through the use of technology, such as track and trace, ESAG has appointed a number of individuals with significant expertise in utilising data and analytics. Becoming more

“To ready ourselves for the

scientific in its approach, the busi-

future, we are investing in technol-

ness will gain a greater

ogy for the benefit of our diverse

understanding of the information

portfolio of businesses, including

received, drawing on lessons from

process automation, mobility, cus-

advanced markets, and combining

tomer service, e-commerce and

this with its understanding of cultural

securing our data infrastructure, as

nuances that contribute to the cus-

well as our procurement and logis-

tomer experience within the UAE.

tics processes,” Al Gurg adds.

AUGUST 2018

MIDDLE EAST

Change management Despite its ongoing transformation, it has been imperative for ESAG to undergo an essential change management process. By fully digitising its procure-to-pay processes, overhauling its supplier relationships and promoting collaboration across its sourcing, invoice submission and payments, Flaig explains that it has presented the biggest challenge.

“We can invest millions into software and give a complete landscape of technology to our staff and to our businesses, whether it’s a fully automated treasury management or ERP system or even the adoption of SAP Ariba software. Nevertheless, if people don’t get comfortable with the technological advantages we have, we can’t bring our horsepower to the ground.

“Years ago, it was clear that companies didn’t want to invest that much in training their employees. This is the biggest challenge in the entire region, but the more awareness we create in

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

211

EASA SALEH AL GURG GROUP LLC

our team, the competitive advantage we will have in the future.

“We have to invest in our people in order to enable them to change as fast as the markets are continually changing.”

With this in mind, the business has placed significant investment in developing a robust team who have a deep understanding of the company and its long-term goals.

Investing in the development of its own training centre, ESAG delivers over 780 hours of training to its 212

3,000 employees in a number of areas, from supply chain, governance, and legislation, to soft skills, such as managing conflict. The company also delivers a number of women’s empowerment initiatives.

“We also cover SAP software utilisation and VAT training, which

and of course, our internal policies

was introduced this year. I also

and processes” observes Kapadia.

manage supply chain-related

“We have heavily invested into supply

training, where every quarter we

chain digitisation, so we have ongoing

gather our supply chain commu-

training which is always happening,

nity and teach them the principles

making sure procurement executives

of procurement, what’s happening

know how to create purchase exercita-

in the supply chain industry, how

tions, how to create sourcing requests

the logistic system works, our pro-

and how to collect it with suppliers. All

cess flows and how to negotiate,

of this happens at the training centre.”

AUGUST 2018

MIDDLE EAST

ESAG Showroom

213

Long-standing reputation A key figure in the UAE, ESAG is keen to lead by example and places particular emphasis on giving back to local communities in a number of health, education and labour initiatives.

Regularly donating clothes for families who are supported by the Red Crescent Authority in UAE, the business also supports local hospitals through blood donation. “For our employees, we also provided complimentary health tests to commemorate International Diabetes Day, offere breast cancer awareness programmes as well as wellness programmes, such as free yoga classes,� explains Flaig. w w w. s u p p l y c h a i n d i g i t a l . c o m

EASA SALEH AL GURG GROUP LLC

214

“From a supply chain perspective, we

they offer different discounts for our

are also heavily involved. For example, we

employees. Any external activities that we

recently did a healthcare check-up for all

do, we drive partnerships with our suppli-

of our 800-plus labour employees, so the

ers. We give them a say in the process. It’s

supply chain team brought our water sup-

not an individual task, but one where the

plier on board, who came and distributed

supply chain comes together.”

free samples of water and juices for the labour staff,” adds Kapadia.

“Similarly, we have collaborated with different partners in the market, where AUGUST 2018

With a long-standing reputation, ESAG remains proud to have a number of successful business relationships, many which have spanned over 50 years, such

MIDDLE EAST

215

“We have to invest in our people in order to enable them to adapt to continually changing markets” — Werner Flaig, Group Chief Financial Officer

as British American Tobacco, Siemens and Dunlop, amongst others.

Its values begin with its staff and are extended to its vendors and clients.

Developing an organisational structure, combined with technology, the business is now able to successfully discuss, negotiate, and work with both international and local business partners effectively, leading to continual business growth. w w w. s u p p l y c h a i n d i g i t a l . c o m

EASA SALEH AL GURG GROUP LLC

Iftar event at a mosque built and managed by ESAG “This holistic approach of being ahead of the curve in the market puts us above the competition, which will make us survive as a business and will continue to enable us to drive a long-term, sustainable, strong performance,” says Flaig.

“We remain unwavering in our commitment to conduct all of our business activities with integrity and excellence, and ensuring the trust of our shareholders, customers, employees and business partners,” concludes Kapadia.

“We will continue to leverage our expertise to achieve sustainable growth in our identified areas of strength and remain agile and responsive to both the market and our customers’ 216

requirements, exploring opportunities for growth into new sectors through a combination BIO

Werner Flaig Chief Financial Officer, Easa Saleh Al Gurg Group Werner Flaig joined Easa Saleh Al Gurg Group LLC in 2011 as Group Chief Financial Officer with responsibility for all financial operations and long term financial strategies of 28 operating companies active in retail, real estate,

AUGUST 2018

industry, trading, banking and investment finance in the Lower Gulf Region and the UK. He came to the United Arab Emirates in 2009 as Chief Financial Officer of Siemens LLC, UAE, responsible for the financial operations of all Siemens entities in the Lower Gulf Region. Werner started his career in 1991 with Siemens AG, Corporate Finance, later Siemens Financial Services, and now possesses 25 years of executive level experience leading structured finance operations.

MIDDLE EAST

217 of deepening relations with existing

Werner has had P&L responsibilities as General Manager in operational businesses for large infrastructure projects in SouthEast Asia and China. His experience also includes leading concession companies as well as structuring and arranging international debt financing.

Werner has a university degree in business administration from the University of Erlangen-Nuremberg, Germany, and studied also at Duke University, North Carolina, USA.

partners and further diversifying our current portfolio of businesses to tap into new customer segments,� concludes Kapadia. “Carrying forward the legacy of our founder, our preparedness and foresight has created processes and policies that guarantee the longevity of the business. A testament to that is being a successful family run Emirati company with three generations working side by side.�

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

An Undisputed Part of Ecuadorian Identity Cervecería Nacional shows an innovative corporate culture that works towards making a positive impact on Ecuadorian society WRIT TEN BY

M ARÍA COBANO-CONDE PRODUCED BY

JULISA VARGAS

L AT I N A M E R I C A

CERVECERÍA NACIONAL

T

he Las Peñas neighbour-

tally sustainable processes that

hood, in the historic centre

also contribute positively to the

of the Ecuadorian city of

Ecuadorian society.

Guayaquil, witnessed the foundation of Cervercería Nacional (CN) as The

GROWTH SINCE 2016

Guayaquil Lager Beer Brewery

Cervecería Nacional has been

Association in 1887, a brewery and

transformed in all its aspects,

ice-making company.

driven to grow and become

In October, 2016, AB InBev – the larg-

220

stronger and more efficient. This

est brewery in the world – became the

has led to a positive corporate

main shareholder of Cervecería Nacional.

culture that flourishes both

This allowed the company to continue

across production plants and

with its traditional production of

within operative work.

national beers, as well as expanding

As regards its sourced raw

its catalogue with imported varieties

materials such as barley, rice,

in the framework of a great cultural

packaging, labels and cold

and corporate change.

equipment, CN created a

The merger promoted production in

supplier development program

the two plants of Cervecería Nacional

looking for collaborators that

in Pascuales (Guayaquil) and Cumbayá

are close to its expectations.

(Quito), with modern and environmen-

This led to joint work and advice in order to offer world-class products and supplies that, in accordance with government regulations in Ecuador, give priority to local raw materials and Ecuadorian suppliers.

These strategies are part of the Decalogue (2016) that serves as a roadmap to CN, where the support of its

AUGUST 2018

L AT I N A M E R I C A

221

FACTS

It has 2 production plants, 1 malting plant and 17 wineries throughout the country w w w. f d f w o r l d . c o m

Comprehensive solutions to complex problems PINO/ELIZALDE’s philosophy is team work. We strongly believe in the maximizing and long-lasting effects of synergy. We understand that the business environment in Ecuador is complex and, as such, in order to implement comprehensive solutions, our lawyers combine their strengths, knowledge and capabilities, with the highest ethical standards, to meet the needs of our clients in the most effective and efficient manner.

The firm is located in Guayaquil, but also has operations in Quito, and outreach throughout the whole country, focusing its practice on several areas of the law such as Corporate and M&A, Energy and Natural Resources, Dispute Resolution, Banking and Finance, Competition and Antitrust, Tax, Intellectual Property, among others, which allows us to provide comprehensive and complete advice to meet the needs of our clients.

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L AT I N A M E R I C A

suppliers is key from local producers

programme is aimed at both

to international companies such as

university students who are

Sinel, Amcor, Sivesa, Croner or Matex.

finishing their degrees and those who are still studying too.

ITS TEAM IS ITS GREATEST

Globally, 300 applicants are

STRENGTH

selected who go through two years

Cervecería Nacional employs more

of training and internships in the

than 2,000 collaborators – a key pillar

different areas of the organisa-

of its success. Consequently, CN

tion. When they graduate from

invests greatly in developing the

GMP, they assume immediate

potential of its teams.

middle management positions.

The Global Management Trainee

In the same way, CN is also

(GMT) programme was created to

responsible for enhancing the

select young global talent and offer

skills of employees who are

the possibility of developing a profes-

already part of its team. There

sional career within the company, for

is an emphasis on meritocracy:

which CN opens a call every year in

30% - 40% of the activities on

all the universities of the country.

the agenda are devoted to

The main idea is that students go

coaching and employees are

through a selection process focusing

empowered to work in different

on their willingness to grow, their

areas of the company to acquire

energy and their ability to learn. The

a global vision. CN leaders are evaluated by the quality of their teams – they are expected to surpass themselves.

The company promotes and seeks people’s growth within the organisation and is agile in measuring talent potential,

Click to watch: 130 AÑOS CN’

combined with results, year on year. This has led to CN enjoying w w w. f d f w o r l d . c o m

223

En nuestras cajas siempre van las mejores marcas.

PLAPASA, proveedor estratégico de más de 45 años de Cervercería Nacional, se enorgullece por sus 130 años al servicio de Ecuador.

Nos sentimos parte de su éxito.

¡Felicitamos a

CERVECERÍA NACIONAL

por su Aniversario 130 y una trayectoria ejemplar!

Para Aon es un orgullo haber formado parte de este hito.

L AT I N A M E R I C A

a high ranking in terms of indicators

tions, CN measures its impact

and results among companies of

on the density of local water

massive consumption in Ecuador.

basins. CN consumes three litres of water for each litre of

POSITIVE IMPACT ON ECUADO-

beer in Ecuador nowadays, a

RIAN SOCIETY

global milestone and one of the

CN has a strong commitment to

best indicators of water

making positive changes to society

consumption for the AB InBev

in Ecuador. Its most ambitious pro-

group as a whole.

gramme, Growing for a Dream, offers

In the same way, CN has

training and education to women in the

global commitments in conjunc-

company who, as an example of

tion with some brands and aims

relevance, make up 60% of the sales

to have all its products pro-

channel in its Latin American stores.

duced with renewable energy

The creation of this program is

by 2025. CN is dispensing with

benefiting 15,000 women and is

thermoelectric energy in favour

based on training, access to financing,

of wind and hydroelectric power,

technology and even scholarships for

a goal that it has already

their children, since part of what the

achieved this year by using

company is looking for is for families

100% renewable energy.

to have a better future.

The initiative #MeUno (#IJoin)

A COMMITMENT TO

involves 3,000 volunteers who work on

CONSUMERS

initiatives from cleaning beaches – such

Cervecería Nacional’s approach is

as the Corona campaign in Galapagos

customer-centric; therefore, it offers

Islands – to helping and supporting

products that are integrated into its

children with limited resources and

customers’ daily lives to improve

learning difficulties, as well as building

them in a responsible way.

houses for those affected by the Ecuador earthquake of 2016.

In relation to sustainability regula-

The commitment to the customer goes as far as promoting responsible conw w w. f d f w o r l d . c o m

225

CERVECERÍA NACIONAL

226

sumption, since in Ecuador there is a

TECHNOLOGY AND

risk of high consumption even among

DIGITISATION

minors, due to a lack of adequate

Technology and digitisation are

differentiation between low-alcohol

key enablers in offering better

drinks and illegal alcohol (which

quality and services to CN’s

makes up 30% of the total national

customers.

consumption).

CN has a commitment by which its

For example, 90% of the company’s sales happen by

portfolio sets the alcohol levels at 30%

teleshopping. CN has created a

for low-alcohol content beverages, as

whole Artificial Intelligence (AI)

well as operating a programme to

system that can offer recommen-

educate consumers and sellers in

dations to customers, according

responsible consumption habits.

to indicators such as the day of

AUGUST 2018

L AT I N A M E R I C A

CN

CN employs 2500 collaborators

ing of its brands is generated since the company’s digital media originates there, too.

As development objectives for the coming years, CN plans to help increasing Ecuador’s per capita beer consumption, since it is one

It produces an average of $ 100 MN in revenue every year

of the lowest in the region.

It is currently set in 32l of beer consumption per year, unlike the 48l in Colombia and Perú and the nearly 80l of consumption in Mexico and Venezuela.

The company is growing again after 2016 (17% of lost sales)

This generates a very strong growth potential for the beer market, which is linked to the development of beer culture and to boosting beer as part of the life of Ecuador’s population.

227

In addition, CN is developing other product lines, some of which are related to beer such as the malts line, but also non-alcoholic the week and the predicted

beverages. For this an investment plan of

consumption for that area, region

around $400mn has been created for the

and geolocation.

next 5-year period.

For this, CN is integrating a B2B platform where customers can order via an app or through the website, tracking their orders until delivery.

The company has also developed the ability to measure trends in real time by monitoring social networks, in a Command Centre from where all the marketw w w. f d f w o r l d . c o m

A solid organisation committed to the Chile’ Supply Chain Digital society discovers the processes WRITTEN BY

MARÍA COBANO-CONDE PRODUCED BY

JASSEN PINTADO

involved in SMU’s strategic management for the supply chain by speaking to Melania Chaverri, Head of Procurement

L AT I N A M E R I C A

SMU S.A.

SMU

is a Chilean

“My role within SMU has been to

supermarket

restructure the purchasing area in a

chain and part of

centralised manner, implementing

CorpGroup, formed at the end of

a planned sourcing strategy for

2007 from the acquisition of more

goods, services and assets that we

than 60 regional supermarkets

call ‘no retail’. Part of this process

chains. Currently, it is the super-

has been to transform decentral-

market company with the largest

ised tactical purchasing

coverage in Chile with sales of

management into a centralised

$3.6bn annually.

model,” explains Chaverri.

The company has more than 500

230

“We have also structured pur-

stores throughout the 15 regions of

chasing policies and procedures

the country through its different

incorporating technology within the

formats (Unimarc, Alvi, Supermar-

supply process through e-procure-

ket Wholesale 10, OK Market and

ment solutions such as Ariba,

Telemercados.cl) that adapt to the

which will allow us to achieve

needs of customers.

greater efficiency in the processes

Melania Chaverri, Head of Pro-

and reduce trading times.

curement, has been a key person

“On the other hand, we have a

in the success of SMU. She was

collaborative work model with the

part of the company between 2010

other functional areas of the com-

and 2011 as Procurement Manager,

pany, which allows us to align

returning in 2014 as Head of the

supply strategies with corporate

division to help drive the firm’s

goals and objectives set by senior

restructuring and modernisation

management.”

plan. The was applied between 2014 and 2016 with focus on com-

OPERATIONAL COST CONTROL

mercial strengthening, operational

AND QUALITY STANDARDS

efficiency and financial and organi-

One of the strategies Chaverri has

sational development.

worked on has been the intelligent

AUGUST 2018

L AT I N A M E R I C A

“ We have a collaborative work model with the other functional areas of the company, which allows us to align supply strategies with corporate goals and objectives set by senior management” — Melania Chaverri, Head of rocurement BIO

Melania Chaverri started her career in Strategic Sourcing in 2002 in Costa Rica, in the division of Global Procurement Walmart, area of food and fresh fruit. She has an MBA from the Interamerican University of Costa Rica.

231

In 2004, she was transferred to Chile together with Walmart Food Sourcing for the development of export of fruits and processed foods for private label from South America to Walmart worldwide.

In addition to her experience in the area of food, she has held positions in retail companies including Cencosud, where she developed in the area of supply for supermarkets and department stores and home improvement.

Subsequently, in 2014 she joined SMU as Head of Procurement in the areas of services, operational inputs, CAPEX, facility management and insurance. w w w. f d f w o r l d . c o m

L AT I N A M E R I C A

MAPFRE - Talento sin barreras

control of costs. “We manage the

specific strategies for each cate-

purchases of operational expenses

gory,” adds Chaverri.

under a ‘category management’

Thanks to its optimisation in ser-

strategy, consolidating the

vice contracts, SMU managed to

demand of all our business units

reduce operating expenses from

with each one of their specifica-

more than 25% in 2013 to less than

tions. In this way, we coordinate

22% in the last periods.

the sourcing and negotiation activi-

The work with suppliers in terms

ties with which we increase the

of quality standards has been

added value defining unique and

another key to cost reduction. SMU w w w. f d f w o r l d . c o m

INTEGRATION OF TECHNOLOGICAL SOLUTIONS FOR THE SUPPLY CHAIN

www.stgchile.cl contacto@stgchile.cl

STG has more than 16 years of experience, with offices in Chile, Argentina, and PerĂş, where we integrate technology to improve end-to-end Supply Chain processes.

+562 2726 6500

cl.issworld.com ISS Chile

@

info@cl.issworld.com

With more than 117 years of experience in Cleaning, Catering, Maintenance, Security and Support services; ISS Facility Services has been present in Chile since 2004. It has over 15,000 collaborators and it offers services in more than 3,500 facilities for 300 clients, who they help improve their performance and operational excellence, through the IFS model (Integrated Facility Services), based on the creation of value through outsourcing and integration of services, creating more economical and flexible solutions.

FACILITY MANAGEMENT | CLEANING | PROPERTY | CATERING | SECURITY | SUPPORT

L AT I N A M E R I C A

sees its suppliers as strategic partners with whom it develops a clear joint strategy of specifications, establishing the standards

“At the end of 2012, we created the ‘100% Ours’ programme, a unique initiative in the country with the purpose of empowering SME suppliers throughout the country and the development of the regions” — Melania Chaverri, Head of procurement

that ensure the quality of the final product.

This is why Chaverri works closely with local producers in Chile. In this line, the company’s commitment to small and medium–sized local entrepreneurs is developed.

“At the end of 2012, we created the ‘100% Ours’ programme, a unique initiative in the country with the purpose of empowering SME suppliers throughout the country and the development of the regions,” she says.

“Through this programme, we seek to encourage our customers the preference for regional products, highlighting them in our gondolas and privileging, in this way, small local businesses. It also allows us to offer our customers fresher and characteristic products from the area, thus generating shared value among local suppliers, our customers and Unimarc.”

TECHNOLOGY, THE SUPPLY CHAIN AND THE CONSUMERS

Process automation is guaranteeing faster and more effective purchases for consumers, with better services. The supermarkets adapt to their customers so that the purchase transactions are made in the best w w w. f d f w o r l d . c o m

235

SMU S.A.

MAPFRE CONTIGO - El seguro seguro. Auto

“OVER

31 YEARS

OF QUALITY” Inapol, leader in bag solutions for waste management and merchandise containment.

www.inapol.cl

L AT I N A M E R I C A

SMU OPERATES THE BRANDS: UNIMARC, ALVI, SUPERMERCADO MAYORISTA 10, OK MARKET AND TELEMERCADOS.CL (E-COMMERCE)

way and in the shortest possible

management. Chaverri explains:

time. For this, technology is funda-

“The main use of this will be in

mental: SMU will invest 20% in

the process of recurring pur-

technology and logistics in the next

chases, that is, simple

three years.

purchases through e-procure-

“In this context, SMU is working

ment applications, as well as in

on the optimisation of our web plat-

certain processes, generating

forms to enhance e-commerce and

efficiency and performance in a

directly benefit our customers, with

context of procure-to-pay in

the aim of making online purchases

addition to the continuous

safely, quickly and easily. Super-

source-to-pay in the technology

markets are also adapting to this

of classification of expenses.”

trend by creating their own e-commerce capabilities and partnering

TEAMPLAY AND FEMALE

with successful operators in the

OPPORTUNITY

last mile.”

SMU employs more than 30,000

Artificial intelligence has also been implemented into supply

employees, being the fourth employer nationwide with 64% w w w. f d f w o r l d . c o m

237

SMU S.A.

“We have also structured purchasing policies and procedures incorporating technology within the supply process through e-procurement solutions such as Ariba” — Melania Chaverri, Head of procurement

238

AUGUST 2018

L AT I N A M E R I C A

women and 1.8% migrants.

According to its transformation

to professional skills, female leadership stands out in the

plan carried out between 2014 and

organisation – cooperation, empa-

2016, the company follows a strat-

thy, the ability to model teams and

egy to train and enhance the skills

make strategic decisions. This

of its teams, allowing employees to

comes to complement the per-

develop professionally and SMU to

spective of the boards of directors,”

improve results year after year.

Chaverri says.

Chaverri participated in the eighth edition of the BOW Program

POSITIVE IMPACT ON

(Board Of Women), developed by

COMMUNITIES

Business Women with the aim of

SMU is committed to reflecting the

offering training to women to hold

culture and needs of Chilean soci-

positions as C- and V- executives

ety, actively working to leave a

and to lead businesses with high

positive footprint in the areas

growth potential.

where it operates.

She explains: “Among the main

“We have a commitment to inclu-

objectives are the development of

siveness of people with disabilities

management skills to face dynamic

in the workforce, a promise that

ventures, the strengthening of stra-

falls within the axis of sustainability

tegic design capacity and the

in our Strategic Plan 2017-2019.

ability to align the different areas of

Since 2012, we have had a pro-

the business. It is also about exe-

gramme that, to date, has allowed

cising strategic and transformational

the entry of around 250 people with

leadership to strengthen the work

some degree of disability to our

of the management team.”

businesses and stores in the coun-

In this regard, the executive

try. Their arrival has generated an

believes that “it has been proven

excellent working environment and

that a strong female presence in a

is very beneficial for the company,

company delivers value. In addition

sensitising the rest of the staff and w w w. f d f w o r l d . c o m

239

SMU S.A.

FACT

‘THE SUPERMARKET CHAIN WITH THE GREATEST GEOGRAPHICAL COVERAGE AND THE NUMBER OF STORES NATIONWIDE’ 240

AUGUST 2018

L AT I N A M E R I C A

promoting teamwork,� Chaverri

alignment and commitment, sus-

explains.

tainability, technological

As part of this commitment, SMU

development and strengthening of

will continue to invest in transfor-

the financial position. In terms of

mation to offer the best of itself as

experience for clients, the com-

an organisation: “SMU is imple-

pany is carrying out a remodelling

menting a strategic plan 2017-2019,

plan for 130 stores throughout

based on six pillars: customer

Chile during the next five years

experience, operational efficiency,

(2017-2021),� concludes Chaverri.

241

w w w. f d f w o r l d . c o m