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DE C E MB E R 2 0 1 9

Tradition and progress in procurement

GROWING A BUSINESS ALONGSIDE THE CLIENT Accelerating customer relationships to establish a robust network of solutions


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FOREWORD

W

elcome to the December issue

the right partners are onboard,”

of Supply Chain Digital!

he explains.

Our cover feature this month zones

Elsewhere in the magazine, Lindsay

in on LF Logistics as we speak with

Bridges, Senior Vice President of HR

Simon Oxley, Executive Vice President

at Deutsche Post DHL Supply Chain,

– Global Business Development and

UK and Ireland, discusses talent

Head of Indonesia, to discuss the

management at the logistics giant.

importance of developing customer relationships in collaboration with revenue streams. “We’re the logistics provider of choice in Asia, focused on expanding our customers’ operations across the region,” says Oxley. In our leadership slot this month, we interview Capgemini’s Jörg Junghanns, Vice President Europe – Digital Supply Chain, to talk about the acceleration of blockchain in the supply chain space. “The key challenge is to convince others to engage with you on the blockchain journey along with the

Also be sure to check out in-depth features with Rhenus Logistics Indonesia, Huhtamaki, Brenntag Group, Erdinger Weißbräu, Anheuser-Busch InBev and Saudi Telecom Company. Finally, our top 10 this month counts down the biggest companies we’ve featured throughout 2019 in Supply Chain Digital by revenue. Would you like to be featured in the next edition of Supply Chain Digital? Get in touch at sean.galea-pace@ bizclikmedia.com

usual challenges of IT implementations,

Enjoy the issue!

the cost involved and ensuring

Sean Galea-Pace www.supplychaindigital.com

03


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Click the home icon (top right of page) to return to contents page at anytime EDITOR-IN-CHIEF

SEAN GALEA–PACE EDITORAL DIRECTOR

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CONTENTS

12

26


36 TALENT MANAGEMENT WITHIN LOGISTICS

48

58 Featured companies

74 Events & Associations


CONTENTS

78 Rhenus Logistics Indonesia

102 DIGIB

90 Huhtamaki

120 Erdinger Weißbräu


CONTENTS

138 Anheuser-Busch InBev

166 PepsiCo

150 Saudi Telecom Company


12

LF LOGISTICS: GROWING A BUSINESS ALONGSIDE THE CLIENT WRITTEN BY

OLLIE MULKERRINS

DECEMBER 2019

PRODUCED BY

CAROLINE WHITELEY


13

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LF LOGISTICS

Simon Oxley, Executive Vice President – Global Business Development and Head of Indonesia at LF Logistics, discusses developing customer relationships in tandem with revenue streams to provide a robust network of solutions

LF

Logistics is a third-party logistics (3PL) provider based in Asia and operating as part of the LF Group. It has been in

operation since 1906, and today provides three key areas of service to users: distribution centre 14

services, transportation management services and global freight management. LF Logistics manages over 250 distribution centers across 15 countries in the Asian region. These distribution centers serve over 400 customers, many of which are recognisable, household brands. Its operations cover a range of key verticals, including Footwear, Apparel & Accessories, Fast-moving Consumer Goods, Food and Beverage, Beauty & Wellness, Consumer Electronics and Healthcare. Simon Oxley, Executive Vice President - Global Business Development & Head of Indonesia at LF Logistics explains: “We’re the logistics provider of choice in Asia, focused on expanding our customers’ operations across the region. One of our customers, for example, has grown across nine countries with our support and another has doubled in size over the DECEMBER 2019


2008

Year founded

10,000+ Number of employees

15

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LF LOGISTICS

“We’ve been very successful in the industry, our growth is above the industry average and we believe our three pillars are the foundation of this” — Simon Oxley, Executive Vice President – Global Business Development & Head of Indonesia, LF Logistics 16

DECEMBER 2019

past 18 months. Through our solution design expertise, we can help a business design and build its distribution centres, employ staff, put first-class operational systems in place or start operations in a new location.” LF Logistics uses a three-pillar model to measure its success and guide its operations with its customers. The first of these is operational excellence, as Oxley explains: “We believe providing excellent service is a main driver for customers’ success and their


CLICK TO WATCH : ‘MANAGEMENT TRAINEE PROGRAM 2018’ 17 desire to stay and grow with us. We

With regards to business develop-

are operations-centric and focused on

ment, LF Logistics identifies potential

exceptional customer service.”

customers’ growth targets to see how

The second and third pillars are

LF Logistics can facilitate this growth,

account management and business

to both provide a solution that best fits

development. Each customer has its

the customer and benefits LF Logistics’

own dedicated account team to facili-

revenue stream. These three pillars have

tate the transformation it will undergo

become the foundation upon which the

with LF Logistics. “This provides

company has built its business. “We’ve

confidence that we are serving our

been very successful in the industry, our

customers to their required service

growth is above the industry average

standards, that operations are

and we believe our three pillars are the

efficient, and that we are prepared

foundation of this,” says Oxley.

to grow our business with existing customers,” Oxley notes.

The dedication to these key areas has ensured LF Logistics rapid expansion w w w.suppl yc ha i ndi gi ta l. com


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of services offered to its customers. As more companies join the network, the benefits of growing infrastructure and forward planning become evident. According to Oxley: “We are investing in our business in the region, whether that’s in people, in systems, in distribution centres or transportation networks, our customers can see our visible commitment to the industry, our infrastructure and an excellent level of service.” LF Logistics’ own growth is led by the needs of its customers, both

“Through our solution design expertise we can help a business design and build its distribution centres, employ staff, put first class operational systems in place or start operations in a new location” — Simon Oxley, Executive Vice President – Global Business Development & Head of Indonesia, LF Logistics

current and potential. The company

19

E XE CU T I VE PRO FI LE

Simon Oxley Simon Oxley is an experienced supply chain professional, having worked in the Industry for 30 years and loves being a part of an industry that improves the lives of billions. He has significant experience in designing and delivering operational solutions to large brands across multiple business sectors, and a strong background in distribution center management, transportation operations, ogistics system implementations and delivering improved supply chain performance. Simon has global experience, having worked in Europe, the US, and in multiple countries across Asia, a region that has been his focus over the past two decades.

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LF LOGISTICS

C O M PA N Y FACT S

• Working in 15 countries • Managing over 250 distribution centers • 100% annual growth over the past two years in Indonesia

20

DECEMBER 2019


invests in its future operations to anticipate the requirements of the industry. For example, rather than building up fulfilment networks from scratch, LF Logistics will instead build upon pre-existing needs to ensure smart investment. “We don’t look to expand into new countries from a zero base. We would rather expand into the markets that our customers are targeting. Over the past five years our expansion has been driven by customer expectations. Entering into a new country with a customer means we expand with their business and can readily provide expertise as they are already familiar with us. We know their operating procedure and, in many cases, are already working with the same implementation teams they have used before.� LF Logistics looks to breed that same sense of partnership and familiarity with other partners it works with. One of the largest types of vendors are property developers, such as MMP Property, that aid in the construction of distribution centres. LF Logistics will work in tandem with developers to design each new facility and from there, negotiate leasing agreements w w w.suppl yc ha i ndi gi ta l. com

21


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23 to use the space. Transportation

strain from areas that may be in need.

vendors, such as Ugasan Berkat Jaya,

A good example of these peaks was

then provide operational and rental

the singles day period of 11 November

services for the vehicles needed to

2018 when the LF Logistics facilities

manage a site, as and when they are

in China received 7.6mn orders in a

required. These services may include

24-hour period. Lastly, equipment

drayage to seaports, heavy duty haul-

providers ensure that customers have

age vehicles or smaller vehicles for

a connection to a steady and reliable

city deliveries. This allows the com-

supply of anything from software and

pany to adapt the infrastructure of its

hardware to automated machinery.

organisation to suit its needs whilst

In addition to this, providers such as

leaving room for reassessment in the

Re>Pal and Loscam give the com-

future. Labour providers meet the

pany a choice in what kind of pallets

requirement to fill positions with addi-

or handling materials it wishes to use

tional labour at peak periods to relieve

throughout its operations. w w w.suppl yc ha i ndi gi ta l. com


LF LOGISTICS

24

“We’re very focused on remaining a leading 3PL in Asia, and if there are countries we could expand into then we will ensure that expansion is in line with our customers requirements so they can grow their business with us” — Simon Oxley, Executive Vice President – Global Business Development & Head of Indonesia, LF Logistics

DECEMBER 2019

The ability of LF Logistics to serve a vast array of requirements, whilst maintaining a trusted network of partners, enables a customer to streamline the growth of its business across individual sectors, through a tried and tested process. This level of holistic integration extends across many LF Logistics systems. Oxley elaborates; “The Oracle Transport Management system allows us to process orders. If we move to a new market we are able to seamlessly provide this same operational system. So, if a brand moves


25

to a new market and needs a 3PL pro-

represents half the world’s population.

vider, it will already have an integrated

Of all the global consumer spending

system with us and that’s one less

growth in the next 12 years, 84% of

obstacle to entry in a new region.”

that is forecast to be within Asia. We’re

Over the past two years LF Logistics

very focused on remaining a leading

has seen 100% growth across the

3PL in Asia, and if there are new mar-

business in Indonesia and continues to

kets we could expand into then we will

grow throughout the Asian region. By

ensure that expansion is in line with our

developing in familiar territory it can

customers’ requirements, so they can

improve upon the services it can offer

grow their business with us.”

its clients, whilst taking advantage of the economic opportunities provided by one of the fastest growing markets in the world. “The area we operate in w w w.suppl yc ha i ndi gi ta l. com


P R O C U R E M E N T T R A N S F O R M AT I O N

26

DECEMBER 2019


SHOWCASING BLOCKCHAIN IN THE SUPPLY CHAIN SPACE Jorg Junghanns, Vice President Europe, Digital Supply Chain of Capgemini, discusses the importance of establishing a strategic blockchain approach while ensuring customer-centricity in the supply chain space

WRITTEN BY

SE AN GA LE A-PACE

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27


P R O C U R E M E N T T R A N S F O R M AT I O N

W

ith technological innovation accelerating on a rapid scale, an increasing number of

companies are beginning to introduce blockchain into their operations in a bid

to counteract cyberattacks. Blockchain is a relatively new technology. Having only existed for just over a decade, it has become a popular component of how companies keep their data encrypted and secure. At its core, blockchain is a chain of blocks, however, instead of a physical chain, there’s digital information (the block) stored in 28

a public database (the chain). Jorg Junghanns, Vice President Europe, Digital Supply Chain of Capgemini, believes it’s important to first establish a clear blockchain strategy instead of implementing it with no direction. “There are several key questions to ask when setting up a blockchain approach,” affirms Junghanns. “What do you want to use it for? Is it the right thing? In what ways are you using blockchain? From there, you can critically assess if blockchain is the right choice.” Having spent 17 years at Accenture, Junghanns has the experience and pedigree to lead Capgemeni’s blockchain strategy. “Both companies operate a similar business model so it wasn’t a major difference,” he states. “At Accenture,

DECEMBER 2019


29

“We primarily use AI in areas such as demand and network planning as well as fulfillment management” — Jorg Junghanns, Vice President Europe, Digital Supply Chain, Capgemini

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P R O C U R E M E N T T R A N S F O R M AT I O N

“It’s our responsibility to identify a pragmatic solution that helps our clients” — Jorg Junghanns, Vice President Europe, Digital Supply Chain, Capgemini

distinct advantages to leveraging blockchain. “It helps to fix problems such as transparency, trust, IT and process security. However, the blockchain solution only works if there’s a number of partners using it. It’s also important to form the right partnerships to make them part of your solution because convincing others to engage with you on in blockchain is one of the biggest challenges to overcome.” Capgemini offers a diverse range of services that caters to a variety of different sectors such as aerospace

30

& defence, distribution, travel & I gained lots of experience in manage-

transportation, automotive and

ment consulting and it really laid the

telecoms. Junghanns affirms block-

groundwork for me to succeed in my

chain is still in its early concept stage

current role with Capgemini.”

as companies begin to search for the

As a research and advisory company

best ways to utilise it. “The key chal-

that prides itself on delivering the best

lenge is to convince others to engage

service to customers, Capgemini is

with you on the blockchain journey

recognised as a leader in consulting, technology services and digital transformation. With a customer-centric mindset, Capgemini is continuously seeking how to better serve its customers through innovation amidst the ever-changing technological world. As a result, Junghanns points to the DECEMBER 2019


CLICK TO WATCH : ‘CAPGEMINI INVENT TALKS: BLOCKCHAIN IN SUPPLY CHAIN MANAGEMENT’ 31 along with the usual challenges of IT

businesses’ digital transformations.

implementations, the cost involved

However, Junghanns believes there

and ensuring the right partners

is still room for development before

are onboard.”

AI is considered an essential tool

The influence of new technology

industry-wide. “Technology is becoming

can’t be ignored. Over the past decade,

increasingly important, but is AI a key

artificial intelligence (AI) and Big Data

part of all businesses’ strategies at the

are increasingly impacting how

moment? Not yet,” explains Junghanns.

businesses conduct operations. With

The scale of what tomorrow’s

companies worldwide searching for

technology could be is staggering. The

ways to leverage new tech in a bid to

supply chain industry remains keen to

speed up their existing processes and

introduce technologies such as ML

differentiate from competitors, this has

and AI to enhance productivity and

led to AI and machine learning (ML)

streamline operations. “We primarily

becoming prominent features of

use AI for demand and network w w w.suppl yc ha i ndi gi ta l. com


P R O C U R E M E N T T R A N S F O R M AT I O N

“It’s about putting our client’s needs at the heart of what we do” — Jorg Junghanns, Vice President Europe, Digital Supply Chain, Capgemini

planning as well as fulfillment manage32

ment,” he says. “We’re continuously looking at how we can include AI to better serve our clients but we certainly don’t rely on it.” With staying ahead of the curve paramount to success, Junghanns believes in the importance of juggling innovation with customer-centricity. “It’s our responsibility to identify a pragmatic solution that helps our clients. We have to be ahead of the latest trends,” he explains. “However, we must ensure we tailormake solutions to our clients’ needs and integrate new technologies based on what they really want.” It’s fair to say Capgemini values its customers. With customer-centricity recognised as DECEMBER 2019


a core part of the company’s corporate values, Junghanns believes his firm’s success rests on how it treats its customers. “We’re fair, frank and open. We believe that we can help our customers achieve their targets more efficiently than anyone else. It’s about putting our client’s needs at the heart of what we do.” Looking to the future, Junghanns has a clear vision for the future of the supply chain industry. “It’s clear that technology is the future of the supply chain space,” he says. “We’re currently working with our customers on ‘no touch supply chains’. We want to free up supply chain professionals and allow a greater focus on strategic thinking to enable better decisions to be made. We want to make life easier for the millions of executives working in supply chain. The future is full of uncertainties and exceptions but it’s how you manage these challenges that ensures you succeed in the future.”

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33


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H AV E Y O U S E E N O U R O T H E R T I T L E S ?


D I G I TA L I S AT I O N

TALENT MANAGEMENT WITHIN LOGISTICS

36

Lindsay Bridges, Senior Vice President of HR, Deutsche Post DHL (DPDHL) Supply Chain, UK and Ireland, discusses talent management at DHL WRITTEN BY

GEORGIA WIL SON

DECEMBER 2019


37

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D I G I TA L I S AT I O N

D

eutsche Post DHL (DPDHL) Group

is a world leader when it comes

to mail and logistics. The group

operates under two brands: Deutsche Post provides postal services to Europe and

DHL offers international express, freight transportation, e-commerce and supply chain management services. Lindsay Bridges, Senior Vice President of HR, Deutsche Post DHL (DPDHL) Supply Chain, UK and Ireland, has worked at DHL for 25 years. Bridges began her career at 38

DHL in an operational role before moving to HR. Over the last 12 years, Bridges has led HR functions in multiple regions around the world. Today, Bridges leads the HR function for the UK and Ireland. Bridges describes DHL as, “a diverse, and globally connected business, that is exciting to work for. The opportunity to progress and develop within the company both in the UK and abroad for the individual is endless. Many of our colleagues have moved around the world with the company.� Over the last 16 months, Bridges has not only been focusing on traditional HR functions of talent learning and development, but driving engagement and a change in culture too.

DECEMBER 2019


39

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D I G I TA L I S AT I O N

“WE CONTINUOUSLY COMMUNICATE WITH OUR COLLEAGUES, ENSURING THEY HAVE THE NECESSARY TOOLS TO UPSKILL WHERE NEEDED” — Lindsay Bridges, Senior Vice President of HR, Deutsche Post DHL (DPDHL) Supply Chain, UK and Ireland

“We want to strengthen our core

40

business, DHL’s Strategy 2025 provides a framework for accelerating opportunities,” says Bridges, who highlights that talent management is an important aspect of her role. “Logistics is a marketplace driven by the employee,” continues Bridges. “It is important that our talent strategy ensures DHL hires and manages its employees effectively in order to develop their skills and progress them within the business.” In order to do so, DHL uses a lifecycle approach that clearly maps out an employee’s journey. “There are key ‘moments that matter in an employee’s journey that DECEMBER 2019


CLICK TO WATCH : ‘DHL SUPPLY CHAIN: ONE TEMPLATE, ONE SYSTEM, ONE WAY OF WORKING’ 41 are an integral aspect of how we

groups - show us that those who have

manage and maintain talent,” says

clearly defined career paths stay with

Bridges. When it comes to retaining

us longer,” comments Bridges. “We’ve

talent, Bridges acknowledges that

used this data to create bespoke

expectations are changing, “candi-

employee journeys, tailored to specific

dates want to work for more than just

groups of individuals,” she adds.

a pay cheque. They want a flexible

To manage performance at DHL,

career, clear progression and

“colleagues have regular feedback

managers that act as mentors,”

sessions with their line managers to

continues Bridges. With the help of

ensure there is a two-way conversa-

data analytics, DHL has been devel-

tion about performance which is then

oping these key areas to further

fed into a bespoke employee map

improve inclusivity as well as increase

outlining their journey, objectives and

staff retention. “Our data points - gener-

goals.” Bridges also notes, in 2019,

ated by running focus and listening

DHL piloted an employee experience w w w.suppl yc ha i ndi gi ta l. com


D I G I TA L I S AT I O N

management tool which includes

leaders through programmes to

coaching, mentoring and practical

reinforce culture, instil values, and

development plans.

create a sustainable leadership.”

Looking back on the evolution

When it comes to maintaining

of HR functions, Bridges highlights

and developing talent, DHL offers

that “HR has shifted. Strategic HR has

its employees a ‘Certified Specialist

always been on the agenda but it is

Programme’ that provides a suite

being elevated.” DHL’s talent strategy

of products, delivered by subject

is now focused on making its recruit-

matter experts to enhance leadership,

ment process more efficient and

operations and functions capabilities.

effective using ‘competency-based’

“We place emphasis on practical

recruiting and automation. “We want

application of learning and on the

to better develop managers and

job learning, while empowering

42

“LOGISTICS IS A MARKETPLACE DRIVEN BY THE EMPLOYEE” — Lindsay Bridges, Senior Vice President of HR, Deutsche Post DHL (DPDHL) Supply Chain, UK and Ireland

DECEMBER 2019


colleagues to take control of their

through our operations as well as for

development,” says Bridges. In

employees leading a department and

addition to the company’s ‘Certified

looking to make the next steps into

Specialist Programme’, DHL wants

senior management.” DHL also

to upskill its workforce at all levels,

partners with

specialist

through tailored programmes that

training

align to business needs and priorities.

providers

“We have developed our own

to offer

training schools for ware-

appren-

house colleagues and drivers looking to progress

ticeship schemes ranging from a level two 43

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D I G I TA L I S AT I O N

“WE WANT TO BETTER DEVELOP MANAGERS AND LEADERS THROUGH PROGRAMMES TO REINFORCE CULTURE, INSTIL VALUES, AND CREATE A SUSTAINABLE LEADERSHIP” — Lindsay Bridges, Senior Vice President of HR, Deutsche Post DHL (DPDHL) Supply Chain, UK and Ireland

qualification (equivalent to two GCSE’s) 44

through to a level seven qualification (equivalent to a Masters). With sustainability and digital transformation being key 2019 trends within the business world, Bridges highlights that it is talent and good leadership that provides DHL with a competitive advantage. “We continuously communicate with our colleagues, ensuring they have the necessary tools to upskill where needed. As we adopt cleaner and greener technology into our fleet, we make sure our drivers are fully informed and coached.” In addition, DHL now offers a robotics engineer apprenticeship for employees to upskill their talent as technology continues to advance. DECEMBER 2019


Reflecting on the company, Bridges believes that DHL’s ‘Certified Specialist Programme’ is the company’s biggest success to date within talent management, which the company will be continuing to develop to ensure cohesion across the business. In addition, Bridges advocates that DHL’s strengths when it comes to talent management are, its global presence, its employee journey mapping process and its talent programmes. “We have defined the moments that matter the most to our employees and this has had a positive effect on onboarding, engagement, retention and productivity metrics.” DHL continues to aspire to be agile enough to quickly identify competency gaps to deliver training, e-learning, or development programs where needed, as well as utilising these gaps to inform how the company hires the right people.

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45


S U S TA I N A B I L I T Y

48

SEEKING A GREENER FUTURE IN THE SUPPLY CHAIN SPACE Alex Saric, Chief Marketing Officer (CMO) and smart procurement expert at Ivalua, discusses how his firm can achieve a more sustainable future by welcoming collaboration in the supply chain industry WRITTEN BY

DECEMBER 2019

SE AN GA LE A-PACE


49

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S U S TA I N A B I L I T Y

W

ith a drive to unlocking significant strategic value within a company’s spend and supply chain,

Ivalua provides software solutions to supply chain and procurement leaders in order to digitally transform business processes. Recognised as a ‘Leader’ by Gartner in the consulting company’s Procure-to-Pay Magic Quadrant 2019, Ivalua’s industry-leading Source-to-Pay suite empowers procurement and supply chain leaders to fully digitise all processes, manage spend categories and improve transparency and data quality. 50

The firm also harbours a vision of a greener future, which it strives to achieve through the provision of powerful sustainability capabilities that support customers’ CSR initiatives in several ways. Alex Saric, Chief Marketing Officer (CMO) and smart procurement expert at the business, discusses how a greener supply chain can ultimately be achieved through harnessing collaboration in the space. How would you describe Ivalua? What gives it an edge over competitors? We provide a solution that truly works for customers, whether they are just getting started with supply chain digitisation or are already leaders looking to build a competitive advantage. Year after year, Ivalua leads DECEMBER 2019


the industry with a retention rate of over 98%. Ultimately, Ivalua keeps customers from having to make the compromises typical in the supply chain industry. The first is between realising rapid time-to-value or having the flexibility to meet unique or evolving requirements. The platform is extremely flexible, but Ivalua has pre-packaged solutions for industries to enable the deployment of tailored best practices as quickly as competitors can deploy generic ones.

51

The second compromise is between digitising the complete source-to-pay (S2P) suite with a unified suite or having best of breed capabilities in the specific processes (excluding sourcing). Ivalua provides a complete suite but is also ranked as leader for its specific modules across the full S2P process. How do you help businesses to achieve true sustainability in procurement? We offer an extremely robust supplier management solution, ranked a ‘Leader’ in Forrester’s current SRPM Wave report, to manage suppliers, w w w.suppl yc ha i ndi gi ta l. com


S U S TA I N A B I L I T Y

52

including robust questionnaires to

In what ways can a greener future be

gather needed certifications and other

achieved in the supply chain space?

information directly from suppliers.

Supply chains are absolutely critical

Its unified data model and powerful

to us achieving a greener future. They

reporting lets customers have a true

determine what goes into the products

360-degree visibility of suppliers.

we consume, how they are produced

To augment customers’ own data

and how they are delivered to us. The

provided by suppliers with third party

key is improving supply chain collabora-

information, Ivalua has integrations

tion. Overly prescriptive approaches

to common sources of supplier data,

of dealing with suppliers ties their hands

such as Ecovadis. We offer an add-on

and makes them miss out on opportuni-

that includes pre-built integrations to

ties to improve. If companies instead

Ecovadis’ supplier data and pre-pack-

include green goals along with their

aged CSR reports.

other ambitions, and then give suppliers

“SUPPLY CHAINS ARE ABSOLUTELY CRITICAL TO US ACHIEVING A GREENER FUTURE” DECEMBER 2019


CLICK TO WATCH : ‘IVALUA OVERVIEW VIDEO 2019’ 53 flexibility on how to best achieve those,

Can you talk through Ivalua’s Pro-

great things are possible. Suppliers are

curement Empowerment Platform?

the experts in their fields and best

What are the key benefits?

suited to find creative ways to produce

Ivalua’s platform helps unlock the full

an item using new processes, designs

value of its customers and suppliers

or materials that can not only be greener

spend. We aim to help reduce costs

but potentially also cheaper and of

through improved sourcing and

greater value to end customers. Some

efficiency improvements. But it also

companies do engage collaboratively

helps customers achieve all their

with suppliers, but usually only a handful

growing objectives, such as accelerating

of suppliers for a subset of the goods

innovation, mitigating risks and growing

and services they buy. Technology can

revenue. Take Meritor for example,

help scale that collaboration to address

which has digitised the full supplier

more suppliers and categories, helping

lifecycle, including configuring a unique

everyone win, including the environment.

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S U S TA I N A B I L I T Y

54

through Ivalua’s platform. As a result,

where and, thanks to the platform’s

the company was able to launch more

unified data model, see everything.

products with greater margins. Our platform is truly comprehensive,

In what ways do you help to ensure

so customers can manage all spend,

that procurement unlocks significant

including direct materials, services and

strategic value from a company’s

even assets/tooling, and digitise all

spend and supply chain?

S2P processes. Ivalua realises

There are three areas. Firstly, Ivalua

companies want to start at different

helps companies achieve extremely

points and get up and running quickly.

high levels of digitisation and automation,

You can start anywhere, go every-

which frees capacity normally consumed

DECEMBER 2019


“IVALUA’S PLATFORM HELPS UNLOCK THE FULL VALUE OF ITS CUSTOMERS SPEND AND SUPPLIERS”

55

by tactical, manual processes for more

where you need a lot of information

strategic activities. Ivalua drives very

sharing or back and forth. A great

high levels of supplier onboarding

example is on new product introductions,

and user adoption, with customers

which customers can fully digitise. That

routinely seeing over 98% of suppliers

requires much deeper collaboration

onboarded and 100% user adoption.

than just coordinating shipments and

Secondly, the platform enables

invoice timing. The platform supports

broad and deep collaboration with

both types of collaboration at scale.

suppliers. Broad in that collaboration

Thirdly, Ivalua provides complete

is possible on virtually any process in

transparency. Ivalua’s unified data

the platform, and deep for those areas

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S U S TA I N A B I L I T Y

capabilities mean a user can see everything that has or is taking place, including a true 360-degree view of suppliers, and have actionable insights at their fingertips to act on opportunities.

“INNOVATION IS ABSOLUTELY CRITICAL�

With a high value placed on enabling companies to make better decisions, how important is keeping up with the latest trends to ensure you are delivering exactly what your customers need? How important is innovation? 56

Innovation is absolutely critical. Customers, especially consumers, have become accustomed to continuous innovations and those companies

and suppliers. Building the right

that can deliver over and over again

relationship, where you are the

will be the winners. That means building

customer or partner of choice, is key

a culture that constantly gathers and

to unlocking the full potential of your

assesses customer expectations and

supply chain to drive innovation.

an approach to capture the best ideas and bring them to your customers in the

What does the future look like

form of innovative goods and services. It

for Ivalua?

also means leveraging all the channels

In a word, bright. Ivalua certainly

and knowledge at your disposal. That

has accelerating momentum at the

includes internal ones such as employ-

moment. But more importantly,

ees and your own customer engage-

our entire approach around enabling

ment channels. And it increasingly

more effective engagement and

includes external ones such as partners

collaboration with suppliers puts

DECEMBER 2019


57

us in a unique position to deliver value.

with suppliers across the organisation

Ivalua’s supplier-friendly model drives

and better collaborate across stake-

extremely high levels of suppliers

holders. This overall approach and

onboarding. The platform was

architecture means no one is better

designed to maximise supplier visibility

positioned to empower customers to

and collaboration. Customers can

collaborate with suppliers – a function

collaborate with suppliers on all

that is becoming critical.

processes spanning the full supplier lifecycle, from assessing suppliers, co-developing products, forecasting orders, shipping, payments and more. The unified data model and vendor master data management capabilities allow customers to see all activity w w w.suppl yc ha i ndi gi ta l. com


T O P 10

58

DECEMBER 2019


59

Supply Chain Digital counts down the top 10 companies featured in the magazine and on the website during 2019 by revenue WRITTEN BY

SEAN GALEA-PACE

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T O P 10

60

10

Starbucks

[ HQ: SEATTLE, USA ]

One of the world’s leading coffee chains, Starbucks boasts more than 25,000 stores across six continents. Having substantially increased its influence in China, the firm now operates over 3,500 branches in the country with plans to expand to 5,000 outlets by 2021. In 2008, Starbucks created a three-step supply chain transformation plan in a bid to realign and achieve significant success. It would reorganise and simplify its supply chain, cut costs and improve service while also to be more sustainable. This has subsequently led to Starbucks developing greener stores, rewarding customers that reuse cups, preserving water and reducing its environmental footprint.

DECEMBER 2019

1971

YEAR FOUNDED

$24.7bn APPROXIMATE REVENUE (US)

291,000 NUMBER OF EMPLOYEES


09

SAP ARIBA

61

[ HQ: PALO ALTO, USA ]

1996

SAP Ariba is considered the go-to place for companies to connect and conduct business together. The leading

YEAR FOUNDED

global spend management network, SAP Ariba allows businesses to monitor spending and reduce costs by enabling buyers and suppliers to collaborate with each other. SAP Ariba’s spend management solutions allow firms to digitise and simplify processes through an end-to-end,

$27.3bn APPROXIMATE REVENUE

3,636

single integrated platform in the cloud. Through the Ariba Network, buyers and suppliers from over 190 countries

NUMBER OF EMPLOYEES

transact US$3trn in business commerce annually. The company ranked in first place in Supply Chain Digital’s top 10 software companies worldwide in the October issue.

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Destination: Cloud

Added value through innovation The cloud is the future! We’re opening up entirely new opportunities for our clients by migrating applications to the cloud and transforming them there, with the option of cloud-native development. As one of the world’s largest independent provider of IT and business services, we’ve also racked up many years of experience in cloud architecture, security, governance, and operations. Independent experts have confirmed our industry-leading expertise: the ISG Provider Lens™ has awarded us “leader” status in the “Public Cloud Transformation” and “IaaS – Enterprise Cloud” categories in 2019. Let us help you make your cloud enterprise-ready, too!

For more information, go to: de.cgi.com


08

Coca-Cola [ HQ: ATLANTA, USA ]

1886

The beverage giants offers over 500 brands in more than 200 countries. With an established and extensive

YEAR FOUNDED

portfolio, Coca-Cola’s brands include its eponymous

$31.9bn

cola, Fanta, Sprite, Powerade and Minute Maid among many others. The company has firm sustainability objectives and featured in the top 10 largest sustainable supply chains worldwide in September. Coca-Cola aims to collect a bottle or can for every one it sells by 2030 and it’s working towards becoming greener through packaging initiatives.

APPROXIMATE REVENUE

62,600 NUMBER OF EMPLOYEES

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63


T O P 10

07

Nike

[ HQ: BEAVERTON, USA ]

As one of the largest manufacturers of athletic footwear and apparel, Nike is renowned for its product quality, innovative designs and unique marketing style. Nike’s products are manufactured in over 40 countries and it operates 525 factories worldwide. The company has a diverse network of suppliers and operates a smart, efficient and agile supply chain. In order to help achieve its sustainability ambitions, Nike opened its North America logistics campus in Memphis, Tennessee. 64

The facility is set across 2.8mn sq ft and helps the company align to its sustainability endeavours as well as meeting customer demands.

DECEMBER 2019

1964

YEAR FOUNDED

$34.3bn APPROXIMATE REVENUE

73,100 NUMBER OF EMPLOYEES


06

Accenture

[ HQ: DUBLIN, IRELAND ]

65

1989

The company specialises in consulting, strategy, technology and digital operations. Accenture works with

YEAR FOUNDED

clients to enable innovative supply chain strategies that drive profitable growth and cater to a variety of industries including the automotive, travel and energy sectors among many others. The firm prioritises sustainability and was recognised as the leading sustainable supply chain in September’s magazine. Kai Nowosel, Chief Procurement Officer at Accenture, commented: “With a multi-billion-dollar supply chain, Accenture has the

$41.6bn APPROXIMATE REVENUE

492,000 NUMBER OF EMPLOYEES

purchasing power to drive positive change on a global scale, creating a more economically inclusive world and helping to shape the future of procurement.”

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Supply Chain Efficiency Demands a World-Class Supplier.

Put Your Trust in a Vertically Integrated Partner. Committed to Sustainability. Driven by Innovation. Graphic Packaging International is an integrated supplier of paperboard, cartons and machinery. We deliver packaging solutions and machinery systems using state-of-the-art technologies. Brand owners around the globe rely on us for our unwavering focus on quality and efficiency. Our products are made from paperboard, a recyclable material and made from renewable resources. When you choose Graphic Packaging International, you’re making a sustainable choice for the environment and your business. Ask us about our alternative paperboard solutions to plastic shrink film and rings. Learn more at graphicpkgeurope.com

Š2019 Graphic Packaging International the wholly-owned operating subsidiary of Graphic Packaging Holding Company (NYSE: GPK)


05

67

Intel

[ HQ: SANTA CLARA, USA ]

Through its technology solutions, the tech giants play a major part in helping its customers to achieve a digital transformation. In recent years, Intel has transformed its own supply chain into a modern “glass pipeline” that improves decision-making capabilities and business agility. Powered through its integrated data platform (IDP), the system features SAP HANA as part of a significant $208mn investment strategy. Intel featured in March’s top 10 global supply chains.

1968

YEAR FOUNDED

$70.8bn APPROXIMATE REVENUE

110,200 NUMBER OF EMPLOYEES

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T O P 10

68

04

Nestlé

[ HQ: VEVEY, SWITZERLAND ]

As one of the world’s leading food and beverage companies, Nestlé operates over 2,000 brands and is active in 189 countries worldwide. Having worked towards achieving its commitment of zerodeforestation by 2020, Nestlé now predicts “over 90% of its key agricultural commodities to be verified deforestation-free by the end of 2020, which has increased from 77% at the start of 2019”. Nestle ranked seventh in Supply Chain Digital’s top 10 global supply chains in March.

DECEMBER 2019

1866

YEAR FOUNDED

$92bn APPROXIMATE REVENUE

328,000 NUMBER OF EMPLOYEES


03

Microsoft

[ HQ: REDMOND, USA ]

The technology powerhouse, Microsoft, aims to empower every person and organisation worldwide to achieve more. Microsoft helps people achieve their potential through cutting edge procurement practices and serves diverse markets globally. Conducting operations in 170 countries around the world, the company has established four key focus areas in a bid to achieve a more sustainable future in the areas of climate, agriculture, biodiversity and water. Microsoft ranked eighth in the top 10 largest

1975

YEAR FOUNDED

$125.8bn APPROXIMATE REVENUE

144,100 NUMBER OF EMPLOYEES

sustainable supply chains worldwide in September.

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69


T O P 10

02

Amazon

[ HQ: SEATTLE, USA ] A global leader in e-commerce, Amazon offers a diverse range of services. The company operates under the divisions of Amazon Logistics, Amazon Web 70

Services, Amazon Prime and Amazon Retail. Considered one of the “Big Four” alongside Google, Facebook and Apple, Amazon is customer-centric under the leadership of CEO and founder, Jeff Bezos. The firm has over 850 warehouse and distribution centres in 22 countries and has recently accelerated its interest in logistics, as featured in November’s edition of Supply Chain Digital.

DECEMBER 2019

1994

YEAR FOUNDED

$232.9bn APPROXIMATE REVENUE

647,500 NUMBER OF EMPLOYEES


71

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T O P 10

01 Apple

[ HQ: CUPERTINO, USA ] The tech giant is one of the world’s leading brands and is also a member of the “Big Four”. The annual release of new products, such as the newest generations of iPhone and iPad, cause a significant spike in sales every year. 72

Founded originally by Steve Jobs, Steve Wozniak and Ronald Wayne in 1976, Apple has enjoyed staggering success over the past 43 years and, in 2018, became the first US company to be valued at over $1trn. With sustainability considered a key pillar at Apple, the company has made a concerted effort to be greener through the launch of new products, with the MacBook Air and Mac mini made from 100% recycled aluminum.

DECEMBER 2019


1976

YEAR FOUNDED

$258.5bn APPROXIMATE REVENUE

132,000 NUMBER OF EMPLOYEES

73

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

The biggest industry events and conferences WRITTEN BY SEAN GALEA-PACE from around the world

9–10 DEC 2019

2 DEC 2019

Oil & Gas Supply Chain Compliance 74

International Conference on Supply Chain Planning in Uncertain Environments

[ HOUSTON, TEXAS ]

[ LONDON, UNITED KINGDOM ]

The one-day event will centre around

The conference is a federated organi-

supply chain compliance, risk and audit-

sation that aims to provide a range of

ing, as supply chain professionals gather

diverse scholarly events for presenta-

to discuss the regulatory issues and

tion within the conference programme.

trends that are creating problems in

The event will bring leading academic

supply chains worldwide. With digitalisa-

scientists, researchers and research

tion becoming an essential tool in supply

scholars together to exchange their

chain management, the conference pro-

experiences and enable research

vides insight into the ever-changing

results on a number of different aspects

space and offers advice on embracing

of supply chain planning in uncertain

the latest trends. There are several

environments. The meetup will create

global oil and gas companies set to be

a platform to discuss the most recent

in attendance, such as Halliburton,

innovations, trends and concerns

Weatherford and Marathon Oil.

in the supply chain field.

DECEMBER 2019


21–22 JAN 2020

5th Annual Strategic Sourcing and Procurement MENA Summit [ DUBAI, UAE ]

27–30 JAN 2020

ship and digital procurement solutions

Temperature Control & Logistics 2020

from top cross-industry players,

[ DUSSELDORF, GERMANY ]

Dubai’s event will focus on the impor-

Recognised as the industry’s foremost

tance and future of digital procurement

operational and hands on conference,

in the supply chain industry. Repre-

the event centres around logistics,

sentatives from leading banking, retail,

supply chain and temperature controlled

pharmaceutical, aviation and other

for the pharmaceutical industry. Now

international firms will discuss how

in its 19th year, there are expected

to gain a leading position on the

to be over 400 attendees, 60 expert

market. Offering attendees great

speakers and 60 sponsors from solution

networking opportunities and the

providers across the entire supply chain

opportunity to partake in important

industry spread across the three-day

discussions with senior-level decision

event. There is set to be logistics giants

makers, the event is expected to be

such as FedEx, DHL and Kuehne &

well attended.

Nagle all in attendance.

Providing cost saving, supplier relation-

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75


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

21 FEB 2020

IRU Logistics and Innovation Forum [ LONDON HEATHROW, UNITED KINGDOM ] Offering road transport companies 76

30–31 JAN 2020

Supply Chain Finance Summit

and stakeholders the opportunity to network with like-minded professionals in the industry, the event will play

[ AMSTERDAM, NETHERLANDS ]

host to experts in the transport and

Now in its fifth year, the Supply Chain

logistics industry. Recognised as “the

Finance Summit provides a great

new networking hub for innovative

opportunity to learn about the latest

road transport solutions,” the meetup

trends, ideas and developments in the

will provide attendees with insight

industry. The event showcases the lat-

into the newest solutions driving the

est innovations in the supply chain

industry forward. There are a number

space for both domestic and cross-bor-

of key themes set to be discussed this

der financing, examines the future of

year, such as fleet management and

technology-enabled supply chain mod-

the digitalisation of the supply chain,

els and increases the access to supply

which includes distribution and ware-

chain finance for emerging markets.

house systems.

DECEMBER 2019


17–18 MAR 2020

26–27 FEB 2020

Defence Supply Chain and Logistics [ LONDON, UNITED KINGDOM ]

Supply Chain Conference

[ LONDON, UNITED KINGDOM ] Now in its 17th year, the event welcomes over 200 professionals and provides the opportunity to network, learn and

The event is set to address the

connect fellow supply chain and logistics

challenges to both logistics and

professionals together under one roof.

engineering commanders to ensure

The Supply Chain Conference will zone

mobility and capability is maintained

in on how to maximise efficiency, reduce

within the combat force. The two-

costs and future proof supply chain

day conference will centre around

operations in the industry. Thought

enabling mobility, momentum and

leaders like Laura Bacon, Integrated

capability through identifying

Business Planning & Operations

innovative, cost-efficient solutions

Manager of Nando’s, and Tom Rose,

to modernise operational capabilities

Head of International Operations at

such as robotic and autonomous sys-

SPAR International, are scheduled

tems in the supply chain.

to speak at the event.

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77


78

DECEMBER 2019


RHENUS INDONESIA 79

OVERCOMING SUPPLY CHAIN CHALLENGES IN INDONESIA WRITTEN BY

SEAN GALEA-PACE PRODUCED BY

CAROLINE WHITELEY

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P T. R H E N U S P R O J E C T L O G I S T I C S I N D O N E S I A

SARI SAFIANTI, MANAGING DIRECTOR OF RHENUS PROJECT LOGISTICS INDONESIA, DISCUSSES HER COMPANY’S SUPPLY CHAIN STRATEGY IN THE FACE OF LIMITED IT INFRASTRUCTURE IN THE COUNTRY

A

s an international freight and logistics forwarding company, Rhenus Project Logistics Indonesia is part of Rhenus

Group and specialises in air, ocean and road freight. Operating as just one component of the larger 80

Rhenus Logistics Worldwide Organisation, Rhenus holds locations all over the globe. Following the company’s expansion into Indonesia in 2017, Rhenus’ headquarters is located in the capital of the country, Jakarta; it has an additional two offices in Semarang and Surabaya. The company offers a project logistics service which focuses on transporting heavy equipment and building parts, for the oil and gas, mining, power, electrical and construction industries. However, Sari Safianti, Managing Director of Rhenus Indonesia, recognises that the nation is a challenging market to operate in. “Indonesia is a developing country where operations don’t run as easily as they do in Europe,” she admits. “When you invest money in Indonesia, it’s important to remember that you’re not likely to see a return on the investment for at least six months to a year.” DECEMBER 2019


81

With a population of over 270mn, Indonesia is the fourth most populous country in the world. Safianti affirms one of the biggest challenges to overcome is finding a way to manage the 17,500 islands in Indonesia. “We have to ensure we’re granted logistics custom clearance more quickly. In Europe, this can be completed within hours, however, in Indonesia, it could take between five days and two weeks,” she explains. “This is especially true if there’s any issues with the documents or discrepancies on the physical goods.” w w w.suppl yc ha i ndi gi ta l. com


P T. R H E N U S P R O J E C T L O G I S T I C S I N D O N E S I A

“IT’S UP TO US TO KNOW WHAT THEIR NEEDS ARE AND HOW WE CAN BEST FULFIL THEIR REQUIREMENTS TO DELIVER ON OUR PROMISES” — Sari Safianti, Managing Director, Rhenus Indonesia

82

DECEMBER 2019


CLICK TO WATCH : ‘WOMEN IN BREAKBULK-BEYOND LOGISTICS: WIDE RANGE OF OPPORTUNITIES FOR WOMEN IN PROJECT CARGO’ 83 Due to technology having a sig-

check where they are at all times but

nificant influence on how businesses

unfortunately, this isn’t supported

conduct operations globally, most

for all areas in Indonesia yet.” With

companies are keen to implement new

Indonesia recognised as one of the

processes whenever they can. With its

world’s most populous countries, the

European locations kitted out with the

potential ability that technology has in

latest IT infrastructure, Safianti admits

the country is staggering. With artificial

Rhenus Indonesia isn’t where it needs

intelligence, machine learning and big

to be from a technological standpoint.

data playing a prominent role in the

“Indonesia still has work to do. We’re

operations of a vast number of supply

not there yet in comparison to some of

chains worldwide, Rhenus has seen a

our operations in European countries,”

clear gap to its European counterparts

she explains. “For example, equipping

open up. “Indonesia has begun digitis-

GPS on trucks is an important tool. We

ing its supply chains, but it is mostly

want to control our trucks and time

centralised in Jakarta at the moment,” w w w.suppl yc ha i ndi gi ta l. com


PT. Karana Line Reliable partner in shipping and logistics Established in 1967 , PT. Karana Line is one of the most experienced and trusted shipping group in Indonesia. Experienced Management, sound finance, own branches manned by professional team and investment in People, equipment and digitalization has made the company trusted by many clients worldwide. Main Services are: - Ship owning - Ship Agency and Stevedoring - Chartering and broking - Depot container - Freight Forwarding - Logistics Support

PT. KARANA LINE RELIABLE PARTNER IN SHIPPING AND LOGISTICS

SHIPOWNING & CHARTERING

SHIP AGENCY & STEVEDORING

Learn More karana.co.id

+62-21-43934356 FREIGHT FORWARDING & CONTAINER DEPOT

2017

Year founded

€6.5mn+ Approximate Revenue

15

Number of employees DECEMBER 2019


explains Safianti. “There’s a lot of startup

to deliver on our promises. Once our

companies that are beginning to do well

customers recognise our commitment

in Indonesia. However, leveraging tech-

towards them, they’ll want to continue

nology remains a big task for the country.”

to work with us. With this mutual trust

Rhenus values customer-centricity

in place, I believe this will help us to

and delivers comprehensive project

achieve long-term sustainability.”

solutions tailored to ensure the needs

Growth is an important focus area for

of its customers are met. “We like to

Safianti. With just six employees a year

focus on select industrial sectors to

ago, Rhenus Indonesia has since dou-

understand as much as we can about

bled the number of its workers. “The

a customer,” says Safianti. “It’s up to us

team is already growing significantly,”

to know what their needs are and how

she says. “We have a number of differ-

we can best fulfil their requirements

ent locations of the project as well as of 85

E XE CU T I VE PRO FI LE

Sari Safianti Sari Safianti started her career in logistics at the age of 18, and at the bottom. Despite the few women in the industry, her measurable performance rapidly led her to work with different international companies at the top level. She is well known for being one of the few women leaders in Indonesia with over 25 years of experience in logistics. In 2019, she received the “Indonesia Woman Leadership Award” from CMO Asia. Her experience is known to be broad in the logistics industry and covers automotive, FMCG, semiconductor, chemical, cosmetics, high-end retail, manufacturing, geothermal, power, engineering and construction.

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P T. R H E N U S P R O J E C T L O G I S T I C S I N D O N E S I A

86

DECEMBER 2019


“WE’RE OPTIMISTS AND HAVE OUR OWN TIMELINE OF WHAT WE WANT TO ACHIEVE IN THE NEAR FUTURE” — Sari Safianti, Managing Director, Rhenus Indonesia

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87


P T. R H E N U S P R O J E C T L O G I S T I C S I N D O N E S I A

our subsidiary companies. We operate all over Indonesia.” Rhenus Indonesia has developed a strategic partnership with PT Karana Line to drive operations forward. Safianti believes in the importance of establishing mutually beneficial business relationships and looks for “trust, communication, commitment, and consistency” when seeking to begin a new collaboration. Looking to the future, Safianti has a clear vision of the position she 88

expects her firm to be in over the next

DECEMBER 2019


89

few years. “We’re optimists and have

implemented rapidly on a global scale,

our own timeline of what we want to

it’s clear the industry is moving in that

achieve in the near future. Ultimately,

direction. I expect that the combination

we want to ensure we become more

of technology and the supply chain will

sustainable,” she affirms. Safianti

drive efficiency forward and save com-

expects the supply chain space in

panies money. It’s only a matter of time

Indonesia to continue to accelerate as

before it’s fully embraced here too.”

technology becomes a bigger player in the Indonesian market. “The supply chain industry is growing and I expect it to continue, not just in Indonesia but worldwide too,” she says. “At the moment, Indonesia is very traditional. However, with digitisation being w w w.suppl yc ha i ndi gi ta l. com


90

Packaging solutions to solve sustainability WRITTEN BY

OLLIE MULKERRINS PRODUCED BY

CAROLINE WHITELEY

DECEMBER 2019


91

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H U H TA M A K I H O N G K O N G

92

Huhtamaki works with clients to find the most practical sustainable solutions to increase revenue without impacting the environment

H

uhtamaki is a global specialist in the food and drink packaging industry. The company

operates across 35 countries including Europe, Asia, Oceania (EAO) and the US, working across three verticals; flexible packaging, moulded fibre packaging and foodservice packaging. Through these key verticals, Huhtamaki holds sustainability at its core and ensures that it offers an increasingly diverse portfolio of sustainable products and practices to satisfy the rising demand for CSR coming from a more

DECEMBER 2019


93

conscious consumer base. Chi Lu, Head of Sourcing –

to a functional sourcing organisation working within the Foodservice EAO

Foodservice Asia-Oceania at

segment,” explains Chi. “For sourc-

Huhtamaki, outlines the challenges of

ing, I’m part of a group function. Our

maintaining a network of sustainable

team supports manufacturing units in

products across distant locations and

India, New Zealand, Australia, China

evolving cultural shifts. Chi is respon-

and Malaysia, totalling seven factories

sible for the governance of sourcing

and four sales offices operating in the

operations in the Asia Oceania region

Asian Oceania region.”

within the Foodservice segment and

The complexities of finding sustain-

is accountable for managing five

able materials produced by sustainable

direct reports for the traded goods.

manufacturers, who take social respon-

He coordinates projects between

sibility seriously, provides its own

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H U H TA M A K I H O N G K O N G

“In terms of changing from plastic to a more sustainable alternative, there is no challenge – it simply must be done” 94

— Chi Lu, Head Of Sourcing, Food Services Asia and Oceania, Huhtamaki

of operating in smaller departments across a diverse range of countries and cultures, Chi has turned to creating a sourcing hub for traded goods in the Asia Oceania region, where suppliers and materials can be vetted through a single aligned process and set of regulations. To maintain consistency across all of its sourcing methods, Huhtamaki Foodservice EAO has chosen to apply a single centralised sourcing model within its group level. “In the group sourcing organisation, we have a sourcing director who is based in Europe for all the sourcing functions operating with our category buyers,”

DECEMBER 2019


CLICK TO WATCH : ‘PLEASE MEET HUHTAMAKI’ 95 says Chi. “The group function will cen-

practicality of what a material can do

trally source key raw materials, paper,

when trying to replicate the versatility

polymer, resin, ink and logistics for the

and robust nature of plastics. Some

segment manufacturing units. My team

materials may require additional chemi-

looks after third party traded goods

cal additives to achieve a level of quality

and we are based in Asia.”

in line with what a consumer may be

When looking to find alternative

used to from traditional materials.

materials, a number of factors must be

“There are instances where a client

considered beyond the tangible assets

may be used to plastics, yet when turn-

being offered by a prospective sup-

ing to sustainable materials, has very

plier. Maintaining sustainability can be

high standards. Not every supplier will

easy to overlook with the production

pass those strict requirements,” affirms

methods or workforce conditions used

Chi. Another challenge to replacing

to manufacture any given material. As

traditional material like plastic is main-

a juxtaposition to this there is also the

taining its long-term sustainability. An w w w.suppl yc ha i ndi gi ta l. com


H U H TA M A K I H O N G K O N G

96

1920

Year founded

example “typical alternative to plastic utensils is wooden cutlery made from birchwood. Birch tree usually takes about 20 years to mature. In the US

€3.1bn+

alone, there are about 40bn plastic utensils used each year. If you intend to

Total Revenue

replace all 40bn units annually, the end

3,200

considered as a whole. With this in mind,

Number of employees

product wouldn’t be sustainable when we ensure our suppliers source their raw material from a sustainable source.” Huhtamaki is also a creator of sustainable materials. It’s Fresh initiative created a meal tray from natural wood

DECEMBER 2019


E XE CU T I VE PRO FI LE

Chi Lu Chi Lu is an experienced senior strategic sourcing professional with industry experience spanning close to 20 years. He has worked for multinational corporations in Australia, New Zealand and Asia. His work portfolio is extensive, including logistics, medical consumables, dairy, building products/construction, and food packaging. Chi is recognised for his proven track record of improving profitability by delivering sustainable cost saving and being a driving force behind transforming from a transactional price based approach to a strategic focus value proposition model. He has influenced business decision making processes, challenged the status quo, and contributed to the growth of businesses. He has participated in organisational transformations and commercial optimisation projects which have contributed to the growth of businesses considerably. In his current portfolio he is part of a regional leadership team and is currently managing sourcing and sales operations. Prior to this, he served in various sourcing and commercial positions. He has a Bachelor’s Degree in Management Studies with a double major in Finance and Strategic Management and a Master’s Degree in International Business and Law from the University of Sydney. w w w.suppl yc ha i ndi gi ta l. com

97


Quality assurance PPD focuses mainly on thermoformed plastics in food packaging industry. Using high-speed in-line automatic forming machines along with in-house tooling and design team, plus in-depth industry knowledge and expertise in production, we will ensure high quality products to our customers. Learn More


“Our team supports manufacturing units in India, New Zealand, Australia, China and Malaysia, totalling seven factories and four sales offices operating in the AO region.” — Chi Lu, Head Of Sourcing, Food Services Asia and Oceania, Huhtamaki fibres, sourced from FSC certified

a natural alternative to provide one

renewable Nordic forests, in collabora-

solution with the resilience of plastic

tion with Saladworks and Södra. The

packaging. Bagasse is the dry pulpy

material can match the versatility of

fibrous residue that remains after sug-

black plastic but is still recyclable

arcane or sorghum stalks are crushed

and certified for home composting.

to extract their juice. This material can

“Huhtamaki Fresh has ensured

then be processed to create a biode-

the removal of 56 tonnes of hard to recycle black plastic from Waitrose

gradable plastic alternative. The perception of sustainable products can sometimes

& Partners supply chain,

be different from the

per year. The fibre-based

reality. Consumers

packaging is also 10%

may expect sustainable

lighter than conventional

materials to behave

trays and creates a 50%

a certain way on first

reduction in CO2 Emissions,”

impressions without

comments Tor Harris, Head

knowing the details behind

of CSR at Waitrose & Partners.

it. For example, there are

Chi has also turned to Bagasse,

instances of materials that w w w.suppl yc ha i ndi gi ta l. com

99


H U H TA M A K I H O N G K O N G

100

“We ran trials, product samples and negotiated the commercial terms” — Chi Lu, Head Of Sourcing, Food Services Asia and Oceania, Huhtamaki

DECEMBER 2019

may be listed as biodegradable but require certain conditions to act as a catalyst in order to achieve that degradation, such as PLA. “PLA is made from starch and other compound which may be able to decompose into a carbon in a controlled environment; that is industrial composting facilities,” says Chi. “However, there are places that don’t have the industrial composting facilities needed to start this decomposition. Putting it into a landfill is not enough.”


to work with customers to find which materials would best accommodate the customer’s requirements, ensuring a satisfactory outcome for the business and the environment. Chi explains one example where Huhtamaki Foodservice EAO worked with its client to reach a sustainable and economically viable solution. “Our customer’s goal was to find an alternative to plastics by 2020. We were able to work with our customer, understand their requirements, and from there we ran supplier selection, trials, product samples and negotiated the commercial terms. The sourcing and product development process ran within our customer’s specific time line and, by the end, we were able to remove Huhtamaki is also educating customers around achieving sustainability

plastics in that supply chain.” The demand for sustainability is ris-

whilst maintaining high standards for

ing as consumers are unable to ignore

product packaging. The Packaging

the realities of a future reliant on sin-

for Good programme focuses on

gle use products manufactured from

four key themes – people, packaging,

pollutive materials.

supply chain and operations – to offer

“Sustainability is on top of the agenda

Huhtamaki’s expertise and guidance

for Huhtamaki,” summarises Chi. “In

for a company’s CSR goals and within

terms of changing from unsustainable to

Huhtamaki itself.

more sustainable alternatives, there is

By educating consumers on the reali-

no challenge – it simply must be done.”

ties of sustainable materials, Huhtamaki Foodservice EAO segment is able w w w.suppl yc ha i ndi gi ta l. com

101


102

BRENNTAG GROUP: A UNIQUE DIGITAL STRATEGY WRITTEN BY

HARRY MENEAR PRODUCED BY

LEWIS VAUGHAN

DECEMBER 2019


103

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DIGIB

Maarten Stramrood, CDO at Brenntag Group and Managing Director of the DigiB innovation hub, discusses the ongoing digital transformation of the world’s largest chemical and ingredients distributor

A

wave of digital transformation is sweeping across the global business landscape, driven by the rapid technological advance-

ments of Industry 4.0 and the Information Age. 104

From cutting edge robotics to paperless invoicing, companies across every industry are racing to galvanise meaningful change that improves efficiency, increases transparency, and translates into greater value for employees, suppliers, partners, customers and shareholders. Digital transformation is no mean feat. It can be an exhaustive, top-down process that reshapes the internal workings, culture and even purpose of an organisation; it can be a revolution. More often, however, the process more closely resembles something different – something slower, and more considered: evolution. Embodying this process is German chemical and ingredients distributor Brenntag Group and its innovation hub, DigiB.

DECEMBER 2019


105

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DIGIB

“Create it, launch it, learn from it” 106 “When it comes to digitalisation, our approach is to create it, launch it,

— Maarten Stramrood, CDO, Brenntag Group, Managing Director, DigiB hub

and learn from it,” explains Maarten Stramrood, Chief Digital Officer at

over 580 locations across 76 countries,

Brenntag Group and Managing Director

Brenntag’s decision to establish the

of the DigiB hub in Amsterdam. “We’re

DigiB hub is a bold affirmation of the

not trying to wait until we have a perfect

need for even large-scale companies

situation; we would rather launch some-

dealing with physical products and

thing fast and do it 92% right instead

services to rapidly accelerate their

of delivering a platform or delivering

technological progress. “The business

a project which might be 100% right

we are in is very physical, but you can

but which gets endlessly delayed

enhance and improve the business in

to the point that, by the time it’s ‘ready’,

parts of the supply chain by using

it’s been out of date for two years.”

digital technology,” explains Stramrood.

For a distribution company with more

“I think this is the kind of definition that

than 16,600 employees operating in

we have for digital transformation.”

DECEMBER 2019


CLICK TO WATCH : ‘#ONEBRENNTAGMINUTE WITH MAARTEN STRAMROOD’ 107 Founded in 1874 as an egg wholesaler,

We sat down with Stramrood to find out

Brenntag expanded into chemical distri-

more about his role in the DigiB hub and

bution in 1912 and today leads the market

its ongoing endeavours to accelerate

on a global scale. “We serve around

the digital evolution of Brenntag.

195,000 different customers, from huge

“We started about two years ago.

accounts like Shell or BASF down to

I was – I don’t know – employee number

small customers who might only buy one

four. We were basically starting from

ingredient each year,” says Stramrood.

scratch,” recalls Stramrood. With an

“Our added value comes from the fact

extensive background in the telco indus-

that we have a dense global distribution

try, Stramrood reflects that he had spent

network that means we can deliver to

the past ten years focusing on digitalisa-

both large and small clients anywhere in

tion, building ecommerce channels and

the world.” The company has a presence

building teams. “Basically, I went through

in almost every manufacturing industry,

a few acquisitions and a couple of big

from food and life science to oil and gas.

mergers in the space of two years, and w w w.suppl yc ha i ndi gi ta l. com


KEY INSIGHTS FROM A CORPORATE STARTUP “DigiB is building the digital future of Brenntag. We opted for a launch-and-learn approach, so that we can easily make adjustments based on feedback and demonstrate the added value of digital applications more quickly.” Maarten Stramrood, Chief Digital Office Brenntag

TECHNOLOGY, DATA, CREATIVITY.


ON A MISSION TO REINVENT B2B Digital transformation is a necessary step for many

er-facing platform providing consumers with the option

businesses but there is not just one way of accom-

to order products digitally with access to individual docu-

plishing this. At one end of the spectrum, companies

mentation, historic purchasing data and other self-service

are increasingly selling products online, while others

components. Since its launch six months ago, Brenntag

still operate in analogue. Digital agency Dept now

Connect is now live in Germany and North America with

successfully offers digital transformation as one

other countries to follow shortly.

of its services following the development of DigiB, the start-up offshoot of chemical distribution manufacturer, Brenntag.

MARKETING ACTIVITIES IN ACTION These digital marketing transformations have helped

Brenntag owns 500 warehouses worldwide which are

elevate Brenntag to the position of global market leader

used to store and distribute chemical products. Though

in chemical distribution – a sector that has remained largely

the company is forward-thinking and guarantees safe

untapped by the digital evolution. Dimi Albers, CEO at Dept,

and sustainable operations, it still largely operates

said: “The DigiB infrastructure is one of the most advanced

as a traditional B2B company – with many orders made

architectures we have. A lot of time was spent on continuous

via telephone and e-mail. DigiB launched in Amsterdam

integration, which makes it possible for Brenntag to onboard

in 2017 after an initial period testing concepts in Berlin.

new developers and roll out functions quickly to make

The corporate start-up was founded to stand apart from

the business more successful.”

its parent company and act as a platform for working on new digital innovations as well as allow Brenntag to

LOOKING FORWARD

be more efficient and prioritise their customers’ experience.

By setting up DigiB as an innovation hub outside of the parent

FINDING THE RIGHT PARTNER AND PLATFORMS

processes inherent to an international B2B player and remain

Dept came on board to facilitate Brenntag with the design and development of new platforms, Brenntag Source and Brenntag Connect, as well as digitise and centralise its analogue processes with its team. Albers: “Our team possesses a range of skillsets to provide us with the flexibility to keep up. We know that we can

company, Brenntag is able to optimise the complex digital competitive. Dept helped the company transition from a traditional company to a digitally-minded one seamlessly. Stramrood said: “DigiB is building the digital future of Brenntag. We opted for a launch-and-learn approach, so that we can easily make adjustments based on feedback and demonstrate the added value of digital applications more quickly.”

provide teams with bolstered creativity, technology and data, which is why it was a no-brainer to help DigiB across all three of these axes. From brand development to digital products and digital marketing, there was no aspect of this process that we weren’t comfortable getting involved with.” Brenntag Source is an innovative tool that helps to boost the company’s internal efficiency by ensuring that data can be easily shared across the company’s subsidiaries.Brenntag Source allows them to retain a local presence within each market and enables Brenntag to use its purchasing power more effectively to optimize spend. “The fact that we can enjoy savings with a relatively simple innovation illustrates the incred-

Maarten Stramrood, Chief Digital Office Brenntag

Dimi Albers, CEO Dept

ible potential digital transformation offers us,” said Maarten Stramrood, Chief Digital Officer at Brenntag. Brenntag Connect, on the other hand, is a custom-

DEPTAGENCY.COM


DIGIB

110

thought it might be time to look for some-

distribution firms on the planet with

thing more stable. Whenever there’s a

sweeping digital change. One of the

merger, you lose all the best people in

things that makes the DigiB hub special

your team, who go on to get their own

is its autonomy from Brenntag’s wider

teams. Then you have to build a brand

operation. The hub is set up as an inde-

new team. After a few mergers, I thought

pendent entity, giving Stramrood the

it looked like I was pretty good at building

power to expand his team, oversee HR

new teams,” he laughs. “Then, Brenntag

and develop new policies and processes

came calling.”

in the name of finding ways to accelerate

For the past two years, Stramrood

the digital evolution of the wider organi-

has built an 80-person team across

sation. “Not a lot of companies have a

Europe, the US and Asia Pacific focused

setup like ours,” he says. “A lot of them

on starting and accelerating digital

have a little innovation hub tucked away

initiatives, and infusing one of the largest

inside the larger organisation. DigiB

DECEMBER 2019


feels like a little startup. Of course, we’re

Amazon in their personal lives, and

funded by Brenntag, but the impact we

they’re starting to expect the same

make and the way we approach things

kind of convenience when doing busi-

is very entrepreneurial.”

ness with a company like Brenntag.

As a strategist with extensive B2C experience, Stramrood acknowledges that a lot of the drive towards digi-

The big challenge for a company like ours is to deliver on that expectation.” This expectation of a digitally

talisation is coming from that sector.

empowered experience is one of

“What we hear when we talk to our

the primary drivers behind the three

customers and suppliers, is that more

pillars around which DigiB’s efforts

and more people are expecting the

are centred. “We’re really focused

way that they do things in their per-

on experiences, on the customer and

sonal lives to be the way they do things

employee side of things, in order

in their professional lives as well,” he

to build smoother relationships,”

explains. “People use companies like

explains Stramrood.

E XE CU T I VE PRO FI LE

Maarten Stramrood Stramrood is a seasoned digital entrepreneur, mobile veteran, manager and strategist with a very broad background. He is an expert in go—to—market strategies, digital marketing and sales, conversion, data science, digital care, digital driven marketing, data driven operations, operational management, product management, business development, digital disruption and product and process design. He has worn many hats throughout his career— entrepreneur: entrepreneur, CCO, manager, product manager, marketeer and strategist.

w w w.suppl yc ha i ndi gi ta l. com

111


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1874

Year founded

$15bn+ Revenue in US dollars (2018)

16,600 Number of employees

tests across multiple dimensions of their portfolios. “A project manager in Poland can benchmark their procurement data against Brenntag’s US figures or against a competitor, or they can compare two different suppliers. This gives us new insights to strengthen our global position in negotiations,” says Stramrood. The goal of Brenntag Source is also, Stramrood explains, to improve collaboration across the many regional branches of Brenntag. “We’re trying to enhance the inter-company trading, between our subsidiaries, for example

BRENNTAG SOURCE

the BeNeLux and German organisa-

The first pillar corresponds to DigiB’s

tions, because this will optimise our

goal of improving the abilities and

global stock position.”

experience of Brenntag’s employees. Brenntag Source is a portfolio of

BRENNTAG CONNECT

internal applications that harness the

The most impactful of the pillars,

company’s data and deliver insights

Brenntag Connect, is the company’s

back to its employees. “We have a lot

ecommerce portal, designed and

of pricing trends and other data points

supported by DigiB. Stramrood

from all across the globe which can be

characterises the portal as an ecom-

very useful to any Brenntag employee,”

merce knowledge and self-service

Stramrood explains. One of the applica-

portal. Due to the highly regulated

tions, Brenntag Explore, gives company

nature of some of the chemicals and

project managers the ability to perform

ingredients Brenntag deals in, only

highly customisable benchmarking

existing Brenntag customers have w w w.suppl yc ha i ndi gi ta l. com

113


DIGIB

access to the portal, and “becoming a Brenntag customer means going through an intensive onboarding process.” For those that have already been cleared, Brenntag Connect is a powerful tool that can access the company’s product portfolio, place orders, automate repeat business, access track and trace functionality and an array of other contextual information. The service is currently live in the US, Germany, Benelux and Scandinavia. “We have a substantial number of cus114

tomers already on the platform and it’s growing rapidly,” enthuses Stramrood.

DIGITAL MARKETING For those who aren’t already onboarded as Brenntag customers — a process that the DigiB hub is focused on automating and streamlining as much as is responsible — the third pillar that Stramrood and his team are working on is the publicly accessible face of Brenntag Connect, which is tied into a digital marketing campaign. The past two years, like any bold endeavour, haven’t been without setbacks and challenges. “The ride has definitely been bumpy at times, from DECEMBER 2019

“We have a substantial number of customers already on the Brenntag Connect platform and it’s growing rapidly” — Maarten Stramrood, CDO, Brenntag Group, Managing Director, DigiB hub


technology to cultural transformation,” says Stramrood. The digital acceleration that DigiB is working to cultivate has also presented its obstacles. “With the launch of new digital offerings, we’re not waiting until we’ve got a perfect situation; we’re just trying to get customers on the platform and see if things work,” he explains. “It’s a challenge in itself, because of course you don’t want to disappoint your customers. On the other hand, we’ve found that if you’re open with them, they’re often very accepting, and some are even keen to help you improve the platform. In a traditional organisation like Brenntag, this is a big thing.” No transformation happens in a vacuum. From recruitment to design to the launch and optimisation of new products and processes, Brenntag and DigiB have embraced the expertise and assistance of experienced, industryleading partners. When DigiB first got started, Stramrood found himself in need of a large, experienced team to start working on the hub’s vision. “We wanted to make a big impact and not have to start by recruiting one developer at a time,” he explains. “This is why we did a pitch w w w.suppl yc ha i ndi gi ta l. com

115


Launch your Customers’ Experiences into the Future. Today. Win the customer. Own the platform. Activate the data. Win the client to build the direct-to-consumer engagement. While data is becoming the new asset, it’s all about building the platform to connect the ecosystem in delivering relevant value to customers. Activate the data to generate insights and translate into meaningful customer experiences and profitable business. www.deloitte.nl Š 2019 Deloitte The Netherlands


for a software development agency and ended up choosing Dept. it offers a great combination of developers and creatives, which is what we desperately needed.” Brenntag has grown rapidly, organically and through acquisitions during the past few years. “Against the background of the numerous acquisitions and Brenntag’s existing business landscape,

“We’re really focused on experiences, on the customer, supplier and employee side of things” — Maarten Stramrood, CDO, Brenntag Group, Managing Director, DigiB hub

especially in EMEA, the company now is putting energy into a single back-end

we discovered our new CMS was going

platform,” Stramrood explains. “Now,

to be a major thing, that’s when we

we’re trying to standardise this process,

decided to go with BloomReach.”

which is why Brenntag decided to bring

The challenges of overcoming inter-

Deloitte on board. They’re advising us

market regulation, and varied standards

on how to adopt this more standardised

across dozens of countries, also

approach, because if we want to accel-

prompted Stramrood to bring Vasco

erate the digitalisation of the entirety

Consulting on board. “One big thing

of Brenntag, we need to find ways to

is the issue of complexity, because

speed up the process.”

we work across multiple countries in

DigiB is working with trusted partners

parallel, so the programme manage-

to better build out its core offerings.

ment itself is very complicated. This

“When we start building something, like

is the reason that we started work-

Brenntag Connect for example, we try

ing with Vasco Consulting, because

to make it as open source as possible.

they have done similar types of

However, if the demands placed upon

programmes before: multi-country,

it become more serious, we always look

multi-backend integration projects.”

to embrace more mature, professional offerings,” explains Stramrood. “When

Stramrood is excited to see the work done by DigiB gaining traction in the w w w.suppl yc ha i ndi gi ta l. com

117


DIGIB

A customer journey should be as simple as crossing a bridge. There is always a solution, no matter how complicated the challenge! Please follow us on Linkedin for interesting blogs and surveys. Follow us

+31(0)851307990 vasco-consult.com


119 wider business, but acknowledges

digitising and optimising the internal

that there is still a long way to go.

processes of Brenntag itself.”

“It’s quite thrilling, this evolution and

Step by step, driven by the mani-

digital enhancement of Brenntag.”

festo of “create it, launch it, learn

Looking to the future, the three pil-

from it,” DigiB is using its unique

lars of Connect, Source and the

identity, capabilities and trusted

Digital Marketing will remain at the

network of partners to continue

centre of everything that DigiB does

accelerating digital evolution of the

to realise this evolution. “It’s going to

world’s number one chemical and

be our main focus for the next year,

ingredients distributor.

as we go into 2020,” he explains. “In the future, we’re looking into things like speeding up our onboarding process and exploring ways to use IoT to simplify aspects of the business. The long-term goal is to move into w w w.suppl yc ha i ndi gi ta l. com


120

DECEMBER 2019


121

The procurement transformation of Erdinger Weissbräu WRITTEN BY

HARRY MENEAR PRODUCED BY

CHARLOTTE CLARKE

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ERDINGER WEISSBRÄU

Florian Eineder, Head of Procurement, discusses his vision of a first-of-its-kind procurement transformation at the private brewery Erdinger Weissbräu

B

etween 2004 and 2018, Florian Eineder worked in the solar power, trucking, oil and gas, chemical, utilities, market

research and procurement consulting industries. He moved onwards and upwards in the procurement divisions of the world’s most important companies, 122

leading global teams and driving transformation at speed and scale. Even early on a Friday morning, with the weekend firmly in sight, his voice is bright and energetic over the phone, rising to laughter as we ask the obvious question. “Why did you decide to go and work in a brewery?” “Come on,” he chuckles. “Isn’t that obvious?” Of the dizzying varieties of beer brewed around the world throughout history, wheat beer has one of the most interesting stories. A passionate beer lover, Eineder chose the brewery that reigns supreme in the wheat beer niche: Erdinger Weissbier. The roots of wheat beer date back to ancient Egypt. Its properly documented history only began around 500 years ago in the Duchy of Bavaria. At the time, beer made from wheat was quite

DECEMBER 2019


123

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© 2019 SAP SE or an SAP affiliate company. All rights reserved.


125

controversial, as wheat was important

‘common,’ and no longer the province

to the bread baking process. From 1567

of the aristocracy. Noble or common,

onward, the use of wheat for brewing

wheat beer’s spiritual home has always

beer was even forbidden throughout

been IN Bavaria, where 90% of all wheat

Bavaria. Over time, a number of elec-

beer sold in Germany is brewed. Today,

toral breweries emerged throughout

the state is home to more than 1,000 dif-

the country in which the local rulers

ferent beer brands.

were allowed to have wheat beer brewed

The most prominent of those brands,

on payment of a special duty. However,

Erdinger Weissbräu, can trace its ori-

it was only when new brewing tech-

gins back to 1886, the year in which the

niques led to an improvement in the

construction of a wheat beer brewery

quality of brown beers in the mid-

in the Bavarian town of Erding was first

18th century that wheat beer became

officially recorded. Today, the mid-size w w w.suppl yc ha i ndi gi ta l. com


ERDINGER WEISSBRÄU

“When you work at a smaller company like Erdinger you really have to be as effective as possible, as quickly as possible. There’s no time for bells and whistles” — Florian Eineder, Head of Procurement, Erdinger Weissbräu

126

DECEMBER 2019


brewery produces around 1.8mn hl

Today, as the world becomes an

(2018) of wheat beer per year.

increasingly complex and digitalised

Its longevity and success are based on

place, Erdinger is undergoing

the four cornerstones of the company’s

a first-of-its-kind procurement transfor-

philosophy: quality of the product

mation. we spoke with Eineder (sadly,

above all, a dedication to wheat beer,

not over a stein of wheat beer) about

appreciation of the employees and

his decision to leave one of the world’s

straightforward brand management.

largest consultancies for a 530-person

Erdinger makes no compromises

beverage company, how he’s driving

when it comes to quality, premium

a cultural and digital procurement

ingredients and its passion for

transformation across the more than

Bavaria’s cultural heritage.

130 year old brewing operation, and 127

C O MPAN Y FACT S

Market-altering innovation with Erdinger Alkoholfrei Innovative decision making has always been a part of Erdinger’s strategy. The decision to position Erdinger Alkoholfrei as an isotonic drink for athletes was no different. This shook up the market and helped kickstart the entire non-alcoholic beer market. The brand soon established itself as the leader in Germany and has helped maintain the overall growth momentum for non-alcoholic beers.

Around the world, non-alcoholic beer is typically seen as the responsible choice for designated drivers who are tired of mineral water. In Germany, it has another role: the perfect drink for athletes and active people. “It helps to recover much faster. As an athlete or a sporty person, drinking an alcohol-free wheat beer after training provides the body directly with valuable ingredients, satisfies thirst even faster and is completely natural,” says Eineder.

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“I was looking for a company where you can really move something, make a difference” — Florian Eineder, Head of Procurement, Erdinger Weissbräu

how I came to Erdinger. I really like the company’s philosophy – taking care of each other, being close, being one team.” Upon taking the job, he assumed responsibility for Erdinger’s entire external spend. “Everything from hops, barley, wheat, yeast, glass bottles, bottling machinery, glasses, labels, label printers, cases, packaging, trucks, cars, the buildings to put them in, that’s all my team and me,” he explains.

Erdinger’s new role as the first

“We do actually have our own well at

brewery to implement SAP’s

the brewery, so I don’t need to buy

S/4HANA.

the water, which is nice.”

Eineder took on the role of Leiter Einkauf (Head of Procurement) in February 2018. “I had this very broad spectrum of experience — all in procurement of course,” he

When Eineder arrived at the company, its procurement function was very classical. Purchasing was regarded mainly as a back office function, and its success was mainly tracked by the number

recalls, “but I was not happy

of purchase orders made

with where I was. My last

throughout the year and the

project was outsourcing

savings that were negotiated

7,500 jobs, while the people

per purchase order. “Having

at the top were making mil-

worked for so many different

lions. From my perspective,

companies in so many differ-

that’s not how it should

ent industries, I had seen that

work. So, I was looking for

everyone is facing more or

a company where you can

less the same problems: opti-

make a difference. That’s

mising the external cost w wew.suppl uro pe .busi yc hane i ndi sscgihief. ta l. com

129


ERDINGER WEISSBRÄU

“We are the first brewery to implement SAP S/4HANA as a full scale adoption” — Florian Eineder, Head of Procurement, Erdinger Weissbräu

130

DECEMBER 2019


131

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ERDINGER WEISSBRÄU

132

1886

Year founded

$600mn Revenue in dollars

530

Number of employees DECEMBER 2019

position while keeping quality at a high level and increasing the efficiency of the procurement function. The difference is, when you work at a smaller company like Erdinger, you really have to be as effective as possible, as quickly as possible. There’s no time for bells and whistles,” says Eineder. At Erdinger, roles that would be dealt with by a 20-person team in a larger corporation are handled by a single individual; the consequences of decision making are felt faster and more


clearly than in bigger companies, leav-

catalogues, etc, but there’s also

ing little room for error.

a huge mindset change within the

Now, Eineder is driving a cultural

whole company that needs to be

and digital transformation across

accomplished.” Digital transformation

Erdinger’s procurement department

without a reimagining of culture and

centred around the integrations of

business process can never be suc-

two pieces of enterprise software:

cessful; George Westerman, a

SAP Ariba and SAP S/4HANA.

principal research scientist at MIT

“We’re going to get rid of as many

Sloan notes that, “when digital trans-

operational activities as possible,”

formation is done right, it’s like a

he explains. “There are technical

caterpillar turning into a butterfly,

challenges, of course, when it comes

but when done wrong, all you have

to implementing the software, the

is a really fast caterpillar.” For Eineder 133

E XE CU T I VE PRO FI LE

Florian Eineder Enthusiastic, professional and with a huge amount of experience, Florian Eineder is leading the procurement function at Erdinger Weissbräu and driving important change across the organization. His specialties include using procurement as an enabler and developing teams into business partners to stakeholders in order to drive corporate strategies and promote business goals. He is driving the digitalisation of Erdinger along with a strong focus on ROI with the necessary caution. Florian has 15 years’ experience in procurement divisions of the world’s most important companies, in leading global teams and driving transformation at speed and scale. w w w.suppl yc ha i ndi gi ta l. com


ERDINGER WEISSBRÄU

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135 to effect a meaningful transformation

is the decision to position itself as the

across the brewery’s purchasing and

most progressive brewery at the fore-

procurement processes, that mindset

front of digital innovation with a new,

change has been essential. “It was

cutting edge ERP. Erdinger worked

and still is important to take every

successfully for many years with its

employee with us on this journey,”

previous legacy system. However,

he says. “We must ensure that digital

due to the company’s constant growth

transformation is seen as an opportu-

and the new digital requirements

nity and a necessity, not as a fashion

of an ever-evolving world, the system

phenomenon or even as a job destroyer.

reached its limits; more and more pain

Therefore, openness, transparency

points were discovered. This disruption

and a lot of communication are

isn’t unique to Erdinger; companies

non-negotiable.”

in every sector are faced with legacy

In addition to a new procurement

processes that are in need of moderni-

solution, perhaps the most disruptive

sation and optimisation. Erdinger’s

change that Eineder is implementing

growth has, for many years, been w w w.suppl yc ha i ndi gi ta l. com


ERDINGER WEISSBRÄU

driven by the quality and individuality of its product, but the company’s backend processes have not grown in tandem. “The bigger you get, the more difficult it gets to put your processes in order and have a cost effective workforce setup,” says Eineder. Erdinger decided to go with a new ERP system and face this mammoth task. “We’re implementing S/4HANA, which is sleek, modern and innovative. We are the first brewery to do this as a full scale adoption. It’s a showcase project; if it works 136

for us, then all the other breweries are going to start switching over to S/4HANA. We meet the brewery’s demand for innovation which is also evident throughout the departments of the company,” explains Eineder.

“It was and still is important to take every employee with us on this journey” — Florian Eineder, Head of Procurement, Erdinger Weissbräu DECEMBER 2019


137

Looking to the future, Eineder is

base in order to generate the most value.

excited to be bringing procurement

I think this kind of orchestrating function

out of the back office and into a place

is where the procurement department

that’s more relevant to the overall busi-

in most companies wants to go.”

ness. “Procurement is a driver for all sorts of things: for cost, innovation, risk management, and efficiency,” he says. “Going forward, I want to manage the relationship between internal stakeholders and external supply w w w.suppl yc ha i ndi gi ta l. com


138

Harnessing the potential of the Middle Americas at AB InBev WRITTEN BY

WILLIAM SMITH PRODUCED BY

CAITLYN COLE

DECEMBER 2019


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AB INBEV

Gabriel Guzman, Director of Raw Materials, Agricultural Development & Utilities for AB InBev’s Middle Americas region discusses the zone’s potential and the sustainable strides the company is making

A

s the world’s largest beer company, AB InBev (ABI) maintains a complex and interrelated global supply chain. One of

the regions most important to the company’s oper140

ations is the Middle Americas, as Gabriel Guzman, Director, Raw Materials, Agricultural Development and Utilities elucidates. “It’s a fast-growing region, for sure. Out of the entire ABI group it is the second largest in terms of revenue and the largest in terms of EBITDA. It’s a growth engine.” The region’s potential is obvious, but it also brings its own set of challenges. “We deal with less developed economies, so we sometimes have problems with taxation and changing regulations and treaties.” Guzman’s role requires the management of a number of teams, each dedicated to the different sections under his purview – the provision of raw agricultural materials, the coordination of utilities and the sustainable development of agriculture all being examples. That last area is covered by Jose Luis Taylor, Director of Sustainability and DECEMBER 2019


141

1366

Year founded (the Artois brewery)

$54.6mn Revenue in US dollars

170,000+ Number of employees

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AB INBEV

“Our goal for 2025 is that 100% of our farmers are to be skilled, connected and financially empowered” 142

— Gabriel Guzman Director, Raw Materials, Agricultural Development & Utilities AB InBev Middle Americas

DECEMBER 2019

Agricultural Development at the company, who speaks to the importance of treating farmers ethically and with respect. “Our goal for 2025 is that 100% of our farmers are to be skilled, connected and financially empowered,” says Taylor. “We have a base of around 4,000 farmers, the majority of which are in Mexico, where we implemented this programme four years ago. We have another programme now in Colombia, and we are making strides in Ecuador. In Mexico, we were challenged to ensure that 100% of the


CLICK TO WATCH : ‘WE ARE AB INBEV’ 143 barley came from local farmers instead

sustainability targets to benchmark

of being imported, which we have now

its progress in these areas, including

achieved. In doing that, we’ve invested

in energy. “By 2025, the target is for

in machinery and created jobs for local

ABI to use 100% renewable electricity,”

people.” This focus on having a positive

says Guzman. “In Mexico we should

effect on the people with whom the

be at 100% by the end of this year,

company works is echoed by Guzman.

which is our largest market – about

“The question is, ‘can we truly talk the

45% of the entire zone. Our goal is

talk and walk the walk and empower

to continue to expand that, so we’re

the communities in which we oper-

looking at opportunities in Colombia.

ate?’ In the early stages, it can be more

in Honduras we have found a source

expensive, but it’s an investment. After

of 11 megawatts of hydro power that

that it can become self-sustainable as

we can potentially use. It will not satisfy

it should be.”

100% of what we are looking for but

ABI has implemented a number of

will definitely help us with our target.” w w w.suppl yc ha i ndi gi ta l. com


AB INBEV

“We’ve invested in machinery and created jobs for local people” 144

— Jose Luis Taylor Sustainability & Agro Development Director, AB InBev

Water Management is also a focus,

this vegetable protein to change their

as the company’s CEO Carlos Brito

diet, and we are looking at a number

demonstrated during a recent talk.

of disruptive projects to create the

Guzman himself discussed the corol-

right products to match this consumer

lary concern of decarbonisation at a

demand. For instance, last year we

Bloomberg event last year.

launched a smoothie made out of

A sustainable approach can also

spent grains. It’s been in a pilot in the

offer opportunities for value crea-

US and it’s being positively received.

tion. “We have a significant amount

We are also making snack bars from

of byproducts left over after finishing

the grains – we have a significant

the beer-making process, in the form

amount of protein value there.”

of vegetable protein content,” says

ABI’s sustainability work serves to

Guzman. “There is a trend in the mar-

complement its focus on making the

ket where consumers are looking for

best beer. “The quality of the beer is

DECEMBER 2019


145

E XE CU T I VE PRO FI LE

Gabriel Guzman Gabriel leads Anheuser-Busch InBev’s Middle Americas Zone teams for Raw Materials, Agricultural Development and Utilities Procurement. Gabriel oversees the Zone’s plan to achieve its ambitious 2025 100% renewable electricity commitment, which is an integrated part of the company’s strategy across procurement, sustainability and supply chain. He works in close collaboration with cross— functional teams, supporting the company’s energy and water reduction targets. Gabriel holds a Bachelors in Management and Economics and an MBA from Case Western Reserve University.

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“To maintain a sustainable, high standard of beer, you have to be dynamic” — Gabriel Guzman Director, Raw Materials, Agricultural Development & Utilities, AB InBev Middle Americas

determined, not only by the expertise

computer models which can help to

of the chief brewers, but by the quality

protect against future price volatility.

of materials,” says Guzman. “Without

Robotic process automation has been

that, you cannot achieve the high

another focus. “We can reduce the

standards that we have in the organi-

amount of man hours spent on very

sation.” Regionally, this year, adverse

basic tasks, freeing us up to evaluate

weather conditions led to 50% of the

the procurement function, to think in

barley crop in Mexico being lost. ABI’s

more strategic ways and to add value.

worldwide presence, however, means

We use robots, for instance, to help

that such an eventuality does not spell

with managing and indexing contracts.”

disaster. “In order to find the quality

Another innovation involves the intro-

that we need, the teams have to mobi-

duction of inter-departmental buying

lise globally with all their counterparts

software. “We use a platform similar to

in other regions. To maintain a sustain-

Amazon whereby the different func-

able, high standard of beer, you have to

tions within the organisation can order

be dynamic.”

whatever they need,” says Guzman.

Tying its efforts together is the

“That may be people in marketing, in

deployment of technology. The vola-

legal, et cetera. They can order certain

tility of prices and currencies in the

amounts without approval, which help

region has led to the development of

them to expedite the process.” w w w.suppl yc ha i ndi gi ta l. com

147


AB INBEV

Aside from making easier the work of employees, technology is also serving to improve the quality of raw ingredients. ABI has pioneered an AI technology pilot, internally referred to as a “brain”, which is able to closely monitor the state and health of cargo as it is being shipped. “We can measure the moisture content of the barley being loaded in Denmark, for instance, and then track that moisture content, based on factors such as weather conditions, all across the route from 148

Denmark to Colombia. When the ship arrives, we will know that the barley arrived with X amount of moisture

“My dream is to increase Mexican barley to the highest of international standards” — Gabriel Guzman Director, Raw Materials, Agricultural Development & Utilities AB InBev Middle Americas

DECEMBER 2019


content, therefore at the malting process we will only need X amount of energy to convert that barley into malt.” In the near-term, ABI will continue to chase its sustainability targets, covering not just the brewing side of the operation but also manufacturing and the entire distribution network, where it is introducing a number of electric trucks to deliver products. ABI is also furthering its origination programme in Mexico. “In Mexico, we use about 400,000-500,000 tonnes of corn imported from the United States,” says Guzman. “You can imagine the impact to Mexican agriculture if we could buy that from a local grower, instead. That’s precisely what we are trying to do right now by launching a corn origination programme. This year we are going to get to 40,000 but our goal is to get to 400,000.” In the longer term, ABI is interested in consolidating its position in the region. “From an agrodevelopment standpoint the goal is to improve the quality of Mexican barley,” says Guzman. “My dream is to increase Mexican barley to the highest of international standards.”

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149


150

How STC is leading the digital revolution in MENA WRITTEN BY

MATT HIGH PRODUCED BY

GLEN WHITE

DECEMBER 2019


151

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STC

Haithem M. Alfaraj, Chief Technology Officer at STC, explains how its technology transformation has made it a digital leader

“ T

echnology transformation is a major enabler of our overarching strategy, which is to be a world-class regional digital leader

that provides innovative services and platforms that enable the digital revolution of the MENA region, and enrich people’s lives,” says Haithem M. Alfaraj, 152

Chief Technology Officer at STC Group. Alfaraj has considerable experience in implementing new technologies and driving innovative transformation programmes. He has been with STC since 2016, assuming his current role in the early part of last year. A key responsibility in this position is the developing and leading of transformation projects designed to improve the organisation-wide deployment of innovative IT and communications solutions. It has been, he explains, “an interesting and informative experience that required a high learning curve in terms of my leadership, both with regards to technology and the wider company’s ambition and transformation. It also creates an opportunity to develop new digital leadership that can take the company to the next level and support the national transformation of the country’s Vision 2030.” DECEMBER 2019


153

During Alfaraj’s tenure, STC has been no stranger to innovation. It has pioneered the use of 5G, for example, becoming the first operator to launch a live 5G network in May 2018. In June of 2019, it launched 5G services commercially. These developments, Alfaraj notes, as well as other wider initiatives and technology innovations, form part of the wider transformation he has overseen. “We focused on developing a strong technology strategy that would advance our capabilities and enable our business w w w.suppl yc ha i ndi gi ta l. com


STC

“Our customers’ experience and achieving true customer-centric operations have been fundamental principles in our transformation” 154

— Haithem M. Alfaraj, Technology & Operations SVP at STC

to be successful – we knew we always had to be at the advanced stages of development when it comes to technologies covering infrastructure, platforms, cloud, applications, AI and Big Data to maintain our leading position in MENA’s digital revolution. At the same time, we worked on our operating model to ensure it was both agile and collaborative.” A key focus for Alfaraj was to ensure that STC’s technology transformation supported the organisation’s wider DARE strategy. This outlines the key pillars under which the business looks to expand: Digitise by becoming a data driven, technologically agile organisation focused on enhanced experiences; Accelerate core asset performance through cultural and technological change, as well as growing both B2G and B2B market segments to lead the market; Reinvent the customer experience through the personalisation of interactions with technology to create new, attractive journeys; and Expand aggressively by pursuing all opportunities for growth related to services and applications, platforms

DECEMBER 2019


CLICK TO WATCH : ‘STC’ 155 and connectivity and infrastructure. Digital and technology are key

“In so doing, it was apparent that our legacy infrastructure wouldn’t have

aspects of realising DARE, he notes,

been able to meet the requirements

outlining how he focused on certain

of the new services we were looking

domains such as services and appli-

to introduce or meet the expecta-

cation, AI and analytics, platforms

tions of our customers in terms of

and connectivity, and infrastructure.

the quality standards we expect to

However, much of the overall devel-

deliver. As an example of our digital

opment was driven by the desire to

transformation, in the wholesale

reinvent STC’s customer experience.

domain, technology demands and

“Going through this transformation

gaps are covered by digitisation,

provided an opportunity to baseline

which is a result of agile partner-

our current operations and archi-

ships adapted during the innovation

tecture and better understand our

phase of the solution. These part-

business performance,” says Alfaraj.

nerships resulted in improvement of w w w.suppl yc ha i ndi gi ta l. com


STC

156

time-to-market, cost reduction and

company’s capabilities and create an

automation of processes.

evolution to customer satisfaction.

“If you look at technology and opera-

“Our objective,” he adds, “is to make

tions as a sector of the business, then

customer experience a competitive

our customers’ experience and achiev-

advantage and a true differentiator for

ing true customer-centric operations

us in the market – something we have

have been fundamental principles in

successfully managed to do over the

our transformation,” Alfaraj continues.

last few years.” Key aspects of that

He details how this has been achieved,

success include leading the region in

including through a focus on baselin-

investing in technologies that continu-

ing and reimagining customer journeys

ously measure customer experience,

and stories through in-depth customer

revamping assurance and operational

design thinking with our business

processes to make service and

units to ensure they are in line with the

customer experience the priority,

DECEMBER 2019


E XE CU T I VE PRO FI LE

Haithem M. Alfaraj Engineer, Haitham M. Alfaraj joined STC in 2016 and currently serves as Senior Vice President of Technology and Operation. He is responsible for conceiving, planning, operating as well as leading the implementation of transformation projects to improve organisationwide deployment of information technology and communication services and solutions. Previously at STC, Haitham served as Vice President of Operation Sector, where he led challenging transformation programmes that excelled the technical operational performance of STC communication services. Haitham joined STC in 2016 from Etihad Etisalat, Mobily Company, where he was Chief Technology Operations Officer. He spent 11 years with Mobily in leadership positions for infrastructure and service management operations. Prior to that, he worked at Saudi Aramco for four years. He holds a Bachelor in Computer Engineering from King Fahad University in Dhahran, and enrolled in multiple executive leadership programmes from Harvard Business School, INSEAD, and other institutes. Haitham is currently on the board of STC Specialized, STC Solution. He is an experienced technology executive who possesses extensive technology knowledge, strong leadership skills and superb relationship management abilities. Haithem has a well-rounded business foundation with keen strategic insight that allows him to manage relationship building, talent development, and organisation turnaround and realignment activities. He has additional expertise in telecom and information technologies, quality management, infrastructure planning, performance improvement, partner alliances, operations excellence, vendor management, outsourcing strategy, and facility/data center and cloud services.

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157


STC

“Technology transformation is a major enabler of our overarching strategy, which is to be a world-class digital leader that provides innovative services and platforms that enable the digital revolution of the MENA region”

160

— Haithem M. Alfaraj, Technology & Operations SVP at STC

With regards to specific technologies, connectivity and speed of connection have been a large focus for Alfaraj and his team. STC already has the highest mobile speed and the most reliable network in the Kingdom of Saudi Arabia, yet it continues to improve this through investment in its ‘backbone’ – data centres, transportation networks and each individual layer of its overall network. “Our new MySTC app has also had a significant impact,” he notes. “This is entirely in line with our digitalisation vision, and facilitates the purchase of smart devices and SIM cards through the

establishing a dedicated service

app store, complete with free delivery.

performance and customer services

It also covers fixed services with intel-

unit, and creating new KPIs and KQIs

ligent customer support capabilities.”

that are aligned with a customer-

On 10 November it was announced

centric approach. To achieve these

that MySTC had received the ‘App

objectives, STC leveraged its data

of the Year’ Golden Award at the

and analytics capability it has built

Network PGs 2019 IT World Awards,

over the years to not only improve

an event organised annually in San

customer experience, but also to

Francisco to recognise excellence in

generate revenue and optimise cost.

technology worldwide.

This capability includes employing

To achieve such significant change

AI techniques such as machine-

requires effective relationships with

learning, NLP and RPA to introduce

key partners and vendors. Here,

efficiency into its operations.

Alfaraj explains that the business has

DECEMBER 2019


161

collaborative platforms at every level

solutions to our customers. For more

of the organisation. “Going through

mature technologies and services, we

this transformation has actually

prefer an ‘off the shelf’ approach that

opened doors for us to have better

is efficient, cost-effective and allows

strategic dialogue with our partners

for faster delivery of products through

and to explore new technologies and

their lifecycle.”

solutions with them,” he says. “For all

STC works with many of the larg-

new or emerging technologies and

est tech and telco brands, including

services, such as 5G, telco-cloud, vir-

Accenture, for digital telco transforma-

tualisation or network transformations,

tion, Ericsson, Huawei and Nokai for

we adopt a collaborative development

5G development and IoT, Redhat for

ecosystem in which we work together

cloud technology developments, and

as partners to identify and deliver

Teradata and SAS for Big Data analyt-

optimal, agile, robust and high-quality

ics. Accordingly, says Alfaraj, STC w w w.suppl yc ha i ndi gi ta l. com


STC

162

has “vast experience� in managing successful collaboration. To do this, he explains, the business approaches each collaboration with firm guidelines in mind that cover such areas as joint planning and strategising, business alignment and planning, executive engagement, technical integration and field readiness, and more. Naturally, greater use of technology brings heightened risk, particularly in terms of cybersecurity. Being a digital leader, STC well understands the risks and how DECEMBER 2019


1998

Year founded

51,963mn Revenue in Saudi Riyal

13,383 Number of employees

critical they are to a successful technology transformation, particularly with the adoption of cloud and IoT solutions. The company invests in three key areas: people, process and technology. “This includes hiring the best cybersecurity professionals and consultants and training a large pool of Saudi graduates in the latest preventative security technologies, all in line with our vision,� says Alfaraj. In addition, the company has established a strong cybersecurity governance, risk and compliance capability within its cybersecurity sector. This combines policies, standards and audits for use in the STC partner ecosystem to ensure consistency in all operations. In terms of technology and partnership, STC has invested in security technologies to complement the governance aspect of protection, deploying the largest Threat Intel programme and Anti-DDoS capability in the Kingdom. These two programmes, as well as several others, have protected STC and the Kingdom at large from major globally known cyberattacks, guaranteeing not only STC’s continued service, w w w.suppl yc ha i ndi gi ta l. com

163


STC

but business as usual for every STC client (Government, Enterprises and Consumers). High-level partnerships with giants like Saudi Aramco, Cybersecurity Center under the World Economic Forum and FIRST. org have been forged to solidify STC’s contribution to local and global Cybersecurity. With the continuous evolution of technology security risks, STC is mandated to sustain and ensure full command around risks mitigations and proper controls. 164

Looking more broadly, STC intends to continue leading the digital revolution in MENA in line with the

“Once the leadership adopted the changes, the rest was a chain reaction right through the organisation” — Haithem M. Alfaraj, Technology & Operations SVP at STC

transformation Alfaraj describes. One example of this is the company’s contribution to Saudi Arabia’s Vision 2030 programme, which includes objectives around digitalisation and extending high speed internet access to all citizens. Steps the business has already taken in this area include streamlining of its vision with that of Vision 2030, adopting a digitalisation framework to significantly lift the nation’s digital potential, improving infrastructure and technology, and upskilling its workforce.

DECEMBER 2019


165

In the latter, Alfaraj is resolute in his

significantly into building our capabil-

belief of the importance of people.

ity across the company, and we were

“Any transformation is about people

fortunate to have a management team

and how we work – we knew from the

committed to driving that change.

start that this journey would be about

That has brought real innovation in

enhancing capabilities, increasing

the way we run our operations, and it

collaboration and developing new

was important to our overall success

ways of working,” he explains. “Our

– once the leadership adopted the

change management was built

changes, the rest was a chain reac-

around three themes; clarity, capabili-

tion right through the organisation.”

ties and commitment. We made sure everyone knew of all the changes every step of the way, we invested w w w.suppl yc ha i ndi gi ta l. com


166

PEPSICO LATAM: DRIVING INNOVATIVE SUPPLY CHAIN OPERATIONS IN A HIGH PERFORMANCE MARKET WRITTEN BY

MARCUS LAWRENCE PRODUCED BY

DENITRA PRICE

DECEMBER 2019


167

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PEPSICO

PEPSICO LATAM HAS BEEN UNDERGOING A SIGNIFICANT SUPPLY CHAIN TRANSFORMATION AS THE COMPANY AT LARGE CONTINUES TO STREAMLINE AND OPTIMIZE THE EFFICIENCY OF ITS OPERATIONS

P

epsiCo’s portfolio of evocative household names has a foothold in every major market around the world, and delivering

those products to consumers in the most effective manner possible has become a company-wide 168

strategic imperative. For PepsiCo’s operations in Latin America (LATAM), the centralization of procurement has been an ongoing endeavor for the past several years and the transformation is reaping dividends. As a key region for PepsiCo’s wider balance sheet, optimization of procurement and logistics in the region stands to have a significant impact on success at large. The procurement function is, in effect, essential to the company’s wider growth strategy. When new CEO, Ramon Laguarta, came in last year, there was a refinement in the company’s vision focused on how PepsiCo can become the leader in convenience food and beverages by winning with purpose rather than just performing – and this mentality is central to the company’s supply chain transformation.

DECEMBER 2019


$64.6bn Approximate revenue

1898

Year founded

250,000+ Number of employees worldwide

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169


PEPSICO

“THE FIRM’S STRONG PARTNERSHIP MANAGEMENT IS TIED INTO THE SUCCESS OF ITS NEW FLEET MANAGEMENT CAPABILITIES”

With its LATAM operations accounting for around 11% of PepsiCo’s global revenues, optimizing supply chain and procurement operations in the region is essential for continued growth at both a national and global level. Leveraging relationships with suppliers worldwide is key, along with the capacity to negotiate on a global scale whilst simultaneously servicing and supporting local markets. In 2012, previous CEO Indra Nooyi set a goal of securing $1.5bn in cost savings through streamlining and incrementally

170

DECEMBER 2019


CLICK TO WATCH : ‘PEPSICO SUPPORTS RECYCLING IN LATIN AMERICA WITH INNOVATIVE PROGRAMS’ 171 upgrading the company’s productivity,

region, has been vital to the realization

citing the firm’s positive performance

of this ambitious goal. By combining

in the five volatile preceding years

procurement and operations, both

for world economies. “Our goal is to

delivering more cost-effective ways

continue on that earnings trajectory

of purchasing and enabling the supply

over the next five to 10 years, fully

chain with new technologies – such

recognizing that we need to make

as the new fleet management system

changes to the way we operate to

– quarterly productivity has been

address the challenges identified in the

enhanced significantly both on a local

review process,” said Nooyi in a press

and wider level.

statement at the time. “2012 will be

Partnerships have been particularly

a transition year, in which we will be

crucial to the cost-saving strategy, as

taking the appropriate steps to build

more effective relationships can yield

a stronger, more successful company

higher quality solutions at cheaper

going forward.” Latin America, as a

rates. Not only that, but the complex w w w.suppl yc ha i ndi gi ta l. com


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About Volkswagen Commercial Vehicles: As an independent brand within the Volkswagen Group, Volkswagen Commercial Vehicles (based in Hanover, Germany) is responsible for the Group’s worldwide activities in the area of light commercial vehicles, people carriers and camper vans. This includes the systematic further development, the production and the sale of the successful Transporter, Caddy, Crafter and Amarok model ranges (almost 500,000 sold units in 2018) as well as the development of new vehicle types, (digital) services and (electric) mobility solutions. By doing so, Volkswagen Commercial Vehicles focuses on the individual transport and mobility needs of its commercial and private customers and contributes decisively to their economic success by offering added value for their work, their business models and their everyday lives. Beyond that, the brand is responsible and will set the pace for the strategic future field of autonomous driving for the entire Volkswagen Group, aiming to become the leading company for individual mobility and interconnectedness by 2025.

Mission: we transport success. Volkswagen Commercial Vehicles is fully concentrating its activities on the fundamental changes taking place in the industry and to the changing customer requirements. Therefore, we pursue a clear strategy for our future business – called GRIP 2025+ (Growth, Responsibility, Innovation, People) – allowing us to design the necessary transformation, to stay competitive and to secure the long-term success of our brand.

For all our products and mobility solutions, we aspire to minimize environmental impact along the entire life cycle – from raw material extraction until end-of-life disposal – in order to keep ecosystems intact and to create positive impacts on society. Compliance with environmental regulations, standards and voluntary commitments is a basic prerequisite of our actions. Facing the task of shaping mobility in a cleaner, safer and more efficient way with our vehicles and services, Volkswagen Commercial Vehicles, too, just like the other brands of the Volkswagen Group, is committed to the target of the Paris Summit on Climate Protection, which aims to restrict global warming and to target a fully CO2-neutral balance by 2050, for example. The opinion and feedback of our customers is very important to us. That is why we always work closely together with them when developing new products. In addition, a huge capital employment enables us to consistently push the transformation towards zero-emission mobility. With the all-electric e-Crafter, ABT e-Caddy and ABT e-Transporter (the last two developed together with our strategic partner ABT), our portfolio contains solutions for urban traffic that are already sustainable now. Expected in 2022, the fully electric ID. BUZZ, which has entirely developed anew, will be one of our most important products for the future and is our technology carrier for autonomous driving. In the end, working together responsibly in all areas of the organization, developing and involving enthusiastic and talented employees, and working together as one team with the best partners of the industry are the crucial things that enable us to live up to our promise: we transport success.

For more info on Volkswagen Commercial Vehicle’s Fleet solutions, visit: www.volkswagen-nutzfahrzeuge.de/de/geschaeftskunden/grosskunden/kontakt-international.html


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175 nature of Latin America’s established

source locations. The aforementioned

and varied markets necessitates

regional and intra-regional quirks are

a high degree of expertise on the

similarly vital to consider when it

business side to initiate and maintain

comes to both partner selection and

such relationships. Every country

the application of innovative techno-

has its particularities, so having the

logical solutions. Driverless vehicles,

necessary talent and capability

for example, are not currently viable in

to connect with the correct partners,

places like Sao Paolo and Lima due to

provide the right efficiencies and

both infrastructural and technological

scale relative to different countries

limitations. However, these limitations

is essential for PepsiCo’s delivery

have not prevented the company from

of its supply chain objectives.

establishing a new fleet management

PepsiCo proactively and regularly

solution in the region replete with

assesses its partners and ensures it

benefits to productivity, efficiency,

is leveraging the most cost-effective

logistics, sustainability, driver safety w w w.suppl yc ha i ndi gi ta l. com


PEPSICO

and more. Focusing on safety and making sure hard braking, hard cornering, inefficient acceleration and so forth are reduced has reaped myriad benefits, improving the employee experience along with wider ranging results. Beyond safety, the new fleet management system has a much broader reach: the platform pilot is seeing a reduction of 10% in both idling and travel distance, significantly reducing fuel consumption and greenhouse gas emissions. The 176

implications for enhanced sustainability are a particular boon as consumers around the globe become more conscious of the environmental impacts of the products they buy. The firm’s strong partnership management is tied into the success of its new fleet management capabilities, too. Leveraging key relationships with expert fleet managers to augment its ability to build and deploy customized systems has enabled PepsiCo to boost efficiency, automatic dispatching, roadside assistance, and more. These efforts have resulted in a 90% reduction in DECEMBER 2019

“IT’S CLEAR THAT THE POTENT INTEGRATION OF TECHNOLOGIES AND BLENDING OF THEIR CAPABILITIES HAS BEEN KEY TO PEPSICO LATAM’S SUCCESS”


177

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PEPSICO

178

DECEMBER 2019


associated administrative work, enabling employees to focus on more fulfilling value-added activities. No single technological solution or platform is responsible for or capable of securing such successes, however, it’s clear that the potent integration of technologies and blending of their capabilities has been key to PepsiCo LATAM’s success. The transport management system is tied into the telematics system, the last mile system, the route planning systems and so on, enabling the best qualities of each solution to be available in the same place. Taking a broader view of business operations, growth of the company at a global level, and the focus on a clear strategic vision are collectively bringing PepsiCo ever further forward as an example of procurement and supply chain operations done right.

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Profile for Supply Chain Digital

Supply Chain Digital Magazine – December 2019  

Supply Chain Digital Magazine – December 2019