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www.supplychaindigital.com

May 2018

SAP Ariba

Playing a key role in defining the future of procurement

INSIDE SPRINT

Sourcing success

AND ITS UNIFIED SUPPLY CHAIN

3D PRINTING

Advice from Oracle on the third dimension TOP 10

Management Software Companies


MAIN STAGE SPEAKERS INCLUDE:

ELOQUII

Mariah Chase Chief Executive Officer

WARBY PARKER

Dave Gilboa Co-Founder & Co-CEO

HOUZZ

Alon Cohen President & Co-Founder

SETH GODIN

Author

JUNE 5-8, 2018

CHICAGO MCCORMICK PLACE WEST

Register at IRCE.com to attend the industry’s top e-commere and e-retail event. Save $200 off your pass with code SCD200.

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Hello and welcome to the May edition of Supply Chain Digital – the essential read for executives working in the procurement and supply chain space. Our cover feature this month comes from Sprint. In an exclusive interview, we look at its unified supply chain and hear from its VP and Head of Supply Chain about how the company is well positioned to bring disruptive technology to the market. “We will be the first in the USA with a mobile 5G network and we will have the devices supply chain to make it happen,” Fijman tells us. Turn to page 12 to begin reading what is a truly eye-opening piece now. We also take detailed look at how IBM is implementing its Food Trust Blockchain solution across the global food eco-system, working with a number of the industry’s leading names. It says the benefits for doing so include cost efficiencies, transparency and traceability, lending yet more evidence that blockchain has made the transition from a buzzworthy concept to a practical business tool.

Its emergence in the coming years will make for fascinating viewing as business gets to grips with how to best utilise blockchain. As usual, we put the procurement and supply chain operations of some of the world’s leading businesses under the microscope, with the likes of Starbucks and Qatar Airways featuring. Elsewhere, you can check out our rundown of the top ten supply chain management software companies beginning on page 50, while Sarah Jacotine speaks with Esker’s COO, Steve Smith, to find out how paperless processes are freeing up resources and driving efficiencies in procurement. As usual, you can join the world’s fastest growing supply chain community on LinkedIn, Twitter and Facebook – let us know what you think of the new issue, or anything else going on in the world of supply chain and procurement.

www.supplychaindigital.com www.bizclikmedia.com

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F E AT U R E S

08 I NTE RV I E W

INSIDE SPRINT’S UNIFIED SUPPLY CHAIN PROC U R E M E NT I N S I G HT S

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ACCENTURE’S KAI NOWOSEL ON THE CHANGING FACE OF PROCUREMENT

ESKER —

KEEPING THE SUPPLY CHAIN MOVING


TEC H N O LOGY

50

LOG I S TIC S & D I S TR I B UTI O N

60

INSIDE IBM’S FOOD TRUST BLOCKCHAIN SYSTEM TO P 10

Advice from Oracle on the third dimension

72

Supply chain management software companies

82 E V E NT S A N D AS S OC I ATI O N S 5


C O M PA N Y PROFILES

128 Starbucks Europe

98

SAP Ariba USA Laureate International Universities Europe

150

162 Turkcell Europe

116 6

QMax Solutions USA

May 2018


232

Qatar Airways Middle East

178

Yamana Gold Canada

198

Kaust Middle East

218

Fetchr Middle East

262 ECOM Ghana Africa

276

Uganda Breweries Ltd Africa

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INSIDE SPRINT’S UNIFIED SUPPLY CHAIN GROWING AND AGILE, SPRINT LIVES UP TO ITS NAME AS ITS ANNUAL GROWTH FIGURES SHOW. MARTIN FIJMAN, THE MAN RESPONSIBLE FOR CREATING AN END-TO-END TRANSFORMATION IN DEVICE PROCUREMENT, OFFERS INSIGHT Written by JOHN O’HANLON


T

HE ANNUAL MOBILE World Congress (MWC) is far and away the largest showcase for the telecommunications industry. At the end of February this year, more than 120,000 exhibitors met in Barcelona to showcase the most innovative products and services and share the big ideas that will influence the future of the industry. Professionals from 205 countries and territories were present, and around 3,500 members of the international press and media attended. It’s certainly come a long way from its inception 30 years ago as a forum for the global system for mobile communications (GSM) when the protocols for second-generation digital cellular networks (2G) were first deployed. Today the industry is gearing up for the fifth generation. Network operators are jockeying for the first position as 5G rolls out, and among the leaders is Sprint Corporation. Sprint is the ninth largest telecommunications company in the world – the fourth largest when combined with the SoftBank family of companies, based at Overland Park, Kansas, and with over 54mn 10

May 2018

customers. Its prepaid subsidiaries include Boost Mobile, Virgin Mobile, and Assurance Wireless. This year’s MWC came at a pivotal moment for Sprint, which has stabilised and grown market share since its acquisition by Japan’s SoftBank in 2013, placing it in the same stable as other outstanding technology companies. In 2016 it recorded a growth in revenue for the first time in three years (at $33.3bn), added 930,000 postpaid phone net customers, and was rated the number one voice network in the USA. Growth continued


Sprint’s Magic Box was awarded the 2018 Global Mobile (GLOMO) Award for Best Mobile Technology Breakthrough at the MWC in Barcelona

in 2017, and by the time of MWC, it was able to make a number of exciting announcements, notably the first six USA markets to undergo 5G transformation starting in April. Customers in Chicago, Dallas and Los Angeles will begin experiencing significant increases in data speed and capacity, as Sprint rolls out advanced network technology called massive multipleinput multiple-output (MIMO), described as the bedrock of 5G. These will be followed later this year by expansion into additional markets including Atlanta, Houston and Washington, DC.

In 2018 and 2019 Sprint expects to deploy thousands of massive MIMO radios, significantly increasing network capacity for millions of customers across the country.

INNOVATION ACKNOWLEDGED A highlight for Sprint at MWC was to be awarded the 2018 Global Mobile (GLOMO) Award for Best Mobile Technology Breakthrough. This was for Sprint Magic Box, the world’s first all-wireless small cell, which improves data coverage and increases download and upload speeds by an average of 11


200%. Small cell technology allows much better and faster mobile coverage, providing average indoor coverage of up to 30,000 sq ft, and with a signal that extends data coverage to Sprint customers in nearby homes and businesses. The company recently hit a milestone of 100,000 deployed Sprint Magic Boxes to businesses and consumers in approximately 200 cities. Sprint plans to deploy more than a million units as part of its multi-year roadmap. Sprint Magic Box represents an outcome from the company’s integrated strategy on partnership, innovation, customer focus, technology leverage and, crucially, end-to-end supply chain management. As part of Sprint’s representation at Barcelona, Martin Fijman, VP of Products and Supply Chain, was there to further relations with the global industry, notably the manufacturers of the devices on which we rely. “Everything at MWC was about 5G,” Fijman says. “I think the convergence of 5G technologies, the devices and the digital supply chain is a very powerful combination. Sprint is very well positioned from a technology and supply chain point of view to bring 12

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this disruptive technology to the market. We will be the first in the USA with a mobile 5G network, and we will have the devices supply chain in place to make it happen.” Fijman joined SoftBank in 2014 with responsibility for a multi-billion dollar global spend, negotiating with key manufacturers and managing sourcing strategy, purchasing operations and contract management for Sprint. At the time he was drawn by the vision and leadership that drove the company at this crucial stage of its development, and was excited by the prospect of driving an aligned transformation in its supply chain function. He is adamant that an effective supply chain organisation should fully support the company’s strategic vision. Since then, his role evolved to lead and implement a unified devices supply chain across all Sprint consumer products, channels and brands, driving a differentiated customer experience (one of the key corporate goals) at an optimal cost. As such he is accountable for boardroom-level relationships with key partners and manufacturers, endto-end forward and reverse supply chain operations, inventory and device


“IN 2015 WE SET OUT ON A MAJOR TRANSFORMATION IN IT, AT THE SAME TIME BUILDING OUR CORE PRODUCT, OUR NETWORK” — Martin Fijman, VP and Head of Product and Supply Chain

portfolio management for the organisation’s three brands: Sprint, Boost and Virgin Mobile.

A UNIFIED, DIGITAL SUPPLY CHAIN These have been productive years from a procurement perspective. “In 2015 we set out on a major transformation at Sprint,” says Fijman. “Since then Sprint has been successful in reducing its costs by billions of dollars, and device supply chain transformation and collaboration across the business has been an integral part of that.” When he started, the challenge was to

lay the foundation for a sound device sourcing structure and build a best in class team. That role has expanded progressively to cover all aspects of the device supply chain, creating what he defines as a unified supply chain that includes both forward and reverse logistic elements. By unified, Fijman is speaking not only of the work of his product and supply chain team: “It’s common in our profession to see people managing supply chains in a vacuum, not aligned with external factors. What I mean by a unified supply chain at Sprint is one 13


that’s incorporated in all the elements of corporate strategy and that supports fundamental consumer demand, at the lowest possible cost. It’s about facilitating a seamless customer journey across the channels, and working toward having a consistent quality of experience in every channel where we operate. To achieve that, naturally we need comprehensive information and tracking to deliver different service level choices. Furthermore, a very important component for us is reverse logistics. Sprint is the industry leader in device leasing, which demands a very agile and frictionless logistic operation. We had to evolve very rapidly to be able to cope with the millions of used devices that are returned in our reverse logistics operation.” The number of mobile devices traded in or returned is increasing constantly. The reverse logistics process has traditionally been a challenge for service providers. Automation is now being used to make the process more reliable but this is not a core function for Sprint, says Fijman. “We look for the best economic use for the devices that are returned, but for the most part we work 14

May 2018

with logistics partners for the processing of the used devices, including their collection and return.”

PROCUREMENT AT THE TOP TABLE It’s with great satisfaction that over the years Fijman has seen the supply chain role develop in importance, from a backroom to a strategic role. “Whichever way you look at it, in our business bringing a product or device to the customer is a critical function. We have succeeded in aligning our team’s goals with the longer term plans of the business. As a company we want


“WE WILL BE THE FIRST IN THE USA WITH A MOBILE 5G NETWORK, AND WE WILL HAVE THE SUPPLY CHAIN IN PLACE TO MAKE IT HAPPEN” — Martin Fijman, VP and Head of Product and Supply Chain

to put customer experience at the center and we want to drive cost efficiency. With that in mind it is counter-productive to regard supply chain as a tactical necessity. It sits at the top table when formulating strategy, forward planning and reducing cost. Sprint’s corporate goals include being a value leader in the market, driving digital growth, driving expansion and growth. The supply chain is essential to each of these.” At the heart of this realignment stands the digital supply chain transformation Fijman has been leading. “We have had

a two-pronged approach toward supply chain transformation. The first has been addressing different aspects of efficiency and effectiveness, introducing better service levels and better management of the process of bringing new product to market. The second has been moving toward being a more resilient supply chain responsive to market conditions, a supply chain that can adapt to the changes and disruptions in the marketplace, and reach out to the consumers in a costeffective way.” Traditionally, telecommunications 15


supply chains have not been configured to handling individual items close to the consumer point. Fijman continues: “Telecommunications companies have been lagging behind some of the retailers. We are now starting to look into the concept of micro logistics networks, which is essentially facilitating the efficient sourcing and delivery of these items and devices to an end-user.” It is not necessary for telecommunications providers to own these micro logistics networks. As with reverse logistics, it is better entrusted to third-party specialists, Fijman believes. Customer expectations have been shaped by the ‘Amazon experience’, and they have become used to next-day or even same-day fulfillment of orders. These expectations are beginning to impact the telecommunications supply chain. The only practical solution, he says, is partnering with innovative providers that can bring the capability to directly fulfill consumer demand. The strategy has delivered stellar results, not all of it from procurement, but in every case with a strong procurement component. Since 2014 the company reduced its costs by 16

May 2018

“WE HAVE HAD A TWO-PRONGED APPROACH TOWARD SUPPLY CHAIN TRANSFORMATION” — Martin Fijman, VP and Head of Product and Supply Chain


Sprint will be the first in the USA with a mobile 5G network over 20%, during a period of growth. Operating expenses have been reducing by between $1bn and $2bn a year, and in 2017 alone inventory levels were reduced by 35%, while stock transparency and availability have increased significantly. “Partnering with external companies has increased the depth and breadth of our network, and enabled us to be more asset light in the way we handle our inventory,” says Fijman.

THE RESPONSIVE SUPPLY CHAIN Technology will naturally play a critical role in designing new models for maximising supply chain effectiveness in this new landscape of micro logistics. Fijman continues: “We are very factbased when making any decisions affecting our supply chain. We rely heavily on the data we glean from the marketplace and from customer feedback. This determines our response to customer needs and giving the customer what they want.” Operational and demand planning to optimise or install the in-store portfolio based on SKU velocity is an example of how Sprint uses data to understand the performance of 17


“AT SPRINT WE ARE IN THE POLE POSITION IN THE RACE TO HAVE A SUPPLY CHAIN THAT IS DIFFERENTIATED COMPARED WITH OUR COMPETITION, AND AT THE SAME TIME MANAGE THE RISKS THAT ARE ASSOCIATED WITH EARLY ADOPTION OF NEW TECHNOLOGY” Martin Fijman, VP and Head of Product Procurement and Supply Chain at Sprint, is an energetic, self-driven, hands-on individual with 23 years of progressive leadership experience in complex global procurement and supply chains. He has a proven track record of successful negotiations and key supplier/partner management in technology and consumer devices. He has extensive experience in leading cross-geographical and matrix teams within dynamic and transformational environments, and is fluent in English and Spanish.

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May 2018

— Martin Fijman, VP and Head of Product and Supply Chain

different products in different markets. Fijman expects that new predictive analytic technologies will turn real time demand into the right inventory in the right place consistently. Alliances and partnerships, vendor management and data analytics are all aspects of what Fijman calls a responsive supply chain. “For me, a responsive supply chain means a customer having the ability to select, to receive and to return a product when, where and how it is convenient for them. That is enabled only through


Xxxxxxx analytics. Customer-centricity is required across all the digital and physical touch points, to drive engagement, satisfaction and loyalty. Proactive rather than reactive, keeping a step ahead of the customer. Giving them what they want before they know they want it.” It’s a holistic approach that applies to employees and to partners, he enthuses, felt at every level and at each touch point within the organisation as well as outside of it. At the same time as MWC debates how the industry is going to deliver 5G

to its consumers this year, Martin Fijman is preoccupied with technology tools that are either just around the corner or just beginning to make their presence felt. Blockchain, AI, IoT, advanced analytics are all poised to disrupt. “We are in the early stages but I think that over the next five to 10 years we are going to see major changes in our supply chains, driven by these new technologies. I think it will be a tipping point as they become less expensive and more mainstream. At Sprint we are in the pole position in the race to have a supply chain that is differentiated compared with our competition, and at the same time manage the risks that are associated with early adoption of new technology.” Finally, Fijman reverts to his favorite topic, sustainability. He is very proud of the impact procurement policy has had on Sprint’s performance in promoting a socially and environmentally sound supply chain and reducing the environmental impact of products. “We are an environmentally conscious company: sustainability is incorporated in our procurement policies and in the way we deal with any partner in our devices ecosystem.” 19


ACCENTURE

HOW ACCENTURE IS CHANGING THE FACE OF PROCUREMENT


Kai Nowosel, Accenture’s Chief Procurement Officer, on his approach to an everevolving and increasingly vital business function Written by ANDREW WOODS Produced by RICHARD DURRANT


ACCENTURE

“THE DEFINITION OF PROCUREMENT IS NOT ‘AM I A BETTER NEGOTIATOR?’ IT IS MORE, ‘AM I THE BETTER ECOSYSTEM MANAGER?’” — K ai Nowosel, Chief Procurement Officer, Accenture

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AI NOWOSEL, A HIGHLY experienced procurement professional – formerly of Sanofi and Deutsche Bank – is currently the Chief Procurement Officer (CPO) of global professional services giant Accenture, and he has a burning ambition. “I want to break the mould of traditional procurement,” he says. We caught up with Nowosel at Accenture’s 22

May 2018

Kronberg office, roughly a 20-minute cab ride from Frankfurt, where he sets out a detailed vision for the very future of procurement. His ambition is to see it transformed from a traditional back office function into an area much more closely aligned with the top line. “Where I want to really take the procurement function at Accenture


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Click to watch our talk with Kai Nowosel, Accenture’s Chief Procurement Officer, on his approach to an ever-evolving and increasingly vital business function.

is very clear. I want to transform it into a full business enablement function,” he says, easing back into his seat. “But to do that, I need to understand what’s out there. What is on their (the businesses’) mind every day and how can I support them to become more competitive? “We have heard a lot, and have read a lot, about business partnering,” he

says, ‘but for me, it’s really not a single point of content or contact. It’s a single knowledge pool of understanding. It’s about translating procurement and supply market opportunities in order to correlate them into business. That is business partnering, for me. So, it’s not like I am a caretaker. No. I want to sit at the table and have creative input on the commercial side of supporting w w w. s u p p l y c h a i n d i g i t a l . c o m

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The Intelligent Edge for Strategic Procurement: Third Party Risk Management By Lee Kirschbaum Senior Vice President Product, Marketing, and Alliances, Opus

A simple definition of the word “procure” is “to obtain by particular care or effort.” Ask any strategic procurement leader, and he or she is likely to agree: particular care or effort is exactly what it takes to manage suppliers in today’s challenging financial and regulatory climate. Business is increasingly interconnected, with unprecedented levels of global trade and capital flows. The potential for corruption and data breaches escalates daily. Regulations like the General Data Protection Regulation (GDPR) demand compliance, and financial viability is an ongoing concern. And there’s the constant need to reduce risk and maximize value across suppliers. Underlying all these challenges is the intense reliance on third parties, such as traditional suppliers, vendors and contract manufacturers, agents, brokers, distributors, resellers, franchisees, affiliates and more. Far beyond the remit of traditional procurement, companies today depend on hundreds, often thousands, of third parties to complete core business functions, delivering 60% or more of a typical company’s revenue. Third parties are a major engine of growth, yet also pose major risks: • 56% of businesses experienced a third-party data breach in 2017 • 60%+ of all data breaches are third-party related • 75% of all anti-corruption enforcement actions are due to third parties To drive value and performance while optimizing costs, strategic procurement professionals must not just manage spend and onboard third parties, but also have a plan to address these risks — from bribery and corruption to performance to information security to financial health to reputational risk and beyond — across all their third parties. It’s a tall order, yet ultimately a company — and by extension procurement — is responsible for the actions of its third parties. That’s why forward-looking strategic procurement teams are taking their supplier and third-party risk management seriously. Through systems and processes to actively monitor third parties, strategic procurement can lower costs, drive value and improve overall performance.

Third Party Management: A Risk-Based Approach Third party risk management helps answer a few seemingly simple yet critical questions: who am I doing business with, what risks do they pose and how do I successfully manage those risks?

It’s the process by which organizations select, onboard and monitor their external relationships with third parties for risk. New risks emerge regularly, so it’s also important that businesses and procurement teams keep a constant eye on their third parties. Companies and procurement teams without a program in place for monitoring third parties for risk expose their organizations to significant regulatory, financial and reputational repercussions. They’re also at a significant disadvantage when it comes to growth opportunities. Effective third-party risk management programs establish a comprehensive view of all third parties and manage each based on risk levels. This includes maintaining an inventory of all third parties and keeping track of documentation, such as contractual agreements, workflows, risk audits and assessments. The goal is to identify potential threats before they occur. Start by determining the most pressing sources of risk and then direct the bulk of your effort toward mitigating those risks, beginning with these fundamental questions: • Who are your third parties? • What services do they provide? • Which introduce the most risk and are most important, what are their specific risks, and how can any risks be mitigated? Once you have identified your company’s risks, another risk management best practice is to develop an up-to date, realtime inventory of all your company’s third parties. The inventory details the nature of each relationship and its risks, such as third parties with access to sensitive information who are sharing your data with their own contractors. The inventory must also be monitored — risk isn’t static, and neither are your relationships. Identifying all relationships across your organization, gathering necessary information on each and effectively assessing their risks can be extremely time-consuming and complicated if done manually. An automated technologybased approach, such as that provided by Opus, allows your business to free up its resources so that you can focus on what you do best. Nothing worth doing in life comes without risk. It’s how you manage your risks that can make or break your business. By making third-party risk a business priority, strategic procurement teams can drive value from third parties, reduce risk and safely guide their organizations into new areas.


Case Study: Intelligent Third Party Management in Action at Accenture Operations As a case in point, the gold standard in strategic procurement, Accenture, turned to Opus for support managing third party risk. Accenture Operations — a business function of the leading global professional services company serving clients in more than 120 countries — is reinventing business operations through industrialized business process expertise, technology, applied intelligence and data. Procurement is one of the Business Processing Services (BPS) offered by Accenture Operations, reinventing procurement from source-tosettle — embedding robotics process automation, market intelligence and analytics, and exceptional business process expertise into the process and augmenting existing resources, so Accenture and its clients can move first in the market and accelerate results. The Procurement BPS team helps operationalize supplier management functions to facilitate continuous improvement, drive compliance and mitigate risk. The BPS team manages more than $168 billion in spend, 23,400+ projects and 87,300 contracts per annum across 380+ Procurement BPS clients and Accenture. Because of this, Accenture works with literally thousands of suppliers and third parties, and needed a robust, automated, reliable technology solution to help identify, assess, manage and monitor third party risk. As a result, Accenture is partnering with Opus, leveraging their award-winning third-party management SaaS platform, Hiperos 3PM, to support their Procurement BPS services. Accenture selected this solution for its: • Comprehensive functionality • Offering maturity • Financial services and industry expertise • Ease of client and technology integration Most important was Opus’s ability to create turnkey functionality called accelerators — such as a banking, GDPR or ABAC (anti-bribery / anticorruption) accelerator. The key to strategic procurement is efficiency. By offering templates and models that could be reproduced quickly, Hiperos promised quick time to value. Today, Accenture is actively managing its third parties and recently added functionality to bolster third-party compliance with the General Data Protection Regulation (GDPR), going into effect in May 2018. As the organization helps its clients prepare reinvent business processes with “intelligent operations” that harness talent, data, and intelligence to deliver the right information where and when it’s needed, it also can rest assured it’s covered one of its most significant risk factors — and opportunities — third parties. Now that’s, well, intelligent.

Put the strategic in strategic procurement. Free your business from third party risk. Global business today depends on third parties, from suppliers to contractors to vendors and more. As reliance on third parties increases, so do the risks — from data breaches, corruption, compliance and financial health and more. But so do the opportunities. Free your business to manage the risks and realize the opportunities. Learn more at opus.com/procure Free Your Business®


ACCENTURE

“…WE SHOULD NEVER FORGET ABOUT THE RELATIONSHIP COMPONENT, AND THE HUMAN COMPONENT” — K ai Nowosel, Chief Procurement Officer, Accenture

the business. That’s one vision. “The second vision is linked to the moment you’re sitting with the business and identifying new opportunities and optimising current initiatives and delivery,” he explains. “But to do that, you also need to understand what is currently delivered. So, you need to get much closer to the business. At Accenture, we call it ‘rotating to the New’. If you want to be more agile, you

need to be faster. You need to be smarter in anticipating things, because just running a process faster doesn’t make you better. To anticipate what’s happening, and to already include that into your process, makes it much easier to work with a procurement function – you already have a solution before the concrete demand really happens. So, I want to drive my function into something of understanding and


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prediction rather than reaction.” The third vision in Nowosel’s procurement manifesto lies in the collation and utilisation of big data. “And that is where I need technology and digital. I need the co-worker. I need the data, and I need, last but not least, access to the right content at the right point. That is probably one of the biggest things. Today a lot of effort is spent creating static content, and that is

where I want to move away and say: ‘Our differentiator is not creating that content. Our differentiator is giving access to the right content.’ So, you need to understand the business to have the right access to the right content and, you need to have the right data understanding to really correlate and identify the right content by basically enabling it with the right rules, and with the right channels.” w w w. s u p p l y c h a i n d i g i t a l . c o m

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ADDING VALUE OF DIVERSITY & INCLUSION IN SUPPLY CHAINS

For over 10 years, we have been dedicated to the mission of improving diversity in entrepreneurship and driving inclusive procurement. We believe that supplier diversity is an economic and moral imperative. Innovation comes from a diversity of perspectives, so when we limit who can contribute, we in turn limit what problems we can solve. Join our global network of diverse entrepreneurs, supply chain leaders, thinkers and doers and realise the power of differences. Look out for more as we expand into Europe with Germany as first stop in 2018!


TRANSFORMING SUPPLY CHAINS THROUGH INNOVATION & INCLUSION We prefer “variety” in our pastimes, “biodiversity” in our ecosystems and “diversified” holdings in our portfolios, yet we unconsciously resist diversity in our social and professional communities. This has become a liability in today’s marketplace, costing companies talent, growth & innovative solutions. From your workforce to supply chains; diversity & inclusion of people and ideas are critical drivers for further growth in your organisation. We must move past the tick box exercise, truly embrace diversity, and commit to applying it. Looking out at the business landscape today, it’s clear that diversity is increasingly being valued in its true sense by companies that thrive to improve productivity and profits — and outperform the competition.

WHY YOUR SUPPLY CHAIN IS RIPE FOR DISRUPTION? As we embrace the new digital world that is driven by technological advancement, innovation takes centre stage in every corporate strategy. There is strong evidence that innovation mostly comes from small businesses and individuals, which makes diversity a critical factor to bring new solutions, breakthrough technology and disruptive businesses to market. Diversity within supply chains can not only bring new ideas and solutions to your organisation, but it also brings competitiveness, and boosts market growth. Beyond these commercial benefits, there is the BIG social value supplier diversity brings -

reducing socio-economic inequality and creating stronger, more stable communities. With many global business leaders finally waking up to the positive impact it brings, businesses that understand how to use this to their advantage will stand to gain a competitive advantage and genuinely make positive contribution to a more fairer society. At MSDUK we are delighted to be working closely with Accenture - and especially delighted that we share similar core values. Together our mission is to rewrite the book on inclusive procurement and encourage diversity as a catalyst for innovation and growth. In partnership with Accenture, we are launching the Innovation Hub – a launchpad for ethnic minority businesses that have an innovative idea, solution or product to bring to the market. And through our extended ecosystem of the Knowledge Hub and Growth Hub, we offer an integrated programme of activities, processes and networks to bring those ideas to life and help these businesses scale-up and access global markets. We all have an opportunity right now to embrace diversity as a competitive advantage, examine our own unconscious biases and proactively look for ways to bring different voices to our team and into our decisions. Let your supply chain be the gateway to innovation, embrace diversity and inclusion to unlock hidden potential and give opportunities to the business leaders of tomorrow that represent modern Britain as it is today; multicultural & diverse!

TO FIND OUT MORE, VISIT US AT WWW.MSDUK.ORG.UK OR EMAIL DIVERSITY@MSDUK.ORG.UK VISIT WWW.GSDA.GLOBAL TO LEARN MORE ABOUT OUR GLOBAL NETWORK

INNOVATION | KNOWLEDGE | PROCUREMENT | BENCHMARKING


ACCENTURE

MAN AND MACHINE Nowosel can see a day when man and machine will work as one. “We need to rethink the way we use systems,” he says. “It’s not just the user interface. The intelligence in the system needs to recognise me. It needs to say: ‘Hey, I know you have already purchased something. I know you’re sitting in this type of business. I guess you’re currently looking for these types of buys. This is what’s relevant for you to be

successful.’ So, it’s less anticipating the right product and much more anticipating the right demand by understanding the business. And that is a very different user interface than just making it a little bit more web-based and smartphone enabled. And for me that is one of the biggest things I would really like to break and move away from. I want to take a very traditional process flow and transform it into something that is an

Click to watch Kai Nowosel talk about his approach to work with partners and business enablement within Accenture including their use of new technologies.

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intelligent portal solution that really guides people to the right channels, seamlessly and intelligently.” Does Nowosel ever envisage a time in the future where we could have an AI CPO? “When I worked in consulting, I wrote a point of view on the ‘organisation of one’. And yes, it was a provocation, and I don’t think it will ever happen, because in every business you run, whether it’s procurement, whether it’s marketing, whether it’s

sales, whether it’s R&D, we should never forget about the relationship component, and the human component. But will the role, or will the processes that we are currently performing, shift? For sure, they will. Can an artificial intelligence machine negotiate as good as a human being? I’m 100% convinced they can. We’re seeing it already in the stock markets where we already have machines to machines. So why shouldn’t it happen in a quite common negotiation? But that’s why I’m saying that procurement is moving to something else. The definition of procurement is not ‘am I a better negotiator?’ It is more, ‘am I the better ecosystem manager?’ Or, ‘am I the better window to innovation?’.” It is possibly easy to theorise regarding future systems and processes, but is Nowosel currently putting these words into practice as CPO at Accenture? “Absolutely. That’s where our big partnerships sit, and where our benefit – where my benefit – is. I am sitting in a company that basically invents digital solutions for implementation. I have access to all that.” Accenture has just released a new w w w. s u p p l y c h a i n d i g i t a l . c o m

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DOING BUSINESS WITH WOMEN IS GOOD BUSINESS

We believe diversity promotes innovation, opens doors, and creates partnerships that fuel the economy. We believe a diverse and inclusive corporate culture integrates women at all levels of the organization, from the C-suite to the warehouse floor. That’s why we are dedicated to fostering diversity in the world of commerce by identifying, certifying, and facilitating the development of women-owned businesses.

The Women’s Business Enterprise National Council (WBENC) is a U.S.-based non-profit organization focused on women’s business development and sustainable economic growth. We are the largest certifier of women-owned businesses and a leading advocate for women-owned businesses in corporate and government supply chains. Our Corporate and Government Members with best-in-class diversity and inclusion programs recognize that partnering with womenowned businesses is not just about equality and fairness – it’s about making better business decisions.

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CERTIFICATION WBENC Certification validates that a business is headquartered in the U.S. and at least 51 percent owned, controlled, operated and managed by a woman or women. Our world-class certification standard is accepted by more than 1,000 corporations representing the world’s most prestigious brands, in addition to many states, cities, and government entities.

OPPORTUNITIES We provide education, programming, events, and networking opportunities for women-owned businesses, diversity and inclusion experts, government and corporate procurement professionals, and other industry and thought leaders. From our signature events to executive education programs, we are dedicated to connecting women-owned businesses and our Corporate and Government Members in meaningful ways, as well as providing the programs and resources that enhance business development and growth.

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RESOURCES To address the challenges many small businesses face in building and growing a business, we provide support and resources through the full life cycle of entrepreneurship. Our goal is to ensure women business owners have access to the education, support, and tools they need to grow and succeed.

ENGAGEMENT Our theme is Join Forces. Succeed Together. because we know that success is only possible when we partner with our constituents toward a set of common goals. We foster healthy engagement through advisory councils, ambassador programs, and a robust recognition and awards program, including our annual America’s Top Corporations for Women’s Business Enterprises award.

WBENC Board Chair Theresa Harrison and WBENC President and CEO Pamela Prince-Eason present Kai Nowosel of Accenture with the 2017 America’s Top Corporations for Women’s Business Enterprises award.


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Supplier diversity is

Learn more about WBENC and how we partner with the world’s leading corporations at www.wbenc.org

a propelling economic force.

PROUD BUSINESS PARTNER OF ACCENTURE


ACCENTURE

procurement offering which Nowosel is visibly excited about as a practicing Chief Procurement Officer. “Because this is more than source to pay – which is not all that sexy. We call it Procurement Plus. Procurement Plus gives you a little bit of an indication that our procurement function has a vision that goes beyond a traditional procurement function, that also gives you an understanding about the size of the organisation.” So, what exactly is in the ‘plus’?’ “From a Procurement perspective, I run all venture and acquisitions on a due diligence side and on the commercial synergy side. So, that in itself is already a big team. In the past three years Accenture has completed roughly 70 acquisitions, that is a lot of work to integrate and to bring it into the right process and supplier panel. And we are buying more and more diverse portfolios. So, in the past we bought a lot of IT and now that we own a lot of agencies, we even budget for things like hair, makeup and other logistics for photoshoots and so on – it’s getting quite diverse. So, V&A to M&A is one. I also run all accounts payable, so I really have a P2P responsibility in that logic. 34

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“I also run something which is extremely close to the heart of where I see Accenture and the function going, and that is Supplier Inclusion and Sustainability,” continues Nowosel. “So, I run all our corporate social responsibility agendas that are attached to our supply chain. I also run the contractor business – one of the biggest categories I oversee. I basically do all the contractor onboard identification, onboarding, background checking


EUROPE

MANAGING RISK

442,000

Number of Accenture employees globally

1989

Year founded

$34.85bn Revenue

and qualifications – that is something that you typically would not see in a procurement function, but that you could potentially see in an MSP (managed service provider) setup. It’s so close to our core business and is essentially the revenue driver. As a result, my team is larger than the traditional benchmark If you think about what is known as traditional procurement, it’s probably around double the size of a traditional benchmark.”

Nowosel is also keen to pinpoint the safety features of Accenture’s offerings. “It is extremely relevant that all the partners we are working with are following a very rigid process, a very clear playbook on how we assess and handle risk and controls,” he says. “Not only on our side, but with all the parties we are working with. Some of the players are much smaller, and therefore, we had to enhance the risk framework to something that is not just for the ‘big is beautiful,’ but also for the smaller, dynamic startups that probably have a completely different mindset. With regards to the size of the organisation that I’m running, I’m operating in 69 countries, so I can really claim it’s a global function. It’s definitely a global governance model I’m running.” Obviously, the role of the CPO has changed a lot over the years and the issues CPOs are presenting to Nowosel have also shifted. “I would say it’s not just them coming to me, it’s me, coming to them, with all the issues. I think the role of procurement has evolved big time. If you go back a little bit in CPO history, what have we always focused w w w. s u p p l y c h a i n d i g i t a l . c o m

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EUROPE

“THE ISSUE NOW IS HOW DO YOU FIND THE RIGHT PARTNERS IN THE ECOSYSTEM? HOW DO YOU MITIGATE THE RISK? HOW DO YOU PROTECT THE BRAND? HOW DO YOU GET COMPETITIVE?” — Kai Nowosel, Chief Procurement Officer, Accenture

on is how will we put enough control, compliance and negotiation power into the process? And I don’t think that is what the issue is anymore. The issue now is how do you find the right partners in the ecosystem? How do you mitigate the risk? How do you protect the brand? How do you get competitive? And getting competitive is more than having a great negotiated price. It is having the right solution for your customers at the right point. So, I see procurement moving very strongly

away from a control and compliance and into a business function. “One of the biggest discussion points I have with myself, but also with my peers in the market, is: What is our value proposition going forward? What is our reason of existence going forward? And how do we measure our impact?” “I talk a lot to my peers. ‘What’s your experience with this supplier? How do you approach this type of category?’ I don’t find that too exciting. I find it much sexier to think about how we combine w w w. s u p p l y c h a i n d i g i t a l . c o m

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ACCENTURE

“I SOMETIMES SAY THAT PROCUREMENT IS THE TINDER OF INNOVATION… BECAUSE IT MAKES PROCUREMENT SEXY AND I WANT TO GET INTO THAT MODEL OF BEING SEXY INSTEAD OF BEING A BACKOFFICE FUNCTION” — Kai Nowosel, Chief Procurement Officer, Accenture

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EUROPE

categories – how do I manage an ecosystem? How do I manage to come to a solution? I sometimes say that procurement is the tinder of innovation. I like the word ‘tinder’ because it makes procurement sexy and I want to get into that model of being sexy instead of being a back-office function. I want to have an impact, and that’s probably what I talk most to my peers about. How do we really see our repositioning?”

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

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PROCUREMENT INSIGHTS

— R E K S E THE G N I P E KE G N I V O M

re a s e s s e c o r p s s e P a p e rl s e c r u o s e r p u g f re e i n in y c n e i c i f f e g n i v and dri O O C ’s r e k s E . t n p ro c u re m e ns i a l p x e h t i m S e S t ev H JACOTIN E Written by SA R A


N I A H C Y L P P U S


PROCUREMENT INSIGHTS

H

ISTORICALLY, COMPANIES HAVE always spent a lot of time and money moving paper around. And if any aspect of that business involves supply chain management, then the inevitable large amounts of paperwork can result in a supply chain that’s sluggish and inefficient. In efforts to streamline, companies are increasingly looking into implementing digital technologies in their supply chains, which enables them to vastly increase the speed of processing while also going paperless. It is actually possible to quit paper completely, which has numerous positive knock-on effects, according to cloud-based document process automation solutions provider Esker. Along with doing away with the need for paper, automating every phase and type of business information exchange enables companies to reap a host of benefits in a short space of time; Esker says its solution can deliver a measureable ROI in as little as three to six months. The company, which launched as a software vendor in 1985 in France 42

May 2018

“We can get orders processed sometimes 80% to 90% faster than they could do manually, so they’re getting orders in and fulfilled quickly, keeping customers happier” – Steve Smith, COO, Esker


before branching into document automation, operates across Europe, North America, Latin America and Asia Pacific, and counts global heavyweights Ericsson, Hyundai, Heineken, John Deere, KimberlyClark and Microsoft among its 80,000 customers and millions of licensed users. Esker’s technology enables businesses in numerous sectors to automate manual inefficiencies and low-value tasks 43


PROCUREMENT INSIGHTS

“We’re always looking at ways that we can enhance our solutions and certainly we are now with the B2G (business-togovernment) initiatives in the Americas” – Steve Smith, COO, Esker

in their order-to-cash (O2C) and purchase-to-pay (P2P) processes. Steve Smith, Esker’s Chief Operating Officer, says the company’s solutions are about “keeping the supply chain rolling and getting goods and services out as quickly as possible”. He adds that cloud-based process automation enables orders to get into the ERP quickly, invoices to be issued, purchase orders to be managed, and invoices to be approved and paid as quickly as possible – all without any data 44

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being inputted manually or paper being printed. “We can get orders processed sometimes 80% to 90% faster than they could do manually, so they’re getting orders in and fulfilled quickly, keeping customers happier,” Smith shares. Speed is something that has always been a priority in business but never more so than today, at a time when customers simply don’t want to wait. Younger generations have grown up alongside the digital boom, where everything is available instantly and services have grown exponentially. “We’ve had many customers tell us that it’s been part of their strategy to fulfil orders the same day or within a 24-hour period. Aside from a competitive standpoint, they may offer certain goods and services that mean they have to get their products out faster, and we’re able to facilitate that,” Smith says. “On the accounts receivables side, you’re gaining efficiencies by being able to send invoices in a format where your client can better work with them, so the customers of our customers can accept or request their invoices in

electronic formats. If they still want them via paper, they can get them via paper, if that’s how it works better in their AP (accounts payable) process. It’s the same on the inbound or the P2P; our customers are seeing benefits by having their spend approved before they actually make it, not after the invoice is coming in. Having all the proper workflow to make sure the spend is acceptable means when the invoices do come in from suppliers, they’re paid 45


PROCUREMENT INSIGHTS

much faster as it’s pre-approved.” As well as reducing the time it takes to fulfil orders, going digital reduces the ecological impact a company has. It’s not often you can argue that the most efficient process in any given scenario can align with the best environmental decision, but Esker certainly makes a strong case for that, when you consider that it’s enabling a customer to send and received tens of thousands of digital documents each year, which reduces CO2 emissions and the need to cut down trees. “We certainly know that we are reducing the amount of paper in companies and that there are environmental benefits to it; we know we’re saving trees,” Smith says, before adding that, unlike Esker, saving the planet has not been a key motivator for companies. He admits: “Customers seem to care more about the cost-savings. We actually talked about doing more campaigns around green initiatives in the past but, surprisingly, it wasn’t as high of a priority within companies as we thought it would be. I was actually quite shocked.” Something that will always be popular, 46

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however, is harnessing technologies that enable human resources to be freed up for more valuable tasks, as it delivers salary savings while significantly minimising the risk of human error. “The goal in many cases is to reduce human interaction and automate processes to the highest degree,” Smith says. “Then you can find other reasons to use those humans. With order processing, many customers are repurposing people that were interacting with those orders coming in to more


valued processes.” Instead of workers being pushed out by automation, they can be redistributed to areas that make better use of human skills, though there still exists an opportunity to trim down the wage bill if required, Smith explains. “Where we may see some reductions from the human perspective is where overtime is reduced greatly or they might not need to hire part-time individuals to handle peak period,” he says. Turning his attention to Esker itself,

Smith discusses exciting digital opportunities he wants to seize this year surrounding new legislation. “We’re always looking at ways that we can enhance our solutions and certainly we are now with the B2G (business-to-government) initiatives in the Americas,” Smith shares, referring to e-invoicing becoming mandatory before the end of the 2018 fiscal year for companies in the US that provide goods and services to the government. “We’ve hired a team to really focus on that in the Americas because it wasn’t as big of an initiative here as it has been in Europe and Latin America. We think, with the B2G initiative starting in the Americas, we could see a real spike in growth for electronic invoicing initiatives here. We’re going to hopefully see more activity around our accounts receivable solution.” Moving to Europe, EU directive obligates all contracting authorities to be able to process e-invoices by the end of 2018 and a major e-invoicing initiative launched last year, requiring an interoperable, common standard for B2G trade in Europe, with a deadline for implementation of April 2019. 47


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Smith adds: “We deal with all compliancy issues in Europe and Latin America, and other parts of the world, including the B2G initiatives. We can format our documents to meet all the different compliancy issues that are out there. On the B2G initiatives, we have to tailor the way the invoices are formatted, specifically to the different government initiatives. In Latin America, we’ve got to make sure the government sees invoices before they’re sent out to suppliers, and we’ve got to make sure we’re showing that VAT is being collected with the different compliancy issues throughout Europe.” In terms of what’s on the horizon, promising to disrupt the global supply chain management industry, Smith sees advancements in robotic processing and AI, revealing that this is a “big part” of Esker’s solution. “Through AI and robotics we are able to automate things faster and adapt to everybody’s environment. Even though what we do is similar in every company, in many cases there’s nuance involved with orders and invoices but no matter what kind of document we’re dealing with, having 48

May 2018

robotics and artificial intelligence built into our solutions enables faster adaption to environments. There’s a lot of talk around this right now and in the next few years we’re going to see huge advancements to speed up and enhance the whole supply chain management process.” While discussing companies’ interest in embracing digital documents over paper documents, Smith tells Supply Chain Digital that he experienced a level of resistance to even going paperless until fairly recently. He cites younger generations entering the workforce as a key factor in driving a change in mentality. “I’ve been talking about paperless for probably 30 years and it’s really been in the last five years that I’ve started to see many of the things that we talked about way back when, really starting to take hold. The younger generations are used to using electronics – laptops, tablets, phones – and that’s the way that they are used to doing their daily activities. To receive something via paper seems odd to them and, quite frankly, they’re forcing people even in my generation to think differently,” he states.


“The younger generations are used to using electronics – laptops, tablets, phones – and that’s the way that they are used to doing their daily activities. To receive something via paper seems odd to them” – Steve Smith, COO, Esker

Asked if there is ever a need for paper, he concedes that he does find it useful to have paper documents occasionally – to look over when he’s travelling for instance – but believes “the need for paper has greatly diminished”. “We’ve all learned to get used to paperless ways of communication and we’re finding that it’s just an easier way of doing things,” he concludes. 49


TECHNOLOGY

Advice from Oracle on the third dimension Oracle’s Supply Chain expert, Dominic Regan, discusses the impact 3D printing is having on the supply chain and how the multinational database giant is supporting the dynamic additive manufacturing market by helping to increase business agility, lower costs, and reduce IT complexity Written by DAN B R IGHTMO R E


TECHNOLOGY

O

RACLE IS BEST known for its database services, offered to business since the company started over 40 years ago. This technology background was the platform to expand into applications in the ERP space and several other disciplines including supply chain. Oracle supports the classic approach to designing products, planning and forecasting supply and demand, focusing on procurement and the 52

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sourcing of products in the manufacturing space then providing the logistics of fulfilment via transport and global trade warehouse management before closing that cycle with service, so once a product has been delivered it can manage the repair and maintenance process. Dominic Regan is the Senior Director for Oracle’s Value Chain Execution Management, Oracle Global Trade Management and Landed Cost Management. Regan


“From a manufacturing point of view the physical ability to use 3D printers has been characterised by the ability to create individual, bespoke items” —D  ominic Regan, Senior Director of Value Chain Execution, Western Europe, Oracle

started at Oracle 12 years ago, at a time when the company was addressing the supply chain as a discipline in its own right. “That strategy coincided with a whole new portfolio of services delivered via the cloud. The supply chain brings value to a lot of our customers and as a technology provider we needed to ensure we could offer best-in-class solutions,” he recalls. “We cover a broad supply chain area and a host of technologies are

having an impact across this, from automation to blockchain and IoT, in connecting up people, products and processes. It’s happening now in an unprecedented era of change in the supply chain industry in terms of how things are run. We’ve moved from an internal point of view to focus on what customers are demanding. This has come from the B2C market through to B2B because you can’t look at your customers as one big homogenous group, you have to understand the different segments of the customer base and what’s important to them to support supply chains to enable those different types of models.” With emerging technologies such as artificial intelligence and additive manufacturing now in the early stages

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TECHNOLOGY of creating change, how does Regan see processes such as 3D printing impacting on the supply chain? “From a manufacturing point of view the physical ability to use 3D printers has been characterised by the ability to create individual, bespoke items – we’ve seen orthopaedic devices for procedures such as hip replacements

“Now you can run a standard process for much of a manufacturing line before 3D printing gives you the opportunity to customise later in the process. We’re seeing that in the construction sector where they are producing components which are then used in the manufacturing plants themselves” —D  ominic Regan, Senior Director of Value Chain Execution, Western Europe, Oracle

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in healthcare and bespoke facades in construction, but we’re now also seeing the potential realised for its impact in the volume space. What’s important to Oracle is the way in which it can change the supply chain. The ability for personalisation and the option to postpone that process, means that mass produced standardised items can be personalised late in the supply chain when the required components can be created using 3D printing processes. It’s also changing the demand that the supply chain can meet and provide” Regan believes that, as with all gamechanging new tech, those who adapt early can be the big winners. So what trends is he seeing in the industry and


how is Oracle reacting to them? “The primary driver of what I’m seeing customers want to achieve is not necessarily always related to cost or productivity, but agility,” he reveals. “Companies don’t want to find their ability to react to the market is constrained by their supply chains or

by the solutions that support them. They understand how to balance being large and efficient, but can also see the dynamics in the market are changing due to customer requirements and the influence of new entrants to that market, so what they’re looking at is the need to disrupt with a flexible and agile supply chain to prepare for the unknown nature of how their businesses will transform over the next 18, 24 or 36 months. From a customer perspective, that flexibility can be met with new developments like IoT and 3D printing offering the chance to assemble solutions that are future proofed.” Regan is seeing more focus on 3D printing with Oracle customers who produce medical devices, or in construction where companies provide manufacturing and production facilities. “The advent of 3D printing will give them a lot more flexibility in terms of the production lines they can provide and how they will be used for delivering products to the end customer,” he says. “That will be part of the transition from how things used to be – traditionally you’d set up a supply chain and a manufacturing line and it’s all about producing volumes and keeping on 55


TECHNOLOGY

churning. But if you have to reconfigure to switch from one product to another it takes a long time to achieve that. Now you can run a standard process for much of a manufacturing line before 3D printing gives you the opportunity to customise later in the process. We’re seeing that in the construction sector where they are producing components which are then used in the manufacturing plants themselves. It reflects the desire for agility through smaller more frequent personalised production runs – we’re seeing what happened in B2C moving over to B2B.” 56

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To that end, companies like Carbon, whose CLIP (Continuous Liquid Interface Production) technology allows commercial customers to 3D print manufacturing grade components, are selecting Oracle’s Cloud Applications to modernise systems, transform business processes and help ensure a secure, scalable, and connected cloud suite for their next phase of growth. “As we evaluated our business needs, we knew we needed a future-proof cloud-based solution that could scale as we grow. Not only did we need a sales-ready product, but we also


“We’re going to see a philosophical shift because the primary stakeholder has changed. The challenge is to think with their mind set and understand what the end consumer wants” — Dominic Regan, Senior Director of Value Chain Execution, Western Europe, Oracle

needed a sales-ready business organisation,” asserts Chris Hutton, Director of Business Operations at Carbon. “Oracle’s Cloud Applications help ensure our business processes are seamless so we can focus on delivering the best experience to every customer.” It’s an experience that Oracle is ready and able to support, explains Regan: “If you look at how we work

with the companies that provide 3D printing we have to be able to integrate with them. In a number of our organisations around the world we have what we call startup accelerators to help us work with small companies who have identified a niche in the market with a real opportunity. Through this program they can utilise Oracle office space, working alongside us and our product people to understand the enterprise perspective. This characterises how we approach alliances around new developments. These small, nimble companies don’t 57


TECHNOLOGY necessarily have the desire to be the biggest, most powerful global cloud or tech provider in the world, but they do want to dominate their particular niche. Working with them enables their ability to compete and benefits us as we have new solutions first, which we can readily integrate with our existing suite. Most importantly this benefits the customer as they can get a complete solution made up of standardised best-in-class products for 90% of what they need, but we can also bring these innovative partners to provide the 10% which provides the differentiation. That’s true not just of startups, but of the ecosystem we work in and in my space, logistics. We have partners who do everything from Integration as a Service (IaaS) to connectivity and IoT to the linking of multiple services provided by logistics companies. The value lies in the ecosystem and its ability to solve problems.” Regan highlights the move from IT being bought and deployed locally, where it’s used as a product, to an era where people are effectively buying a service, SaaS (software as a service) and PaaS (product as a service) etc. “That reflects the pendulum shift in 58

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importance from IT to operations which is becoming more flexible,” he adds. “But customers aren’t necessarily interested in the technology behind the solution – they simply want to be able to use it, scale it, deploy it quickly and grow it. I see that from a software perspective and more and more from a hardware, manufacturing perspective and 3D printing will play a big part in that. From a manufacturer’s perspective they’re asking, ‘why can’t I charge per unit?’”


Regan notes that the change in the business model we’ve seen in IT means that companies will have to look at that same business model with the physical service they provide. “For example, if I get a puncture on my car tyre, I buy a new one then 20,000 miles later replace the set… why can’t I buy a tyre as a service?” he asks. “The manufacturer can come along and replace it for me when they tell me it needs replacing, based on sensor information that picks up on degradation and performance.

That approach to buying products as a service will become more commonplace. That has an effect on the manufacturing space because it changes what they produce, and the way they do it, while altering the dynamics of the supply chain. Inventory replenishment at stockists point of sale will still be needed, but the relationship will not always be with the distributor and will move more towards being direct to the consumer.” Regan concludes: “We’re going to see a philosophical shift because the primary stakeholder has changed. The challenge is to think with their mind set and understand what the end consumer wants.”

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LO G I S T I C S & D I S T RI B U T I O N

Inside IBM’s Food Trust Blockchain system BLOCKCHAIN IS HERE, AND IT HAS THE POTENTIAL TO SIGNIFICANTLY IMPROVE SUPPLY CHAIN AND DISTRIBUTION OPERATIONS Written by MATT HIGH


LOGISTICS & DISTRIBUTION

B

LOCKCHAIN. IT’S A word that, depending on your aptitude for technology – or, indeed, your patience for buzzwords – can either inspire or confuse. But here’s the thing, blockchain really is the future. That’s none truer than for businesses that operate or rely on national or international supply chains and complex logistical operations. To give a simple indication of the advantages of implementing blockchain, consider this example: a package of mangoes that you may find at a grocery store can typically take six days, 18 hours and 25 minutes to track back to their farm of origin. Using blockchain it takes 2.2 seconds. The particular blockchain in question is IBM’s Food Trust Blockchain solution. The company is collaborating with a number of businesses, including leading food processor and distributor Golden States Foods (GSF), across the global supply chain to implement blockchain technology into the worldwide food ecosystem. The suggested benefits of doing so are far reaching, and include improved traceability and transparency,

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optimised delivery and efficient transport operations, improved strategic decision making related to cargo and shipping, better supply chain collaboration, fewer operational costs and improved food safety.

CRITICAL FOR LOGISTICS AND DISTRIBUTORS “Blockchain establishes a trusted shared environment for all transactions, providing permissioned access for all verified partners,” says Bjorn Kutz,


“BY INPUTTING CRITICAL DATA POINTS THROUGHOUT THE ENTIRE SUPPLY CHAIN PROCESS, ALL PARTIES INVOLVED CAN VIEW THE TRANSACTIONS TAKING PLACE AND ACCESS THE DATA” – Bjorn Kutz, Program Director, Watson IoT Solutions and Blockchain IBM

Program Director, Watson IoT and Blockchain. “It’s a secure solution that simply and quickly tracks products and transactions with visibility to the different parties throughout the chain. “This is critical for logistics and distributors because it enables businesses to quickly track when and where products have travelled, react to changes and to minimise impacts for all vendors involved.” Blockchain is an open, distributed ledger system that records transactions

between two parties efficiently, but also in a verifiable and permanent way. As it’s secure by nature, it is the perfect solution for recording and tracking events, records and management activities, as well as transactions, provenance of any documentation and issues such as food traceability. The latter makes blockchain the ideal solution for food logistics and distribution organisations according to Kutz, who states that blockchain improves visibility and accountability from all parties. 63


LOGISTICS & DISTRIBUTION “By establishing a trusted environment for all transactions, any business and its food distribution partners – from farm, to restaurant, to customer – can utilise real-time, trusted information regarding the origin and state of food for their transactions to maximise freshness, minimise risk and improve distribution and restaurant operations.”

IBM AND GOLDEN STATES FOODS IBM is presently collaborating with GSF – which has a fleet of 1,000 trucks that make over 25,000 deliveries each week – on a project combining blockchain technology with innovative internet of things (IoT) solutions. IoT refers to any network of devices that uses embedded technology to communicate and interact with an external environment – think connected security systems, sensor systems or, in the case of GSF, real-time data that actively monitors its fleet operations. “IBM’s IoT for Automotive incorporates weather, traffic and telematics data that enables GSF to improve its fleet operations and ensure deliveries are made on time,” Kutz elaborates. “Using this solution, GSF is infusing

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Genius of Things: Blockchain and Food Safety with IBM and Walmart featuring Featuring Frank Yiannas and John Cohn


Blockchain helps products reach stores faster

“B LOCKCHAIN IS ALL ABOUT TRANSPARENCY. IT ALLOWS FOR KEY INFORMATION TO BE RECORDED ON A SHARED, IMMUTABLE LEDGER” – Bjorn Kutz, Program Director, Watson IoT Solutions and Blockchain IBM

cognitive computing and augmented intelligence into its distribution operations to improve fleet management, enhance driver safety and test new capabilities that optimise decision making in areas like energy, equipment and restaurant wellness management.” Leveraging blockchain technology into this system can, through the recording of the information, provide a single source of insights that helps all in the supply chain. IoT can, for example, provide fleet sensor data through a blockchain smart contract that is then shared with other parties in the supply chain, enabling the entire network to have improved visibility of a shipment’s status. The end result is a streamlined and more transparent supply chain. “Using the two technologies together,” says Kutz, “companies can quickly identify potential problems, streamline transactions and identify new opportunities.”

TRANSPARENCY AND SAFETY Of course, an efficient and streamlined supply chain is an essential requirement for any business but ask a food

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Blockchain provides a realtime, and instantaneous view of the entire supply chain

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distributor to name key drivers and you’ll likely receive the same answer: transparency and safety. Indeed, the World Health Organisation estimates that one in 10 people fall ill due to contaminated food each year and, with increased regulation and a growing understanding among consumers of issues surrounding food hygiene and provenance, the message for any business involved in food supply chain is clear – there is no margin for error. Because blockchain provides a real-time, and instantaneous view of the entire supply chain it creates an entirely transparent – and trusted – environment for all transactions, from the farm the food is grown at until it’s sold to consumers. “Blockchain is all about transparency,” states Kutz. “It allows for key information to be recorded on a shared, immutable ledger. By inputting critical data points throughout the entire supply chain process, all parties involved can view the transactions taking place and access the data. For it to work, everyone

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LOGISTICS & DISTRIBUTION needs to participate, which increases accountability.” And, in the unlikely event that a contamination issue should occur across a food distribution chain, blockchain’s recording power is such that it’s capable of reducing the amount of time required to identify the exact point at which contamination occurred from weeks to a matter of seconds. The nature of how blockchain works means that there are associated benefits to implementing it into a supply chain. For some, there’s a common misconception that, because blockchain is decentralised, it’s somehow open to access to anyone. In fact, according to Kutz, it’s one of the most secure methods of recording and managing a supply chain. “Permissioned blockchains make it so only approved parties have access to the information recording,” he states. “This ensures that information is kept secure, private and transparent, but only for the parties involved.”

A NEW WAY OF OPERATING Alongside its work with GSF, IBM is also working on blockchain-based solutions with food giants such as Dole, 68

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Driscoll’s, Nestle, Tyson Foods, Kroger and more, implementing advanced technology that can improve comms, security and safety, and which has the potential to bring significant benefits to the global food ecosystem. Naturally, the complexity of global supply chains and distribution operations means that the implem-


“I BM’S IoT FOR AUTOMOTIVE INCORPORATES WEATHER, TRAFFIC AND TELEMATICS DATA THAT ENABLES GSF TO IMPROVE ITS FLEET OPERATIONS AND ENSURE DELIVERIES ARE MADE ON TIME” – Bjorn Kutz, Program Director, Watson IoT Solutions and Blockchain IBM

entation of a technology as innovative as blockchain isn’t without its challenges. Kutz, for example, cites the fact that it is a ‘team sport’, in that everyone along the chain must be willing to participate. Predominantly, though, he explains that “blockchain requires new thinking and a new way of business operations

that can be unsettling for business that aren’t quite sold on the benefits”. Those businesses need only look at the tangible evidence to understand the potential of a blockchain based supply chain – safety, security, real-time strategic decision-making capabilities, transparency, cost efficiency and more. 69


20th Annual EMEA

Supply Chain & Logistics Summit & Expo Maximise efficiency and minimise costs through supply chain strategies of the future

Key Speakers In a world where digital supply chain disruption is in full swing – how can you prepare to successfully navigate these digital complexities? 70% of executives say they have started digital supply chain transformation, but they may lack a clear understanding of what this transformation entails. So join us at the 20th edition of the Supply Chain and Logistics Summit & Expo, that will take place at the Okura Hotel in Amsterdam on the 4-6 June, to understand how other industry leaders have created their roadmap towards digital implementation.

Rohit Sodha Amazon

Onofrio Caradonna Procter & Gamble

Mirko Senatore Pfizer

Ivanka Janssen Pepsico

Michael Tomuscheit BMW


4 - 6 June 2018 Hotel Okura Amsterdam

Book your place now at www.sclsummit.com

Supply Chain & Logistics Network

#SCLEMEA18


T O P 10

Top 10

Supply chain management software companies Supply Chain 24/7 recently named the top companies for supply chain management (SCM) software. We’ve taken a look at the top 10 based on revenue, how they have grown and why they stand out Written by OLIVIA MINNOCK


T O P 10

09 10

Coupa Software

Coupa Software’s total 2016 revenue from SCM was $114.3mn, a significant increase from $72.4mn in 2015. Coupa’s Business Spend Management Platform offers businesses software solutions across their procurement, invoicing, expenses, sourcing and analytics. It cites some impressive names as clients including Salesforce, Sanofi and NEC. Led by CEO Rob Bernshteyn from its headquarters in San Mateo, California, the company was set up in 2006 with the aim of reinventing spend management software. It now has over 400 customers across more than 40 counties. Coupa has been listed in the Silicon Review’s 30 Most Trustworthy Companies, and is also a certified Great Place to Work.

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Basware

Basware offers automated payment solutions to help firms with everything from e-invoicing and e-procurement to financial software and services. The company was first launched in Finland in 1985 and now connects businesses in over 100 countries and territories. In 2016, it made $122.3mn revenue from its supply chain software, which marked a steady increase from 2015’s figure of $112.6mn. Some notable accolades have included Innovative Procurement Technology of the Year at the Innovate Awards and making Global Finance’s list of Best WebBased Supply Chain Financing Solutions. Basware has worked with some huge MNCs, most notably Heineken, Toshiba and McDonald’s.


07 08

HighJump

Spanning across 66 countries to help over 4,200 customers, HighJump offers a suite of software relating to warehouse management, business integration, transportation management and retail solutions. The company reportedly made $134.9mn in sales of its supply chain software in 2016, marking fairly steady growth from the previous year’s $129.7mn. HighJump aims to help clients “drive growth, customer satisfaction and revenue” through improved supply chain management at all stages. HighJump promises to help its clients remain agile in a rapidly changing economy.

Descartes Systems Group

Descartes made an impressive $159.2mn in 2016 from its SCM offering, marking a year-on-year increase of 9.6%. This offering includes softwareas-a-service for the logistics sector, which aims to accelerate time-to-value and increase productivity and performance within the supply chain. The group has made some notable acquisitions in recent years, pointing to a time of positive growth for the business. These include MacroPoint, Aljex and PCSTrac. Current CEO Edward Ryan has been at the company for nearly 18 years, his previous business having been acquired by Descartes. The company was founded in 1981, and its headquarters is located in Ontario, Canada.

“HighJump promises to help its clients remain agile in a rapidly changing economy”

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05 06

Epicor Software Corporation

International software giant Epicor made $191.6mn from its SCM software in 2016, marking a significant increase from $162.1mn the previous year. However, SCM makes up just part of the company’s overall revenue, which currently stands at around $900mn. As with all its offerings, Epicor offers supply chain software tailored to the needs of various businesses and industries, ranging from manufacturing and distribution to retail. Having been founded in 1972, Epicor now employs around 3,900 people, serving over 20,000 customers across the globe. With the aim to “drive growth for our customers by being the leading provider of industry-specific software solutions and services,” some notable clients include Energizer, Teconnex, Rexel and North American Lumber.

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Manhattan Associates

Manhattan Associates works across wholesale, retail, pharmaceutical, FMCG, manufacturing and many more sectors. From its supply chain management offering, the company made $218.8mn in 2016 and continues to grow, having invested $55mn in research and development in the same year. Since its foundation in 1990, the company now employs over 3,000 people and is a mainstay as Warehouse Management Leader on Gartner’s Magic Quadrant Report, having featured since 2009. Some other notable recognitions have included making Forbes’ ‘America’s 100 Most Trustworthy Companies’ list three years in a row, and the Top 100 Logistics IT Providers for Inbound Logistics over the same period, 2014-16.


03 04

Infor Global Solutions

Infor helps over 90,000 organisations across the world with their digital transformation, including within their supply chains. In 2016, that particular aspect made the company $243.3mn in revenue, a year-on-year increase of $30mn from 2015. From its foundation in 2002 when it had 1,300 customers and operated under the name Agilsys, Infor now boasts 168 direct offices across the globe which house over 15,000 employees. Specifically, Infor’s SCM software works across many sectors including retain, distribution, F&B and industrial manufacturing. The software on offer, Infor Supply Chain, claims to “provide unparalleled visibility and collaboration capabilities, from planning, to execution, to connecting with your entire network of trading partners”. In this way, Infor’s clients can expect an end-to-end solution across their entire supply chain.

JDA

In 2016, logistics giant JDA made $475.9mn from its SCM segment. JDA works across the manufacturing, retail, distribution, logistics, hospitality, travel and entertainment sectors. In particular, the company offers an impressive 3PL (third party logistics) segment which includes “inventory optimisation, omnichannel fulfilment, returns facilitation and even value-added warehouse or manufacturing services”, according to the company’s website. The service helps clients increase productivity, reduce costs and manage risk across their supply chains, as well as improving customer service. JDA was founded in 1985 and currently serves about 4,000 clients in total across over 40 locations worldwide. Among its clients are 20 of Gartner’s top 25 supply chains.

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02

Oracle

Oracle offers software as a service as well as platform, infrastructure and data services. The company has a total of about 430,000 customers spanning 175 locations. The numbers don’t stop there, with Oracle employing 138,000 people including 40,000 developers and engineers, 16,000 support and services specialists and 19,000 implementation consultants. In 2016, Oracle made 78

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$1.5bn in the SCM software segment, an impressive $100mn increase from the previous year. This is, however, a drop in the bucket in comparison with its overall yearly revenue which currently amounts to around $37bn. Oracle helps businesses modernise their SCM processes, offering clients services like product life cycle management, supply chain planning and order management.


01

SAP

Global supply chain master SAP made $2.93bn from its SCM-related software in 2016, which remains a fairly steady figure from the previous year. SAP is the largest business software company in the world and the Germany-based company has become somewhat of a household name since its foundation in 1972. Fast-forward 46 years and the company serves about 378,000 customers, with notable clients including Microsoft, Lennox and Komplett Group. SAP’s IoT and Digital Supply Chain offering promises clients that it will help them digitise their supply chains as well as making collaboration with partners easier within the supply chain. This is done partially though cloud-based deployment.

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‘IoT ne blockc that o config crede perfor action

Could Blockchain Transform Manufacturing? How will blockchain impact the manufacturing sector? Kate O’Flaherty compares the reality with the hype. It is the distributed ledger system that enables cryptocurrencies, but blockchain technology offers new use cases across multiple vertical industries. Within the Internet of Things (IoT), blockchain’s applications go beyond security and authentication to asset tracking and the exchange of smart contracts, which give devices a way of handshaking and exchanging information according to mutually agreed rules. Indeed, the claimed potential of the technology to boost efficiency in supply chains, for example, has resulted in a number of projects and pilot programmes that focus on the IoT. The Trusted IoT Alliance – a consortium of companies that includes Bosch, Cisco, Gemalto, and Skuchain – was formed in September 2017 to focus on how blockchain and the IoT can intersect for business advantage. Recentl AI and blockchain technologies Recently, have been combined by Fetch.AI to create autonomous ledgers that can act as smart agents on behalf of a person, organisation, or technology. iom-uk.internetofbusiness.com

Yet more than most new technologies, blockchain is surrounded by hype on the one hand and criticism on the other. For every claim that blockchain forms the basis of a new data commons, there is another saying that it is slow and inappropriate for 90 percent of the tasks that it is being proposed fo And for every claim that it forms a new, for. more secure bedrock for tracking goods and services, there are voices suggesting that it is a flawed technology. Is the hype real? Innovative ventures certainly abound – using blockchain to track and authenticate contracts, for example, and both physical and digital assets – while even some blockchain experts express reservations about the technology and suggest that it urgently needs to evolve. So, taking all of this into account, what will the real impacts be on the manufacturing sector? The There are multiple uses for blockchain in manufacturing. According to Shaan Mulchandani, global security strategy and blockchain leader at Aricent, blockchain-based processes and smart contracts can facilitate automated security and compliance checks as part of the p manufacturing/building process.


etworks can leverage chain solutions to ensure only devices with valid gurations – or trusted entials – are accepted and rm a limited set of ns.’

He says: “IoT networks can leverage blockchain solutions to ensure that only devices with valid configurations – or trusted credentials – are accepted and perform a limited set of actions.” futu manufacturing will increasingly In the future, see the IoT and blockchain intersect, powering robots that are able to teach themselves, says Van Ostaeyen. He cites the example of Sewbot, a robot that makes clothes without human intervention, which could take advantage of blockchain in the futu to become fully integrated into the future supply chain.

In addition, Van Ostaeyen claims that manufacturing will “become 100 percent transparent through blockchain”. In the future, he predicts: “There will be no tampering, and no fakes or counterfeit goods.” Th claim seems unlikely. However, it is clear That that manufacturing is itself slowly transforming from a slow, monolithic process into a smarter, more automated, more localised one, in which smaller facilities that cater to local needs replace offshore outsourcing, which is based on the lowest labour cost. Read full article.

Radisson Park Inn London, UK 5-6 June 2018 Taking place in London from 5-6 June; the Internet of Manufacturing UK conference and expo is your opportunity to network with and learn from those driving IoT adoption for Manufacturers as well as your peers already benefiting from this innovation.

The summit will examine in detail how Manufacturers can enhance their IoT strategy focusing on ROI, blockchain, additive manufacturing, connectivity, AI/analytics and security. All attendees will leave with tailored roadmaps to the adoption of these next generation technologies to reduce costs, imp improve efficiency and increase ROI.

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E V E N T S & A S S O C I AT I O N S

Events The biggest and best events and conferences from around the world‌ Writ te n by AN D R E W WOO DS


14-16 May 2018 Hamburg, Germany SCIWeek.com

Introducing a New Concept for 2018: 3 IndustrySpecific Events, 1 Week of Cross-Industry Learning. With the rapidly increasing consumer demand for excellence in logistics and the emergence of automation in supply chain, it is now vital for senior executives to get ahead of the latest trends, strategies and techniques while expanding their professional network. Being able to benchmark and leverage best practices with industry leaders is important - however in this current climate, executives now cannot afford to focus merely on the very latest approaches within supply chain as an industry, it is now imperative that they drill down within their specific sector. Taking place at Hamburg’s newest terminal, The Cruise Center Steinwerder - The Supply Chain Industry Week event has been structured for delegates to have a concentrated day of learning and networking while vendors/exhibitors attend on the relevant day for their target audience. Day 1 will focus on Retail, Day 2 will focus on Industrial Manufacturing, and Day 3 will cover Food & Beverage and Chemicals. The conference will offer an interactive format, encouraging lively debate, in-depth discussion and exchange of ideas and best practice.

3 Industry Specific Days

9+ Hours of Networking 60 Speakers

80 Solution Providers 900 Delegates

FREE for Directors

Join us for: • Informative presentations from leaders in supply chain. • Case studies from leading industry figures tackling the same issues you face. • Panel discussions with leading organisations in and outside of your industry discussing topical issues • Roundtable and other formats to encourage peer-topeer learning and benchmarking opportunities across the industry. Maximise your time out of the office – attend for a highly focused day of key learnings or benefit from a whole week of supply chain knowledge.

To join 300 of your peers at Supply Chain Industry Week contact enquire@SCiWeek.com or call +44 (0)20 7036 1357 quoting “Supply Chain Digital” Alternatively, if you are a cutting-edge service or solution provider for Supply Chain and Logistics professionals and wish to increase your presence among the Retail, Manufacturing, Food and Beverage or Chemical industries – please get in touch at +44 (0)20 736 89423

FREE for readers of Supply Chain Digital who register before March. HEAR FROM

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E V E N T S & A S S O C I AT I O N S

ISM Nashville, USA 6-9 May ISM2018 is the ‘must-attend professional development conference of the year’. With sessions developed by industry leaders, ISM2018 is the only supply management conference developed by practitioners for practitioners. Guest speakers will include Mitt Romney (CEO Bain Capital), Arianna Huffington (Huffington Post) and John Rossman (ex Amazon). http://ism2018.org

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10th GPCA Supply Chain Conference InterContinental Hotel, Festival City, Dubai, UAE 8–10 May The 10th GPCA Supply Chain Conference will take place in Dubai on 8-10 May, 2018 under the theme ‘Collaboration for growth: A cultural transformation’. The conference will address topics of organisational health and culture and focus on collaboration as a key driver of growth and a cornerstone of supply chain transformation. Recent studies suggest that more than 80% of organisations globally agree that increasing collaboration with internal and external stakeholders can drive bottom line results and reduce costs of supply chain functions. This important regional petrochemical industry event will cover a wide range of topics cutting across global trends, technology disruptions, collaboration, business optimisation, procurement, organisational culture and fascinating case studies from around the region and globally. www.gpcasupplychain.com 86

May 2018


Internet of Supply Chain Berlin, Germany 15-16 May The only IoT event for supply chain and logistics professionals, providing you with insights to transform your supply chain strategy, deliver transparency, value and efficiency throughout your business. Leading supply chain and logistics operators are facing a perfect storm as huge technological advancement, coupled with changing consumer habits, drive businesses to adapt to survive and thrive in 2018. If you are a forward-thinking supply chain and logistics professional, this conference is for you, providing you with insight to transform your supply chain strategy, deliver transparency, value and efficiency throughout your business by revolutionising your inventory, warehouse and fleet management. https://iosc-de.internetofbusiness.com

5th Annual World Procurement Congress London Intercontinental London, The O2, London, UK 16–17 May Agile Procurement: Thriving Through Disruption is a key theme for this year’s Annual World Procurement Congree, and guests include 50 senior procurement professionals, plus more than 100 speakers from companies such as Adidas, Avril and Shell. Topics to be discussed include digital procurement, cyber security, talent recruitment, upskilling and retention. World Procurement Congress has established itself as the foremost global gathering for senior procurement professionals. https://events.procurementleaders.com/events/congress/ world-procurement-congress 87


2nd Annual

15th-16th May 2018, Berlin , Germany

The only IoT event for supply chain & logistics professionals. Gold Sponsor

Silver Sponsor

Bronze Sponsor

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To re g i s t e r : c a l l u s o n + 4 4 2 0 3 8 4 1 8 3 4 2 , e m a i l : A h m e d a @ i o b - m e d i


Our 2018 Speakers Include

Dr. Dirk Holbach Corporate SVP & CSCO, Henkel

Ivanka Janssen VP Supply Chain, Beverages Category, PepsiCo

Knud Lasse Lueth CEO, IOT Analytics

David Sheldon Head of Global Supply Chain Development, NestlĂŠ

Dario Calderoni SCM Operation Director, Zalando

Anne-Laure Charpenet Director Supply Chain Transformation Project, Le Groupe La Poste

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i a .c o m , o r re g i s t e r o n l i n e a t : h t t p : / / i o s c - d e . i n t e r n e t o f b u s i n e s s . c o m


E V E N T S & A S S O C I AT I O N S

9th Annual North American Supply Chain Summit The Westin Peachtree Plaza, Atlanta, USA 5–7 June The event features 50-plus keynote speakers from companies such as Coca-Cola, Nike, IBM and Schneider talking about the new wave of disruptive digital technologies is transforming processes for businesses and their customers. Discover how leading companies are capitalising on digital trends to update their business strategy, create sentient supply chains and empower the workforce of the future. Organisers have also created dedicated tracks and sessions that address how organisations are driving the responsible business agenda, bringing together experts from sustainability, communications, procurement and innovation departments as well as investors, NGOs, governmental bodies and academics. https://events.eft.com/scsc

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European Procurement Excellence Dresden, Germany 26 June The 13th European Procurement Excellence Summit will continue to offer a high-level platform for intense exchange and high-quality networking to procurement executives from Europe’s leading companies, bringing together thought leaders, highly regarded mentors and influencers whose experiences benefit their organisations and inspire the business ecosystem they operate in. ‘Through inspirational keynotes and small, interactive working groups we aim to contribute to enable Europe’s procurement executives to meet every challenge ahead’. www.bme.de/en/all-events/epe-european-procurement-excellence

Gartner Supply Chain Executive Conference London 23–25 September Gartner Supply Chain Executive Conference is the world’s most important gathering of supply chain leaders, discussing how disruptions large and small confront today’s supply chains on a daily basis and how ‘organisational survival depends on the ability to anticipate, adapt, and transform supply chains to deliver reliability and performance’. www.gartner.com/events/emea/ supply-chain 91


The 10th GPCA Supply Chain Conference will take place in Dubai on 8 -10 May, 2018 under the theme ‘Collaboration for growth: A cultural transformation’. The conference will address topics of organizational health and culture, and focus on collaboration as a key driver of growth and a cornerstone of supply chain transformation. Recent studies suggest that more than 80% of organizations globally agree that increasing collaboration with internal and external stakeholders can drive bottom line results and reduce costs of supply chain functions. This important regional petrochemical industry event will cover a wide range of topics cutting across global trends, technology disruptions, collaboration, business optimization, procurement, organizational culture and fascinating case studies from around the region and globally.


Want to know more? Visit us at

APAC’s Procurement Event is BACK & BIGGER than ever!

www.procureconasia.wbresearch.com

Digital Evaluation Focus Day 10 July 2018 Main Conference & Exhibition 11 - 12 July 2018

The Only Event That Brings Together Asia’s Top CPOs and Heads of Procurement

KAUSTUBH WADEKAR Group CPO Singtel INFLUENCING BEHAVIOURAL CHANGE

DR. CHRISTINA S. S. OOI Head, Group Procurement Malaysia Airlines WOMEN IN PROCUREMENT

QASIM HUSSAIN CPO, APAC & Africa Kellogg ETHICAL SOURCING

ROB HALSALL CPO Westpac New Zealand ROBOTICS & AI

PENNY CHONG Head of Procurement Maybank Kim Eng DEVELOPING NEW AND EXISTING TALENT

KEITH CARTER TEDx Speaker, Author of Actionable Intelligence & Associate Professor of Computing National University of Singapore BLOCKCHAIN AND DIGITAL TRANSFORMATION

BHAVESH SHAH CPO Firmenich STRATEGIC LEADERSHIP OF SOURCING

TAKUTO UEHA Partner McKinsey & Company INFLUENCING BEHAVIOURAL CHANGE

Why You Can’t Afford to Miss ProcureCon Asia 2018 ProcureCon Asia returns for 2018 with a focus on Digital Transformation and Future Proofing Your Procurement Strategy. Benefits of attending: Expand your professional network while networking with over 200 CPOs and Heads of Procurement from Asia’s leading companies including Maybank, Malaysian Airlines, Telstra and Shell – Twice the size of any other procurement conference in the region! Hear case studies from 50+ CPOs and Heads of Procurement including the CPO of Singtel, CPO, Perfetti Van Melle and the Head of APAC Procurement, eBay

Exclusive Knowledge Partner:

Join dozens of small-group, peer-to-peer learning formats and gain a practical roadmap to everyone of the challenges that you face Get real-world examples on how to lead your team in an era of disruption and the future trends that will shape the procurement landscape and the role of the CPO Learn how Blockchain will enable the digital transformation of procurement

Associate Partners:

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Join 200+ Senior Procurement Professionals www.procureconasia.wbresearch.com Phone: +65 6722 9455 Fax: +65 6822 7370

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E V E N T S & A S S O C I AT I O N S

CSCMP EDGE 2018 Nashville, USA 30 Sept–3 Oct Discover over 100 forward-thinking sessions covering real world strategies implemented to maximise and transform supply chains and learn from some of the brightest academics and practitioners in supply chain today. ‘The Council of Supply Chain Management Professionals (CSCMP) hosts the must-attend supply chain event of the year — CSCMP’s Annual Global Conference, EDGE. From leading-edge content to cutting-edge supply chain solutions, EDGE reflects the unparalleled resources CSCMP offers today and symbolises our unwavering commitment to supply chain in the future.’ http://cscmp.org

CIPS SM Awards Queen Elizabeth II Conference Centre, Barbican, London Chartered Institute of Procurement & Supply

31 October Chris Bell FCIPS, Commercial Director – City of London Corporation, one of this year’s judges, and winner of the ‘Procurement and Supply Management professional of the year 2016’, will chair the day while presenters from the various winning organisations will deliver case studies. www.cips.org/en-gb/event

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Now in its second edition, GPCA’s Responsible Care Conference will take place in Dubai on 6 - 8 May, 2018 under the theme ‘Responsible Care® – The Competitive Advantage’. The conference will showcase best regional learnings across the chemical and petrochemical sector and define the future direction of Responsible Care companies in the region. World-class industry leaders will share their accomplishments in the areas of Health, Safety, Security and the Environment (HSSE) not only inside the fence but across the entire value chain. The conference provides a unique opportunity to network and learn from renowned international and regional industry experts about leadership, HSSE operational advancements, regulatory collaboration, and the industry’s future direction.


www.gpcaresponsiblecare.com

www.gpcaresponsiblecare.com


SAP Ariba and the transforming landscape of procurement As the supply chain industry continues to evolve, SAP Ariba plays a key role in defining the future of procurement Written by Dale Benton Produced by Glen White


SAP ARIBA

T

he very nature of procurement and the supply chain is changing. Advancements in technology and innovation have significantly shortened the lifecycle of products, forcing suppliers and procurement functions to transform their approaches. As procurement and supply chain has changed, so too has SAP Ariba. Speaking at SAP Ariba Live in Las Vegas earlier this year, Marcell Vollmer, the company’s Chief Digital Officer, looked to the future of procurement and more importantly, how it will continue to move beyond delivering cost savings and process efficiencies. “For the last two decades, procurement has been on a journey that has led to dramatic transformation. But the journey is just beginning,” Vollmer said. “Over the next 10 years, companies will face more opportunity and disruption than ever. And procurement will play a critical role in maximising these opportunities to create business value. In embracing digital technologies and strategies, procurement can reimagine the function and beyond delivering cost savings and process efficiencies, fuel innovation and market advantage.” Mark Schenecker, VP Supply Chain, Procurement & Networks with SAP Ariba, has seen this transformation happen first hand in large scale organisations, both in culture and in practice.

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USA

SAP Ariba Business With Purpose

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The direct approach to procurement transformation As the pace of digital business accelerates and as customer expectations rise, supply chain transformation has become a priority for many organizations. Reimagining procurement—especially direct materials activities—offers an opportunity to help your organization gain efficiencies, mitigate risks, serve customers better, and identify new areas for growth.


Proactive value For any business, direct materials can represent a huge slice of the actual costs of doing business. But transforming direct materials in a holistic, strategic manner can prove challenging. Deloitte’s Direct Materials Value Transformation approach can help by supporting a more proactive, more strategic approach to procurement. By bringing together a host of capabilities in a unified portfolio, Direct Materials Value Transformation provides a single source of leading-edge solutions for addressing needs all along the source-to-pay continuum. The potential payoff? A tighter, more value-focused supply chain that can support greater supplier collaboration and help you maintain a competitive edge. Elements of Direct Materials Value Transformation

18,500

SAP®-FOCUSED PROFESSIONALS

Strategic insights and SAP technology implementation, supported by a network of 18,500 professionals focused on SAP solutions—and 8,500 focused specifically on the supply chain function

Deloitte Accelerator for SAP® Ariba®, a fully pre-configured SAP Ariba solution that blends cloud and on-premise ERP capabilities

Cognitive spend capabilities leveraging machine intelligence and advanced analytics to identify patterns and generate insights

Global Sourcing Insights to help companies analyze, visualize, and act on complex direct materials sourcing issues

Tax tools to help automate processes such as tax determination

Should-cost analysis and parametric cost modeling

Third-party risk management

Supplier enablement

Supply chain optimization

www.deloitte.com/SAPAriba @DeloitteSAP Copyright © 2018 Deloitte Development LLC. All rights reserved. Member of Deloitte Touche Tohmatsu Limited.


SAP ARIBA

Mark Schenecker Vice President, Strategic Customers Business Networks, Supply Chain

Mark Schenecker works in the Ariba Center of Excellence for strategic customers at SAP Ariba, drawing on over 20 years of experience in SAP Business Suite, supply chain management, business networks, the Internet of Things and SAP Ariba Cloud Solutions. Schenecker transitioned out of the SAP development organisation and now specialises in guiding customers on the Ariba Business Network and supply chain solutions to achieve incremental value with speed and simplicity. Schenecker is a frequent speaker on future technologies and is the author of numerous articles, one book and four patents.

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USA

“People are understanding this more and more. It’s about responding quicker, and more cost effectively and how we can create this near real-time instantaneous communication with our suppliers and treat them as an integral part of our supply chain and network” – Mark Schenecker, Vice President, Strategic Customers Business Networks, Supply Chain

With SAP, Schenecker plays a key role in working on the implementation of industry-leading cloud-based applications to some of the world’s largest companies in order to better collaborate with a global network of partners. Vollmer’s sentiment is echoed by Schenecker, who feels that as the procurement transformation journey will only continue to develop further, now more than ever companies must embrace a far more collaborative approach in order to keep up. “Typically, in the supply chain space, the conversation will start around demand planning,” says Schenecker. “From that, you make up a supply plan based on your customer requirements and then you

share that with the suppliers. This is often referred to as forecasting. “Forecasting, though, is very hard to get right because there’s some level of variability that you just can’t control.” Schenecker points to large companies that tackle this challenge of forecasting demand through collaboration. Rather than spending resources through inventory buffers to mitigate risk in supply, or create more precise forecasting, companies will work collaboratively with their suppliers in order to respond to a change in demand instantaneously. In the ever-changing pace of product cycles, this is crucial to being able to deliver true value to the supply chain. “It’s about making your supplier

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800-440-2137 intrigosys.com


These are just some of the real-world successes that Intrigo and SAP have delivered together. It is not just about technology. It is about spotting opportunities early, ensuring that it is the right fit for your organization, and adapting to en ensure that you can capitalize on them. Often, this requires transforming yourself, even if it means wrenching change. You need the right partner.

$300 million in reduced inventory at Albemarle, $250 million saved at Microsoft, in just the first year.

Intrigo has defined and delivered on large scale digital transformation efforts at some of the most prestigious global corporations. As many of our clients will vouch, their transformation journey was cr created and executed by Intrigo. We have helped our clients reinvent themselves and gain market leadership while substantially improving their bottom line.

range of industries such as High-tech, Fashion, Consumer Products, Manufacturing and Chemicals. Leveraging our knowledge and experience of specific implementation scenarios, we translate our insights into outcomes, ensuring that technology ou and processes are optimized to flourish in today's complex and competitive environment.

Intrigo is an SAP channel partner and a leading provider of Advisory, Implementation and Support Services. Intrigo has a hands-on leadership team who collectively have over 100 successful SAP implementations to their credit. Th These include S&OP, ERP, Supply Chain and Analytics for a wide

Intrigo is a co-innovation partner of SAP in a number of areas including SAP IBP in Supply Chain Planning and SAP Ariba Supply Chain Collaboration for Procurement. We are a recipient of the SAP Ariba award for the innovator of the year, and our entire senior leadership team is recognized in the industry

for their thought leadership, expertise and innovative mindset. Headquartered in the Silicon Valley, we constantly advocate leveraging packaged applications to meet the constantly changing demands of business world. We have registered offices in Houston, Dallas, Jersey City, Heidelberg, Bangalore, Hyderabad and Ba Chennai from where we support our clients across the globe. Our clients include internationally renowned brands such as Broadcom, Oclaro, Corning, NVIDIA, Dolby, TriQuint Semiconductors, Clorox, Aptina Imaging, Allergan, Vishay Intertechnology, and Albemarle.

Learn more at https://intrigosys.com/resources/case-studies/


SAP ARIBA

network tick through collaboration,” Schenecker says. “People are understanding this more and more. It’s about responding quicker, and more cost effectively and how we can create this near real-time instantaneous communication with our suppliers and treat them as an integral part of our supply chain and network.” SAP Ariba works with companies in creating solutions in order to establish and build this “tight knit” collaborative network. Millions of companies all over the world use SAP’s cloudbased network to manage their business relationships and allow their customers to shop, share and save. This network is what enables that true collaborative approach. It allows buyers and suppliers to collaborate on transactions, manage their entire procurement process from source to settle, all the while controlling costs, finding new sources of savings and building an ethical supply chain. One of the key advantages in this collaboration is reducing lead times. A typical plant, when processing an order, could have a month of supply of parts. These parts are either

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stored by a supplier, sometimes via a 3PL, or stored on the factory floor or warehouse. This is often inconsistent and will vary from product to product, part to part. “If we run this through our tight knit collaboration you are looking at significantly reducing inventory,” says Schenecker. “Taking days or weeks of supply of inventory out of the supply chain will reduce costs. These inventory cost savings are critical to reducing the cost of the finished goods. It’s a real big move on the profit line.” Supply chain and procurement processes are often complex, taking into account direct spend (the materials that go into the makeup of a product), as well as indirect spend (services such as facilities management) which, when multiplied across numerous manufacturing lines, represents a significant investment. Schenecker points to the need for change management and how one of the biggest moves in product design is the intimate integration of procurement. Engineers or designers are sometimes in a position where they


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SAP Ariba works with compnaies to establish and build collaborative networks

will purchase parts based primarily on their familiarity with the part or vendor rather than aggressively looking for the lowest cost at the highest quality. “We are witnessing a change in the integration of procurement with design,” he says. “Whereas before it would be a case of sourcing parts to an individual engineer’s familiarity, or just looking at supply chain optimisation, the challenge was that

the supplier relationship was owned by the company or by the procurement team not necessarily engineering. “Now, it is much more individual and much more owned and dictated by the joint efforts of engineering and procurement. “The lifecycle of products is much shorter today and so change management revolves primarily

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SAP ARIBA

around speed, which is incredibly difficult to manage. It can be overwhelming, but it’s about training, coaching and understanding how to leverage the entire process in order to better understand the way that you will work with suppliers.” Through the cultural change and the way in which work is managed, Schenecker notes that the role of the designers, buyers, planners, suppliers, right through the entire supply chain is beginning to converge. Historically, the different suppliers throughout the supply chain process would operate as entirely separate entities. But in this time of shorter product lifecycles, which will only continue to get shorter in the near future, the whole supply network is moving from a serial to a parallel model. “What happens now is design, sourcing, ramp to production are all working simultaneously,” Schenecker says. “You, your network, your suppliers, and your buyers and planners are all working in parallel. “Teams don’t work in a serial fashion anymore, they work in parallel and it

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all overlaps, with each other area.” This echoes back to the importance that Schenecker places on the planning process, as companies are now looking to reuse parts and streamline the introduction of new parts much more than ever before. “Today, companies are constantly cannibalising their products in order to continue to win in the marketplace,” he says. “With the speed at which the market is changing, you have to, otherwise someone else will.” In the procurement and supply chain space there is a firm understanding that you can only be as good as your supply chain. The SAP Ariba Network, which has millions of customers and suppliers from all over the world, sees beyond the realms of being just a supplier and what it means to really be a partner.


USA

“Teams don’t work in a serial fashion anymore, they work in parallel and it all overlaps, with an overlapping of capabilities” – Mark Schenecker, Vice President, Strategic Customers – Business Networks, Supply Chain

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“Sure, you look for a supplier and ensure that they make the right product, the right parts, to the right timescale and right cost,” he says. “But now you have to look at what it actually means in terms of the actual cost to do business with that supplier.” If a supplier has process inefficiencies or does not have the required integration capabilities in this ever-demanding environment of speed, then the buyer has to look at what effect that will have from a cost perspective.

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“Inefficiency for example, will bring inventory buffers into place to cover up a lack of proficiency in communications in the supply chain, which of course means added cost,” says Schenecker. This approach has changed the way in which buyers evaluate suppliers, with the quality and pricing of parts being equally as important as the ability to perform. Performance and performance measurement of suppliers has become as crucial than the supply itself.


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SAP Ariba has worked with supply chain integration specialists Deloitte and Intrigo

Working with suppliers has become centred much more around supplier management than ever before and through close collaboration, SAP Ariba helps buyers to navigate this changing landscape to truly implement new processes with little disruption. SAP Ariba has worked with Intrigo and Deloitte, integration specialists with deep supply chain expertise, as Schenecker describes. These two companies understand the SAP Ariba network, the procurement business processes, complex supply chains

and SAP Ariba solutions, and have successfully helped the integration of new process and new ways of working through close collaboration. Other key partners include Liason, an integration specialist for the buyers that don’t use SAP systems, but through the work of the company can seamlessly integrate to the SAP Ariba Network. SAP also calls upon the work of EY and Deloitte in order to look closely at integration from the change management level,

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approaching the transformation of supply chain with the view of asking the question ‘how do you implement for success?’ “Our partners have been key to us,” says Schenecker. “And the best thing is, they don’t work on just the one area. Sure, you’ll see Intrigo working on integration of SAP Integrated Business Planning, ERP and Ariba with Deloitte running change management, but all of our partners operate under the wider scope of a larger transformational journey.” As SAP continues to redefine its supply chain network in order to continue to provide true value to its supply chain and procurement partners, the question then becomes one of how to keep up the pace with the rapidly changing procurement landscape. After all, today’s best practice will not always be tomorrow’s. “Customers, and not just ours but our competitors, drive us to higher levels of innovation,” says Schenecker. “But we intend to lead, not to follow. Sure, we look to broader market to see what’s happening, but in terms of procurement and supply chain, SAP Ariba is setting the tenor, the direction and the trend for the current market. And we will continue to do just that.”

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“We intend to lead, not to follow” – Mark Schenecker, Vice President, Strategic Customers Business Networks, Supply Chain

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QMAX & TO A

THE JOURNEY

CENTRALISED, OPTIMISED

SUPPLY CHAIN


Through the advent of a centralised supply chain strategy, QMax continues to deliver success for drilling fluids customers in the global oil and gas industry Written by Dale Benton Produced by Denitra Price


QMAX

A

s a company that promises to deliver with no excuses, the role of supply chain is crucial for QMax in staying true to its word. But that is what it proudly promises, and in 2015 the company brought in the talented Veronica Brown to oversee the development and continued growth of a market leading supply chain function. With over two decades of global supply chain experience in the oil and gas industry in roles with both Halliburton and BP, Brown brings significant experience of working with international customers in her current role as Vice President of Supply Chain at QMax. “I have been on both sides of the table when it comes to oil and gas,” says Brown. “I have worked as the operator and as the buyer. So, I understand how things work with regards to buying the products. We need to provide the services, but also how these services are then used by the operator, understanding their pain points, and what they are truly looking for in their product.” The supply chain function

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is undergoing a significant transformation in industries all over the world. No longer seen as a separate business function, supply chain is now recognised as a key driver of growth and, in some cases, guiding the strategic direction of a company. This is no different for QMax. Throughout her career, Brown has seen this evolution happen first hand. “This is something where I think QMax is a perfect example. I sit in planning meetings surrounding the future of the company, where we want it to go, what we want it to be, and supply chain is right there in those discussions,” she says. “It is very clear from the CEO to the VPs of Operations and Technology that they need to work closely with supply chain. It has been refreshing, to say the least. Supply chain is part of the discussion from the beginning, and it really enables true collaboration which, in turn, drives the company forward.” As a global supplier of solutions for


USA

Veronica Brown Vice President, Supply Chain

Veronica Brown holds a BS in Business and a MBA from Bellevue University. She began her oil and gas career in 1994 with Halliburton in Mexico City. Following a twoyear stint in Finance, she moved to a Supply Chain role, and then she was offered a position in the Latin America Region ERP implementation team based in Houston. She then progressed to several management Supply Chain roles within Halliburton before accepting job with BP in 2008. Within BP, she led teams in the Gulf of Mexico Region and as the Global Fluids Category Manager. Early in 2015, Brown joined QMax as Head of Function for Supply Chain.

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“I HAVE WORKED AS THE OPERATOR AND AS THE BUYER. SO, I UNDERSTAND HOW THINGS WORK WITH REGARDS TO BUYING THE PRODUCTS” – Veronica Brown, Vice President, Supply Chain

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Mud plant midland


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drilling needs, waste management, the Middle East, etc. need to order transportation, technical testing products from the US, they contact and analysis services, QMax has our central supply chain team and we always had a logistics arm, but buy the product and ship it to them.” through Brown it has its very first QMax has also implemented a Vice President of Supply Chain. Supply Chain Manager role within Following the acquisition of QMax each country it operates. These by Palladium Equity Partners, LLC managers communicate their local in 2014, the new CEO recognised an needs directly with Brown who, issue across the company, one working with the global team, that saw a siloed way of leverage their global working between supply volumes across the chain and logistics. organisation. This is where Brown One example is a came into play. discount that was Year founded “There was a negotiated with a US logistics department, supplier. Now that a very siloed one, QMax buys directly and there was a with this supplier in representative in every one the US and ships to other of our locations. The problem countries, the whole organization was they never communicated reaps the benefits of the discount. with one another,” says Brown. This is an example of how “So, the decision was made Brown, through her role, has to create a global supply chain an almost real-time view and organisation and this is when my role understanding and of what is was created. One of the changes we happening across the organisation, implemented was to centralise our working with the CEO, operations, supply chain operation. So, when and technology to leverage cost our operations in Mexico, Colombia, savings and enable efficiencies.

1993

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QMAX

Barite silos midland

In three short years QMax and Brown have come a long way, but no supply chain journey ever truly ends. As noted above, supply chain is a continuously evolving space and so Brown understands that the company must not rest on its laurels and continue adapt to this changing landscape. “Right now, as an organisation we are implementing an ERP system that will provide us with greater visibility not only of what we are buying, but also the contract negotiations surrounding that purchase,”

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she says. “We are negotiating a number of different agreements in different countries, and currently there is no visibility to see what exactly these countries are buying, unless I ask for that information. “Having an ERP system in place will provide us with that visibility, but it will also enable us to have a better understanding of our performance and generate better, more valuable KPIs as an organisation.” An ERP system is but one of the many ways that technology is redefining the supply chain


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QMax – Our Solutions

process, and while QMax currently runs most of this data capture through manual processes, technology will open the door to a more efficient and agile function. “Technology, starting with the ERP system, will enable us to improve our planning and demand planning for a product,” says Brown. “Once that is in place, we can add to that, such as transportation management systems. It will make the supply chain work better. I can have less inventory and be more efficient with planning and giving

forecasts to my suppliers.” With any transformation, particularly one that has been, and will continue to be, defined by technology and changing of process, challenge is inescapable. Brown recognises as much. In building the very foundations of a supply chain network to be more efficient and centralised, Brown knew that the first component required to enable change was the people. “Changing the mindset of people, be it operations or sales, and making them understand that supply chain

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“CHANGING THE MINDSET OF PEOPLE, BE IT OPERATIONS OR SALES, AND MAKING THEM UNDERSTAND THAT SUPPLY CHAIN IS NOT A ROADBLOCK, BUT RATHER ENABLERS FOR THEIR JOBS. THAT WAS A CHALLENGE AT FIRST” – Veronica Brown, Vice President, Supply Chain

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is not a roadblock, but rather enablers for their jobs. That was a challenge at first,” says Brown. “As we work closer together, they can see the benefit much better than before. They understand that just because we are not out in the field with the technologies or products in action, it does not mean we cannot come up with innovative ideas and solutions to help them address their pain points.” As a means of reinforcing this message, Brown promotes a culture of collaboration. She insists that everyone on her team meet regularly with their internal customers in operations across the different regions to understand their needs and listen to them. In creating an open dialogue across the entire organisation, Brown and her team are better prepared to help those who need it. This open dialogue extends further, as Brown has redefined the negotiations process through the creation of mixed negotiation teams. “It is not just supply chain going to

Anchor USA a QMax Company negotiate with the supplier. We engage technology, operations, sales, and finance,” she says. “Together we developed a negotiation strategy centred around how we can go out and work with the suppliers, understand exactly what is required, and how we can tailor and shape our negotiations to generate the best possible deal for both parties. For me, that has been a huge milestone for the company.” As QMax continues to grow and expand its supply chain network, Brown points to the implementation of the ERP system as the next big doorway to opportunity, as it will pull together the various elements of the

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Quality Salts and Brines. Reliable Service. Cal-Chlor is an integrated chemical packaging and distribution company, specializing in salts and brines. Known for efficiency and reliability in the global e distribution of calcium chloride products, Cal-Chlor operates facilities in Michigan, Louisiana, and New Jersey, providing access to key oil and gas markets in the U.S. land, offshore, and overseas oil and gas markets.

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supply chain into one centralised system, enabling visibility that will prove key in achieving future success. “My goal for QMax is to grow the organisation in a way that we can manage all the categories of spend, including the indirect spend categories such as IT,

and manage our total spend much better,” she says. “Because they are important. Of course, we want to continue to ensure that we are getting the best product or the best service, but for me it is the centralisation that will drive us into the future.”

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SOURCING THE RIGHT BLEND IN PROCUREMENT Written by James Henderson Produced by Richard Durrant


S TA R B U C K S

THE WORK OF EELCO VAN DER ZANDE AND HIS EMEA SOURCING TEAM AT STARBUCKS IS REAPING REWARDS

G

iven its obvious presence on the high streets of Europe, Middle East and Africa (EMEA), it is difficult to believe that the first Starbucks in the region opened just 20 years ago in London. The brand has exploded in popularity in the intermittent years, and there are now thousands of outlets across the territory. The scale of the Starbucks’ footprint brings inevitable challenges in terms of its supply chain, sourcing and procurement operations, especially when you consider the wide spread of its stores across the geography, and that around 85% its sites are not company-run, instead being run as a licensed operation. Up until three years ago, the sourcing and procurement approach of sourcing partners was to a certain extent fragmented, from time to time

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“I would say expanding our relationships with our key suppliers is very important, getting a better and better view on who are the right suppliers to work with and developing the supply model with them” EELCO VAN DER ZANDE Director Strategic Sourcing for EMEA, Starbucks leading to an inconsistent execution. Enter Eelco van der Zande, the company’s director of strategic sourcing for EMEA who today leads the team for direct and


EUROPE

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We’re proud to be the market leader in plant-based food and drink.

Alpro’s sustainability story

We supply the food service industry with plant-based products that not only deliver on taste and performance, Proudly brought to you by but also on sustainability too. We’re lucky to work with ingredients that inherently require fewer resources than animal-based ones. But our journey doesn’t stop there. We work tirelessly to ensure that we minimise our impact on the environment at every stage of our production process – from plant to pack. So we’re proud to deliver our partners quality products that help them offer greener choices without compromise. Here are some of the steps we take to sustain our planet.

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Sourcing? Only the best

We always start by carefully selecting the highest quality nuts, oats, rice, coconuts and soya beans. We work in close collaboration with farmers and build long-term, mutually beneficial partnerships with them.

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All our soya beans are ProTerra certified, which not only guarantees GMO-free beans, but also means that good working conditions for the farmers and good agricultural practices are followed throughout. For example, our almonds come from the Mediterranean, where the orchards are small and traditional. 90% of the orchards are “fed” by rain and don’t need extra irrigation.

Local? As much as possible

We source our grains, beans and nuts as locally as possible. All our almonds come from the Mediterranean and more than half of our soya beans come from European countries, such as France, Italy, and Austria. The rest come from Canada.

Transport? Keep it light

We go to great lengths to keep our transport footprint as light as possible. Sometimes, that means floating our goods to the factory down a river or a canal. After all, fewer air and land miles mean less fuel and cleaner air.

A sustainable journey in our factories too We’re fanatical about monitoring our energy efficiency, reducing carbon emissions and limiting water usage everywhere we can. And we’ve started putting waste heat and renewable energy sources to good use too.

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Our Tetra Paks are fully recyclable and designed to impose minimum impact on the environment.


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indirect spending for Starbucks EMEA, covering all COGS, operational and capital spend to support a business that generates over $1bn in revenue annually. The Dutch native came to Starbucks with logistics and sourcing experience in Europe and Asia and quickly recognised the challenge. “It was important that we brought together how all of our partners were sourcing; there was a lot of good work being done, but we felt that there was a lack of consistency and that perhaps the right tools were not being used consistently. The various partners were also reporting into a number of different managers so we perhaps were not maximising our output as a team,” comments Van der Zande from the company’s hub in Amsterdam. “We thought about how we could benefit from using standard systems and processes and really look to professionalise the sourcing function. A large part of that was to free up our senior people from admin as there was evidence that it was very time consuming for a lot of them. Another important piece of work was the

SOURCING SUCCESS A great deal of the success of the sourcing team is down to its talent and diversity, according to Van der Zande. “Having a lot of good people, good talents with the right mindset is absolutely critical. I believe the sourcing function really will change through the years from much more internally focused and looking at cost towards more of an ‘outside-in’ and relationship management focus. “I think with that it brings a different mindset, and also a different skillset that is required. It means having the right people that embrace change is just crucial to the success of sourcing teams. On top of that, in my view another enabler to team success is having real diversity in the team. I would describe diversity in different ways – it’s either about cultural backgrounds, but it’s also about gender, it’s about age, and I think by looking at the right balance in your team from a diversity perspective, you get better sourcing teams.”

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â&#x20AC;&#x153;There is a lot of focus on creating endto-end visibility in our supply chain and that will allow us to better understand demand and supply patternsâ&#x20AC;? EELCO VAN DER ZANDE, Director Strategic Sourcing for EMEA, Starbucks


S TA R B U C K S

conversation with our cross-functional peers about how to create value in a defined way. So that was an open talk about costs, innovation, risk and quality, which – amongst other outcomes – led to us changing the team structure so that we are much more focused on licensees and franchises and how they are organised from a sourcing perspective.” This approach has fostered a closer working relationship with the company’s licensees as strategic partners, with very regular communication between licensee groups and Starbucks. “I would say the most important thing for our business to keep in mind is that although the licensees operate our brand, and they have the rights to operate our brand, we almost need to deserve the right to work with them in terms of investing in their business and spending their money. So, the acknowledgement that the licensee is actually the investor and the entrepreneur and it’s their money that we eventually are able to spend, that recognition is just super crucial

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Goglio North Europe offers solutions for packaging materials that must excel in run-ability on packaging lines and must be spot on with expectations on design. Of course needless to say that our offers must match clients expectations on shelf-life to have the final consumers enjoy a fresh coffee, even if it has been packed 6 months ago. Goglio offers total partnership on logistics and forecasting to have demands on-time and in-full. Fres-co System International offers solutions to pack coffee on an automatic packaging machine and maintain it in the best possible ways. We team-up with our clients to determine the best machine that can do their bags at the requested speed and corresponding with all quality aspects you can think of. Last but not least we gladly share our experiences using Industry 4.0 standards that measures variables in order to identify a potential problem before it really happens. www.goglio.it Provincialeweg 200, 506MG Zaandam, The Netherlands +31 (0)75-6518000 Arthur van Dijk | Sales Director Northern Europe +31 6 1508 1975 | Arthur.vandijk@goglio.it

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in my view,” says Van der Zande. “It’s a very close collaboration with our licensees that we require, and it’s exciting, because creating a ‘demand driven value chain’ gives a very entrepreneurial spirit to how we work.” Within the business itself, Van der Zande says that one of his main goals was to make sourcing be seen as a real value creator and ally. “It was important that with the programme of work that we were doing we were not considered the disruptor,” he comments. “We didn’t want to take exciting work away from people, rather

we became a sustainable supporter of driving business. That meant being clear to other departments that we are not cost-cutters or savings chasers, but rather a team to help improving margins and ensuring the top and bottom lines align. “And in our company, as we are so brand and product focused, by definition product related spend gets a lot of attention. So we worked hard to also focus on improvements in nonproduct spend categories, which I think was a really valuable thing to do.” The team has also been driven

Video: Starbucks Year of Good

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“At the moment we have about 9mn mobile paying customers, and in the US at the moment already one out of three customers are actually using mobile order and pay” EELCO VAN DER ZANDE, Director Strategic Sourcing for EMEA, Starbucks


S TA R B U C K S

by a recognition of the importance of indirect spending. â&#x20AC;&#x153;There will always be more of focus on direct, but indirect can and does play absolutely a pivotal role. Take, for example, what marketing services can do to us or the wider benefits of procuring 100% green energy to drive our corporate sustainability agenda. These are really important things for us and it gives the opportunity to actually talk a little bit more to our consumers about what we buy and how we buy.â&#x20AC;?

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By Van der Zande’s own admission, Starbucks has perhaps been guilty of taking quite a conservative approach when it comes to technology adoption in the supply chain in past years. But, he says, its efforts have been accelerated in the last two years, as the company has embraced what technology can offer, to the extent that Starbucks considers digitisation

one of its three key pillars of growth. “It is and will be a major driver of our business,” Van der Zande says. “We expect and have already achieved a lot with what we call ‘Mobile order & Pay’, and its functionality. At the moment we have about 9mn mobile paying customers, and in the US at the moment already one out of three customers are actually using mobile

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Eating is something we do every day. Our mission is to make those moments better and more special.

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order and pay. Thatâ&#x20AC;&#x2122;s quite impressive and our challenge now is to actually expand that platform globally. Each customer coming into Starbucks, whether itâ&#x20AC;&#x2122;s a company-owned store or a licenced store, should be able to order online, or through its mobile app. Through that platform we can actually engage much closer with the customer and actually further grow our business. Then, back to the adoption of technology in the supply chain:

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S TA R B U C K S

“There is still significant work to do on the supply chain and sourcing side, but we are making progress and digitisation is absolutely key to our supply chain strategy. In the two years since Starbucks brought in new, strong supply chain leaders in both global and regional teams, there has been a lot of focus on creating end-to-end visibility in our supply chain and that will allow us to better understand demand and supply

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patterns. We’re working on supply and demand maps, and by doing so that gives us a lot of information in order to further optimise supply chains, specifically our source to pay function.” Clearly, great strides have been made by Van der Zande and his sourcing team supporting Starbucks’ presence across Europe, Middle East and Africa; that 100% of its supplier base comes from ethical sources is something he is, rightly, very proud of. But there


EUROPE

is clearly still an ambition to iterate and continue to refine the function. “We certainly want to continue to grow with our licensees and strengthening our sourcing collaboration with them is something I am very passionate about investing in,” he says. “I would say expanding our relationships with our key suppliers is very important, getting a better and better view on who are the

right suppliers to work with and developing the supply model with them. By doing that I think we get to a better supplier development and recognition programme, which will set us up for further success and future growth: Our licensees, our suppliers and Starbucks.”

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N I M R O F S N N A E M TR E R U C E O C PR NHAN E O O J T T N E D U ST rm a n u t S erine Durrant h t a by C ichard n e t t i Wr by R d e c u Prod


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L A U R E AT E I N T E R N AT I O N A L U N I V E R S I T I E S

Francisco Zuriguel, VP Procurement, discusses his work to transform Laureate’s procurement operations to better serve its students

W

ith a mission to make learning accessible to all, Laureate International Universities enables students to unlock their potential and further their careers. Spanning more than 20 countries, its multifaceted approach has been enhanced through its procurement transformation. Providing world-class sourcing, supplier, product and service capabilities, Laureate’s procurement team enforces the organisation’s global mission to promote accessibility and works to create further value as a strategic partner. “At Laureate, procurement is organised in two regions, the Americas and Europe, Middle East, Africa & Asia (EMEAA). I lead the strategic sourcing across EMEAA,

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guiding a team of high-performance professionals in each country who are responsible for supporting more than 60 institutions that are part of the Laureate network,” explains Francisco Zuriguel, VP Procurement. “I devise and enforce strategic sourcing plans to assure adherence to procurement policies, processes, ethics and supplier relationship management guidelines by all procurement staff. Additionally, I interact and build relationships with internal stakeholders, countries and regional C-suite professionals to understand the needs of the business.” Procurement transformation Throughout his tenure, Zuriguel


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Dr. Nery Parada Bonilla

â&#x20AC;&#x153;I devise and enforce strategic sourcing plans to assure adherence to procurement policies, processes, ethics and supplier relationship management guidelines by all procurement staffâ&#x20AC;? Francisco Zuriguel, VP Procurement w w w. s u p p l y c h a i n d i g i t a l . c o m

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VIDEO: OneCampus by Lau

‘LAUREATE INTERNATIONAL UNIVERSITIES ENABLES

STUDENTS TO UNLOCK THEIR POTENTIAL AND

FURTHER

THEIR CAREERS’

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has continually sought to bring detailed visibility and essential processes to the table at Laureate. “The procurement division was completely decentralised, with a focus on tactical sourcing, with no standardised global processes, policies, or visibility into spending – that could result in inefficiencies or further opportunities for improved controls,” he says. Taking on the challenge with gusto, and with support from Chief Executive Officer Eilif Serck-Hanssen (who previously held the role of Chief Finance


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“Apollon Fanzeres, our Chief Procurement Officer, has been instrumental in building and establishing the Laureate procurement team”

ureate

Francisco Zuriguel, VP Procurement.

Officer) and Apollon Fanzeres, Chief Procurement Officer, Zuriguel has created a world class regional procurement team to serve the needs of its students. “Apollon has been instrumental in building and establishing Laureate’s global procurement team. His leadership and guidance allowed us to successfully execute on the objectives identified within the procurement division. Without him nothing would have happened the way it finally occurred,” says Zuriguel. “He brought expertise in

both procurement and in global companies at the Senior Executive level, as well as an enormous influx of energy that influences everyone from the top, down.” Implementing an increasingly effective organisation structure as a result of the Excellence in Process (EiP) global initiative, the procurement division has developed into a Procurement Centre of Expertise (CoE), incorporating policies, processes and procedures to professionalise its functions. “Today, we operate on a

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geographical and category expertise basis. We have country procurement CoEs and global category leaders providing strategy, guidance and category expertise. Two Regional VicePresidents then look after the country Procurement CoEs, as well as build and maintain relationships with the business and C-level executives,” adds Zuriguel. “A series of shared service centres (SSCs) were also built to

‘ZURIGUEL HAS SOUGHT TO BRING DETAILED

VISIBILITY AND ESSENTIAL PROCESSES TO THE TABLE AT

LAUREATE’

ENVIRONMENTAL SERVICES

FACILITY MANAGEMENT

RESOURCES & INDUSTRIAL

TRANSPORT INFRASTRUCTURE MAINTENACE

UTILITIES

Ferrovial Ser vices is a provider of end-to-end solutions for cities and infrastructure. It has a solid international p r e s e n c e in s t ab l e r e gi o n s an d wit h a w o r k f o r c e o f m o r e t h a n 6 9, 0 0 0 .

www.ferrovial.com


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The Volunteer network in AIEP

oversee transactional operations and tactical purchasing, which enable the Procurement CoE to focus on strategic sourcing.” Team resilience A key focus within Laureate’s procurement operations has been the development of its procurement team. Adhering to a five-year roadmap, incorporating the implementation of business intelligence (BI) and e-sourcing tools, strategic sourcing initiatives, a savings methodology and much more, it is clear that the organisation continues to place procurement at the centre, in order to provide student-focused solutions.

“With the contribution of our country teams, global category directors and peers in the Americas, today we can better serve our students. It is a truly collaborative environment within the procurement organisation,” says Zuriguel. “I work closely with my colleague in the Americas, Jose Mello, where we are constantly sharing best practices and helping each other. He is an experienced and humble professional from which I continuously learn.” With up to 50 employees within the procurement organisation, Zuriguel has sought to eradicate

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L A U R E AT E I N T E R N AT I O N A L U N I V E R S I T I E S

“Laureate has embarked in a new programme called Positive Leadership, where we invest in training and energising our teams, while encouraging best practice and sharing throughout the organisation” Francisco Zuriguel, VP Procurement.

certain obstacles in order to allow for the development of key sourcing strategies. Professional development is also encouraged throughout a number of initiatives. “Laureate has embarked on a new programme called Positive Leadership, where we invest in training and energising our teams, while encouraging best practice sharing throughout the organisation. We provide face to face training, as well as online training, where employees can develop expertise in areas such as strategic planning, change management or leadership. We 158

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also facilitate certifications, if they are interested, like CPSM,” Zuriguel explains. “We also encourage mobility when possible and we always recognise success. It is important to acknowledge others, to make your team to feel recognised. It doesn’t have to be a monetary recognition, but many times a sincere thank you note is much more appreciated.” Supplier diversity Leveraging its supplier partners for quality, innovation, growth and total cost of ownership,


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Laureate has unlocked increased quality and educational services across its entire portfolio. “Apollon decided that we had to have a motto in procurement, which is: ‘World Class, World Wide,’ and we won’t stop until we get there,” adds Zuriguel. “Consequently, our supplier base is quite diverse, where we have an interesting mix of global, regional and local vendors due to our many

Universidad Europea de Madrid

different geographies, as well as a strong base of local suppliers.” With a number of specific services in certain markets, working with local suppliers has supported Laureate’s mission to promote educational accessibility. Its B-Corp certification also cements its drive to work with local vendors. “We work on a global and regional basis with IT and

VIDEO: 2017 Here for Good Awards Winner - Faculty/Staff

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L A U R E AT E I N T E R N AT I O N A L U N I V E R S I T I E S

facilities management (FM) vendors, as well as for specific medical equipment. Other than this, we rely on local vendors,” reflects Zuriguel. “In FM and food services, Ferrovial has been crucial for our FM operations in Spain and Portugal as well as Sodexo that supports us in a number of geographies, working closely with Jose Verdejo, our Category Director for FM. Both companies have helped us to standardise processes. “GE is also working with us on a global lighting project to help us become more efficient in our energy usage, and to become more sustainable, something which is increasingly important for students,” he continues. “With regards to medical equipment or printing, Laerdal, Konica Minolta, 3B Scientific and Ricoh are all working closely with Andre Khoury, our Category Director for Administrative and

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Professional Services, as well as Telefonica, HP, or Optus on the IT side, who are working with Randy Estep our IT Category lead. “We also have good relationships with consultancy firms like KPMG, EY and Accenture that have been supporting us in different projects.” As the industry increasingly moves to put the student at the centre, Laureate will continue to enforce and drive highlevel education, but at the right cost for its students. “Nowadays, students have more information than before and want to have the control and flexibility to study at their own pace. They also want to participate more and be more involved in everything regarding their education and want to take advantage of new technologies as much as possible,” concludes Zuriguel. “Online and hybrid education will become more and more important in the upcoming years to cater to this growing market.”

‘WORKING WITH

LOCAL SUPPLIERS HAS SUPPORTED

LAUREATE’S MISSION TO PROMOTE

EDUCATIONAL ACCESSIBILITY’

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A true root-and-branch procurement transformation


Written by LAURA MULLAN Produced by RICHARD DURRANT

WHILST OTHER TELECOM COMPANIES HAVE STRUGGLED, TURKCELL HAS BLAZED ITS OWN PATH IN THE SECTOR THANKS TO ITS AWARD-WINNING PROCUREMENT PRACTICES


U

NTIL RECENTLY, PROCUREMENT was seen as a necessary, but rarely celebrated, aspect of daily business. But times have changed. Nowadays, procurement sits squarely at the heart of almost every five-year plan and business strategy in a way the sector could never have imagined. Embarking on an ambitious root164

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and-branch transformation of its procurement function, Turkcell has seen considerable success in recent years, reporting record revenues of $4.9bn in its last fiscal year. Ali Türk, the firm’s Executive Vice President of Supply Chain Management, says that by championing resourceful buying practices and close-knit supplier relationships, procurement is elevating the company to new heights. “If you want to stay strong and


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“IF YOU WANT TO STAY STRONG AND COMPETITIVE IN THE MARKET, YOU HAVE TO ESTABLISH A POWERFUL PROCUREMENT FUNCTION”

competitive in the market, you have to establish a powerful procurement function,” he explains. “While the role of procurement used to have a supportive and reactive function, it now has a strategic and central role in the organisation. “We have a responsibility to contribute to the company’s strong

– Ali Türk, Executive Vice President of Supply Chain Management

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“CONSOLIDATING GROUP SPENDING AND BRINGING THE DIFFERENT PROCUREMENT UNITS UNDER ONE UMBRELLA WAS ONE OF THE TOUGHEST CHALLENGES WE FACED” – Ali Türk, Executive Vice President of Supply Chain Management

financial structure, leadership in corporate business, and superior customer experience.”

A DIGITAL OPERATOR Procurement isn’t the only thing that’s changing at Turkcell. A few years ago, the Turkish firm was better known for its mobile infrastructure, but today it has earned its stripes as a fully-fledged digital operator. Growing its value-added services – its digital communication platform ‘BiP’, music platform ‘fizy’, TV platform ‘TV+’, digital publishing platform

‘Dergilik’, search engine ‘Yaani’, cloud platform ‘lifebox’ as well as its legacy communication services – Türk says that the company no longer sees itself as a mobile operator, but as “the only digital operator in the world today.” “Turkcell has transformed its role from being an infrastructure focused service provider into an experience focused digital operator,” he adds. “Our digital services are giving us the opportunity to share every moment with our customers, 1,440 minutes in a day. It gives us a competitive edge over our rivals in the market right now.

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“We closed our last fiscal year with a 23.4% increase in local currency revenues, thanks to our 4.5G investments and successful digitalisation model,” he adds. With a footprint across Turkey, Ukraine, Belarus, Northern Cyprus, Germany, Azerbaijan, Kazakhstan, and Moldova, Turkcell has evolved to become an international technologydriven and customer-centric company.

POWERFUL PROCUREMENT Procurement has played a pivotal role in this shift and, as a result, the chief of procurement has gained a welldeserved place at the company’s executive board level.

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In his role, Türk is responsible for the procurement of approximately $1.1bn in annual capital expenditure (2017). With 300 people in the supply chain management team, Türk says that procurement is contributing to the company’s finances and enhancing its sales activities. “Buying decisions have a direct effect on company’s’ earnings before interest, taxes, depreciation, and amortisation (EBITDA),” explains Türk. “This is one of the most important reasons why we are in close cooperation with our finance people. “It’s helping us streamline processes, better serve our internal customers’ needs and identify better sources of


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supply,” he continues. “In essence, supply chain management plays a critical role in reducing the bottom line spending and increasing the top line revenue growth.” The Chartered Institute of Procurement & Supply, better known as CIPS, represents one of the highest procurement standards in the world today. By overhauling its procurement function, Turkcell emerged as one of the first companies in the country to achieve this certification. Along this journey, Turkcell has seen an ‘external transformation’ whereby it has grown its relationships with its suppliers; an ‘in-company transformation’ which it changed how it

Investing in its people This procurement journey wouldn’t be possible without the talent and expertise of Turkcell’s employees. Therefore, the Turkish company has developed a unique Young Talent Program, Digital Masters Program and Marketing Masters Program to help nurture the company’s skills. “We have taken serious steps towards recruiting the best talent on the market, enhancing the capabilities and competencies of our employees,” says Türk. “Our people are one of the key drivers behind our groundbreaking results.”

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communicated with internal stakeholders and management; as well as a ‘structural transformation’ where its internal procurement function underwent organisational changes.

Ali Turk addresses a group of Turkcell’s leading vendors

EXTERNAL TRANSFORMATION Sustaining strong supplier relationships is a critical aspect of supply chain management and, when working with almost 1,800 suppliers, it’s something Turkcell doesn’t take lightly. As a result of a workshop with its top 20 strategic vendors, Turkcell has started to work towards increasing the transparency of its supply chain, using digital tools like online supplier portals and e-auctions. Vendors can apply for active tenders through Turkcell’s online supplier portal, with 95% of tenders being published publicly. Additionally, with 90% of Turkcell’s sourcing carried out through e-tendering, suppliers can also bid online through Turkcell’s e-auctions. “Online tendering tools are very efficient and transparent,” notes Türk, “so this means suppliers can no longer claim that they have the lowest offer or that their offers are not being assessed. 170

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“The procurement team has also benefited from our supplier’s positive change in perception, the reduction in negotiations, and the data we can collect from submitted offers,” he adds. “We are trying to stop evaluating our suppliers from a price-driven approach and trying to build long-term valueadding partnerships.” On top of this, the Turkish company has promoted an open-door policy with suppliers. This means that if a supplier


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wants to get in touch with Türk’s team they can have a face-to-face meeting in less than two weeks. “Although it can be tough and timeconsuming, these practices have increased the level of confidence our suppliers have in us and it has supported the transparency of the organisation,” he says.

IN-COMPANY TRANSFORMATION Yet, Turkcell has not only transformed

how it works with its suppliers – it also works more closely with internal stakeholders and management to reimagine its procurement function from the inside-out. With a seat at the top level of the organisation, the procurement team has weekly meetings with internal management every week, which has helped to increase its visibility. “With the new C-level presence, the power of distance between top management and the procurement team has vanished,” Türk bserves. “The new structure has increased the confidence of the procurement team and support from top management has helped to enhance the teams’ awareness and capabilities.” Cooperating closely with Turkcell’s finance division, procurement is also helping to manage the company’s strong financials by providing cash flow reports, opex optimisation programmes and capex per revenue analysis, for instance, to see visible financial results. Increasing the visibility of the procurement function, Turkcell has also formed a strategic buying committee which Türk says has been a roaring success. “The strategic buying committee

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was also a great opportunity to impress top management and show how procurement can bring additional value to the business,” he notes.

STRUCTURAL TRANSFORMATION Perhaps one of the biggest transformations, however, is how Turkcell’s internal procurement function has evolved. With over 30 companies under the Turkcell umbrella, the digital operator consolidated its group spending into one centralised procurement team. “Consolidating group spending and bringing the different procurement units under one umbrella was one of the toughest challenges we faced,” notes Türk candidly. “However, the company has not only profited from the increased budget, our smaller group companies were also benefited by the unified processes and contracts which helped to deliver savings.” In the midst of Industry 4.0, digitisation has also had a ripple effect on the company’s procurement function. The Turkish-based company has created a digital cockpit which monitors the company’s supply chain management, sales, network operations, marketing and HR in real time. With the help of this digital cockpit, Turkcell has made dashboards which combine different reporting tools, on the same platform, using different data sources. By developing and customising its current infrastructure, this digital cockpit makes access to information possible in real time monitoring. On top of this, procurement has also developed a supplier integration project with one of its vendors for real-time order monitoring. “Today if your strategies, resource planning, and business 172

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BiP users are able to make voice and video calls as well as messaging services

models are not in line with digitisation, it is impossible to be successful,” Türk says. “Therefore, we have digitised our processes, services and more to make real monitoring possible throughout the organisation.” All of these initiatives and policies have accumulated to form an immense transformation, one which demonstrates the firm’s innovative thinking, strong business practices, and collaborative approach.

AWARD-WINNING PROCUREMENT Turkcell’s transformation has been 174

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a mammoth task but it hasn’t gone unnoticed by the international supply chain community, apparent as Turkcell scooped up accolades at both the Supply Chain Excellence Awards and the inaugural Procurecon Europe in association with CIPS SM Awards. Procurement is a discipline that is defined by the need to meet aggressive cost targets, and thanks to its awardwinning procurement strategies Turkcell is meeting this challenge head-on. Working with around 1,800 suppliers, the company deftly tackles supplier relationship management with its suppliers’ performance management tool and its supplier management system. These tools allow Turkcell to track its procurement processes from endto-end and also allow it to measure suppliers’ performances using key performance indicators. In turn, this is helping to promote supplierenabled innovation and cost-effective procurement. On top of this, the company also manages its strategic business partners using a Key Account Management (KAM) model. Using this model, the firm promotes a dedicated, standardized,


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•T  urkcell reported an 23.4% increase in revenues to TL 17.6bn (c.$4.9bn) in its last fiscal year. •9  0% of Turkcell’s sourcing is done through e-tendering. •9  5% of Turkcell’s tenders are published publicly on its online supplier portal. •T  here are 30 companies under the Turkcell umbrella.

disciplined and heightened focus that ensures tasks are fully completed to a high-standard in an efficient way. Türk also credits the firm’s innovative bundling negotiation technique for some of its success. “We have changed the rules of bundle negotiations and transformed it into a more planned, structured, systematic and collaborative structure,” he adds. Understanding the collaboration is key to success, Turkcell has also organised a Supplier Summit whereby the company can explain its strategies

and expectations, make new business connections, strengthen existing relationships, and discuss new market trends. In a similar vein, Turkcell’s procurement team is collaborating closely with its finance division. By working together, the pair approach the firm’s budget in a very disciplined manner, meeting challenging capex and revenue targets. With enviable financial health and some of the industry’s leading procurement practices, it seems Turkcell is set

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to continue on its upward trajectory. But what are the next steps for the digital operator? As a Turkish company, one of the company’s main focuses is supporting local production and local firms that will contribute to the country. What’s more, the digital company has also revealed that it is participating in a joint venture to create the country’s first national car and it is also helping to develop smart cities using its 4.5G technology. Forecasting a surge in demand for data, Türk also says that the company will continue to tap into the growing demand for data, leveraging its search

engine ‘Yaani’ and developing new tier III data centres. “We expect that demand for data will keep rising as we see more and more 5G technologies,” he says. “Everybody needs to understand that a country which does not own its data is a country that is going to disappear in the future.” In order to keep Turkish data in Turkey, the company notably has several data centres in the country. “All of these data centers have been built to Tier III certification in order to provide security and management services for our customers at the highest international level,” Türk adds. Keen to show leadership in

“WE ARE TRYING TO STOP EVALUATING OUR SUPPLIERS FROM A PRICE-DRIVEN APPROACH AND TRYING TO BUILD LONGTERM VALUE-ADDING PARTNERSHIPS” – Ali Türk, Executive Vice President of Supply Chain Management

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corporate business, Turkcell is also looking for new opportunities as a health technology provider. For example, the company has embarked on a series of city hospital projects in partnership with one of the main health investor companies in Turkey to help usher in a new era of digital hospitals. â&#x20AC;&#x153;We have digitised city hospitals from end to end by installing and managing the latest technological infrastructure and IT management systems,â&#x20AC;? TĂźrk explains. On top of this, the firm is also exploring opportunities as an educational technology provider.

All in all, it seems Turkcell has truly evolved from the company it was when it was first founded in 1994. It has undergone an extraordinary shift, putting procurement at the heart of its strategy. As such, whilst other telecom companies have struggled, Turkcell has blazed its own path in the sector.

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YAMANAGOLD

and the

DIGITISATION of ETHICAL

GOLD SOURCING

Through the advent of the G-Coin, backed by a blockchain supported Responsible Gold solution, Yamana Gold is transforming the sourcing of gold Written by Dale Benton Produced by Glen White


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CANADA

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YA M A N A G O L D

T

he world of mining is changing. Historically known as an industry lagging behind when it comes to the implementation and deployment of technology, over the course of the last five years the mining conversation has turned towards innovation. One of the biggest conversations in mining, throughout history, surrounds the sourcing and supply of raw material, and now a number of companies are investing into technology solutions in order to track, trace and ethically manage its mineral supply chain. One such company that looks for innovative solutions to mining challenges is Canadian gold producer Yamana Gold. The company’s vision states its intentions clearly – to mine precious metals profitably and responsibly. It is this focus on responsible mining that has driven the company to partner with Emergent Technology Holdings to implement an innovative blockchain solution for the responsible sourcing of gold, making it the first in the industry to

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partner with the American firm. “We are not the only ones working on supply chain solutions in the gold sector, but in our view, this solution, in particular, is unique; it adds significant value to both us, as industry participants, and more so to people in communities where we mine and buyers, consumers and investors of precious metals. On the one hand, it leverages blockchain technology to execute supply chain contracts between miners, refiners, logistics providers and buyers in what has historically been a very manual and inefficient process with data recorded across disparate systems and several industry participants. This solution is certainly an improvement. And, perhaps more importantly, it leverages this technology to track and trace the provenance of gold from mine to vault, providing virtually absolute assurance that the gold produced through this supply chain solution is responsible gold, complying with the strictest due diligence standards including the World Gold Counsel’s Conflict-Free Gold Standard. There’s a market for that. We are starting to see pent


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up demand for responsibly-sourced gold from jewellers, electronics manufacturers and even fund managers who have long been driving and promoting socially conscious and responsible agendas. With Emergent, and other supply-chain participants, we have developed an ecosystem to essentially guarantee that production flowing through it is 100% responsible

gold. Now, we and Emergent, hope to populate this ecosystem with as many supply chain participants as possible” says Tony Cina, Senior Vice President, Business Administration, Yamana Gold. “This is an industrywide solution. It is not exclusive to Yamana. If a participant contributes to responsibly-produced gold, then we encourage their participation.”

“Through this ecosystem, we will continue to

mine gold ethically and responsibly with the benefit of more efficiently ensuring that all of our gold is conflict-free” – Tony Cina, Senior Vice President, Business Administration, CPA, CA, ICD.D

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“Tracing gold from the mine site right into a vault, and then ultimately to a currency that you can spend across the world or to transfer money. That, for me, solves a real problem” – Tony Cina, Senior Vice President, Business Administration

“So ideally that means every miner, every refiner, every logistics partner and everyone in the entire precious metals supply chain joins the ecosystem; and Emergent is talking to all the major market players aiming to secure their participation. It is in everyone’s best interest to have one ecosystem that buyers, consumers and investors can depend and rely on. This is a unique opportunity for the gold sector to band together to further contribute to the improvement of social and humanitarian conditions in remote areas” Yamana Gold will utilise Emergent’s Responsible Gold Platform, the

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only permissioned blockchain that tracks responsibly sourced gold from its origin through to the end buyer. Along with supply chain partners, Yamana Gold will use a secure mobile network that scans smart chips in tamper-proof seals to record transfers of custody and other data on the Responsible Gold blockchain. “We had a unique interest in the supply chain element of gold production,” Cina says. “We saw the potential to employ an innovative solution to an industry challenge and we recognized the benefit in developing that solution through collaboration.”


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Yamana Gold first worked with Emergent Technology back in 2016, and this partnership is part of a larger strategy whereby the company has sought out new ways of implementing technology and innovation to refine its operations. As technology continues to shape the world of tomorrow, Joe AbiDaoud, Vice President, IT at Yamana Gold, understands that the very nature in which a mining company must operate is changing. “It’s no secret that every company in the world is becoming a technology company,” he says. “We work in a very cyclical industry that will forever

go through ups and downs, and what we’ve begun to see in recent years is companies understanding that in order to stay competitive, they need to start doing things differently.” And doing things differently is exactly what Yamana Gold has been doing as it undergoes a significant technology transformation. But, as AbiDaoud notes, innovation and technology not only change the practical, physical element of mining, such as the automation of equipment, but innovation is almost driving the strategic thinking and direction of organisations. “The industry as a whole has

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H OCH S CH I L D M IN IN G

SPROTT MINING INC


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been undergoing a significant transformation for quite some time,” says AbiDaoud, “albeit at its own pace and perhaps a little slower than others. This comes down to the cyclical nature. Gold prices plummeted in 2013, and it forced everyone to rethink our operating model. “Technology is one component of that, it’s not the only component but over time it has become more and more integral to the way in which Yamana Gold achieves success and will continue to deliver value.” AbiDaoud entered Yamana Gold in 2017 with a core mission to drive innovation and seek out opportunities to leverage technologies to provide value and to support the overall vision of the company, which is to mine precious metals profitably and responsibly. For AbiDaoud, three core pillars define innovation: people, process, and technology. When organisations think of innovation, they often focus largely on the technology aspect, while AbiDaoud believes the people and the processes are more important. “For some they seem to fail to

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recognise the important impact and role that people and process have to play in helping your organisation innovate,” he says. “Technology can’t move forward if the people and processes don’t move forward with it, so it becomes fundamentally about changing the way we work and the way we operate. Technology in the end is just a tool to do that.” The people element to innovation should not be understated, especially in an industry that has largely operated in the same manner for decades. Technological innovation breeds a cultural change, but as any transformation has shown, cultural change is no walk in the park. Part of that challenge is communication. Yamana Gold approaches this a little differently. “We actually don’t have a technology conversation,” says AbiDaoud. “When you’re speaking about innovation, or doing things differently, we don’t even talk about technology. It’s about talking about business outcomes in a language that’s understandable and relevant


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to the end user’s business. That’s how you get a much more engaged partner at the end of the day.” As VP of IT, AbiDaoud has lived and breathed technology throughout his entire career and so it may be easier for him to say that due to his extensive experience. But it is a feeling shared by Cina, as he sees Yamana Gold’s approach to technology centred much

more around efficiency and effectivity, rather than seeking out problems. “We work with our operations and exploration teams to better understand what challenges they face and together consider whether there are operational or other technologies that could be deployed to resolve those challenges. Our approach is targeted. We do not introduce

“The industry as a whole has been undergoing a significant transformation for quite some time, albeit at its own pace and perhaps a little slower than others” – Joe AbiDaoud, Vice President, IT

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RESPONSIBLE GOLD BLOCKCHAIN SUPPLY CHAIN TECHNOLOGY BY EMERGENT TECHNOLOGY

solutions and then look for problems for which to solve. The solutions are very specific. They either solve a problem or create an opportunity” says Cina. “That’s why we try not to have discussions focused entirely on technology. It’s about how we can become more efficient; how can we produce more ounces both profitably and ethically. It’s about working with our strategic partners and seeking out areas of opportunity, to which we then work collaboratively to find a solution.” The partnership with Emergent Technology and the implementation

of the company’s Responsible Gold blockchain platform is but one shining example of Yamana Gold’s approach to technology, but it is not the only one. Yamana Gold has invested in Emergent’s “G-Coin”, a digital token backed by physical gold sourced from the Responsible Gold supply chain platform. “The conversation started a few years ago from a group consisting of technology experts, fintechs legal experts and gold market participants to look at the possibility of digitising gold,” says Cina.

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“We were invited as the only gold supply-chain representative.” “While initially we were not clear on where the discussion would lead, we quickly caught on to the concept of a digital gold currency that was backed, and had its value supported by, conflict-free gold.” This was a novel concept a couple of years ago. Today it’s a lot more real. And tomorrow even more so. G-Coin, first and foremost, is not a cryptocurrency, it is digital gold. It provides a digital certificate of ownership to physical gold stored in a secure vault, opening access to responsible gold as an investment, wealth transfer vehicle and payment mechanism.

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As AbiDaoud admits, it’s not an answer to a business problem, it’s an opportunity to open up efficiency and profitability, all the while remaining committed to responsible, ethical gold sourcing. Cina adds: “It is not the only digital token of gold in the world, but what makes it different is that it is more than just a digital store of value. It


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can actually be used as a medium of exchange to settle transactions or transfer value. That’s where it’s unique. I don’t know of anyone else that’s using responsible gold to back a viable digital currency. “Tracing gold from the mine site right into a vault, and then ultimately to a currency that you can spend or transfer to individuals and businesses

across global markets - that, for us is innovative.” Cina went on to say that “since the beginning of time, gold has been a store of value. With blockchain technology, gold can now be digitized; you can own it in your digital wallet and no longer have to hold physical gold. But what does the digitization of gold really solve if all you have done is alter the form in which wealth is stored?” Cina argues, “not much. But when you introduce the ability to spend and transfer gold as if it were cash, instantly,

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with zero transaction fees and in the smallest of denominations - that is a real solution. That’s innovative” Cina believes that the case for G-Coin is especially feasible in emerging markets, where currencies are more sensitive to inflation and currency devaluation and in some cases subject to currency controls. “The introduction of a gold-backed digital currency becomes extremely appealing to individuals and businesses in those markets”. Users will now have the ability to convert their local currency into the G-coin and protect their wealth and purchasing power. Through the Responsible Gold platform, and the advent of G-Coin, the mining landscape is well and truly on the cusp of great change. The demand for conflictfree gold has already begun to surge over recent years, with more and more participants looking to change the way in which they purchase and acquire gold. But what does the future truly hold for the ethical sourcing of gold? Cina feels that, in actual

fact, we could see a whole new gold asset class. “In 5-10 years, or perhaps less, as demand for responsible gold continues to increase, responsiblegold emanating from this ecosystem may become a new and distinct asset class, demanding a premium to gold otherwise produced. This bodes well for the sector, its participants and for the people in areas where we mine precious metals.” This is why we got involved: good for gold and good for society – profitably and responsibly.” Yamana Gold started this journey of digital transformation in 2016, but with technological innovation there is never truly an end to that journey. The official launch of G-coin is targeted for the third quarter of 2018, with the back-end technology already in place, but where does Yamana Gold go from here? “With everything in place with regards to that launch date, the goal for Emergent is to introduce and integrate G-Coin into payment walls and wallets in those emerging markets,” says Cina. “Emergent expects to process approximately $2

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“There is great opportunity for us as an industry to become much more collaborative and unified in our approach to innovation” – Joe AbiDaoud, Vice President, IT

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billion in transactions and payments in these markets over the next year and are looking to have G-Coin become a widespread alternative to traditional payment methods, ultimately pushing gold to become the most liquid asset in the world.” For AbiDaoud, the future is one of possibility and collaboration. “There is great opportunity for us as an industry to become much more collaborative and unified in our approach to innovation,” says AbiDaoud. “What I’d like to see is an ecosystem that all industry participants are a part of, with real benefits to everyone. That would be a tremendous accomplishment for the mining industry.”

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ENABLING LEADING

EDUCATION THROUGH

WORLD-CLASS PROCUREMENT


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How an environment of continual improvement in the university’s supply chain has supported the positioning of King Abdullah University of Science and Technology as a leading light in the GCC’s higher education sector

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audi Arabia boasts a number of leading universities, and, while not one of the oldest, having been established in 2009, King Abdullah University of Science and Technology (KAUST) ranks among them. The university is quickly and consistently gaining a reputation for excellence—in 2013, KAUST was recognised for delivering some of the fastest-growing high impact research, expressed through the number of prestigious citation in recognised publication. Also, in 2016, Nature ranked KAUST 19th in the world as one of the fastest-rising universities for high-quality research output in the Nature 2016 Index Rising Stars. In addition, KAUST was ranked as the world’s top university in citations per faculty ranking indicator as per

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the QS World University Rankings for 2015-2016 and 2016-2017. At inception, the university’s procurement team numbered just 15, all of whom worked in contracting roles, with the supply of research materials outsourced. It was soon recognised that the supply chain was integral to the achievement of the university’s research objectives and indeed the success of the university and that it can be affected by many unforeseeable variables, the decision was made to in-house this function. Purchasing, logistics, permitting, customs clearance and warehousing were then established, progressively increasing the number of professionals to around 160. From the early years, it was recognised that the procurement


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KAUST Breakwater Beacon

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LEADING GLOBAL EXCELLENCE IN PROCUREMENT AND SUPPLY CIPS, THE CHARTERED INSTITUTE OF PROCUREMENT & SUPPLY, ISâ&#x20AC;¦

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THE PROFESSIONAL BODY A not-for-profit organisation that exists for the public good, promoting and developing high standards of skill, ability and integrity among procurement and supply chain professionals.

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A COMMERCIAL ORGANISATION CIPS helps businesses and governments around the world to excel in procurement and supply, supporting them to improve and deliver results and raise standards.

A GLOBAL COMMUNITY We are the world’s largest professional body dedicated to procurement and supply with a community of over 200,000 professionals in over 150 countries, and offices in Africa, Asia, Australia, the Middle East, Europe and the USA.

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function and its role needed to develop in tandem with the university, which was steadily increasing its applied and pure research activity. This led to the strategy of having a continual improvement process that has spanned over the past nine years. This process has focused on improving the speed of the supply chain and improving the positioning of research materials along the nodes of the supply chain. The program of improvements was overseen by Christopher Harvey, Head of Procurement; Sayed Magthum, Head of Supply Chain Services; and Ismail Alfarooque, Manager of Customs and Compliance. Speaking from the KAUST campus located on the Red Sea at Thuwal, which is just north of Jeddah, Harvey reflects on the improvements that

have shaped the last nine years, commenting: â&#x20AC;&#x153;There has been a concerted and continual effort to improve and develop. For example, in 2011, the lead time for us to get research materials from our key vendors warehouses to our professors was around one and a half months, which weâ&#x20AC;&#x2122;ve managed over time to bring down to less than three weeks. That compares with other locations in the region, where the lead time for these materials is two to three months or more, so cutting that time enables our professors to carry on with their research initiatives.â&#x20AC;?

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“THERE HAS BEEN A CONCERTED AND CONTINUAL EFFORT TO IMPROVE AND DEVELOP. FOR EXAMPLE, IN 2011, THE LEAD TIME FOR US TO GET RESEARCH MATERIALS FROM OUR KEY VENDORS WAREHOUSES TO OUR PROFESSORS WAS AROUND ONE AND A HALF MONTHS, WHICH WE’VE MANAGED OVER TIME TO BRING DOWN TO LESS THAN THREE WEEKS” CHRISTOPHER HARVEY, Head of Procurement

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Along with improving the speed and sustainability of the supply chain, KAUST has focused on bringing research materials closer to the bench. By implementing an online chemical tracking system by Jaggaer, the university and its professors monitor the stocks of research materials held in the laboratories, allowing researchers to share acquired resources and avoiding the need to buy. In addition to these stocks, the university has implemented a freezer program holding consignment life science reagents from the main manufacturers. This, along with a chemical warehouse holding over 4,000 SKUs, enables the most common materials to be readily available. Another popular initiative has been the chemical and consumable reuse program. Part-used or unused chemicals and consumables are returned to the warehouse where they are offered up free-of-charge to other users. This process maximises use and reduces hazardous waste. Lab equipment is also reassigned across the university to maximise


5 years. 1,000 Suppliers. 90,000 paperless invoices. 1 outstanding university. When King Abdullah University of Science and Technology (KAUST) wanted to remove the friction from their AP processes, they

Christopher Harvey Head of Procurement KAUST

chose Tungsten Network for its compliant e-invoicing capabilities. Over the past five years, we’ve served as KAUST’s trusted e-invoicing partner, and today we believe the results speak for themselves.

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to us during this transformation. Their ongoing commitment to us is demonstrated perfectly through our recent project to develop a VAT compliant invoice solution.”


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its usage. Standardisation of such equipment has become the norm, meaning the maintenance department can be more proactive rather than reactive. Furthermore, KAUST has contracted with partners such as Thermo Fisher Scientific, Merck and VWR, part of Avantor â&#x20AC;&#x201C; organisations that are willing to adapt their business models to the needs of the university. Successful examples include the reduction in the time preparing shipments for export and increasing their in-stock first time SLA.

Working with companies such as SAP, Jaggaer and Tungsten has enabled KAUST to implement tools such as e-catalogues, an online procurement portal and e-invoicing. These tools have enabled more than 40% of the transactions to be automated from order to invoice, allowing time to be freed up for more complex, strategic actions. Furthermore, working with Kintetsu World Express, Biocair and DHL has ensured that logistics are aligned to KAUSTâ&#x20AC;&#x2122;s customs and compliance needs and that goods arrive in a viable

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KAUST customs and compliance team

quality. The Permitting and Customs Clearance team require a high service level from our logistics providers to ensure that they can adapt to the needs of the Saudi Arabian Ministries and Saudi Customs, enabling KAUST to clear the materials in a fast and efficient manner. At the outset, the university inherited its supply chain and procurement model from that used by Saudi Aramco, which Harvey says is “great for an energy company, but not really suited to a fast-evolving university”. In 2016, KAUST teamed up with a consultancy firm, Efficio Consulting, to review its processes to align them to the needs of its customers. As a result, it came up with a simple vision – to create a procurement function that added

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value, featured less bureaucracy, and was more customer-focused, while still remaining transparent. “We combined the contracting and purchasing teams to form Procurement Services and created a service that was more aligned to our customer’s needs, through the use of category planning, SRM and other techniques. It was something that hadn’t been done before, which enabled us to introduce a strategic planned approach to procurement,” comments Harvey. “We then looked at our governance by considering risk and value, which enabled us to approach our more transactional


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KAUST

procurement with a light touch, while keeping stronger governance for our high-risk and high-value actions.” Today the function is split between Procurement Services, which is comprised of 50 staff members, and Supply Chain, which has 75 staff members. Together they facilitate the smooth running of day-to-day operations. “We are handling a medical centre, an advanced ICT infrastructure, thousands of houses and so on. It’s like running the procurement function

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of a university with a town council bolted on, and to do that effectively, we’ve had to develop our staff,” says Magthum. “Procurement is perhaps not as advanced here as it is elsewhere, so development is really important. We have implemented a development programme, that to date we believe is best-in-class.” Currently, 14 have graduated with MCIPS, which bolsters the number of qualified professionals to 60%, with a new cohort kicking off the journey in 2018. The Supply Chain and Procurement


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teams have also been strengthened by a healthy complement of Saudi talent. Noting the importance of developing local expertise in line with the Saudi leadership’s Vision 2030, Magthum says: “What we’ve never tried to do is rely on expat labour. Since our inception, we have tried to bring in young Saudi graduates and develop them with us.” “Part of the transformation was to focus on the staff development and creating opportunities,” says Harvey. “We’ve restructured the

“WHAT WE’VE NEVER TRIED TO DO IS RELY ON EXPAT LABOUR. SINCE OUR INCEPTION, WE HAVE TRIED TO BRING IN YOUNG SAUDI GRADUATES AND DEVELOP THEM WITH US” SAYED MAGTHUM, Head of Supply Chain Services

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THE POWER OF PROCUREMENT PARTNERSHIPS KAUST has built some hugely important partnerships in the last decade, all of which have played a part in developing a best-inclass procurement and supply chain function. Here, Christopher Harvey and Sayed Magthum comment on a few of its key relationships KINTETSU WORLD EXPRESS “We have a very good working relationship with KWE who are our main freight forwarder. They collect all of our materials for us and we get excellent data from them, so we are well prepared to clear goods from customs.” TUNGSTEN NETWORKS “When we first established, all of our invoices were delivered by hand, but now they are pushed through Tungsten, so all of our invoices come through on XML. Paper invoices are a thing of the past. “Tungsten were new to Saudi so we had to together closely to understand the legality of e-invoices, and they worked well with us recently on the VAT implementation to ensure all of our invoices were compliant.” SAP SAUDI “The ERP system that we use is SAP, and they helped establish the systems when the

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University was initiated. So, our orders are placed through SRM, our warehouse stock is managed by MM, and we use FI for our payment processes. The whole system is SAP.” THERMO FISHER SCIENTIFIC “We’ve developed a strategic partnership with Thermo Fisher Scientific where one of their staff sits in our maintenance department. We get access to their manuals and a lot faster access to their spare parts, which is really important. We are now trying to establish a cXML connection with them so they can process our purchase orders even faster. Also, recently the Thermo Fisher Scientific Electron Microscopy Centre of Excellence opened at KAUST” VWR, PART OF AVANTOR “Over the years we have established a close relationship with VWR, enabling them to pick, pack and ship our materials using the correct shipping options available to us. This has enabled us to establish a third-party program for ordering materials from suppliers with less experience in trading with KAUST”


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team to make it easier for people to develop through the ranks. We had a lot of entry positions and a few high grades, but now we’ve squeezed the pyramid so candidates are not competing against – say – 15 others. They’re up against four or five, which makes development more achievable. We want our staff to feel like they can rise through the ranks with us.” With the team now in a stable function, members have been reaching out to other organisations to enable the sharing of best practices. This has led to KAUST working other Saudi institutions and organisations, such as Saudi Aramco, King Abdullah Medical City and King Fahd University of Petroleum and Minerals (KFUPM). “We see the next stage of our development is to encourage our suppliers to trade similarly with other Saudi companies, as we are often the sole client they have here,” says Harvey. Having developed the procurement and supply chain functions to such an extent, Magthum says that the key role for the teams is now to

make the university competitive in what is a tough economy. “The goal currently is to save the institution money. We know that with the world and local economies as they are, we have to be as efficient as possible. We have to invest time with our key suppliers and build them as partners so that the relationship is strong and the service is right. “Regarding the future, this will almost certainly involve incorporating global best practices and up-todate technologies,” he adds.

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“We are spending a lot of time looking at spending analytics, so we are developing a better understanding of where we are spending our money,” Magthum continues. “It means we can better predict our outgoings and identify where we can improve our savings. While full use of AI is a ways off, we are working on areas such as a multi-platform tracking system so that our researchers know what materials are coming in, where they are in transit, etc. That is a big piece of work that includes integrating our suppliers, freight forwarders, couriers, permitting team and customs clearance. What it will mean is that we’ll be able to more accurately identify where goods are, manage our customers’ expectations and enable our people to more accurately schedule their research.”

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FETCHR

Disrupting the courier market with GPS tracking Written by Laura Mullan Produced by Heykel Ouni


FETCHR

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H E U N ITE D N ATI O N S estimates that as many as 4bn people around the globe live in places where there are no street names or numbers. This is particularly prevalent in the UAE and the Middle East, but is also common in emerging markets like Pakistan, Nigeria and Egypt. This simple lack of an address can have big consequences â&#x20AC;&#x201C; it makes receiving deliveries difficult and it makes e-commerce Approximate number sluggish. However, of employees at Dubai-based Fetchr Fetchr believes it has the answer, and itâ&#x20AC;&#x2122;s in your pocket. Tapping into the GPS location service on your phone, the international courier service is revolutionising the world of shipment and delivery in both the Middle East and abroad. By leveraging cutting-edge technologies and tracking systems, Fetchr enables delivery of parcels directly to you, wherever you are.

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“In these regions, drivers might pick up 30 packages at the warehouse in the morning, and then they will call the consumers. The customers will then have to actually describe their location and say ‘it’s the second street on the right after the grocery store’, for instance. “It’s very suboptimal because your fleet is subutilised,” he adds. “It’s also a huge pain for the consumer because they have to repeat this conversation every time they receive a package. It just doesn’t — Idriss Al Rifai, Founder work and the and CEO un-delivery rate is extremely high. “About 30-35% of A GAP IN THE MARKET packages don’t get Cities where Fetchr The usual delivery delivered because the operates from system in the Middle driver cannot find the globally East is an unpredictable customer. It’s a big one, explains Fetchr Founder problem, and this is why we and CEO Idriss Al Rifai, and this is how decided to deliver straight to your the Dubai-based firm can disrupt the mobile phone. People spend a lot of industry with a simple solution. time on their smartphones and so it’s “Whether you’re in the Middle East, a device which you have with you most Pakistan, Nigeria, Egypt or elsewhere, of the time. there are so many countries in emerging “We use the GPS location on your markets that don’t have address smartphone so you can receive your systems,” he says. delivery anytime, anywhere – that’s

“We use the GPS location on your smartphone so you can receive your delivery anytime,anywhere – that’s the genius of Fetchr”

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the genius of Fetchr.â&#x20AC;? By using GPS, Fetchr is not only circumventing the problem of not having an address, it is also tapping into the mushrooming mobile market in the UAE. The region has the highest level of smartphone penetration in the world, according to a report by Newzoo, and so Fetchr has a promising target demographic. This successful concept has taken hold in the region, and for Al Rifai, there w w w. s u p p l y c h a i n d i g i t a l . c o m

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is one statistic that sums up the company’s success – its undelivery rate. “For a traditional logistics company in the e-commerce market, the undelivery rate is anywhere between 25% to 35%. This means about 30% of parcels never gets delivered either because the customer doesn’t want it, the delivery company cannot find the customer, or the experience has been so painful that the customer decided to cancel it. “‘Cash on delivery’ is the typical payment method for e-commerce in 224

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the UAE, and so if a parcel is undelivered that’s a huge cost. In contrast, our return rate is only about 6%, which demonstrates how different we are.

A TECH-DRIVEN COMPANY Like apps such as Uber and Deliveroo, the Dubai-based company uses an algorithm to match couriers with pick-up and drop-off points. Its basic service asks customers to choose a time slot and also offers the option to drop-off a package with a receptionist or a safe space.


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As well as this, the company’s Fetchr Al Rifai. “Everything at Fetchr is cloudNow offering can also pick up your based, dynamic, and run by algorithms package in less than 45 minutes and whereas many other logistics companies deliver immediately to the recipient. are based on pen and paper. Being able to use GPS locations is “Being dynamic is so important to us,” important to the company – “From he continues. “It means we can adapt a consumer perspective, it’s very to consumer requests, whether that’s important to have full visibility and changing a location or bringing a new traceability on where your order is and task to the system. the estimated time of arrival,” “We’ve made the platform explains Al Rifai. However, scalable but perhaps, the firm is also proud most importantly, we’re of its dynamic, building something technology-driven that we wish we had vision. when we’re on the Disrupting ‘the last other side of the table.” Number of nationalities mile’ delivery industry, employed globally ‘NEXT DESERT UNICORN’ the firm partnered with by Fetchr Hailed by Fortune as the Eniverse Technologies ‘next desert unicorn’, Fetchr and Skycart last year to has come a long way since its deliver the very first autonomous humble beginnings. Like many tech drone delivery service in the region. startups, the first few years of the It may be a while before you receive your first parcel by air as this technology company’s life were challenging ones, Al Rifai says candidly, but since then is still in its early stages, but it clearly demonstrates Fetchr’s commitment to its promising concept has helped it achieve worldwide success. reinventing the logistics landscape “We started Fetchr with three devewith new technology solutions. lopers and six years later we now we “We’re a technology-first company have close to 3500 employees,” he that happens to do logistics,” notes

40+

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• In the UAE, retail represents about $426bn in sales, and e-commerce represents about 1.9% of that. • We started Fetchr with three developers and six years later we now we have close to 3500 employees • For a traditional logistics company in the e-commerce market, the undelivery rate is anywhere between 25% to 35%. In contrast, Fetchr’s return rate is only about 6%.

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“We’re a technologyfirst company that happens to do logistics. Everything at Fetchr is cloudbased, dynamic, and run by algorithms” — Idriss Al Rifai, Founder and CEO

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says. “We’ve grown rapidly. Last year alone, we grew by 600%. Right now, we’re recruiting about a hundred people a week and we’re still growing.” Fetchr’s progress can not only be seen by its expanding employee count, it is also evidenced by its growing global footprint. Using its growth in the UAE and its presence across 6 countries today, the Dubai-based firm is now turning its gaze to Kuwait, Pakistan and beyond and is planning to be in approximately 12 markets by the end of 2019.

REINVIGORATING E-COMMERCE With this ever-growing reach, the delivery courier service is also helping local merchants and brands build, launch and grow profitable ecommerce businesses in the region. “In this region, retail represents about

$426bn in sales, and ecommerce represents about 1.9% of that,” explains Al Rifai. “This is extremely low if you compare it to other regions such as the UK, the US or China – the main reason for this is that logistics has been a big impediment of e-commerce growth in the region. “Over the last six years we’ve grown quite a lot and we now serve all top 10 ecommerce companies from the region and outside the region,” he continues, “but I think it’s just the beginning of the story. We’re still investing in technology, and better customer experience so we’re definitely on the right track to continue this growth and unlock the region’s potential.”

Click to see how logistics app Fetchr works

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Idriss Al Rifai Idriss Al Rifai is an entrepreneur passionate about disrupting the Middle East retail market with technologies and customer-centric services that enable the growth of e-commerce in the region. Idriss has developed and optimized a last mile delivery solution specifically for the e-commerce needs and requirements in the Middle East. In 2012, Idriss founded Fetchr which has evolved to become a full end-to-end logistic solution, backed by technology, for e-commerce companies, regional players, social media sellers as well as SMBs in the MENA region. Fetchr is also the first company in MENA to raise $52M in funding to date ($11M Series A and $41M Series B), led by a top tier Silicon Valley VC, New Enterprise Associates. Idrissâ&#x20AC;&#x2122;s goal is to empower all deliveries through technology in emerging markets. Previously Idriss worked for MarkaVIP, a leading ecommerce

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player in the MENA region, where he headed the operations and built an in-house logistics department for the company to expedite deliveries. Prior to this he worked as a consultant at Boston Consulting Group (BCG). Idriss holds an MBA from University of Chicagoâ&#x20AC;&#x2122;s Booth School of Business. He is also a Rath and Fulbright scholar and Endeavor entrepreneur.


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“There is so much more that we could do, whether you’re talking about restaurant deliveries or courier services, I think your smartphone, and the Fetchr app, are at the centre of it”

In its brief history, Fetchr has seen incredible growth, and it sounds like it is only beginning to scratch the surface of what is possible. “If you think about it, the sky’s the limit,” reflects Al Rifai. “There is so much more that we could do, whether you’re talking about restaurant deliveries or courier services, I think your smartphone, and the Fetchr app, are at the centre of it.”

— Idriss Al Rifai, Founder and CEO

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Procurement amidst a blockade: Qatar Airways is in it for the long-haul Written by Laura Mullan Produced by Heykel Ouni


e:

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Against the backdrop of the blockade, Qatar Airways’ trailblazing procurement strategy is helping to deliver a flight experience like no other

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aking off from runways across all six continents, the burgundy logo of Qatar Airways has become synonymous with luxury, excellence and customer service. The Doha-based firm has tirelessly earned its stripes as a five-star airline, gaining accolades for its service time and time again, but perhaps the most distinguishing feature of the Qatari airline is the pride its staff reserve for the company. “Before being a buyer, we are an ambassador of our brand,” says Mr. Liazid Benkoussa, Senior Vice President of Procurement and Logistics – and perhaps it is this belief which is helping the company raise the bar in procurement. Today, procurement is a pressurised discipline to be in, with departments

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under ever-increasing pressure to reduce costs and sustain genuine supplier relationships. However, the pressure is perhaps tenfold for the team at Qatar Airways. Overcoming the blockade It’s been nine months since four of its Gulf neighbours – Saudi Arabia, UAE, Bahrain and Egypt – imposed a blockade on Qatar, posing a challenge quite like no other for businesses across the country.


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â&#x20AC;&#x153;Before being a buyer, we are an ambassador of our brandâ&#x20AC;? Liazid Benkoussa, Senior Vice President of Procurement and Logistics

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Despite this, Qatar Airways has deftly tackled the upheaval and, in doing so, it has demonstrated the talent, expertise, and resolve of its staff. “The blockade has definitely had an impact on us,” notes Benkoussa candidly. “It currently prevents people from having the luxury and the freedom to choose the airline they want to travel with. We would like to enable any kind of client to experience Qatar Airways no matter where they are living. “The blockade not only affects our clientele, it also has a huge impact on procurement activity because we had some key suppliers based in those countries,” he continues. “Fortunately, we’ve been able to work with our suppliers to mitigate this. “We were proactive. We asked our suppliers to change their company registration or asked their sister companies, based elsewhere, to procure the product and this was done very efficiently.” The airline also closely monitored its inventory to ensure that all

Qatar Airways in one of the only airlines worldwide to have earned a 5-star rating by Skytrax

the equipment needed for its economy class, business class and first-class operations was available and it is this proactive approach which has shielded the company from major disruptions. “It was very challenging but it’s with great pride that I can tell you that none of our flights departed without the original Qatar Airways products that we requested,” Benkoussa adds. In the dynamic city of Doha, the blockade may have seen an insurmountable challenge to

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“The blockade not only affects our clientele, it also has a huge impact on procurement activity because we have some key suppliers based in those countries. Fortunately, we’ve been able to work with our suppliers to mitigate this” Liazid Benkoussa, Senior Vice President of Procurement and Logistics


Q ATA R A I R WAY S

Voted Airline of the Year by Skytrax in 2011, 2012, 2015 and most recently in 2017 overcome, but it is possible, and Qatar Airways made it happen. Procurement: A critical function In fact, the firm actually used this event as a catalyst to accelerate its existing five-year plan. Where it may have taken other airlines a few weeks or months to recognise the urgent need to adapt, Qatar Airways wasted no time in launching new and far-reaching routes to Turkey, Russia, Oman, Thailand and the Czech Republic, amongst others. After overcoming such mammoth hurdles, it’s clear that the importance of the company’s procurement

function cannot be underestimated. “It’s really linked to the vision of our Group Chief Executive, His Excellency Mr. Akbar Al Baker,” Benkoussa explains. “He has the drive to innovate and evolve our products, but he is also a businessman. “Therefore, he asked himself, ‘how can I upgrade my product, whilst also maintaining cost-efficiency for both the airline and its board members?’ “There’s only one department that can do that, and that’s group procurement. That’s why it’s so important.” Accelerating growth    As the national carrier of the State of Qatar, the firm has undergone rapid expansion in recent years, proudly standing as one of the world’s fastest-growing airlines. “I work for an airline that is one of the rarest in the world as it has consistently grown in the market,” says Benkoussa proudly, and it’s clear to see why. The national airline has consistently strengthened its fleet with new


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Video: Qatar Airways Airbus A350-1000 delivery from Toulouse to Doha

acquisitions and it was the launch customer for the coveted Airbus A350-900 and most recently A3501000. Qatar Airways was the first airline to operate the Boeing 787 in the Middle East, is a launch customer for the 777X, and has twenty 737 MAX airplanes on order. In 2016 the airline placed a record $11.7 billion order with Boeing for 30 B787-9 Dreamliners and 10 777-300ERs. This is not only indicative of the company’s growth, but also of its reputation and standing within the aviation community. “Qatar Airways is not only growing in terms of aircraft acquisition,”

adds Benkoussa, “it is also growing in terms of network.” Consolidated, digital procurement As you would expect, this accelerated growth has also had a knock-on effect on the company’s procurement strategy. Today, the Qatari airline has consolidated all its entities and subsidiaries into one procurement group which allowed it to order mass volumes of product and secure competitive prices for the organisation. What’s more, it is also leveraging modern technologies

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to prepare its procurement function for the digital age. “We are in the process of migrating to SAP Ariba,” Benkoussa says. “This procurement system will give endusers within Qatar Airways access to their contracts, their data, and the volume of product they need to target on a monthly or yearly basis. It’s a fully-automated and innovative procurement tool which will definitely enhance our process.

“Qatar Airways is not only growing in terms of aircraft acquisition, it is also growing in terms of networking” Liazid Benkoussa, Senior Vice President of Procurement and Logistics “It’s also important to bear in mind that we are the only airline that will introduce such consolidated IT tools in the aviation industry,” he adds. “How do I know that? Because SAP Ariba is conducting this exercise for the first time with Qatar Airways.” Close supplier relationships However, aside from this, the key to the company’s procurement transformation perhaps lies in the way it creates sincere and genuine relationships with its suppliers. Ensuring consistent communication and setting ambitious KPIs for


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its vendors, sustaining supplier connections is definitely high on the agenda for the Qatari airline. When customer experience is at the cornerstone of its operations, it’s clear that Qatar Airways can’t accept anything less than the best for its customers. “We are meeting the clientele’s demand and supporting group procurement by interacting with our suppliers in a much deeper and professional way,” says Benkoussa. “But it’s important that, when we’re developing these relationships, we clearly present and reflect

what a dynamic and innovative company Qatar Airways is. “It’s not possible to secure our cost-efficiency if you are unable to show the supplier the exact type of airline we represent,” he adds. “We need to be the sellers of Qatar Airways before being the buyer.” Fair, ethical practice Benkoussa also highlights how the national airline takes a fair but thorough approach to ensure that suppliers share the company’s ethical practices. As such, Qatar Airways takes a zero-tolerance approach

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to vendors who are associated with major issues such as child labour, environmental concerns, bribery and discrimination. “We wholly reject these kinds of unethical practices,” says Benkoussa. “We are very fair when we tender a supplier and don’t discriminate based on its location. We make sure we give suppliers the chance to introduce the best offer and best practices that they can for Qatar Airways.” Qatar Airways’ suppliers also recognise its underlying desire to innovate. By meeting its demands and developing new and exciting products, it is these relationships which are helping to propel the company forward, distinguishing it as a customerfocused, customer driven-airline. Q-Suite innovation None of the company’s products exemplifies this more so than its highly-anticipated Business Class Q-Suite. Debuting a year ago at the ITB travel trade show in Berlin, the

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pod-like suites promise more privacy, choice and personalisation to travellers. Benkoussa says that it’s products like the company’s Q-Suite which are helping to up the ante in the travel sector. “Although it’s in business-class, it is very much a first-class product,” he notes. “Qatar Airways is always enhancing and innovating the latest trends in the aviation industry and that is thanks to the relationship we have with the suppliers as well as the entire team at Qatar Airways.” Consistently trying to deliver high-quality whilst balancing a healthy finance book, Qatar Airways also ensures that its economy fliers also receive its renowned five-star treatment. Benkoussa says that this is clearly illustrated by the company’s new and improved economy class menu, which is going the extra mile for its customers.   “We introduced cost-saving measures but we also upgraded the product itself,” explains Benkoussa. “The quantity will be upgraded and


“We’re successful because the clients evolve, the clients demand more and Qatar Airways always listens” Liazid Benkoussa, Senior Vice President of Procurement and Logistics


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there will be 30% more food than any other airline in the world. “It will have more expensive items such as salmon and asparagus which is quite rare for economy class,” he continues. “We decided to dedicate a little bit more effort on our economy clients who decide to fly often with us and value our product. We respect them and so we decided to enhance the product for them.”    When upholding positive

procurement practices or maintaining supplier relationships, all roads lead back to the customer, says Benkoussa. By putting customer service at the forefront of its vision, Qatar Airways has reinvented its procurement strategy and carved out a path as one of the leading airlines in the sector. Customer-focused, customer-driven Gaining countless awards for its cabin service and more, it is clear that the airline’s sincere, hands-on approach to its customers is what

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gives it a competitive edge. “You can see that the relationship between Qatar Airways and its own clientele is quite focused and attentive,” Benkoussa explains. “That’s the reason why we like to be innovative in order to gain our customers’ attention and make sure that Qatar Airways always exceeds their expectations.” Guaranteeing that it is meeting these high standards, Qatar Airways takes on internal and external audits to ensure there is no degradation of

service and also consistently collects feedback from its customers. By evolving and adapting, the Qatari airline has side-stepped the series of hurdles in its path and cemented itself as a major player in the fiercely competitive airline sector. The latest chapter in Qatar Airways history is one which has been defined by the national blockade, but looking ahead to 2018, Benkoussa is optimistic about the company’s prosperous, dynamic future. “It would be very difficult for me to

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even consider working for another airline after working for Qatar Airways,” says Benkoussa. “The demands and the expectations at the company are so high that I think it would be unsatisfying to work for another entity. “Qatar Airways will always have a prosperous future because this company truly understands the needs of the client,” he adds.

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“We evolve because we want to attract a wide demographic of customers – whether it’s economy, business or first-class travellers. No matter their profile, they are most welcome on the Qatar Airways to experience our five-star product. We’re successful because the clients evolve, the clients demand more and Qatar Airways always listens.”


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Against the backdrop of the blockade, the state of Qatar has proved that business is open as ever. The national airline has handled the situation with grit, innovation and dignity, and although the challenges are far from over, it seems that Qatar Airways is in it for the long haul.

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ENRICHING

GHANAâ&#x20AC;&#x2122;S FARMING INDUSTRY


Written by DALE BENTON Produced by JUSTIN BRAND

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ECOM Ghana continues to develop the agriculture of Ghana by placing the farmer at the heart of its operations

s a leading global commodity merchant, with a specific focus on developing and fostering sustainable supply chains in over 40 agricultural markets worldwide, the responsibility to provide real value and growth right through the supply chain, to the farmers, is something that cannot be taken for granted. For ECOM Trading, it’s in the company’s very nature. “ECOM is a global player with a significant footprint here in Ghana,” says Muhammadu Muzzammil, Country Manager and Business Head Commodities & Logistics at ECOM Ghana. “What really drew me to the company was its purpose and the strategy, ECOM has a huge focus on increasing rural prosperity in the communities that we participate.”

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It is this focus and this commitment to delivering true value to those communities that has actually seen ECOM significantly grow its footprint in Ghana over the last four years, with Muzzammil pointing to a “300% growth”. ECOM’s strategy of enhancing and fostering rural prosperity was conceived by Rahul Gopinath, Regional Director, Africa. Rahul looked at the traditional operating model and sought to implement a system that would reach out to the farmers, to the producers. “Sustainability strategies have, in the past, benefited the consumer more than the producer and the farmer,” says Rahul. “We realised that we could create a model where we could provide prosperity to the community and at


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Cocoa farmer

MUHAMMADU MUZZAMMIL

Country Manager and Business Head Commodities & Logistics at ECOM Ghana

Muhammadu Muzzammil is the Country Manager for ECOM Ghana. He works closely with the small holder farmers in Ghana to implement ECOMâ&#x20AC;&#x2122;s inclusive strategy to improve rural prosperity while meeting its sustainable supply chain obligations. He currently overseas cocoa, edible nuts and spices, logistics, sustainability and farm management services, agro input businesses and new business ventures in Ghana and Burkina. Muzzammil has previously worked with Triton Group, a frozen commodity trading and distribution company in various capacities in Africa. Muzzammil has completed his MBA from Indian Institute of Management, Shillong. He is also a gold medalist in Automobile Engineering from Anna University. w w w. s u p p l y c h a i n d i g i t a l . c o m

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the same time provide true value and benefits to the farmer through a higher disposable income which in return provides them with a higher standard of living and can continue to farm.” Muzzammil joined ECOM as Business Head in 2016, overseeing the company’s logistics and commodities division which supplies more than 180,000 metric tonnes of cocoa and cashew direct from local farmers. Over time, his role developed and as Country manager he begun to

oversee the company’s sustainability efforts, farm management services, agro input business and even supporting the company’s edible nuts and spices business in Burkina Faso and Guinea Bissau. Having worked in the food and logistics space in Africa with some of the largest frozen food distributors in West Africa, Muzzammil knows first-hand the nuances of working with local suppliers and local farmer across the African continent. RMG

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“Africa is full of opportunity and trust,” he says. “There is the trust that people have in you, trust from the board and management that provides you with great opportunity to go out and deliver on the promises of the organisation. You wouldn’t normally get this in a more developed economy, but because we are here, to really drive growth throughout Ghana, that trust goes a long way in enabling that.” ECOM is committed to the development and advancement of rural prosperity, but how does it actually deliver on this commitment? A number of organisations state that economic growth and corporate social responsibility are some of the highest priorities in their strategic direction, but what separates ECOM from other companies? In the first instance, ECOM defines the very nature of rural prosperity as starting with the farmers themselves and looks to understand just exactly how it can provide value and growth to the farmers. It does this in two parts, by increasing the farmer’s

RAHUL GOPINATH NAIR Regional Director - Africa

Rahul Gopinath is the Regional Director for ECOM Agro Industrial Corporation for the African Region. He works very closely with smallholder farmers in Africa providing sustainable supply chain solutions to blue chip food companies in cocoa and coffee. His business also provides base of the pyramid solutions to the populations in Africa to improve income and farm yield. Rahul is also responsible for the new business ventures for the group in the region. Rahul has previously worked with Armajaro Holdings and Olam International in multiple countries in Africa, London and Singapore. Rahul has done his General Management Program from Harvard Business School and has an MBA from the Institute of foreign Trade, India. He is an engineer by training and prior to his business experience he has worked with IBM and the Indian Space Research Organization.

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revenue and reducing the costs that the they will incur. “ECOM comes in with an approach where it’s not just acting as a trader to come and buy the farmers’ beans, it focuses on other business models that supplements the farmer’s income,” says Muzzammil. “Farmers across Ghana don’t have access to large farmlands, large yields and large revenues. They are sustenance farmers, using farming as a means of surviving each and every day. This is where ECOM works extremely hard to support them.” ECOM takes on a very “hands on” approach to working with local farmers and it does so through a number of initiatives, each designed to enrich lives. One such initiative is the Crop Doctor. The purpose of the Crop Doctor is to provide a complete service for the farmer not only providing inputs to protect the crops from diseases, but also equip them with the knowledge about farming, disease control, identification of infestations. Crop doctor also

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enables convenient payment options to ensure the farmer does timely applications without having to worry about his cash flow. Crop Doctor is able to also offer this facility to the farmers at a much cheaper price. “We minimise the supply chain by contract manufacturing these inputs from the best plants in the world and supplying directly to our farmer base,” says Muzzammil. “This really provides a major advantage for the farmers and saves close to 20-25% of their overall operating costs.” The company’s farm services don’t stop there either. ECOM’s Sustainability Management Services (SMS), works with farmers to enable them to improve their yield through best practices in Agriculture, Environmental and Social standards. SMS also works on additional livelihood programs, farmer business school trainings which equip the farmer with the knowledge to see farming as a business and also enables a year round income generation opportunity. This also extends to farm management


S U P P L Y ACF H RA I CI N A

“Farmers across Ghana don’t have access to large farmlands, large yields and large revenues. They are sustenance farmers, using farming as a means of surviving each and every day. This is where ECOM works extremely hard to support them” Muhammadu Muzzammil, Country Manager and Business Head Commodities & Logistics at ECOM Ghana

www ae i nsds icghi ti ea fl . c o m a .f sr iucpap. bl yucshi n

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services target directly at older farmers and absentee farmers, ones that still require farming to survive but don’t have the same level of capabilities to run it themselves. ECOM will completely manage the farm and return all the revenue back to the farmer in a clear, transparent and accountable way, continuously improving the

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prosperity of those farmers. “The model that we use really looks at how a business can actually improve the rural prosperity and livelihood rather than rely on an NGO to do this,” says Muzzammil. “That’s what we are trying to achieve in Ghana. That’s the end goal.” As Muzzammil noted, ECOM has achieved a 300% growth


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The ECOM Global board members visited Ghana to appreciate and encourage the team to achieve the purpose of increasing rural prosperity

over the last four years but what can he attribute this success to, and how is this measured? He looks along the value chain of ECOM and points to a spirit of entrepreneurship. ECOM strives to create entrepreneurs at the district level across Ghana, with micro-entrepreneurs at village and society levels.

“We’re not envisaging everyone to become an employee of ECOM,” he says. “Rather, what we are doing is creating businesspeople in every village. This is close to 6,000 micro entrepreneur network and these people are engaged in purchasing or selling and, in the future, will help the farmers through training and managed services.

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“The model that we use really looks at how a business can actually improve the rural prosperity and livelihood rather than rely on an NGO to do this. That’s what we are trying to achieve in Ghana. That’s the end goal” Muhammadu Muzzammil, Country Manager and Business Head Commodities & Logistics at ECOM Ghana

Ecom supplies farmers with agrochemical products

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Agrochemical inputs of Ecom Ghana - Crop Doctor products

“This spirit of entrepreneurship is what I feel is a huge contributor to our success as a company.” Rahul takes this one step further, identifying that any success that ECOM has achieved has not come from having the best facilities or brands. “Our greatest asset is the good people we have,” says Rahul. “If you want good people to create value for you, they need to feel that their inherent ambitions are being met and, in most cases, that means developing them as people and as employees. “What we are trying to do here is

based around finding innovative ways of solving a problem and in order to do that and to find innovation, you need to empower those employees.” As a commodity trader, ECOM places great emphasis on establishing strong relationships with a number of vendors, vendors that will help the company deliver on its promise. ECOM works with some of the largest chocolate makers in the world, such as Lindt, Nestlé, Mars, Hershey and Ferrero, but for Muzzammil it’s much more about how those companies’ sustainable goals and beliefs align with ECOM. “All these clients have their certified, sustainable, and verified programmes going all the way back to the farmers,” he says. “And obviously, the clients every year on year, they commit to their sustainability programme. Where ECOM comes in is, we act as the executor for the clients on the ground and to me, these vendor relationships have really proved key in enabling the significant growth of the company.” ECOM is currently undergoing a major increase as to the scale of its

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service delivery and its product offering. With around 140,000 farmers currently working both directly and indirectly with ECOM, and on the back of considerable growth, what does the future hold? Muzzammil points to 2020 as a key target year. “Of those 140,000, we’ve only been able to scale around 30,000 farmers on a full-time basis,” he says. “Our aspirations are to get all farmers in our farmer base, get there by 2020. Our goal has always been the same, to enrich the lives of the farmers in Ghana which in turn will allow the

country to grow and the economy to improve. And we will achieve this by increasing our product offering, our service delivery and continue our incredible work with our farmers.” In the end, as Rahul notes, ECOM will always strive to deliver on its vision of rural prosperity. “There is an adage in commodity training that says volume is vanity, profits are sanity”, says Rahul. “For ECOM, we believe that prosperity has to be a reality – there’s no way we can provide without having that for our farmers.”


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PROCURING LOCALLY AND SUSTAINABLY TO DRIVE CHANGE IN UGANDA Written by Catherine Sturman Produced by Justin Brand


A farmer in his sorghum garden in eastern Uganda donning a senator branded T-shirt. Senator is a sorghum based beer


Head of Procurement at Uganda Breweries, Joshua Muwema, on the company’s work to give back to local communities

C

onsuming up to 10 litres of alcohol per person per annum, Uganda has become a country of significant growth for the adult beverage industry. Each year, up to a million Ugandans reach legal purchase age, fueling a market full of untapped potential for new and developing businesses. Focused on delivering highquality products, from international brands such as Guinness and Tusker to popular local products Bell Lager, Uganda Waragi, Senator, Ngule and much more, Uganda Breweries Limited (UBL) strives to tap into the tastes and demands of its consumers. The company seeks to become

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one of the best performing, respected and, more importantly, most trusted consumer goods company in Uganda. “Whilst spirits continue to grow, the informal beer sector represents 60% of alcohol consumption in Uganda. There’s a huge opportunity for us to recruit consumers into our product segments,” explains Joshua Muwema, Head of Procurement. Local raw materials agenda In spearheading the implementation of sustainable, domestic value creation across UBL’s supply chain, UBL has sought to transform its business through placing increased emphasis on procuring raw materials from local communities to improve


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“WE’VE SEEN A LOT OF GROWTH ON THE SPIRITS SIDE OF THE BUSINESS AND ARE INVESTING WHERE WE SEE A FUTURE” - Joshua Muwema, Head of Procurement w w w. s u p p l y c h a i n d i g i t a l . c o m

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OFFERING BETTER SERVICES THAN EVER BEFORE

Savannah Commodities is an agricultural commodities trading company mainly dealing in coffee and grains. We are one of the most reliable suppliers of quality Ugandan coffees. We are currently expanding our processing, silo storage & value addition infrastructure to avail to the farmersĘź grain & pulse handling throughout the year. Savannah has chosen to go green and has installed high energy efďŹ cient agro processing, handling & storage complex driven by motors & drier systems. Vision: To provide Agro processing infrastructure, agro value addition & Soft commodities trading solutions company in East Africa. Mission: One Stop for value addition on agro-products where the agrocommodities are exported or traded to other manufacturing industries.

www.savannah.co.ug savannah@infocom.co.ug | Tel: +256 (41) 4252 541 | Fax: +256 (41) 4252 542 Plot 6/8 Nyondo Close, Industrial Area Bugolobi, P.O Box 6217 Kampala, Uganda


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the lives of Ugandan citizens. Through UBL’s local raw materials sourcing agenda (LRM), the company has sought to nurture partnerships with local suppliers and farmers. UBL provides farmers with the necessary seeds to grow the grain for its processes and educates them on how to achieve the right quality and subsequently provide the market once the crop is harvested. This remains an area of immense pride for Muwema, and in 2015 the company reached a total of approximately 17,000 farmers under its LRM agenda, benefiting over 25,000 households countrywide. ‘Our collaboration with Kakira Sugar (part of The Madhvani Group), for example, has enhanced our ability to avail our consumers with affordable quality beverages resulting from a tax benefit from the government,’’ explains Muwema. UBL’s decision to also appoint Savannah Commodities as a single aggregator for sourcing its local raw materials is projected to bring immense benefits to both company and farmers. The farmers have a

UGANDA HAS BECOME A COUNTRY OF SIGNIFICANT GROWTH FOR THE ADULT BEVERAGE INDUSTRY

UBL PLANS TO INVEST IN ITS BEER PACKAGING AND STORAGE CAPACITY TO INCREASE PRODUCTION BY 50%

UBL’S WORK WITH SAVANNAH COMMODITIES AND LOCAL FARMERS HAS ENHANCED THE LIVELIHOODS OF LOCAL COMMUNITIES

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one stop centre where all produce is received, processed and stored hence guaranteeing quality. The agro processing facility sits beside a fertiliser blending plant that provides cheap affordable fertiliser to the farmers hence boosting productivity on their land. “With Savannah being our partner in extension delivery, we have seen more demo farms established while an opportunity arose out of this marriage for us to expand barley growing areas to the south western frontier of Kigezi region which adds to the communities that benefit from working with UBL,” comments Muwema. As the business thrives, its engagement with the communities doesn’t stop at commercial activity only, where UBL continually engages in impactful corporate social responsibility activities. Whilst many communities in Uganda lack access to clean water, UBL’s Water for Life Programme has worked to deliver essential access to clean water facilities, improved sanitation levels and provided a

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significant long-term impact. Additionally, UBL’s involvement in environment conservation has seen its staff undertake the E Green Initiative to contribute to the restoration of Uganda’s forest cover through tree planting. Most recently, UBL, in partnership with National Forestry Authority (NFA) and Wild Wide Fund (WWF), restored 109 hectares of forest cover to the Navugulu Forest Reserve, allowing for the forest to serve its purpose as a catchment for Lake Victoria thus contributing to less pollution upstream. Driving productivity Throughout its ambitious fiveyear plan, UBL has witnessed a significant improvement in the rollout of various Capex projects as its brewery continues to expand. “Productivity is an engine for growth for us because, for every penny that we save, we look at how much we can plough back into the business,” says Muwema. “We are currently installing a stateof-the-art bottling line at the distillery.


UBL E-green team @ Navugulu Forest where they restored 109 hectares of degenerated forest cover

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UBL board launching Ugx 800 million scholarship fund and water projects for 2018 in northern Uganda farming communities

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DHL SUPPLY CHAIN INTERNATIONAL LTD What DHL offers :

• Outbound Warehousing - Beer and spirits • Inbound Warehousing • Warehouse management solution and inventory management Aila Aliongo Director: Business Development E-mail: Aila.Aliongo@dhl.com

www.dhl.com/logistics

• In plant logistics Line feeding and evacuation • Inventory Management • VAS (Sortation and Conversion of new glass bottles from cartons to cases) • Distribution of beer and Spirits to Customer

distributors countrywide • Reverse Logistics ( Empty glass and returns) • Site Health and Safety Management • A multi-skilled and flexible workforce to accommodate peaks of activity

Zachary Mukwaya - Head of Business, Uganda E-mail:Zachary.Mukwaya@dhl.com +256 772 671 592


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UBL Management Team i.e MD, SCD & HOP visiting the Savannah processing & storage facility in Mukono

This line is fully automated and will be deployed along with associated utilities and civil works which include a brand-new warehouse and other amenities. This will be launched in June this year and will help us roll out products that will meet ever growing customer demands. “We’ve seen a lot of growth on the spirits side of the business and are now investing where we see a future,” he adds. “On the beer side of the business,

we have currently maxed out the production capacity of 1.2mn h/ litres. The limiting factor being the packaging line and storage. “Our plan is to invest in packaging and storage capacity to increase production by 50%. This is a work in progress and is planned for the next financial year.” To further support its ongoing expansion, UBL has developed strategic partnerships with logistics suppliers to drive efficiencies while

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bringing down cost. “Efficiencies in transport, inventory management and warehousing are key in maintaining positive COGS which in turn drives the product pricing to an affordable price point for the consumer,” says Muwema. Partnering with DHL East Africa has seen UBL outsource its distribution, inventory management and warehousing operations, thus unlocking increased value and ensuring the products are at the right place, the right time and at the right price. “DHL shares in our vision and in 2018 has embarked on an expansion program at its Luzira warehouse facilities in order to meet UBL’s growing warehouse capacity demands. Additionally, DHL is aggressively looking at their existing fleet with a plan to refresh and expand the existing fleet and forklifts as well, to improve efficiency and manage UBL’s increased production volumes,” Muwema says. “We did something similar with Mansons, who is also a major transporter but on longer routes.

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We have structured a performance contract with them that gives us more, without necessarily driving up costs. Within this 3PL contract, we have included bonus malice clause, wherein we discuss gain share opportunities. “All of this helps us to run the business efficiently and drive down costs which in turn allows us to price our products competitively to the consumer,” he continues. “Nonetheless, we continue to face challenges in sourcing especially when dealing with importation of raw materials through trade barriers which include import levies and cross border charges, longer lead times and foreign exchange disruptions. “By sourcing materials locally, UBL has therefore worked to reduce and mitigate such barriers to trade, importation and transit times, whilst improving the planning of materials which are sourced from overseas.” Inspiring others Housing a number of category managers across its procurement team, in areas such as agri-business,


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“PRODUCTIVITY IS AN ENGINE FOR GROWTH FOR US BECAUSE, FOR EVERY PENNY THAT WE SAVE, WE LOOK AT HOW MUCH WE CAN PLOUGH BACK INTO THE BUSINESS” - Joshua Muwema, Head of Procurement

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EXPEDITED SOLUTIONS FOR OUR CUSTOMERS Expediters International Ltd was established in 1984 primarily as a sourcing and procurement company, to support the various regional refugee efforts. Through deliveries of essential supplies, vehicles and distribution of large volumes of food aid in Sudan, Uganda, Ethiopia and Rwanda, the ethos of the company developed to offer multimodal logistics solutions that provide a competitive and reliable market edge to local manufactures to export their products. The company has continue to grow on this platform of service integrity and hands on management to offer their clientele an increasingly viable export option.

info@expediters.co.ke Tel: +253 722206353 | +253 733699001

Quality & Freshness Uncompromising CAPACITY 350,000 bottles a day; 3 IS bottle making machines; Inspection machines on line; An updated quality and analytical lab CUSTOMERS We service the top spirit packers and distillers in Kenya/Uganda and Tanzania and we are authorized and approved by major multinationals, in Food / Beverages and Spirit Segments to produce bottles for them, we produce Jars / Beverages / Water bottles. SERVICE We own a logistics fleet to ensure clients get bottles in shortest possible time DESIGN We have an in-house design team to ensure the client gets the bottle as per his type. We also have 3D printing and design facility.

www.millyglass.com gm@millyglass.com | sales2@millyglass.com +254 41 2224401/2/4 | +254 41 222 2449

An ISO 9001 and FSSC 22000 certified company


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raw materials and packaging, indirects, demand, and capex/ MRO, Muwema’s passion for seeing his team thrive is clearly illustrated throughout our conversation. By growing the fundamental structure of UBL’s nine-person strong procurement team through rotation, the team has gained a diverse skill sets and raised morale across the division. “If we are to be the best performing and most trusted company in the country, we should be investing in our people,” explains Muwema. “We inspire through purpose,” he adds enthusiastically. “What we’ve really brought to the table is integrity, which is something that the company takes pride in. I think my love for people and mentoring has also rubbed off on my team members, colleagues and peers, so it is something that I’m really proud of.”

So, what does the future then hold for Uganda Breweries? With future investment in large infrastructure projects in Uganda, such as dams for electricity generation, the country will continue to witness a boost in economic growth and industrialisation. The country will also undergo oil exploration in 2022, which Muwema notes, “will further change the landscape”. “The future is bright for us,” Muwema confidently concludes. “I see us remaining a major player in the market because we are a very dynamic company. Year on year we’ve put the right plans in place and take advantage of opportunities which arise. We also have a great portfolio of products as we keep innovating. “There is a bright future for the country and for the business as we remain a major player in the market.”

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Supply Chain Magazine — May 2018  
Supply Chain Magazine — May 2018