SupplyChain Magazine – October 2023

THE WORLD’S FASTEST GROWING PROCUREMENT & SUPPLY CHAIN EVENT ATTRACTS DISRUPTIVE THOUGHT LEADERS FROM AWS, PEPSICO, MAERSK, VISA AND SIEMENS

WIND IN SAILS: Sea freight wind power signals cleaner future SKY HIGH SUPPLY: Digital twin tech in defence and aerospace

Adam Elman Head of Sustainability EMEA Google

Musidora Jorgensen Chief Sustainability Officer Microsoft

Nick Jenkinson Managing Director Verto Solutions Ltd

Susan Spence VP, Sourcing Procurement & Accounts FedEx VP,

Geraint John VP, Interos Resilience Lab Interos

Kate Rosenshine Director - Global Azure Technology Sales Microsoft

Aravind Narayan Global Director - Sales Strategy & Execution Refinitiv (LSEG)

Sam Clarke Chief Vehicle Officer Gridserve

for Supply Chain Leader s

Ways to Work With us

The SupplyChain Team

EDITOR-IN-CHIEF

SEAN ASHCROFT

CHIEF CONTENT OFFICER

SCOTT BIRCH

MANAGING EDITOR

NEIL PERRY

CHIEF DESIGN OFFICER

MATT JOHNSON

HEAD OF DESIGN/

SUPPLYCHAIN LEAD DESIGNER

ANDY WOOLLACOTT

FEATURE DESIGNERS

MIMI GUNN

SOPHIE-ANN PINNELL

HECTOR PENROSE

SAM HUBBARD

REBEKAH BIRLESON

JULIA WAINWRIGHT

VICTORIA CASEY

ADVERT DESIGNERS

DANILO CARDOSO

CALLUM HOOD

ADRIAN SERBAN

VIDEO PRODUCTION MANAGER

KIERAN WAITE

SENIOR VIDEOGRAPHER

HUDSON MELDRUM

DIGITAL VIDEO PRODUCERS

ERNEST DE NEVE

THOMAS EASTERFORD

DREW HARDMAN

SALLY MOUSTAFA

PRODUCTION DIRECTORS

GEORGIA ALLEN

DANIELA KIANICKOVÁ

PRODUCTION MANAGERS

JANE ARNETA

MARIA GONZALEZ

YEVHENIIA SUBBOTINA

KENDRA LAU

MARKETING MANAGER

KATHRYN WEBB

PROJECT DIRECTORS

STUART IRVING

JAMES BERRY

MEDIA SALES DIRECTOR

JAMES WHITE

MANAGING DIRECTOR

LEWIS VAUGHAN

CEO

GLEN WHITE

THE FUTURE IS ALREADY HERE FOR SUPPLY CHAIN

DIGITAL TWIN TECHNOLOGY IS REVOLUTIONISING SUPPLY CHAIN MANAGEMENT, GIVING US A GLIMPSE OF WHAT THE FUTURE HAS IN STORE

Of all the technological advancements in recent times, digital twin technology continues to be one of the most discussed.

In this issue we look at how digital twin technology is being deployed in the supply chains of the aerospace and defence (A&D)industries.

We talk to Lee Annecchino, EVP Global Aerospace & Defense Leader at Capgemini, where he is responsible for aero and defence strategy and for helping create the ecosystem needed by the industry.

Annecchino “In A&D, traditional approaches to solving problems throughout the value chain are often costand time-intensive,” says Annecchino.

He says an estimated 73% of A&D organisations have a long-term roadmap for digital twin tech, because traditional approaches to solving problems throughout the value chain are often cost- and time-intensive.

It is a fascinating insight into the high-tech end of what is already an ultra high-tech industry, and it is a similar story across many other industries. That’s the thing about supply chain: there are so many reminders that the future is already here.

SEAN

ASHCROFT sean.ashcroft@bizclikmedia.com

“In supply chain there are so many reminders the future is already here”

Smart business buying starts here

Streamline purchasing while saving on everyday supplies so you can focus on growing your business.

Create

BIG PICTURE

IMAGE: Taiwan Semiconductor Manufacturing Co., Ltd

Chips with everything for TSMC

Taipei, Taiwan

The small East Asian island state of Taiwan is the world’s undisputed leader in terms of raw semiconductor manufacturing.

This is due to a single company: Taiwan

Semiconductor Manufacturing Co (TSMC), which single-handedly manufactures roughly 50% of the world’s semiconductors. On average it makes around 15 million chips a year.

Unlike chip makers such as Samsung or Intel – which produce semiconductors for use in their own products – TSMC manufactures semiconductors for many other companies, including Apple, AMD, Nvidia and Qualcomm.

PRESIDENT, FLEXPORT

Sanne Mander LEADING THE DIGITAL REVOLUTION IN LOGISTICS

Over ten years ago, two entrepreneurs went knocking on doors in Silicon Valley, looking for investors to fund their logistics start-up. Their pitch? To make global logistics more efficient with software optimisation.

That pair were Ryan Petersen and Sanne Manders, and their idea was to become Flexport, one of the first ever solutions for digitising freight forwarding, in order to create more visibility and control for shippers.

Today, Flexport facilitates endto-end communication between shipping stakeholders, and allows cargo owners to track shipments in real time. It employs 2,800 employees across 89 countries.

Pre-Flexport, Petersen was an importer of Chinese motorbikes and

was frustrated by the arcane logistics processes he faced.

Speaking to McKinsey, Flexport President Sanne Manders recalls that a typical response when they were seeking investment was that “we don’t need the internet in this industry”.

Back then, Manders was a logistics consultant, and was helping former Columbia Business School graduate Petersen.

But the pair succeeded in bankrolling their venture, and today the company is the sixth-largest digital freight forwarder in the transpacific region. In 2022, the company earned $3.3 billion in revenues.

Manders says the secret for Flexport’s success is that the company is “customer obsessed”. Crucially, he points out, Flexport

When Sanne Mander co-pitched the idea of a digital freight forwarder over a decade ago, most people said the Internet had no role in logistics

“Years ago everything could be easily managed on a spreadsheet, but no longer”

defines its customer as including those “beyond people who pay for our services”.

“We look at our employees as customers, as well as our asset owners and partners,” he says. “My mantra is, if you make clients, partners and employees happy you will only make money.”

Manders adds that another plank of the company’s success has been the realisation that in logistics “you can create a lot of value through better user experiences and by reducing inefficiencies”.

The world has changed a lot since Flexport was founded, notes Manders – not least the power of technology.

“You need real-time visibility to observe, and that’s the data,” he says. “Although a lot of companies claim they’ve solved this, that’s not the case.” Visibility, he says, “is a hard nut to crack, especially in markets where nothing runs on schedule”.

Manders says this is why Flexport channels a lot of its engineering resources into this, and that its longterm goal “is to make visibility so easy you don’t even think about it”.

As well as the emergence of datadriven digital solutions, Manders says supply chains are far more complex than they were a decade ago.

“Supply chains used to be relatively simple,” he says. “You might have had a factory in Guangzhou and a warehouse in Ontario, next to the port. You imported a thousand containers a year and had direct contracts with the steamship line, a customs broker, and a drayage provider. Everything could be easily managed on a spreadsheet.”

Today, he says, it’s a very different story. “On the supply side, you’re sourcing from ten locations in the world, and there are trade conflicts and tariffs,” he says, adding: “On the demand side, where your customers sit, complexity has also increased dramatically.

“While you used to store all your goods in one location, now you need to have nine locations to accomplish fast, two-day deliveries to your e-commerce customers.”

This is why, says Mandersa, expectations are shifting towards one-day deliveries, which might require 40 locations to execute.

“If it’s same-day deliveries you’ll need 200 locations,” he says. “In other words, in the past you were looking at one straight line with a permutation of one and now, with ten points of origin and nine or more destinations you’re looking at 90 combinations. That’s not manageable on a spreadsheet, and you need technology to keep a lid on that.”

2,800 employees ACROSS 89 countries

In terms of what is next for Flexport, Manders says: “Keeping up the growth, through better user experience and trade lane diversification, remains super important for us.

“The largest forwarder in the world has something like a 3% or 4% market share. Globally, we have a 0.3% market share, which means I can increase this share by 300 times before I’m done.”

“In logistics you can create a lot of value through better user experiences”

MARKUS KANIS

Markus Kanis is Europe Logistics COO at DP World, a world leader in global supply chain solutions, specialising in cargo logistics, port terminal operations and maritime services.

TELL US A LITTLE OF YOURSELF AND YOUR ROLE

» I joined DP World in my current role in January 2023. I bring senior management and leadership experience from Imperial Logistics and Kuehne & Nagel. In all I have spent 30 years in the global logistics and supply chain industry.

At DP I am responsible for establishing, developing and growing our logistics commercial strategy and capability. This involves a focus on enhancing brand offering and acquiring additional markets, industries and tailored innovative end-to-end supply chain solutions for global customers.

I am a passionate advocate for providing training, guidance and mentoring, to enhance productivity and develop talent in the workforce.

HOW IS DP WORLD HELPING CUSTOMERS BUILD RESILIENCE?

» Supply chains are unique and complex in nature, making the ‘one size fits all’ approach ineffective. At DP World we have the experience and expertise to understand customer requirements and build customised solutions that can vary across regions, sectors and capabilities.

In the context of Europe, we’ve deployed a vast network of employees with varied skills and resources to study the market trend and provide a tailored solution to our customers in the region. We are investing time and money to deliver creative solutions to

In a 30-year career Markus Kanis has become an expert in supply chain development and freight forwarding across multiple sectors

“The EU is helping us create resilient and sustainable supply chains”

MARKUS KANIS

TITLE: CHIEF COMMERCIAL OFFICER

COMPANY: DP WORLD

Kanis has a demonstrated history of success across multiple industries. He says of himself: “I am an intuitive leader with acute business acumen in end-to-end supply chain, logistics, international business development and operations management, and streamline operations to achieve targets.”

World builds customised solutions across regions, sectors and capabilities”

the biggest challenges in Europe’s supply chains and beyond. This allows us to end supply chain disruption by reducing friction in every part of the journey to create certainty and security for all.

WHY IS EUROPE THE NEW GO-TO MARKET FOR MANUFACTURING AND SOURCING?

» As the world experiences instability due to geopolitical tensions and natural disasters, supply chains are learning how to be agile and resilient.

Quickly embracing the challenges and finding new ways to make trade flow, supply chain leaders are seeking strategies that will bring goods closer to consumers quickly and efficiently.

Europe is one of the top five consumer markets for any product or service. Along with a large customer base, the region benefits from a robust infrastructure and transparent regulations, making it the perfect manufacturing and sourcing hub.

“DP

Cited as one of the most open economies in the world, the European Union (EU) ensures an accessible market for investments and reduced tariffs.

Further, according to Cushman & Wakefield, 9.9mn square feet of industrial space has been acquired or leased in the region in 2022. This is a 29% increase compared to the previous year and strengthens Europe’s position as a manufacturing region.

WHAT IS ATTRACTING BUSINESSES TO THE EU?

» The European Union is the topmost trading partner for 80 countries worldwide. There are some attractive policies and regulations in place to assure the safety and security of consumers.

The Green Deal Industrial Plan, for one, is creating a pathway for Europe’s net zero industry. As we look to achieve the new International Maritime Organisation

countries

(IMO) goal for the shipping industry of net-zero emissions by 2050, this deal will play a huge role in building sustainable operations at the outset. Similarly, the Critical Raw Materials Act will help the industry source essential material sustainably, helping the automotive sector reduce its carbon footprint significantly.

These EU initiatives are helping companies adhere to sustainable procurement, to invest in renewable energy and to implement international labour laws. This is driving a better future for all, putting us on the path to create resilient and sustainable supply chains.

The European Union is the topmost trading partner for 80

Smart business buying starts here

Streamline purchasing while saving on everyday supplies so you can focus on growing your business.

Reshape buying for your organisation

Quantity discounts

Enjoy great discounts, starting from just two units, on over 4 million products from the most trusted brands.

Business Prime

Get unlimited, FREE delivery on eligible orders for everyone on your business account, plus more benefits.

Optimise your purchasing processes

Connect your teams, create purchasing groups and share payment methods. Create a free account

TOP 10 BUSINESSES

Here are the top 10 organisations from the recently published Supply Chain Magazine

Top 100 Businesses

2023 publication

WRITTEN BY: SEAN ASHCROFT

Supply chain is a theatre of change and evolution, a fact reflected in our list of the Top 100 companies for 2023. Included are many smaller, innovative businesses you might not have heard of before, but the top 10 is dominated by multinational businesses of global renown.

J&J is a global healthcare company that operates in three main segments: Consumer Health, Pharmaceutical, and Medical Devices. Globally, J&J employs an estimated 135,000 employees worldwide.

Its medical devices division produces products, such as surgical equipment, orthopaedic devices, diagnostic tools and contact lenses. J&J’s consumer health division, meanwhile, manufactures and sells well-known brands such as Band-Aid, Listerine, Neutrogena, and Tylenol (in the US).

The company marshalls a vast global supply chain network to support its global operations. It has manufacturing facilities, distribution centres and logistics hubs across six continents to ensure timely and efficient product availability.

J&J makes strong supplier relations the beating heart of its supply chain, working closely with suppliers to ensure the quality and reliability.

Oracle is a multinational technology company develops and provides enterprise software products and services. It was founded in 1977 and is headquartered in California, US. It’s one of the world’s largest technology companies and operates across 175 countries.

It is best known for its popular relational database management system, Oracle Database, which helps organisations efficiently manage and store large amounts of structured data.

Another business strand is Oracle Cloud, which offers cloud-based solutions, as well as enterprise applications, designed to support critical business functions including customer relationship management, enterprise resource planning, supply chain management and human capital management.

It also offers consulting and support services, to help customers get the most from their IT.

Oracle CEO: Safra Catz

Johnson & Johnson CEO: Joaquin Duato

Accenture

CEO: Julie Sweet

Employing an estimated 624,000 people in 200 cities across 50 countries, Accenture provides solutions in strategy, consulting and operations in the space between business and technology. Its expertise spans 40 industries and all business functions. / It helps clients implement ESG strategies, operating models, processes, and technologies so that organisations behave more sustainably.

To expand the scope of its knowledge in across the areas it covers, Accenture has acquired specialist consultancies, with Avieco and Greenfish in the sustainability space two among many examples.

On logistics, Accenture helps client companies design 4PL operating models, typically featuring a network of control towers that coordinate regional and global transport that are orchestrated by 4PL providers.

These providers manage all transportation activities.

Deloitte

CEO: Joseph Ucuzoglu

Deloitte is an umbrella brand for several global independent firms, comprising tens of thousands of dedicated professionals specialising in audit, consulting, financial advisory, and tax.

One of the Big Four accounting organisations, it offers financial accounting and regulatory services, including those around sustainability requirements. Deloitte works collaboratively and dynamically by bringing together multidisciplinary teams of people with diverse perspectives, skills, and expertise.

The firm, founded in London in 1845, serves a number of industries including energy, life sciences and technology. It currently employs an estimated 330,000 people across 150 countries.

A key area that Deloitte advises around is supply chain strategy. Its team of regional experts help customers identify efficiencies and design a roadmap for enhancements.

Social Values Compliance

Operationally Where It Counts

Empower your entire ecosystem to drive real and meaningful change.

Suppeco leverages the potential in relationships to solve key challenges within the value chain.

An award-winning solution built for the real world.

Take a tour

Nestlé

CEO: Ulf Mark Schneider

Nestlé is one of the world’s largest food and beverage companies. It operates in 190 countries and its product portfolio includes householdname brands such as Nescafé, KitKat, Maggi and Purina, among many others.

It has invested heavily in its global supply chain, with key areas of focus being ESG leadership, reducing packaging waste and new business models to improve endto-end supply chain.

Switzerland-based Nestlé has a ‘Creating Shared Value’ strategy that drives sustainability through partnerships with suppliers and environmental organisations, as well as with other corporations.

The company says its supply chain professionals “play a critical role in ensuring quality and sustainable products reach our customers and consumers”.

To achieve this, its commercial teams develop demand forecasts, and its suppliers are all vetted.

IBM CEO: Arvind Krishna

IBM describes itself as a company that “brings together all the necessary technology and services – regardless of where those solutions come from –to help clients solve the most pressing business problems”.

IBM integrates technology and expertise, providing infrastructure, software – including market-leading Red Hat – and consulting services for clients as it “pursues the digital transformation of the world’s mission -critical businesses”.

“Our clients’ systems support modern society,” says IBM Chairman and CEO Arvind Krishna. “In making them faster, more productive and more secure we don’t just make business work better. We make the world work better.”

IBM offers a range of B2B services and solutions to help businesses address technology needs, enhance operations and drive digital transformation.

Apple

CEO: Tim Cook

Consumer tech giant Apple is one of the world’s most valuable companies. Its iconic and hugely popular product line includes the iPhone, iPad, Mac desktop and laptop computers, the Apple Watch, Apple TV, as well as numerous software apps, such as GarageBand.

In August 2021, Apple became the first publicly traded US company to reach a market capitalisation of $2 trillion.

This growth has been overseen by CEO Tim Cook, who has doubled the company’s revenue and profit since taking up the position in 2011, when founder and CEO Steve Jobs was terminally ill with pancreatic cancer.

Cook’s first deed was to pare back Apple’s supply chain vendors, from more than 100 to 24. He also cut the number of warehouses by half and established relationships with contract manufacturers.

Unilever

CEO: Hein Schumacher

Unilever is a multinational consumer goods operation with a rich heritage that dates back to the 19th century. Its purpose is “to make sustainable living commonplace by offering products that enhance people’s well-being and contribute to a more sustainable future”, it says.

In Beauty & Personal Care, Unilever provides products for skin care, hair care, deodorants, oral care, and personal hygiene. Some of its popular brands include Dove, Axe, Sunsilk, Rexona, and Lifebuoy.

Unilever also offers a range of cleaning agents and household products, including laundry detergents, dishwashing liquids, surface cleaners, and air fresheners. Brands such as Omo, Cif, Domestos, and Sunlight are part of its home care portfolio.

Its Foods & Refreshment business, meanwhile, includes popular brands like Knorr, Lipton, Magnum, Ben & Jerry’s, Hellmann’s, and Wall’s ice cream.

Microsoft says its mission is “to empower every person and organisation on the planet to achieve more”. To this end it creates innovative tech solutions that enable individuals, businesses, and communities to “realise their full potential”.

Microsoft is known for its flagship operating system, Windows, which powers a majority of PCs worldwide. It also develops and distributes software including the Office Suite, Azure cloud platform, and Visual Studio development tools.

Microsoft Azure is a cloud computing platform that provides infrastructure as a service (IaaS), platform as a service (PaaS), and software as a service (SaaS) solutions to businesses in sectors including computing, storage, networking, analytics and AI.

Azure Supply Chain Management is a recently launched set of cloudbased services and solutions that help provide end-to-end supply chain visibility, predictive analytics, demand forecasting, inventory optimisation and supplier collaboration.

This helps businesses gain insights, automate processes and make datadriven decisions to improve supply chain performance.

In the wake of the release, Microsoft Chairman and CEO Satya Nadella posted on LinkedIn: “It’s time to transform supply chain operations. That’s why we’re bringing together data, AI, and collaboration – to tackle customers’ most urgent supply chain issues.

Microsoft CEO: Satya Nadella

Founded in 1994 by Jeff Bezos, Amazon started as an online marketplace for books but today is a global leader in e-commerce, cloud computing, digital streaming, and AI.

Its ecommerce platform allows consumers and businesses to buy and sell a vast range of products, including household electronics, books, clothing, white goods, and more.

As well as selling products directly, third-parties can list and sell their items on the platform, and can use Amazon services, such as fulfilment by Amazon (FBA).

With FBA, sellers send their products to Amazon’s pick-pack-and-ship fulfilment centres. FBA also manages logistics, with FBA products eligible for Amazon’s various shipping options, such as Amazon Prime’s free next-day shipping.

Amazon

CEO: Andy Jassy

Business Prime provides additional benefits, such as free two-day shipping on eligible items and exclusive deals. It is designed to meet the needs of business customers and their procurement workflows.

Amazon has built a vast logistics infrastructure to support its marketplaces, ensuring fast and efficient product delivery from its array of fulfilment centres worldwide.

Amazon Logistics is built around last-mile delivery manned by a network of delivery drivers, including Amazon Flex drivers and independent contractors. It uses advanced tracking systems to provide real-time package tracking and delivery updates to customers, and has introduced innovative delivery methods such as Amazon Prime Air, an unmanned drone delivery system.

IMAGE: AMAZON

CHAINS TO NETWORKS MARKS THE CHANGING SHAPE OF SUPPLY

The post-pandemic world has changed the nature of supply chains, and geo-economic factors are changing its shape, say Glenn A Steinberg of EY and UST’s Jonathan Colehower

WRITTEN BY: SEAN ASHCROFT

When back in the early 1980s, German physicist and business analyst

Wolfgang Partsch first coined the term ‘supply chain’, no one could have imagined how the world might look in 2023.

The pandemic changed the nature of the global supply-and-demand economy, while geopolitical instability – Ukraine & Russia and China & the US – has changed its shape.

The challenge for today’s businesses is moving from the concept of a linear chain to the dynamic configuration of a network of companies and locations.

Some refer to this as networked supply, others call it the ‘demand response network’. But whatever term one applies, the reality is that supply chains are tech driven and

comprise smart suppliers, plants and transportation companies, coupled with intelligent locations for placing products.

“Supply chain reinvention is in vogue” says Glenn A. Steinberg, EY Global Supply Chain Leader. The multiplicity of demands facing CSCOs is incredible. It used to be enough just to balance cost, service, quality and speed but now you need to add resilience and sustainability into your supply chain.”

Sustainability, visibility and resilience are coming to define the new standard for supply chain excellence in a world where, Steinberg says, “something broader is at play”.

“The world order is changing from a unipolar economic order to a multipolar one,” Steinberg continues. “This has a tremendous impact on the strategic

Glenn A. Steinberg

TITLE: GLOBAL SUPPLY CHAIN LEADER

COMPANY: EY

“If you want to be successful in this industry, you have to have a thirst for learning,” says Steinberg. “Just continually stay out of your comfort zone. All the critical turning points in my career came when I got out of my comfort zone.”

“It’s about creating agile networks by re-evaluating the geo-strategic architecture of the supply chain”

TITLE: GLOBAL SUPPLY CHAIN

STRATEGY PRACTICE LEAD

COMPANY: UST

A skilled executive with deep experience in operations (McKinsey and Accenture) and enterprise applications marketing and sales (Oracle and Manhattan Associates). Colehower says he has “a proven track record of maintaining $100 million licence revenue pipelines”.

“Traditional supply chains are set to become more like “private trading networks”

Jonathan Colehower

at Procurement & Supply Chain Live 2022

architectures of the world’s supply chains. As a result, virtually every company in the world is re-evaluating their supply chain footprint, determining where best to place their physical assets such as manufacturing facilities, warehouses and more.”

Resilience is multifaceted and broad in nature, says Steinberg, who adds that endto-end visibility is “foundational to a resilient supply chain”.

He adds that a key theme of resilience has emerged in the course of EY stress-testing clients’ supply chains, in order to uncover both vulnerability and opportunity.

“It’s about creating agile networks, by re-evaluating the geographical and strategic architecture of the supply chain,” he says.

He adds that, although it is a simple question to ask what should be local, regional or global, in a complex partner ecosystem “reconciling a network of

warehouses, manufacturing plants, logistics, procurement and the other pillars of the supply chain is never easy”.

Steinberg cautions that building a trusted, secure supply network in an era where everything is interconnected by technology means “cybersecurity is paramount if a supply chain is going to be resilient”.

If trust in the cyber integrity of a supply network is vital then so to is trust among those who comprise the network.

Jonathan Colehower – Global Supply Chain Strategy Practice Lead at digital transformation specialist UST – says there is little doubt that modern supply chains are more network-based than in pre-pandemic times, and that this will require a mindset change among vendors.

Colehower points out that in traditional supply chains suppliers typically have visibility one layer up and one layer down.

Jonathan Colehower

Social Values Compliance

Operationally Where It Counts

Empower your entire ecosystem to drive real and meaningful change.

Suppeco leverages the potential in relationships to solve key challenges within the value chain.

An award-winning solution built for the real world.

Take a tour

The US and China are engaged in a technology trade war. With distrust running high between the countries, supply chains are looking to loosen ties with China by reshoring and nearshoring supply

But he says that traditional supply chains are set to become more like “private trading networks”, all of which will be “many-to-many trading networks that are permission-based”.

He adds: “This means you can turn visibility on and off, depending on who the actors are, because you don’t want every supply chain actor to see what everybody else is doing.

“One of the biggest challenges for such networks will be trust. Will trading partners trust one another enough to share information?

Colehower feels it will take a “pioneer company” to help establish such trustbased networks.

He says: “It’s going to take somebody who’s comfortable and confident in that supply chain, who is willing to share, and who can actually demonstrate what the results are.”

Also with an eye on the future of supply chain, EY recently published a study based on interviews with 500 seniorlevel executives at organisations of more than US$1bn in revenue. The findings suggest 2025 will be the year that largely

Supply networks present opportunities, says Capgemini

The traditional model of delivering large volumes of the same product to retailers and distributors has become a thing of the past, says Lindsey Mazza, Global Retail Lead, Capgemini Group

She says: “Modern consumers expect to personalise products and make purchases across different channels. At the same time, organisations must balance the need to serve a variety of customers and consumers with optimised business operations.

“As a result, today’s supply chain is instead a supply network, designed to deliver instant choice and hyperpersonalisation across several fulfilment channels and an expanding range of digital enablers.”

Mazza adds that shifting from a traditional supply chain to a supply network “creates room for growth, optimises operations and improves service while reducing costs and working capital”.

She adds: “The challenge for organisations is not to simply produce goods quickly and cost effectively, but to anticipate and address demand and supply variables that could impact the balance in the supply value network, including shortages of raw materials, changes in demand and rising fuel costs.”

The supply chain of today is not a chain at all but a flexible, agile value network designed to deliver instant choice and hyperpersonalisation across a variety of fulfilment channels and an expanding range of digital enablers

autonomous supply chains begin to replace the hybrid processes common today.

“We’re already on a path to an autonomous future,” says Steinberg. “We have self-driving cars, where people’s lives are at stake. There’s no reason we can’t have an autonomous and self-organising supply chain. In the end, it’s just about mastering the power of data.”

He adds: “We’re already doing projects to help clients get to their future state, to show them what the roadmap for a digitally

networked and autonomous supply chain looks like.”

Steinberg points out that in today’s supply chains, changes in customer demand have to work back through the supply chain to get to the OEM [original equipment manufacturer], the supplier, to the supplier’s supplier, and all the way through the tiers. He says this means it can take months before businesses change their production plans according to demand figures.

This, he says, is precisely why supply chains are headed towards “digitally networked ecosystems with shared data in the cloud”.

Steinberg adds: “This way everyone can see what’s happening in the moment, and immediately adjust to real-time events, and even predict what happens next.

“Finally, we have all the tools and technologies at our fingertips to make this a reality. There has never been a better time to be a supply chain professional than right now.”

VIRTUAL EVENT FOR THE ULTIMATE MANUFACTURING LEADERS

6th December 2023

1,000+ Virtual Attendees

1 Day Learning and Networking Event

30+ Acclaimed Speakers

6 Interactive Panel Discussions

Ready to stay ahead of the curve with Manufacturing Digital LIVE Virtual 2023?

The Manufacturing stage is here, and it’s putting on an exclusive virtual event for the industry.

Join Manufacturing Digital LIVE on 6th December for a two-day virtual event, where the brightest minds in Manufacturing will grace the stage.

Experience a unique opportunity for knowledge sharing, learning, and networking with industry professionals from all corners of the globe.

Dive into the innovative networking platform, Brella, to build meaningful connections, schedule meetings, and prepare yourself for the immersive LIVE stream about to unfold.

There are more than 30 internationally acclaimed leaders that you can’t afford to miss!

Covering five key themes, the event will showcase engaging presentations, interactive sessions, panel discussions and fireside chats, facilitating deep learning and exploration: Factory of the Future, Sustainability, Digital Manufacturing, Tech & AI and Women in Manufacturing.

Mark your calendars, set your reminders, and get your complimentary pass to Manufacturing Digital LIVE!

It’s time to connect with like-minded professionals who share your passion for innovation and growth.

PROCUREMENT AT CLAROTY AT THE FOREFRONT OF BUSINESS SUCCESS

WRITTEN BY:

NEIL PERRY

PRODUCED BY:

STUART IRVING

Noga Sharabani, Director of Global Procurement at Claroty, discusses putting procurement at the forefront of business strategy

Claroty’s goal is to secure the cyber-physical systems (CPS) that are used to run critical infrastructure every day. Its technology protects systems used to run oil pipelines, health facilities, power grids, water utilities and many other essential services.

When Noga Sharabani made her first steps into the procurement sector, it was to protect against a very different type of threat.

“It was mid-1999, I was working in a bank and studying for my Master’s degree in Marketing & Finance when a friend called me saying that the high-tech company she was working for, Gilat Satellite Networks, was looking for someone to join the procurement team for a temporary role to oversee suppliers’ compliance for the Y2K bug,” she says.

“At the beginning of 2000, when the Y2K panic ended, I was asked to take the role of direct buyer and started to learn everything about the procurement world. Working for nearly 22 years at Gilat gave me the opportunity to develop my skills and gain experience in almost every category of purchasing – direct and indirect –and managing OEMs and suppliers in a multicultural environment, which kept my career very challenging but interesting.

“I had excellent mentors over the years who taught me about supplier relationship management, and this is what I am focused on teaching my team today.”

Unified Intake. Intelligent Orchestration.

Learn more

ProcurementWorks gives procurement teams what they need to build buying experiences that are personalized and intelligent. Now, procurement can automate the intake of all kinds of procurement requests and orchestrate complex resolutions.

Sagi Eliyahu, co-founder and CEO, Tonkean

Tonkean: Business process automation to maximise adoption

To understand the mission of Tonkean, you need to understand that compliance requires high adoption, and adoption requires a great experience

Sagi Eliyahu is CEO at Tonkean and was one of the founders just under a decade ago. Tonkean is a first-ofits-kind experience platform with the purpose of developing internal processes that employees actually follow.

“We started the company with a very simple goal in theory, but very hard in practice, which is empowering companies to leverage software better,” he says.

Maximising compliance through process improvement

The key to empowering companies in that way is helping them optimise their internal processes so that following those processes is both easier and more valuable than circumventing them.

“Everyone knows that if you go on a website and there are twenty fields for you to fill in versus one, the conversion rate is going to be poor. Why do we expect people within the company to fill in a twenty-step process?” he says.

Partnership with Claroty

Tonkean has been working with Claroty to modernise the way internal teams engage with the company’s processes and systems, with the aim of increasing adoption, compliance and satisfaction.

Ultimately, organisations like Claroty work with Tonkean to increase the value their procurement teams are able to create as partners to the business.

“They were a great partner to work with, and we are very excited to see the results and the value they’ve been getting through the platform,” Eliyahu adds.

The influence of AI is also something that excites Eliyahu, as he believes it will inspire people to rethink their approach..

“One thing that is very clear, is that it has reinvigorated the minds and the imagination of people into asking ‘why do I do it manually?’,” Eliyahu concludes. “They will ask why is this something that I need to take 10 clicks to do? Why can’t this be smarter? Why can’t this be more intelligent?”

Nearly 25 years later, Sharabani is a passionate advocate of procurement operations taking a leading role within business, being central to the strategy of organisations going forward, and brought that mindset to Claroty since establishing its procurement operation in 2020.

After leaving her career in banking, she embraced procurement at Gilat Satellite Engineering, before making the step to Claroty, where she enjoyed the opportunity presented by helping a young cyber company implement a growth strategy.

Driving innovation through procurement Claroty was founded in 2015 and has grown to be a trusted provider and advisor for

“I am passionate about driving innovation in procurement and staying up to date on industry trends and best practices”

NOGA SHARABANI DIRECTOR OF GLOBAL PROCUREMENT, CLAROTY

hundreds of businesses with thousands of locations around the world. Its platform is a crucial tool that integrates with customers’ existing infrastructure to provide a full range of controls for visibility, risk and vulnerability management, threat detection, and secure remote access.

“I am passionate about driving innovation in procurement and staying up to date on industry trends and best practices,” says Sharabani. “I believe that collaboration and building strong relationships with suppliers are essential for achieving successful procurement outcomes.”

Driving that innovation has become ever more crucial after the expansion of

NOGA SHARABANI

TITLE: DIRECTOR OF GLOBAL PROCUREMENT

COMPANY: CLAROTY

INDUSTRY: CYBER SECURITY

LOCATION: ISRAEL

Noga Sharabani is the Director of Global Procurement at Claroty, and has 25 years of experience in the procurement sector and a Master’s Degree in Business Management from Ben-Gurion University in Israel.

She spent two decades at Gilat Satellite Networks, working her way from Procurement Buyer to Strategic Procurement Manager, before moving to Claroty in 2020.

She is passionate about professional development, embracing the latest technological trends, and moving procurement operations to the forefront of business.

Claroty Ensures Safe SaaS Usage With Wing Security

Wing provides peace of mind by leveraging in-product remediation and automation to secure organizations' SaaS usage at an affordable price

Regaining control over SaaS usage with Wing Security

Claroty turned to SaaS security posture management (SSPM) leader Wing Security, to ensure its SaaS usage is secure.

Claroty secures the Extended Internet of Things (XIoT) to achieve unmatched visibility, protection, and threat detection across all cyber-physical systems. When it came to securing their employees’ SaaS usage, they turned to Wing Security to ensure they have full control over their SaaS layer.

“Wing provides us with the visibility and the detail we need to protect our (SaaS) environment and make sure that our employees are safe and secure when they’re dealing with SaaS applications,” says Tim Hillyard, Senior Director of Security Operations at Claroty.

SaaS onboarding is decentralised and often doesn’t go through IT or Security approvals. This creates a massive Shadow IT problem, as well as a serious security concern Hillyard adds: “We need Wing because many SaaS applications are actually vulnerable to certain types of attacks, and in some cases these SaaS applications are malicious. “They are created

by bad actors whose intention is to compromise your end systems, or gain access to your personal data. So we need visibility on bad applications so that we can protect our employees.”

Wing Security is the only SSPM provider to deliver SaaS visibility completely for free. More info on that here It is unique in that it doesn’t only lay out the problem for you by showing you all the SaaS applications, users who use them and the data that is shared in and between SaaS applications, it also automatically remediates SaaS security issues from within the system, taking the load off of the security teams.

For other companies looking for similar SaaS peace of mind, Hillyard has this advice: “Find a company like Wing, that can change quickly and adapt to the ever-changing SaaS threat landscape.

“You need a tool that can also adapt quickly to the environment and protect your users and your data.”

the Claroty team and portfolio with the acquisition of the healthcare IoT security company Medigate in January 2022.

This represented a quantum change in the company, expanding its focus beyond operational technology (OT) to protect all CPS across industrial, healthcare, and

commercial environments: the Extended Internet of Things (XIoT).

Procurement at the forefront of business strategy

This expansion, combined with the everchanging roster of cyber threats, means it is imperative that the company remains at the forefront of technology innovation while maintaining fast, efficient, and sustained growth.

“In my experience, putting procurement at the forefront of business strategy is essential in driving efficient growth for any organisation. At Claroty, the procurement function is fully aligned with the company’s growth objectives, which empowers our team to not only source and manage resources more effectively, but also to proactively identify cost-saving

“Procurement teams must establish robust data governance practices, clear policies, data quality controls, and data integration strategies to leverage AI effectively”

NOGA SHARABANI DIRECTOR OF GLOBAL PROCUREMENT, CLAROTY

opportunities, adopt a culture of innovation, and foster supplier partnerships.”

One of the biggest challenges Sharabani faced in this role was managing cloud spend. “After the Medigate acquisition, we had to bring two very different cloud spend strategies together. The Claroty platform at the time was on-prem with very little cloud spend, while the Medigate platform was fully SaaS and drove high cloud spend.”

Within a few months of the acquisition, Claroty had developed a new SaaS product called xDome, which further increased its cloud spend.

“To address this challenge, I asked Eli Mansoor, the owner of OskaQ Consulting, to help us develop a cloud spend management plan,” Sharabani describes. “This plan included setting clear goals, identifying cost-

“By leveraging cutting-edge solutions, emerging technologies, and strategic partnerships, I am able to secure the most innovative and robust technologies offerings for our organisation”

Claroty WATCH NOW

NOGA SHARABANI DIRECTOR OF GLOBAL PROCUREMENT, CLAROTY

saving opportunities, and implementing best practices for cloud procurement. As a result of this plan, Claroty as a team – including Procurement, Product, DevOps, R&D, and Chief Architect – is working in full sync and we were able to reduce the cloud spending substantially, while still supporting the growth of our business.”

It is by adopting this mindset for the procurement function that Sharabani believes she can make the greatest impact on the future success of the business and the customers who rely on its technology to secure their most critical operations.

“I am committed to staying at the forefront of technological advancements and industry best practices,” she argues.

“By leveraging cutting-edge solutions, emerging technologies, and strategic

partnerships, I am able to secure the most innovative and robust technology offerings for our organisation. I meticulously evaluate and select suppliers with proven expertise, track records of excellence, and a strong commitment to data protection and privacy.”

By building strong communication channels with other business functions, Sharabani has helped to add value to Claroty and support the revenue side through proactive engagement with key departments such as Business Development, Product, DevOps, and Finance. I’ve been able to identify and capitalize on numerous opportunities for cost optimization and value enhancement that directly contribute to revenue growth.

My team and I work closely with the Product team to define and track our COGS (Cost Of

Your partner for optimizing

cloud spend

“With OskaQ Consulting I feel confident that Claroty’s cloud spend is optimized, in control, and we have the agreements we need in order to accelerate Claroty’s business growth”

Noga Sharabani, Director of Global Procurement, Claroty

OskaQ

Consulting services:

• On-going FinOps-as-a-service

• Negotiate cloud discount agreements

• FinOps maturity assessment

• Build a cost aware organization culture

• Accelerate business collaboration with your cloud vendors

and CEO

Co-authored by OskaQ-Consulting Founder

Goods Sold) and cloud infrastructure, ensuring we are getting the best value for our investments but also maintaining scalability.

In collaboration with the Finance department, we’ve successfully optimized payment terms, reduced supplier duplication, and streamlined critical processes. For instance, we’ve implemented an efficient vendor onboarding process through automation using the Tonkean AI platform, which not only saves time but also ensures compliance and cost efficiency.

Year founded

driven innovation and continuous improvement throughout the organisation,” Sharabani says. “I take great pride in my ability to establish and nurture these relationships and communication channels, as they have been instrumental in driving success and positively impacting the procurement function at Claroty.”

Embracing emerging technologies

Moreover, a strategic partnership with the Business Development team has resulted in the optimization of AWS agreements, further boosting revenue for Claroty. This collaborative approach across functions underscores how procurement can have a direct and positive impact on the bottom line.

“These examples reflect how the strong relationships and effective communication channels established in procurement have

Sharabani believes that the future of procurement is going to be fundamentally linked to, and influenced by, emerging technologies and digital transformation and that procurement leads need to embrace automation, AI and data-driven decisions.

“By leveraging technology effectively, procurement leads can enhance efficiency, reduce costs, and improve decision-making,” she says. “So, in the next 12 to 18 months, we’ll continue to adopt automation and AI.” This mentality, Sharabani explains, will help

“I wake up each morning eager to learn something new and experience the impact it has on procurement”

NOGA SHARABANI DIRECTOR OF GLOBAL PROCUREMENT, CLAROTY

build the foundations for the next decade of progress at Claroty.

“By successfully establishing a scalable procurement organisation, we are helping to position Claroty as a trusted partner for securing critical infrastructure and enabling the adoption of CPS. This will create new opportunities for growth and expansion, allowing us to play a pivotal role in securing the XIoT ecosystem.”

Although AI presents many positive possibilities, she emphasises that it needs to be used carefully and with intelligence to get the most useful results.

“AI relies heavily on high-quality data and we – as the data source – need to ensure data accuracy and integrity. Procurement teams must establish robust data governance practices, clear policies, data quality controls, and data integration strategies to leverage AI effectively.”

Best-in-class partnerships

The quality of the partnerships formed between the procurement team at Claroty and both internal and external colleagues is something Sharabani is particularly proud of, as it has allowed her to align with business objectives and drive successful outcomes.

“Collaborating closely with strategic suppliers has allowed for deeper, stronger partnerships, resulting in achieving company targets like opening local fulfilment centres in the US and Germany to support our customers locally,” Sharabani says. “By maintaining strong connections with stakeholders, I have been able to align procurement strategies with organisational goals, ensuring seamless integration and driving mutual success like cost optimisation and risk mitigations.”

Sharabani emphasises the importance of some of Claroty’s external partners, as identifying best-in-class partners helps the company achieve its objectives.

She highlights the partnership with OskaQ which has become a key partner in cloud management strategy.

“They have expertise in optimising cloud expenditure and work closely with me and the company to identify areas of improvement,” she says. “Through their guidance and recommendations, we have been able to make strategic adjustments that increase profitability and optimise our cloud spending.”

This has helped fulfil a highpriority project focused on cloud cost management and optimisation, which is essential for improving the company’s gross margin.

Another key partnership Sharabani references is Wing Security, which gives full visibility into Claroty’s environment and enforces security controls and policy.

“We have monthly meetings with the partner to discuss issues, features, new requests and mutually understand the evolving threat landscape to ensure we are aligned,” Sharabani says, emphasising the importance of close communication.

“The partnership with Wing Security has been essential,” she adds, “allowing Claroty to effectively manage our security programme and meet our projected target goals to protect Claroty and ultimately our customers from everchanging threats.”

Another partner is Snyk, which helps Claroty’s software development team develop fast and

stay secure, using AI and automation from their first lines of code to their running cloud.

Sharabani also highlights the value of the Tonkean partnership, as a comprehensive solution to handling the entire procurement process.

“By leveraging Tonkean, we can save time and resources for my team while ensuring a seamless and efficient procurement process, from intake to resolution,” she says. Sharabani continuously links the importance of the procurement operation to wider business and customer goals, whether that be in terms of finance, environment, or security, and the input of partners is critical to that success.

“Overall, these partnerships have been invaluable in helping us achieve our aims. They bring expertise, technological capabilities, and streamlined processes that contribute to cost savings, efficiency, and a positive user experience,” she emphasises. “By collaborating with these partners, we can drive success in our procurement function and support the overall growth and success of the company.”

When Claroty acquired Medigate, Sharabani says this presented an opportunity to increase value from procurement synergies. “I implemented a new SaaS management platform called Zluri for visibility into all the software within Claroty and Medigate’s respective technology stacks and was able to manage renewal effectively. This way I could better manage the integration, and identify similar or duplicate SaaS platforms, which not only saved a significant amount of money but also enhanced overall efficiency.”

Continuous improvement

With nearly 25 years of experience in the procurement sector, Noga Sharabani has seen significant changes in technology that have fundamentally transformed the way procurement business is conducted, and she says it motivates her to stay on top of industry trends and best practice.

She believes seeking continuous improvement is the way she gets constant fulfilment from her profession.

“Besides the joy of raising my five children, I wake up each morning eager to learn something new and experience the impact it has on procurement,” she says enthusiastically. “I actively engage in professional networks, participate in continuous learning opportunities, and find inspiration in podcasts and webinars. It is incredibly exciting to witness how AI, for example, can elevate the field of procurement.”

Her advice to other professionals earlier in their procurement careers is to embrace change, as the environment is constantly evolving because of technological advancements, market dynamics and global factors, but by staying adaptable you can thrive.

“What I find most fulfilling about working in my role is the opportunity to shape the future of my organisation in today’s rapidly changing business landscape,” Sharabani concludes. “By embracing innovation, collaboration, and continuous improvement, I can contribute to creating a resilient and sustainable procurement and supply chain that drives business success.”

Pyxis Ocean in August 2023. The vessel was chartered by food firm Cargill, which hopes the technology will help the industry chart a course towards a greener future

IMAGE: CARGILL

SEA SHIPPING SECTOR FACES CHOPPY WATERS ON CLEAN FUEL JOURNEY

Cargill’s recent trial of sea freight wind power signals a cleaner future for the sea shipping industry, but what are the cleaner-fuel options today?

WRITTEN BY: SEAN ASHCROFT

Many freighters could be saved from being scrapped if alternative sources of energy could be found

IMAGE: GETTY

The sea shipping sector is involved in an estimated 90% of global trade. Estimates from the International Chamber of Shipping suggest around 11bn tons of goods are transported by sea each year – everything from raw materials to finished products.

Sea shipping also accounts for around 3% of total global carbon emissions, which if unchecked could rise by as much as half again by 2050.

In short, shipping industry efforts to implement a programme of carbon-cutting measures is pivotal to the global bid to be net zero by 2050.

This is why the International Maritime Organization (IMO) – a specialised agency of the United Nations responsible for regulating shipping – has mandated emission reductions of 50% for all vessels by 2050. A number of countries, including Japan, the UK and the US, have also set similar net-zero shipping targets.

But progress is proving to be far from plain sailing, with recent top-level talks to tackle greenhouse gas (GHG) emissions in the maritime transport industry slammed by environmentalists as “disheartening” and “tepid”.

Those comments followed the 80th session of the Marine Environment Protection Committee (MEPC), held in London in July at the London HQ of the IMO.

The talks focused on the adoption by the IMO of an upgraded greenhouse gas strategy, and involved delegates from 175 shipping countries, all of whom are looking to set a timeline for decarbonising their industry.

The outcome of those talks was that the IMO set a revised target of a 10% reduction of GHG by 2030, with the earliest measures to achieve this not being put in place until 2027.

Diane Gilpin is Founder and CEO of Smart Green Shipping, a company that is unlocking wind power for the shipping industry.

"It's difficult not to be disheartened by the outcome of the IMO talks,” Gilpin says “Science tells us that anything less than 36% emissions reductions by 2030 and 96% by 2040 will be detrimental to keeping global warming below 1.5 degrees.”

She points out that emissions in the shipping industry have consistently risen since the first UN climate conference held back in 1979.

She says: “The industry has been calling for a level playing field and clarity through regulation but it's simply not happening because there are so many conflicts of interest.

“The maritime industry is on a difficult but exciting journey to decarbonise”

JAN DIELEMAN, OCEAN TRANSPORTATION BUSINESS LEADER, CARGILL

Turn your rebates into an engine for growth.

Gain visibility into rebate program performance

Easily calculate, pay, accrue and forecast your rebates

Grow stronger trading relationships

“The technologies already exist and it's positive to see ship operators starting to harness them to future proof their assets. Those that act now stand to reap significant financial and reputational benefits."

Gilpin adds: “The fact 40% of shipping trade is fossil fuels speaks for itself. We do not have the time to wait for regulation or alternative fuels to catch up. We need to move with urgency and work with what we have. Wind is the obvious solution – it's abundant, freely available, saves costs and drives down emissions.”

Gilpin’s insistence that wind power is one answer to the sea freight fuels issue comes at a time when cutting-edge wind propulsion technology is being tested by sea freight carriers for the first time.

Wind energy pilot aims for 30% cut in carbon

The wind energy pilot is a collaboration between multinational food company Cargill, BAR Technologies, Mitsubishi Corporation and Yara Marine Technologies, and if successful could decarbonise cargo vessels by up to 30%

Mitsubishi Corporation’s vessel Pyxis Ocean has been chartered by food giant Cargill, and is the first to be fitted with ‘WindWings’, which are wing sails 37.5 metres high that can be fitted to the deck of cargo ships to harness the wind.

Jan Dieleman, Ocean Transportation Business Leader at Cargill, says: “The maritime industry is on a journey to decarbonise. It's not an easy journey but it is an exciting one.

Algae can be used to make ethanol and biodiesel fuels IMAGE: GETTY

“We have a responsibility to pioneer decarbonising solutions across all our supply chains to meet customer needs and the needs of the planet.

“A technology like WindWings doesn’t come without risk, and as an industry leader we are not afraid to invest, take those risks and be transparent with our learnings to help our partners in maritime transition to a more sustainable future.”

Clearly, wind power is one for the future. But what about the present? What other carbon-reducing measures can be taken by the sea freight industry?

Alex Hersham is CEO of Zencargo, a digital freight forwarder and logistics provider.

Referring to IMO regulations around cleaner fuels, Hersham says carriers face a choice, particularly around older vessels: either switch to cleaner and more expensive biofuels or simply slow down, to cut down on fuel consumption.

Pyxis Ocean sets sail with ground-breaking wind technology

WATCH NOW

“The pace of change in sustainable sea freight is encouraging” ALEX HERSHAM, CEO, ZENCARGO

Jan Dieleman

TITLE:

BUSINESS

LEADER, OCEAN TRANSPORTATION

COMPANY: CARGILL

INDUSTRY: SEA SHIPPING

Dieleman says of himself: “I am passionate about driving change in the shipping industry. There is still much we can do. We work together with customers, partners and suppliers to find sustainable solutions that are scalable, so make a real impact.”

Alex Hersham

TITLE: CEO

COMPANY: ZEN CARGO

INDUSTRY: SEA SHIPPING

Hersham is Co-founder and CEO of Zencargo, a digital freight forwarder that enables organisations to make smarter decisions through a real-time overview of their supply chain.

“With new capacity entering the market, many carriers might choose to retire older vessels rather than maintain inefficient operations,” he says.

Hersham also points out the IMO is not forcing vessels to comply until 2024, and that it will not prevent non-compliant vessels from sailing until 2025.

“This means any scrapping or idling of ships for the next two years is at the carriers’ discretion,” he says.

In terms of what the new regulations will mean for sea freight prices, Hersham feels that shipping companies “might eventually increase the cost of sea freight to help pay for new energy efficient technologies and

The sea shipping sector is involved in an estimated 90% of global trade

Uncertainty surrounds shipping biofuels

Recent research into how shipping industry leaders are planning the move to lower-carbon fuels shows one-third of respondents don’t know the type of fuel their vessels will run on in future decades.

The survey was conducted by the Global Centre for Maritime Decarbonisation, the Global Maritime Forum, and the Mærsk Mc-Kinney Møller Center for Zero Carbon Shipping, with analysis by McKinsey.

Respondents were shipping companies that own and operate fleets comprising roughly 20% of the world’s total capacity.

A total of 46% say they have already run pilot programs involving one or more lowcarbon fuels, such as biodiesel instead of traditional fuel oil, whereas 35% have taken no action regarding greener fuels.

One-third say they “don’t know” what type of fuel they expect their fleets to run on in 2030 and 2050, with the remaining two-thirds with diverging expectations around future fuel usage.

“We have a responsibility to pioneer decarbonising solutions across all our supply chains”

JAN DIELEMAN, OCEAN TRANSPORTATION BUSINESS LEADER, CARGILL

IMAGE: CARGILL

fuels that comply with IMO requirements. Having endured some of the highest ever sea shipping rates over the past three years, it remains to be seen how customers will react to such a price hike, especially as they have only recently begun benefitting from a return to pre-pandemic shipping rates.”

Despite these challenges, Hersham feels the pace of change in sustainable sea freight is “encouraging”.

“We’re already seeing a shift to moresustainable shipping,” he says. “This is reflected in the carriers’ order books for more dual-fuel ships, which are beginning to make up a greater proportion of new vessels.”

He adds: “There is great potential for investment in biofuels. Some biofuels, such as dimethyl ether, require no extensive modifications to engines, and are the most ready low-emissions fuel option.”

But, he adds, these are also “substantially more expensive than traditional fuels”, and that there are doubts such fuel “can be consistently produced in the required quantities”.

However sustainable shipping plays out over the coming years, Hersham says that supply chain executives must prepare for change by “speaking to their partners in order to understand how the new regulations will affect capacity, lead times and schedule reliability”.

Sea shipping accounts for around 3% of total global carbon emissions

“There is great potential for investment in biofuels”

ALEX HERSHAM, CEO, ZENCARGO

IMAGE: CARGILL

ARE YOU READY FOR 2024?

Convera looks at today’s global economy, analysing the impacts of monetary policy, bonds & equity, credit, trade and geopolitics on FX rates, with an eye to how these may change as we enter 2024

WRITTEN BY: LOUIS THOMPSETT

PRODUCED BY: JAMES WHITE

Facing headwinds and high expectations for global commerce

Today, exchange rates are experiencing volatility, with economic headwinds leading to unpredictable impacts on a growing global trade market post-COVID-19. This volatility is affecting cross-border trade for SMEs and large corporations alike.

Interest rates from 155 central banks between August 2021-2023 have risen over 500 times – constituting the most aggressive period of interest rate hikes ever recorded – a reality that has jolted foreign exchange (FX) rates.

The cause of these unprecedented hikes? The need to swiftly contain inflation. Central banks have had to reverse course from their actions during the COVID-19 pandemic when over 200 interest rate cuts happened throughout 2020.

As the gears of industry and trade began turning again in 2021, a regime shift has been mandated to control inflation. But rapidly imposed, successive interest rate hikes have knocked exchange rates; the euro, US dollar and pound sterling have seen much volatility since.

Top five macro concerns businesses expect 6-12 months ahead

Note: percentages will not add up to 100% due to multiple response options. Only displaying top 5 concerns.

Source: Convera – July 6-7 2023. Displaying responses from 95 businesses across Europe, APAC and NAM. Respondents included industries such as financial services, manufacturing, and respondent job titles included FDs, CFOs, and MDs. Question: “Thinking about the next 6-12 months, what issue(s) concerns you most today?”. ‘Other’ concerns not displayed included Digital transformation/automation.

In fact, Kybira’s 2023 Currency Impact Report examining 1,200 companies found that rising exchange rate risk cost them US$64.2bn in Q3 2022 alone. These FX headwinds were more than three times the fiscal amount of any tailwinds experienced by any of the sampled companies.

Moreover, a Convera survey found that 71% of such businesses counted high inflation and rising interest rates as the most pressing macroeconomic issues they face, with another 49% citing a lack of cash flow and 44% geopolitical trade risks as the most immediate issues. These figures are best highlighted in the graph below.

With these figures in mind, it’s clear that exchange rate risk constitutes a significant point of friction in cross-border trade for SMEs and corporates alike. These headwinds are affecting payments and organisations’ bottom lines.

2024 may mark a turning point, with volatility easing at the back end of the year to keep cross-border trade on a path to growth. Convera forecasts that crossborder business will accelerate some 33% between 2023-2028, reaching US$39.8tn from US$30.3tn in 2022.

Today’s higher for longer interest rate narrative will be challenged if inflation falls to the much-coveted 2% mark, meaning central banks could be compelled to lower interest rates.

In the US, inflation is falling, but economic resilience has resulted in volatile US rate expectations, reducing the US dollar’s 13% fall from its October 2022 high, to around 7% at present.

While falling inflation could constitute a shift in monetary policy from central banks – which in turn could impact FX rates – other factors could contribute to

the broader macroeconomic outlook and the potential for further FX rate volatility: bond and equity price divergence, credit conditions, trade circumstances, and the geopolitical landscape.

This report considers each of these coalescing factors, forecasting their compounding effects on FX rates.

From Convera’s perspective, the key to success for cross-border trading businesses in 2024 will be determined by their ability to mitigate cross-border frictions and volatility, negate losses and maximise growth. Those who succeed will execute sophisticated hedging processes, effectively automating these processes at speed.

Having the right solutions in place will enable global organisations to address cross-border frictions, ensuring they remain beneficiaries of a growing trade industry, amid widening macroeconomic uncertainty.

Today’s macroeconomic landscape: A picture of economic uncertainty

Exchange rates are experiencing volatility today. This is a legacy of recent crises –from the US-China trade war, the aftermath of fiscal COVID-19 measures and Russia’s war with Ukraine – all leading to the current cost-of-living crisis stretching from 2021 into 2023.

Many economists predicted the global economy would fall under its weight, with high interest rates and high energy prices – the latter a partial symptom of severed trade with Russia following its invasion of Ukraine – seeing consumers’ wallets pinched and the economy heading to a potential recession.

Despite fears, inflation – particularly in the US (as aforementioned) – has started to

fall. With incoming economic data showing resilience, these stagflation risks have subsequently eased.

But where does this economic resilience come from? The pandemic may have had a part to play. Fiscal stimulus measures sparked a global consumption boom that is still influencing the global economy in 2023.

Consumers have accrued excess savings post-pandemic and a shift in consumer preferences may have contributed to the disconnect between lagging and leading economic indicators currently seen.

But this is not the only disparity contributing to an uncertain economy. The potential for further divergence between bond and equity markets could further alter the outlook for FX rates.

Quantitative tightening is gaining more and more attention and could have significant side effects for the economy and, subsequently, FX rates. Bond yields have continued to surge as central banks raise interest rates across the board and actively sell government bonds. The graph below shows how, historically, bond prices fall

Equities and bonds to surge – dollar to weaken in 2024?

Median cross-asset performance after interest rates peak, 7-day moving average

Sources: Refinitiv,

Note: Historical data since 1971. G7 bond price series is an average of individual bond prices for G7 nations, weighed by their respective GDP values. G7 equity index is an average of individual equity indices, weighed by their respective trading volumes.

Yahoo Finance, Oxford Economics, Macrobond, Convera – August 2023

when the Federal Reserve raises rates but rise once rates eventually reach their peak.

Additionally, equities have surprinsgly outperformed this year and the VIX Index – a measure of equity market volatility commonly known as the “fear index” –has stayed below its long-term index average of 20 for over three quarters of this year. In comparison, we saw the VIX Index above 20 for over 90% of the time in 2022.

This only adds to the picture of an uncertain economy, and the divergence between bond and equity markets could lead to further jolts in FX volatility as we head into 2024.

Quantitative tightening to reduce the economy’s money supply, as imposed by central banks, has been mirrored in the credit space. In fact, one of the most aggressive credit tightening cycles is potentially coming to an end, although the impact of higher credit rates is still feeding through.

The result of this tightening is that 40% of consumers across 28 markets expect their disposable income to fall in the next year, potentially driving down consumer spending.

For years, consumers have relied upon cheap credit. In December 2020, at the height of the pandemic, the world’s negative-yielding debt pile hit a record high of US$18tn and home prices in the US, UK and Germany rose by an average of 30% from the start of 2020 to mid-2022.

But since then, the battle against rising inflation has shifted the landscape of credit in the private sector. Today, shortterm interest rates and mortgage rates in G10 countries have hit a 14-year high, and

“As we near the peak of high interest rates and ponder the timing of future rate cuts, volatility in, and divergence between bond and equity markets could materially alter the outlook for FX rates”

GEORGE VESSEY LEAD FX & MACRO STRATEGIST, EUROPE

we see companies and households having to adjust to a new rate environment.

While we don’t expect credit conditions to tighten much more, the lagged negative effect of tighter conditions is yet to be experienced by businesses and households.

This could be particularly true for mortgage holders. In the UK, mortgage debt has shifted from being responsive to changing interest rates to stagnant over longer periods as many consumers have elected for fixed mortgage rates in blocks of two or five years.

With this lagged impact on consumers in mind, financial conditions – particularly consumer spending – could tighten further in 2024 when both sovereign credit and mortgages come due for refinancing.

We are already seeing tighter bank lending standards due to rising interest rates, which may start to crimp down on credit flowing to businesses and households, particularly those households with mortgages due for refinancing.

In the Eurozone, the Bank Lending Survey (BLS) reported demand from firms for loans or drawing of credit lines in

Global credit cycle remains negative, but is improving

Change in G5 central bank’s balance sheets as a share of global GDP, in % terms Note: Global GDP forecast taken from the IMF for Q1 and Q2 2023 Source:

of Convera Analyze Global Economy & FX Rate Influences for 2024

the second quarter of 2023 dropped to a record low.

Meanwhile, the share of small US firms reporting it is difficult to access loans rose to a 10-year high in May 2023, and the Senior Loan Officer Opinion Survey (SLOOS) showed that US banks’ tighter lending standards have breached the threshold that in the past was consistent with a recession. This may come into sharper focus once lag effects have run their course.

And yet – to add further fuel to economic uncertainty – while credit may be tightening and bond prices surging, global stocks have bucked the trend seen from other economic indicators that point toward recession – appreciating over 15% year-to-date. US Nasdaq stocks are

particularly noteworthy in their defiance of expectations, surging 40% in large part thanks to the emergence of AI products on the market.

With global stocks healthy, one may assume this lays the foundation for stability in global trade. But is this the case? Yes and no. The value of cross-border global trade, much like stock markets, defied expectations of a downturn. Although global cross-border collapses were feared amid the onset of the COVID-19 pandemic, trade grew 24% between 2019 and 2022 and compared favourably with the longrun average of around 6% per annum since 1995. Nevertheless, a thriving global crossborder trade market does not necessarily rule out volatility, particularly regarding FX rates.

Jody Visser & Jennifer Aubert Parker

New politically charged trading policies have had a big impact on trade in recent years, as leading Western nations look to diversify from an over-reliance on China. Near-shoring trading has seen India, Vietnam, Mexico and Thailand become key beneficiaries of new trade opportunities as global firms move production away from China.

The US Inflation Reduction Act and the CHIPS and Science Act have both impacted the ability of China to undertake trade with the US and accept foreign direct investment. Chipmaker Intel is one major producer that is considering moving

production out of China to comply with new US regulations.

Today, the difference between Chinese imports into the US compared to five years ago is stark. In the first six months of 2018, Chinese imports into the US sat at US$249bn, but in the same period in 2023, Chinese imports accounted for only US$203bn – a drop of 18.5%.

Decoupling from China, the US has turned to Mexico as its number one importer. Its imports have grown from US$168bn in the first six months of 2018 to US$236bn in the first six months of 2023 –an increase of more than 40%, underpinning

Mexico overtakes China as US’ #1 source market for goods

Monthly US imports, USD mln, 6-month rolling total Sources: US Census Bureau,

the geopolitically-fuelled shifts emerging in trade patterns post-pandemic as part of the US-China trade war.

The process of decoupling from China is hastening amid growing geopolitical tensions, something that is bound to have implications for USD/CNY exchange rates.

This could be further complicated, as Xi Jinping looks to diversify his country’s economy, a process that is expected to result in China generating more than onequarter of all global consumption growth – more than any other country.

How the Chinese Yuan will subsequently look against the US Dollar seems all the more uncertain.

Shifting trade conditions are not endemic to just China and the US, Europe has introduced the EU Carbon Border Adjustment Mechanism (coming into force in 2026) to penalise high-carbon imports which, according to Energy Monitor, is likely to have the biggest impact on Russia. Over US$10bn of its largely iron and steel exports between 2015 and 2019 would have fallen under this new CBAM legislation.

Of course, the key driver in these shifting trade conditions is the result of geopolitical decisions and the key role politics plays in economic issues that affect FX rates. And in 2024, some big political events could alter economic outlooks, thus fuelling exchange rate volatility.

No upcoming political event is perhaps as large as the impending 2024 US election, where it is expected that incumbent President Joe Biden will again face off with Donald Trump, the likely Republican candidate.

The outcome of this election could have vastly different geopolitical implications.

“In the first six months of 2023, Mexico overtook China as the largest overseas source market for US imports of goods. Trade disputes or diversification is having consequences for longer-term balance of trade and payments”

STEVEN DOOLEY LEAD FX & MACRO STRATEGIST, APAC

For instance, would another Trump administration roll back any of the severe economic sanctions on Moscow that ensued after Russia invaded Ukraine in 2022?

Such is the polarity in today’s political sphere that the impact of elections on the economy is arguably more unpredictable than ever.

History backs this up. Since 1980, only six of the US’s Congressional 21 sessions (29%) have been led by a unified government, leading to higher policy uncertainty.

Add to that Donald Trump’s 2016 election win, the US-China trade war and pandemic-led economic policy responses, and the polarity only grows. The Global Economic Policy Uncertainty Index has already reached record levels near 435 in 2020 (versus 196 in 2010) and it has never really normalised to pre-pandemic levels.

Such political conditions are not constrained to the US alone either – they are global.

Take the UK, where the British pound collapsed in 2022 because of thenPrime Minister Liz Truss’ poorly received economic recovery plan. And the UK could see further economic shifts in 2025 at the time of its next general election.

That is if it does happen in 2025. There are suggestions current Prime Minister Rishi Sunak could pull this timeline forward should the UK economy remain on a resilient path. And should the British public vote in the Labour Party after more than a decade out, there is a chance this could alter UK-EU trade and business relations.

The scope for election-driven economic uncertainty is everywhere in 2024, with key elections happening in Mexico, South Africa and the EU. There is

“Most forward-looking indicators – like the Purchasing Managers Index, the Conference Board’s Economic Index, and yield curves across government bonds –point to high recession probabilities in 2024, while backward-looking indicators continue to perform well”

BORIS KOVACEVIC GLOBAL MACRO STRATEGIST

uncertainty around the election of a new European Parliament in 2024, with far-right candidates gaining traction in recent months.

Could far-right candidates, if successful, reshape the European landscape for climate policy and lead to a more conservative Brussels?

This adds to today’s economic picture of disparity and uncertainty. The changeability of political policy and shifting trade allegiances, alongside a lag in the pinch on credit, and a divergence between bonds and equities points to an uncertain economic outlook, one which could unpredictably affect FX rates globally.

Most forward-looking indicators –like the Purchasing Managers Index, the Conference Board’s Economic Index, and yield curves across government bonds – point to high recession probabilities in

Get a copy of our full report:

Are you ready for 2024?

2024, while backward-looking indicators continue to perform well.

The last four recessions have been preceded by circumstances that are currently in place, such as tighter US Federal Reserve monetary policy, the New York Federal Reserve’s recession probability indicator rising above 30%, the Conference Board’s US Leading Economic Index falling below -5, over 50% of US bond yield curves inverting, and the US’ CEO Confidence Index falling below the key 40 threshold. Nevertheless, consumer spending has remained resilient and global stocks have appreciated, with the Nasdaq surging.

So, amid the divergence and uncertainty today, what outcomes should we expect in 2024, and how could these potential outcomes affect FX rates?

In our full report, we’ll provide an even more comprehensive outlook for 2024, looking at how key markets will be affected in our FX rates analysis and forecast scenarios and recommendations for crossborder businesses looking to successfully navigate international trade as we enter 2024. Register here to receive a copy of our full report, launching at Money2020 US on October 23rd.

Are you ready for 2024?

DESIGNING SUSTAINABILITY INTO SUPPLY CHAINS

SAP’s Martin Barkman on why sustainability must be embedded across the supply chain, from product design and manufacturing to distribution and reuse

WRITTEN BY: SEAN ASHCROFT

Multiple factors influence purchasing decisions: cost, convenience and some form of verified status are important, but today’s consumers also expect goods that are environmentally friendly.

As a result, organisations are reinventing the way they plan, design and produce products and services, with sustainability now front of mind. Yet sustainable product design can be technically challenging, as businesses seek to straddle the twin demands of sustainability and product quality.

With pressure increasing on businesses to make their operations more climate responsible. Industry bodies now exist to help organisations measure and recalibrate their social and environmental impact. The Sustainable Apparel Coalition and the Sustainable Packaging Coalition are just two among many.

Measuring is important; a company cannot change what it is unable to measure.

But once a business has a clear picture of its sustainability goals it then has to achieve these – and that, of course, is the difficult part.

In the context of supply chain, sustainability is most effective when it is designed into the product itself, in the premanufacturing stage, so that a product uses different, or fewer materials, is designed to last longer, be more repairable and more recyclable, when it has reached the end of its useful life.

Firms need help to embed sustainability

Clearly, businesses need expert help with this, and German multinational software giant SAP is in the vanguard of organisations who offer tech-driven sustainability solutions that can be embedded at every stage of a product’s life – from drawing board to recycling centre.

SAP customers generate 87% of total global commerce, and its advanced analytics help customers make a difference to both their bottom lines and also the environment.

SAP hard-bakes sustainability into its solutions, so that businesses can think green and behave green, from one end of the supply chain to the other.

“The supply chain encompasses every part of the process, all

“Supply chain encompasses design and manufacture, planning, logistics and assets

MARTIN BARKMAN

SVP GLOBAL HEAD OF SOLUTION MANAGEMENT, DIGITAL SUPPLY CHAIN, SAP

For a sustainable supply chain, all parts of the supply chain should be considered: including the businesses who filfil the supply chain of the suppliers themselves

Smart business buying starts here

Streamline purchasing while saving on everyday supplies so you can focus on growing your business.

Create

the way from design and manufacture to planning, logistics and asset management,” says Martin Barkman SVP Global Head of Solution Management, Digital Supply Chain at SAP. “Each of these not only has a direct impact on sustainability but they’re also inter-related.”

This is why SAP solutions are designed to work at every stage of a product’s life cycle – from how it is conceived to how it is recycled.

Barkman says that regarding sustainability, SAP solutions can be categorised broadly as enablers of lower or zero emissions, zero waste and a circular economy. Barkman and his global team help businesses across all sectors worldwide keep sustainability top of mind every step of the way, from product concept to product consumption.

“If you think about how a product is going to be manufactured when you

Martin Barkman

TITLE: SVP GLOBAL HEAD SOLUTION MANAGEMENT, DIGITAL SUPPLY CHAIN

COMPANY: SAP

INDUSTRY: ENTERPRISE SOFTWARE

Barkman joined SAP in 2013. He has held various roles in supply chain management – first driving growth and introducing a new planning solution, and most recently being responsible for solution management for its digital supply chain portfolio.

Design impacts the cost of logistics and how customers experience the product

Sustainable designs critical but too

– Capgemini report

Sustainable product design has helped 67% of organisations reduce carbon emissions, yet 41% of currently have no plans to implement sustainable product design, or do not plan to do so at all, research from Capgemini reveals.

Sustainable design is often held to be too expensive, but Capgemini’s study finds 23% of businesses have seen a decrease in costs since implementing new sustainable strategies, while 37% of organisations found that costs remained the same.

Other key findings include:

• Regulatory pressure overrides sustainability goals

• Businesses don’t understand sustainability strategies

Sustainable design practices provide a multitude of long-term benefits, including revenue growth, improved customer satisfaction, improved employee engagement and carbon emissions reduction.

design it, then that’s a much better and more holistic approach,” says Barkman. “A properly designed product will impact how sustainably that product can be manufactured.”

Not just how it is manufactured, either, Barkman says, but also how a product is distributed. “Design can impact the cost of logistics, and ultimately also how the customer experiences the product,” he adds.

How SAP is able to bring together the stages of design, production and distribution – and digitalise those processes and allow them to operate continuously with each other – “is super-interesting to me”, Barkman says.

uncommon

Barkman says that when designing a product with sustainability and the circular economy in mind “you have to think about whether the raw materials can be reused, if they are biodegradable, and if they are readily available”.

He adds: “Then when it comes to manufacturing you want to know you’re making it in the right location – that you’re not generating too many emissions transporting the raw material.”

Manufacturing poses sustainability problems

The manufacturing process itself also poses sustainability challenges, Barkman points out.

“You have to be smart about keeping equipment properly maintained, so that you’re not constantly replacing and disposing of components,” he explains. “The aim is to extend the life of all of your supply chain assets.”

Barkman adds: “It can get complex, which is why SAP solutions are absolutely geared to helping companies navigate through all of this, to make sure they’re always headed in the right direction.”

On the ground, SAP solutions help businesses make joined-up sustainable decision-making in practical ways, its software allowing companies to manage what needs to be in any given product’s

Can the raw materials involved in your supply chain be be transported without generating too many emissions?

(INSET) And can they be re-cycled ?

bill of materials. A bill of materials is a list of parts, items, assemblies, subassemblies, documents and drawings required to create a product.

Design sustainability into products

“A business might need to make a change to a product’s bill of material,” says Barkman. “We can help them make that change at the design stage, and then translate this into a bill of material for the various manufacturing steps.”

He adds: If a business can do this digitally on an ongoing basis then that’s going to drive both productivity and sustainability to a whole new level.”

When it comes to embedding sustainability into companywide processes surely there are challenges? Changing regulations from country to country, for example.

“Of course, we want to ensure our customers have the right tools, processes and systems to be in compliance with regulations,” says Barkman. “But in some ways, it’s gone way beyond regulations. The journey into sustainability kind of began with that base level of regulations, and these don’t really change.”

Now, he says, the real challenge is more about keeping up with customers’ evermore ambitious sustainability goals.

“The United Nations has set some pretty top-level sustainability goals, and many of the businesses we meet have rigorous aspirations and goals for how they want to operate, and how they want to help lead us towards a more sustainable world. I’d say that the real challenge is how we lead these companies towards those noble, but highlevel, goals.

Sustainable supply chains are in SAP’s DNA

Being smart about maintaining equipment properly helps protect your investment and can add years to its usable life

“The aim is to extend the life of all of your supply chain assets”

MARTIN BARKMAN SVP GLOBAL HEAD OF SOLUTION MANAGEMENT, DIGITAL SUPPLY CHAIN, SAP

LOGISTICS HUB IS DRIVING A BRIGHT NEW FUTURE

WRITTEN BY: SEAN ASHCROFT

PRODUCED BY:

JAMES BERRY

For the hospitality industry the pandemic was traumatic – the stuff of nightmares. Overnight, restaurants closed, staff were furloughed and customers were but a wistful memory.

For the Germany-based Italian food franchise chain L’Osteria, the date of March 20, 2020, was its darkest ever; it was the day it had to close all its restaurants across Europe.

“It was the hardest day in our history,” confirms Stefan Höllen, L’Osteria’s Supply Chain VP.

But rather than being defined by the trauma of those closures, L’Osteria instead chose to be defined by its response to it.

“It took only two weeks for us to reopen our delivery and pick up channels,” says Höllen. “And within a very short time we had developed a web shop for a home delivery service.

“Covid showed us just how important it was to be flexible, and how crucial it is to have strong partnerships in the supply chain. It is also important to show our nearly 7,000 employees that we are resilient. Resilience is key.”

L’Osteria was so strong that during the entirety of the pandemic it was nearly never out of stock on any products “because our partners supported us”, says Höllen.

He adds: “It showed that we need to have more stability for the future, to be prepared for whatever happens.”

L’Osteria’s restaurant empire has bounced back from Covid stronger than ever, says Stefan Höllen, its Supply Chain VP

Best served ice-cold...

Coca-Cola stands for incredible taste, refreshment and moments full of joy.

The original: with the classic red design and unique, traditional taste convinces Coke Original Taste fans all over the world.

Learn more

WITH

GREAT. IT’S BETTER TASTING A TIRAMISU THAN TESTING SCREWS”

STEFAN HÖLLEN VP SUPPLY CHAIN, L’OSTERIA

Supplier contingencies vital for L’Osteria

For Höllen being prepared meant that, for the company’s most important products, it must have a two-supplier strategy so that in the event of disruption, it always has a contingency partner.

L’Osteria is a franchise-based restaurant business that’s mainly grown with pizza and pasta. All its restaurants are individually designed.

“It’s not like other brands that are homogeneous,” says Höllen. “All our restaurants have a separate design, which we try to fit to the region where they are, or the city. We want guests to feel at home in a relaxed and nice atmosphere. Our mission at L’Osteria is creating moments where favourite people and favourite food come together.”

Underpinning this mission is Höllen and his team, who make sure each restaurant always has what it needs, when it needs it, at the price at which it needs it.

Echoing his earlier point about resilience, Höllen references the company’s recent pan-European logistical rethink. The company now uses a single logistics provider to supply the restaurants in Germany, and also in all other countries, with more than 1,000 or so food and non-food products its restaurants need.

“WORKING

FOOD IS

“The target is to provide a one-stop shopping experience for the restaurants,” explains Höllen, “because they need to concentrate on the guests, and not be sat in the back office ordering products.

“Together with our logistics provider, we provide all restaurants with the same level of service. It doesn’t matter if we have only a single restaurant in Lyon. They will have the same quality level as everyone else.”

Cost control drives logistics strategy

Part of the reason for this approach is cost control – an increasingly important factor at a time of stiff cost inflation and the war in Ukraine.

Pre-Covid, says Höllen, the company was performing strongly on cost control. “One of my proudest achievements since joining L’Osteria at the end of 2017 was we reduced

the cost of our food by nearly 4% points of food-cost in just over two years. That was before Covid and the Ukraine war. That was a big achievement. Inflation continues to be a huge problem”, Höllen concedes.

“The biggest challenge right now in purchasing is the inflation rate. What the future holds, nobody really knows. Everything bad that has happened in the past 18 months could happen again.”

He adds that this is one of the key drivers of its logistics hub structure, the others being efficiency and time savings.

“If you have only a single restaurant in a country and you buy local, it is likely to be much more expensive. It’s better to go with full truckloads over long distances, and then use local partners or our own warehouses from where we can make the last mile deliveries with small trucks. That’s the plan.”

Stefan Höllen, Supply Chain VP at L’Osteria, on the Post-Covid Rebound of the Restaurant Empire

STEFAN HÖLLEN

TITLE: VP SUPPLY CHAIN

COMPANY: L’OSTERIA

LOCATION: GERMANY

Stefan Höllen is the VP Supply Chain of FR L’Osteria SE. He has been part of the company since 2017 and has over 20 years of experience in Supply Chain. Before working for L’Osteria, he had been working for HAVI Logistics, Supply Chain Integrator for McDonalds, before then working with Vapiano in 2008. During his time at Vapiano, the company grew from 16 restaurants to 200 in 30 countries. There he set up the entire supply chain for Vapiano.

At L’Osteria, he is continuously perfecting and optimising supply chain.

Knowing how to make flour since 1875

Quality, controlled supply chain and sustainability. These are the values that drive our company.

A range of professional flours ideal for pizza, bakery, pastry and fresh pasta, based on shared values, respect for rules and earth, a constant commitment and a joint vision of a better future, starting from today, starting from us.

LEARN MORE

Höllen feels the most difficult part of the operation has already been achieved: switching from wholesalers to a single logistics provider who has “open-book transparency and can bring products everywhere where we are”.

“Now we are working on the optimisation of this structure,” he adds. “Our one-stop strategy is the next step. We are working on systems that will allow us to forecast the restaurants’ inventory needs.

“We have a monthly changing menu, and special products that are not in our standard range, and we already push these products into the restaurants.

“We calculate the needs of each restaurant based on their sales, and then deliver the products they need so that they don’t need to think about it. As I said, we want them to focus on the most important people: their guests.

“The idea is that eventually they will never need to place an order anymore. They simply get what they need and that’s it. That’s the future.”

It’s a future that will serve the company well as it continues to expand.

“We need sound logistics to operate in the new countries we are entering. For example, in September, we will open the first restaurant in Poland, in Warsaw, for which we are setting up a complete supply chain. But there are also more countries under discussion, including those in Scandinavia, as well as Spain and Portugal.”

THE AIM OF OUR LOGISTICS HUB IS THAT OUR RESTAURANTS WILL NEVER AGAIN NEED TO PLACE AN ORDER”

STEFAN HÖLLEN VP SUPPLY CHAIN, L’OSTERIA

L’Osteria doubles restaurant numbers in six years

Since Höllen joined the company in 2017 L’Osteria has doubled the number of its restaurants to 163.

“This is why we need to develop a hub structure,” he says. “We are also looking for new markets for ultra-fresh products, from Spain for example. Plus, many of these products, especially in winter, are moving more to North Africa. We will need reliable and sustainable partners in these places.”

Höllen adds that it is also important that the company continues to develop its operations in smaller countries where it has just a few restaurants.

“We need to optimise our supply chain,” he says. “And we need to be ready for changing supply chain law in Europe, which will be part of all our futures before too long.”

Höllen is referring to the EU’s Supply Chain Act, which from 2024 will require EU companies to audit their suppliers along the entire global supply chain, including all direct and indirect business relationships.

“

We think hygiene for our customers

Global partner with local support

Brain creates gain. user safety

Achieve your sustainability goals Ensure

Employee safety is very important to us, Ecolab as our hygiene partner supports us with an overall concept that fits our values and goals.

President

Director

Such challenges are all part of the job – a job that for Höllen has some very definite perks.

“It’s not just our restaurateurs who are passionate about food,” he says. “Working with food is really interesting. It’s better tasting a tiramisu than handling screws.”

He and his team get plenty of opportunity to give expression to this passion, because they work closely with their product development colleagues.

“It’s very important we are included from the outset with a potential new partner or product,” he says. “The food in general is inspiring,” he adds. “Since Covid, for example, the development of vegan and vegetarian products has been very fast, which I find interesting.

“It’s a difficult balancing act. At L’Osteria we don’t want to simply follow trends; we want to follow those trends that are a perfect fit for us.”

Hospitality industry

‘is all about relationships’ Hospitality at all levels is a people business, and this is another aspect of his work about which Höllen is passionate.

“I love to work with people. For me, it’s all about the people. It’s very important we have long-term relations with our partners. Even if we put them under pressure with tenders and so on, it’s important to be fair, transparent and reliable also.”

Höllen reveals that the strength of these relationships means that the company does not even have contracts with some partners.

“It’s just a handshake,” he says. “Of course, with some of the larger ompanies a contract is necessary.”

In total, L’Osteria works with around 120 partners. These include everyone from multinationals such as Coca-Cola to small, local companies.

“The best-known of our partners are Coca-Cola or San Pellegrino. We also work closely with Molini Pivetti, who is one of

the biggest wheat mills in Italy. With them we developed our pizza flour and the semolina we use for our pasta production. These have been developed exclusively for L’Osteria, and that is very important to us.”

Another key partner is Ecolab, a global sustainability leader offering, hygiene and infection prevention solutions.

“Ecolab produces all our cleaning materials, so that we can have one standard everywhere. It was also a strategic step to move to Ecolab, taken about two years ago.”

As close as these partnerships are, Höllen says it’s crucial that L’Osteria continues to push their partners to deliver ever-better standards.

“When it comes to tenders we challenge all our partners, even if they are large and have their own processes. “They always need to be challenged if they are to innovate. It’s important our partners innovate around products, processes, and sustainability.”

“WE DON’T EVEN HAVE CONTRACTS WITH SOME PARTNERS; IT’S JUST A HANDSHAKE”

STEFAN HÖLLEN VP SUPPLY CHAIN, L’OSTERIA

DIGITAL TWINS BRING RESILIENCE, VISIBILITY + SAVINGS TO

AEROSPACE AND DEFENCE SUPPLY CHAIN

As resilience becomes ever-more important to supply chains, Lee

Annecchino of Capgemini explains how digital twin tech is making a difference

WRITTEN BY: SEAN ASHCROFT

A Eurofighter EF-2000 Typhoon

IMAGE: MATTHEW HORWOOD/GETTY IMAGES

Digital Twins tech can be used to predict weather and flight profile data to reduce fuel loads and fuel dumping

IMAGE: FRANK WAGNER/GETTY IMAGES

“Most aero and defence organisations have a long-term roadmap for digital twin tech

LEE ANNECCHINO, EVP GLOBAL AEROSPACE & DEFENCE LEADER, CAPGEMINI

Of all the technological advancements in recent times, digital twin technology continues to be one of the most discussed.

For the record, a digital twin is a dynamic digitised model of a physical thing or system that relies on sensor data to understand its state, respond to changes, improve operations and to add value.

In the context of supply chains, a digital twin is a virtual replica, comprising potentially thousands of assets, warehouses, logistics and inventory positions. It offers a clear view of the risks facing complex, interconnected supply chains. This allows supply chains to be agile, because risk is identified early and disruption is minimised, or perhaps even averted.

This sounds complex enough, but the truth is that digital twin technology is even more multi-layered and nuanced than many people realise.

For example, there are different levels and types of digital twins. Multiple layers of digital twins can coexist within an organisation. Some might represent an asset, while others will represent people and their interaction with that asset. Then further digital twins might represent a process, a facility, or the entire supply chain.

What is needed, and often lacking, is a strategy around creating a common data platform that is able to create digital threads to connect all of this data across all of these digital twins – something that creates a full genealogy of all that was involved in the creation of these multi-layered digital twins.

Agility and flexibility are more critical than ever

Gain real-time visibility across your end-to-end supply chain by connecting data into a ‘single source of truth’ with streamlined business processes through

One solution to this is industry specific standards and communities. These include:

• THE OPC FOUNDATION, an industry consortium for open connectivity of industrial automation devices and systems.

• THE DIGITAL TWINS CONSORTIUM, which drives the awareness, adoption, interoperability, and development of digital twin technology.

• MICROSOFT’S OPEN MANUFACTURING PLATFORM. This is a partner ecosystem that connects people, assets, workflows and business processes to bring visibility to operations, with a view to making them more adaptable.

Lee Annecchino

TITLE: EVP GLOBAL AEROSPACE & DEFENCE LEADER

COMPANY: CAPGEMINI INDUSTRY: IT

Annecchino has 25 years’ experience driving growth, innovation and revenue in a series of executive and leadership roles in the aerospace industry. At Capgemini, he is responsible for creating aero and defence strategy and the ecosystem needed by the industry.

Digital twins are being deployed in supply chains across all sectors and industries, but here, we focus on the aerospace and defence industries.

Lee Annecchino is EVP Global Aerospace & Defense Leader at Capgemini, where he is responsible for aero and defence (A&D) strategy and for helping create the ecosystem needed by the industry.

In a recent Capgemini report – Mirroring reality: Digital twins in aerospace and defence – Annecchino and his colleagues found that the ability to visualise and address issues virtually before committing to a solution – the raison d’etre of digital twin tech – makes it an invaluable tool for the A&D industry.

“In A&D, traditional approaches to solving problems throughout the value chain are often cost- and time-intensive,” says Annecchino.

This is why, he says, an estimated 73% of A&D organisations now have a longterm roadmap for digital twin technology, and why, he says, investment “is ramping up” – being projected to increase by 40% year on year.

He adds: “Aside from the potential for significant cost savings, A&D organisations

“Sustainability is an important driver of investment in digital twins”

LEE ANNECCHINO, EVP GLOBAL AEROSPACE & DEFENCE LEADER, CAPGEMINI

“Digital twins reduce time to market, increase sales and improve operational efficiency”

LEE ANNECCHINO, EVP GLOBAL AEROSPACE & DEFENCE LEADER, CAPGEMINI

are looking towards digital twins for benefits that include reduced time to market, increased sales, improved operational efficiency, access to advanced training environments, and technological advancement. Importantly, digital twins can also play a role in helping sustainability efforts.”

Capgemini’s research explores digital twin tech as the backbone of the industrial metaverse, where it helps businesses and individuals collaborate on processes, systems and product design and testing.

The report includes feedback from large aerospace original equipment manufacturers (OEMs), who are applying digital twins to manufacturing processes. Companies such as Airbus UTM, which is building the infrastructure needed to allow future vehicles, such as delivery drones, to safely share our future skies.

“Our digital twin allows us to model, simulate, and scale a wide range of situations for critical stakeholders, including drone and aircraft pilots, operators, regulators, and the unmanned traffic management service

providers themselves,” Max Egorov Nova, Airbus UTM’s Head of Simulation, tells Capgemini.

Most importantly for the A&D industry, says Annecchino, digital twins can improve revenue without compromising on safety.

“For example, while every aircraft has a maximum take-off weight), the weight limits imposed are typically lower than this. Using digital twins, coupled with weather and flight profile data, it’s possible to better estimate the required load without overloading the aircraft.

This, of course, saves fuels, which is hugely important for air freight carriers who are seeking to decarbonise operations.

73% OF AERO AND DEFENCE ORGANISATIONS HAVE A LONG-TERM ROADMAP FOR DIGITAL TWIN TECHNOLOGY

Digital twins tech can be used to predict maximum take-off weight to improve revenue without compromising safety IMAGE: FANGXIANUO/GETTY IMAGES

Two benefits of digital twin tech for supply chains

Mark Landry – Intelligent Industry Leader for Capgemini Americas – offers this insight into digital twin tech in supply chain.

HOW DO DIGITAL TWINS HELP WITH ESG COMPLIANCE?

Recent Capgemini research shows 57% of organisations agree that improving sustainability efforts is one of the key drivers of their digital twin investments.

The tech helps reduce waste, minimise energy consumption, and helps organisations and societies become more sustainable, as they become more digital. Siemens, for example, is modelling energy demand and infrastructure using a digital twin in a project with a German city of

about 200,000 residents. It has so far found that cutting emissions by 70% by 2035 is a feasible target.

HOW DO DIGITAL TWINS HELP SUPPLY CHAINS?

The tech allows companies to digitally model, simulate, test, and analyse products, services, and systems.

Used in multiple cases across the value chain, businesses can experiment with different scenarios and assess the impact of each decision without any real-world, tangible risks. The benefits? Risk-free, lowcost system improvement across the value chain. DTs can also transform ways of working, alter employee experience, and improve safety.

“Sustainability is an important driver of investment in digital twins,” says Annecchino, “Technology is also improving the efficiency of flight engines, which is shrinking the industry’s carbon footprint.” Confirming this is Stuart Hughes, Chief Digital Officer at Rolls-Royce, who in the Capgemini report reveals that, since 2014, the company has helped one of its airlines reduce fuel usage by 85 million kilograms – a saving of 200 million kilograms of carbon dioxide

Hughes says: “We did this by taking data on how the pilot is flying the plane, how the plane is operated, and how they do the operational funding around this.

“We found data and insights that helped them to make better decisions. In areas where it felt there were barriers to change, we helped it design new policies and procedures.”

In the areas of logistics and the wider supply chain in A&D, Annecchino says digital

twins have a significant role to play. “They are essential for ensuring raw materials and finished items are packaged in the optimum volumes and sent to the correct destinations,” he says. “They have the ability to replicate package forms and packaging materials, and can lower financial and environmental costs.”

On supply chain, he says systemlevel digital twins are used to monitor networks, including real-time tracking of military operations for personnel, equipment, weapons systems, and essential supplies, such as food, water, and fuel.

“The US military has also tried to ensure the integrity of its semiconductor supply chain by employing digital twin technology to verify the provenance of the components,” says Annecchino.

He continues: “This has helped create a trusted ecosystem of chips.”

Rolls-Royce has helped one of its airlines reduce fuel usage by 85 million kilograms – a saving of 200 million kilograms of carbon dioxide IMAGE: OMER MESSINGER/GETTY IMAGES

RECAP

(Left to right)

Jon Willescroft, G4S; Nicholas Wright, BP; Milind Tailor,Diebold Nixdorf; Patsy Duncan, PepsiCo

RECAP

Top experts mingle at disruptive supply chain & procurement learning and networking event

WRITTEN BY: SEAN ASHCROFT

The world’s fastest growing procurement and supply chain event recently took place over two insight-packed days in one of London’s top business arenas – the Business Design Centre, in Islington.

BizClik’s Procurement & Supply Chain Live London was a disruptive learning and networking event that showcased some of the industry’s top speakers across innovation, thought leadership and strategy.

The line up for Procurement and Supply Chain LIVE 2023 included:

• Alisa Bornstein, Chief Procurement Officer, VISA Europe

• Matthew Harris CPO, Logistics & Services, A.P. Moller – Maersk

• Juud Tempelman Global Chief Procurement Officer, JLL

• Nicholas Wright, Director, Procurement Innovation (Digital & Talent) bp

• Ashley Naughton, Former Director of Logistics, McLaren Automotive

• Waleed AlSaeedi, Director of Procurement Department, Abu Dhabi Government

• Alexander Tschentscher, Head of Supply Chain & Logistics Excellence & Strategy, Siemens AG

Benn Godfrey, Rolls Royce

Scott Birch, BizClik

Procurement and Supply Chain LIVE: Day One recap

A sparkling programme of keynotes and panel discussions was hosted on two conference stages, as leading industry figures discuss the most important ideas – and shared telling insights – around the world of procurement, supply chain and logistics.

As well as keynote speakers and fireside chats there were networking opportunities for an estimated 2,000 in-person attendees with nearly one thousand more attending as virtual delegates.

It was a packed agenda. Matt Yanchyshyn, General Manager, AWS Marketplace & Partner Engineering at AWS discussed procurement challenges and how to overcome them, as well as the benefits of digital marketplaces to foster innovation.

There was also Jim Townsend, Chief Procurement Officer at Walgreen Boots

Turn rebates into a growth strategy.

Boost financial performance. Mitigate risk. Drive efficiency. All while building trust across your trading partners.  Schedule

Alliance, who shared his perspective on ProcureTech companies and how they can be more successful in the sales process.

Delegates also heard from the likes of Community Fibre, Baringa, and Wyndham Hotels & Resorts as part of the Supply Chain Sustainability Forum; and Siemens and Cushman & Wakefield as part of the Supply Chain Strategy Forum.

Strategic sourcing was a key theme, with events on Stage 1 dealing with this key issue:

Adrian Oyekanmi, Radisson Hotel Group Global Strategic Sourcing SVP, discussed how strategic sourcing can unlock the potential for success.

Patsy Duncan, Senior Director of Global Procurement at PepsiCo, shared insights around unlocking ESG targets through strategic sourcing.

The Strategic Sourcing Forum featured three speakers:

• Milind Taylor, Global Head, Services Procurement & Vendor Management, Diebold Nixdorf

• Andrew Turner, Global Head of Indirect Procurement with real estate professional services firm JLL

• Benn Godfrey, VP Raw material & Forming at Rolls-Royce

Meanwhile, Alexander Tschentscher, Head of Supply Chain Excellence & Head of Strategy, Supply Chain & Logistics, at

(Left to right) Mike Brooman, Community Fibre; Maureen O'Shea, Baringa; Phil Halanen Wyndham Hotels & Resorts; Neil Perry, BizClik

Adrian Oyekanmi Radisson Hotel Group

THANK YOU TO OUR SPONSORS

PLATINUM SPONSOR

Enable helps manufacturers, distributors, and retailers turn rebates into an engine for growth. Starting internally, Enable helps you better manage rebate complexity with automated real-time data and insights, accurate forecasting, and crossdepartmental alignment. This lets you – and the business –know exactly where you are with rebates. Then it lets you extend externally, setting you and your partners up with one collaborative place to author, agree upon, execute, and track the progress of your deals.

GOLD SPONSOR

Suppeco is the collaborative relationship space for sustainable supply chains.

Suppeco leverages customer-supplier relationships to drive service excellence, actionable visibility, and operational sustainability, whilst promoting innovation and growth across the ecosystem & supply chain.

Suppeco customers appreciate the importance of going beyond contract performance. They seek to drive exponential value through the top line. A truly reciprocal relationship, exploring trust, shared values, innovation, enhanced collaboration, shared responsibilities, and thought leadership.

GOLD SPONSOR

Kodiak Hub turns your supplier relationships into a competitive advantage. By consolidating your siloed and scattered supplier data into one hub and automating tedious tasks, Kodiak says it

GOLD SPONSOR

InterSystems Supply Chain Orchestrator is an intelligent decision data platform that enables supply chain organisations to see, understand, optimise, and act to attain an agile and resilient supply chain model.

Established in 1978, InterSystems is the leading provider of next-generation solutions for enterprise digital transformations in the healthcare, finance, manufacturing, and supply chain sectors. Its cloudfirst data platforms solve interoperability, speed, and scalability problems for large organisations around the globe.

InterSystems is committed to excellence through its award-winning, 24×7 support for customers and partners in 80 countries. Privately held and headquartered in Cambridge, Massachusetts, InterSystems has 36 offices in 25 countries

process through its innovative and configurable technology, coupled with highly experienced human knowledge and insight. It contributes to the advancement of its clients’ sustainable growth by protecting supply chains from a wide range of potential risks through trusted contractor prequalification, safety training and monitoring, regulatory compliance and other areas of risk.

SILVER SPONSOR

BinarApps builds digital products for startups and global brands. Its team offers insight from both perspectives: business and technology. Whether it’s building from scratch or developing new features from your backlog –the company says it will meet the challenge.

It has delivered solutions for healthcare professionals, data analysts, creative freelancers, filmmakers, logisticians, restaurant chain managers, cryptocurrency users, and many more. It ensures a project’s success by carrying its Clients from ideas to profits.

Benefit from its wide experience in digital product consulting, web, and mobile app development, custom development, UI/UX design, AI solutions and software quality assurance.

Andrew Turner JLL

Eirini Etoimou, Sellafield Ltd

Procurement and Supply Chain LIVE: Day Two recap

Siemens AG, spoke about the company’s move from being tactical to being strategic.

Another address came from Shawn Plunkett – Global Procurement Category Director, Warehousing & Logistics at Springer Nature, an academic publisher – who spoke about how smart inventory management has furthered the company’s sustainability goals,

The networking area was buzzing across the two days, with many conversations taking place in an Expo-style atmosphere, at company stands.

One company with a stand was Kodiak Hub, whose supplier relationship management platform boosts efficiency and performance through automation, data enrichment and advanced analytics, so leveraging supplier data and market

Alisa Bornstein Visa

(Left to right) Nathan Pearce, IBM; Sue Kay, Compass Group Plc; Bob Booth, Basware

information into actionable insights. There was insight aplenty from a raft of industry experts, including Mark Gilham, an evangelist with Enable, a SaaS rebate management platform that drives relationships between B2B trading partners.

He delivered a powerful keynote entitled ‘The Transformative Journey of Procurement’, sharing insights and expertise on the latest trends and strategies in procurement and supply chain management.

Gilham told his audience: “You don't want to be spending time on administrative tasks

– ploughing through software we, working out what's going on with rebates. Every hour you're doing that, the tech-savvy version of you isn't there, which means it can’t add value.

He then urged showgoers to “speak to your peers – the thought leaders and the service providers – and challenge them, so you can go away more informed on what technology can and can't do for you”.

Sheldon Mydat is CEO of supplier relationship-management platform, Suppeco. He took part in a panel discussion on digital procurement.

Speaking about the importance of data governance, Mydat told his in-person and virtual audience: “All procurement solutions are based on data, so if you have poor data your KPIs exist in a dysfunctional environment.

He added: “Most company data is unstructured, and you need to sort the wheat from the chaff, in order to be able to understand that data. It's also about harnessing unstructured data that lives inside the operation.”