DIGITAL TRANSFORMATION IN PROCUREMENT
DE C 2 0 2 0
www.supplychaindigital.com
SAP: ADOPTING INDUSTRY 4.0 IN DIGITAL SUPPLY CHAIN Mike Wade talks us through SAP’s mission to accelerate the adoption of Industry 4.0 across manufacturing.
TRENDS OF 2021
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FOREWORD
H
ello, and welcome to the December edition of Supply Chain Magazine; a publication that explores the trends shaping the global supply chain networks today, through the individual journeys and stories of leading organisations and executives in the industry. Within these pages, we’ll be deep-diving into the depths of the industry, exploring digitisation, and checking out the growing trends across the sector. Take, for example, December’s lead story: an exclusive interview with Mike Wade, Head of Digital Supply Chain for Southern Europe, Middle East, and Africa, at SAP, where we dive into the importance of digital transformation and discuss SAP’s mission to accelerate the adoption of Industry 4.0 across the manufacturing space. On top of that, Oscar De Bok, CEO of DHL Supply Chain, discusses the datacentric approach that his organisation has adopted, and how digitalisation is having an increasing impact on daily business operations. Elsewhere, Frederik Gesthuysen, Manager of Sales Administration and
Marketing at Mitsubishi Electric Europe B.V. details his personal, first-hand experience of how the manufacturing industry has transformed through the implementation of the ‘Internet of Things’, and what it means for Supply Chain 4.0. Also inside, find insights from Vijay Raja, Simon Hayward, and Andy Fox, as they deep-dive into the role of artificial intelligence and big data in the supply chain space. Oh, and, don’t forget to keep an eye out for this month’s ‘Top 10’, which takes a look at the upcoming supply chain trends in 2021. Fancy seeing your name featured in an upcoming edition of the magazine? Get in touch today at oliver.freeman@bizclikmedia.com From the team at Supply Chain Digital, we hope you enjoy the issue. Oliver James Freeman
supplychaindigital.com
03
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PUBLISHED BY
PRODUCTION DIRECTORS
Georgia Allen Daniela Kianickovรก EDITOR-IN-CHIEF
Oliver Freeman
PRODUCTION MANAGER
Owen Martin Philline Vicente
DEPUTY EDITOR
Georgia Wilson EDITORAL DIRECTOR
Scott Birch CREATIVE TEAM
Oscar Hathaway Sophie-Ann Pinnell Sophia Forte Hector Penrose Sam Hubbard Mimi Gunn
VIDEO PRODUCTION MANAGER
Kieran Waite
Tom Livermore James Richardson MEDIA SALES DIRECTOR
James White SALES AND MARKETING DIRECTOR
Jason Westgate MANAGING DIRECTOR
Lewis Vaughan
DIGITAL VIDEO PRODUCERS
Sam Kemp Evelyn Huang DIGITAL MARKETING EXECUTIVE
Kayleigh Shooter
CHIEF OPERATIONS OFFICER
Stacy Norman PRESIDENT & CEO
Glen White
PROJECT DIRECTORS
Karl Green supplychaindigital.com
SAP Industry 4.Now: it’s NOW time for Data-Driven Business Processes
10 28
DHL Supply Chain: A Data-Driven Approach in Transformation
38
Change Management in Manufacturing
The Role of AI and Big Data in Modern-Day Logistics
48
The Global Supply Chain Technology Outlook 2021
62
TRENDS OF 2021
72
90 Arm
108 KWS Group
124 Bayer
140 IMI Critical Engineering
158 Crown Resorts Limited
10
SAP Industry 4.Now: it’s NOW time for Data-Driven Business Processes WRITTEN BY
GEORGIA WILSON PRODUCED BY
GLEN WHITE & CAITLYN COLE
DECEMBER 2020
11
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SAP SE
12
DECEMBER 2020
“ The time is now,” says SAP Digital Supply Chain’s Mike Wade, on SAP’s mission to accelerate the adoption of Industry 4.0 and to help customers transform their manufacturing business.
M
ike Wade’s career in the supply chain industry began “rather by accident” he reflects. “I started in air freight and logistics, so that’s
how I got into the big world of supply chain. Then I was a manager and the Regional General Manager for a third-party logistics business in the UK. I then changed direction slightly and moved into a UK headquartered global Retail organisation (The Body Shop International) as a distribution manager. This exposed me at that point to the combination of distribution management, supply chain planning, supply chain execution, and manufacturing. In 1998, I then made what felt like a radical change and moved into a supply chain technology business.” Today, Wade is the Head of Digital Supply Chain in South Europe, Middle East & Africa at SAP Digital Supply Chain (DSC), where he still finds his varied experience in the sector very helpful when talking with customers “because I have empathy with them in operations, running their businesses”. “When I look back, I can recall some of the experiences I had running those supply chain organisations suppl yc ha i ndi gi ta l. com
13
SAP SE
“ It’s a great time to be in the world of supply chain” — Mike Wade, Head of Digital Supply Chain in South Europe, Middle East & Africa, SAP Digital Supply Chain (DSC)
profile changed massively seeing huge increases. “I’ve talked to multiple CEOs, and I’ve talked to some who have been given by their chairman or board open cheques to secure the supply source for their business. On the other hand, I talked to customers who were told to close their doors for three months during the peak of COVID – their busi-
14
or supply chain operations,” he contin-
ness was closed. We see both ends
ues. “I’ve been in this role for three and
of the scale. And what this has really
a half years, but I have been with SAP
focused on is resilience. Resiliency in
nine. It’s a great time to be in the world
supply chain operations and supply
of supply chain. The focus is higher now
chain planning is critical.”
than it ever has been, and the good news,
With resiliency now more than ever
even in this world that’s accelerating and
being a critical requirement in supply
adopting new innovation, is that there
chain operations, Wade explains that
is still absolutely – and probably more
“a new lens has focused organisations
than ever – a need to focus on the supply
in a different way, making companies
chain. So it’s a good place to be.”
ask the questions: how agile are the
With the increased focus on the supply chain industry experienced over the last eight to nine months, Wade comments that “supply chains have been a focus like never before, we felt the impact of that in the early days of COVID.” When supply sources were put under pressure at the outset, Wade reflects on his discussions with others in the industry, whose demand DECEMBER 2020
Mike Wade - Head of supply Chain EMEA South, Middle East and Africa at SAP CLICK TO WATCH
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1:03
15 systems supporting my supply chain?
has been so high, and we’ve seen the
How reliant are we on outsource manu-
pressure that this has put on omnichan-
facturing? I read recently a Bain report
nel fulfilment operations. So companies,
that shows how many companies are
in general, have had to reassess their
now considering onshoring versus
supply chain planning capabilities to
offshoring when compared to perhaps
manage and plan their way forward.”
two or three years ago, and the potential change is incredible.” However, “trying to balance supply
INDUSTRY 4.0: INNOVATION AND TRANSFORMATION
and demand has never been more diffi-
Being a founding member of the ‘Industry
cult or challenging,” adds Wade, who has
4.0 Alliance’ established in Germany,
seen online retail accelerate their adop-
“SAP has been at the forefront of industry
tion of digital transformation by many
4.0 for some time,” comments Wade.
years. “They have pulled forward that
The alliance brings together like-minded
transformation because the demand
organisations to drive the agenda and suppl yc ha i ndi gi ta l. com
SAP SE
16
common standards across industry 4.0.
placed to help our customers navigate
“I’m pleased to say that that Alliance is
from the idea to the realisation of value,
accelerating the nature of industry 4.0,
which can be either at the manufacturing
which essentially calls for technology to
level – so the shop floor level in an organi-
connect business processes and physi-
sation – or enterprise-wide, and the
cal assets,” adds Wade. “SAP is ideally
focus is to drive competitive advantage.”
DECEMBER 2020
“ It’s the combination of SAP, the company, the digital supply chain solutions and the people that make us different to our competitors and enables us to deliver real value for our customers” — Mike Wade, Head of Digital Supply Chain in South Europe, Middle East & Africa, SAP Digital Supply Chain (DSC)
Three of the top trends that Wade is currently seeing in the industry when it comes to industry 4.0 are centred around: business performance, personalised products and a combination of product excellence and intelligent products. Breaking down each trend in more detail, Wade explains that, “if we look at business performance, the World Economic Forum launched an initiative called the Global Lighthouse Network (GLN). This community of manufactures shows leadership in
E X E C U T I V E P R O FILE :
Mike Wade Title: Head of Digital Supply Chain – South Europe, Middle East & Africa, SAP Digital Supply Chain (DSC) Mike serves as the General Manager of the Digital Supply Chain business across South Europe, Middle East & Africa region at SAP. Mike is responsible for the go-to-market of SAP strategy for the Digital Supply Chain & Industry 4.0 solution portfolio and how this delivers and drives value to its customers across the region through the SAP ecosystem. Mike supports and works directly with many of SAP’s customers across the region as well as leading a team of sales specialists who operate in the specific markets across this geography of 75 countries and six time zones. suppl yc ha i ndi gi ta l. com
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SAP SE
Mike Wade Explain industry 4.0 CLICK TO WATCH
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1:18
18 using Industry 4.0 technologies to transform factories, value chains and business models, for compelling financial and operational returns. Together with McKinsey, they have identified that unprecedented efficiencies are available when adopting industry 4.0 innovation at full scale; the numbers are big, and these companies are showing the way forward for the majority of businesses that are stuck in what is termed ‘pilot purgatory’. “Number two, personalised products to meet customer demand. We all know of course – and some of us may have
actually tried – the example of Adidas where you can personalise your own shoes to order. However, the consumer then expects that order to be available immediately. They’ve taken the time to customise their order, to take advantage of personalised products and they want the order immediately. So now you see a link between manufacturing and fulfilment, and the agility that is required there in that link. The third area of focus is product excellence and intelligent products. So as consumers, we expect high quality, and this is putting pressure on creating shorter innovation cycles in design and manufacturing, and all of this, of course, has to be done and to drive the circular economy.” With these trends in mind, when it comes to SAP’s capabilities to help organisations transition to Industry 4.0,
“ With SAP Industry 4.Now, we can help companies translate their vision into reality now” — Mike Wade, Head of Digital Supply Chain in South Europe, Middle East & Africa, SAP Digital Supply Chain (DSC) suppl yc ha i ndi gi ta l. com
19
SAP SE
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Wade deep dives into the four key com-
The second area that SAP helps its
ponents of the Industry 4.Now strategy.
customers in is intelligent assets. “This
Starting with intelligent products, Wade
is the ability to links the physical assets
explains that “this is where SAP provides
with its digital twin and to share a sin-
the bridge between engineering and
gle common view between the assets
manufacturing. This handoff has to be
operator, the manufacturer, and the
seamless and fully connected. It’s crucial
service providers that combined
to ensure that the manufactured product
with Machine learning, Predictive
meets – in full – the customer demands.
Algorithms and IoT technology can
Having a fully connected engineer-
help drive operational efficiency and
ing and manufacturing environment
improve maintenance activities.”
means that a company can, for exam-
Number three, intelligent factory – or
ple, accommodate late-stage changes
what we sometimes refer to as the smart
to an order.”
factory – is an agile and adaptable
D2O | 00 | Highlight Video Design 2 Operate CLICK TO WATCH
DECEMBER 2020
|
4:38
S A P C U S T O M ERS HARN ESSI N G I T S I N D U ST RY 4. 0 SO LU T I O N S
De’Longhi Group Headquartered in Italy, De’Longhi is “a very well-known and famous householder appliance manufacturer,” comments Wade. “De’Longhi has adopted industry 4.0 technologies from SAP in their manufacturing operation using IoT technologies and connecting all of their manufacturing assets.” In providing its services to De’Longhi, Wade explains that as a result, De’Longhi has reduced its order to dispatch time. “This is a critical customer service metric and also a very important metric for most manufacturing vice-presidents,” comments Wade, who adds that SAP’s services have “also helped
De’Longhi implement new production lines, in rapid time. I’ve talked about the ability of manufacturers to pivot during the times that we’re in. This is important because they may want to pivot into new areas as we move forward.” Faurecia “Faurecia is one of the world’s largest automotive suppliers,” comments Wade, who details that the company is using SAP’s manufacturing solutions to connect all of its manufacturing lines and production machines to deliver innovation inside the operations. This, in turn, delivers innovation to its automotive customers.
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SAP SE
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“ When intelligence systems give people the data to make informed decisions, the human aspect is further enhanced” — Mike Wade, Head of Digital Supply Chain in South Europe, Middle East & Africa, SAP Digital Supply Chain (DSC)
DECEMBER 2020
D2C | 00 | Highlight Video for Design 2 Consume CLICK TO WATCH
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3:54
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factory environment, which is also elastic, and if we think about what’s happened during these times of COVID, manufacturing has had to be flexible and elastic and pivot to produce new products to deal with multiple scenarios. This type of factory is fully connected and uses real-time data to drive performance and link manufacturing and logistics together to ensure that the customer demands are met,” adds Wade. The final area which SAP helps its customers to develop is the human aspect “Empowered people”. “People have often suppl yc ha i ndi gi ta l. com
SAP SE
Mike Wade explains the process of SAP CLICK TO WATCH
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1:20
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1972
Year founded
€27.63bn Revenue
101,450 Number of employees
DECEMBER 2020
asked: the adoption of industry 4.0, what
Summarising SAP’s role in customer
does it mean for me? What does it mean
journeys, Wade reflects that “here at
for my people?” Wade says. “The great
SAP, we can help companies translate
news about industry 4.0 is that as we
their vision into reality. It’s our job. We
deploy those technologies, we move the
can help move companies beyond
people to a more empowered environ-
what I referred to earlier as “pilot
ment by adopting AI, artificial intelligence,
purgatory” into full-scale adoption of
and connecting all the assets involved
Industry 4.0 – or as we say here in SAP
in manufacturing. The demand from
Industry 4.Now – because the time
the customer allows people to focus on
is NOW. We have an Industry 4.Now
real value. When intelligence systems
team, which is a worldwide team oper-
give people the data to make informed
ating across our regions where we can
decisions, the human aspect is further
bring them alongside customers to
enhanced,” says Wade.
translate vision into reality.”
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SAP SE
26
Whilst Wade states that he may be
connected digital supply chain. In fact,
slightly biased, he believes there are
the digital supply chain is, by definition,
many reasons why SAP is different
fully connected. It has to be, and the
from the competition, the first being
analysts rank us as number one in the
that “SAP Digital Supply Chain has
market. So this is all very good, but
the broadest process and solution
actually, I think, more importantly, it’s
coverage in the industry, from Design
the people that make us different. We
to Operate. We also cover the fully
are, of course, confident in the SAP
DECEMBER 2020
Launching Industry 4.Now Hub by Thomas Saueressig 27 CLICK TO WATCH
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3:37
solution capability, but unless we can
the people that make us different
translate customer demands, customer
to our competitors and enables us to
needs and customer strategy into a
deliver real value for our customers.”
solution vision, then it’s meaningless. We have deep subject matter experts that allow us to do this. So for me, it’s the combination of SAP the company, the digital supply chain solutions and suppl yc ha i ndi gi ta l. com
SRM
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DHL Supply Chain: A Data-Driven Approach in Transformation WRITTEN BY
SEAN GALEA-PACE
DECEMBER 2020
29
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SRM
Oscar De Bok, CEO of DHL Supply Chain, discusses a data-centric approach at his organisation and how digitalisation is having an increasing impact on operations
D
HL Supply Chain is the world’s leading contract logistics provider. It combines
value-added and management services with
traditional fulfilment and distribution, with its
30
customised and integrated logistics solutions driving efficiency, enhancing the quality and helping to establish a competitive advantage. Oscar De Bok is the CEO of DHL Supply Chain. Originally from the Netherlands, De Bok has spent the majority of his career across numerous roles around the globe before moving into his current role in October 2019. De Bok believes what sets his organisation apart is customer-centricity and the standardisation across the business at the same time. “It’s about our consistency in the way we operate around the world,” he says. “We also standardise the way we train and develop our people; it’s important you get the same level of service.”
DECEMBER 2020
31
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“ BEING FLEXIBLE IS VITAL BECAUSE NO ONE HAS A CRYSTAL BALL AND CAN PREDICT THE FUTURE” — Oscar De Bok, CEO, DHL Supply Chain
While automation isn’t a new
to enable us to make better decisions
innovation in the logistics industry,
around how we can introduce
De Bok believes that flexibility
collaborative robotics into operations,
has improved considerably and
as well as still having the flexibility
allowed the cost of robotics to
to upscale, downscale and adjust
streamline operations to be greatly
going forward.”
reduced. “This means that you’re far
De Bok is well aware of the plethora
more flexible in the type of solutions
of information at his organisation’s
you can develop and you can adjust
fingertips; however, he recognises
solutions far more quickly than in the
how important it is to leverage this
past,” explains De Bok. “The level
data effectively. “In the logistics
of investment has substantially
industry, we sit on so much data and
increased in the industry, and this has
information, and this means we have
meant there is a lot more innovation
lots of visibility over what’s happening
within the logistics sector. That has
in the market,” he says. “By leveraging
created the possibility together
machine learning in a better way,
with the increase of data analytics
we can start telling our customers suppl yc ha i ndi gi ta l. com
33
SRM
what will happen tomorrow instead
industries worldwide, De Bok believes
of it being the other way around.
his organisation has coped with the
Data has allowed us to accelerate
pandemic well. “Some of our sites we
decision-making, making conclusions
had to practically close down in terms
to implement changes within the supply
of fashion and automotive,” explains
chain together with our customers
De Bok. “But on the other hand, we
much quicker. Machine learning and
experienced a considerable rise in
data analytics are two of the biggest
consumer and grocery retail, and we
topics in logistics at the moment.”
had to cope with both. In some countries
DHL Supply Chain provides
34
such as the UK, we’ve been able to
specialist, proven expertise within
move people between operations
a range of different industries. These
which was always a benefit of having
include consumer, life sciences &
all members of staff trained in the
healthcare, retail, automotive, technology
same way.”
and engineering & manufacturing
De Bok believes that one of the
sectors. With COVID-19 having
biggest lessons he’s learnt from the
disrupted company operations and
pandemic is again realising that there
“ IT’S ABOUT OUR CONSISTENCY IN THE WAY WE OPERATE AROUND THE WORLD” — Oscar De Bok, CEO, DHL Supply Chain DECEMBER 2020
DHL Data Analytics CLICK TO WATCH
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2:44
35 are great people at all levels within
the demand of e-commerce. “There is
the organisation. “I’ve been highly
a considerable change towards B2B
impressed by how people have stood
e-commerce just as much as the BTC
up and made important decisions,”
commerce,” he says. “Over the past six
he affirms. “I feel that we’ve empow-
months, we’ve seen companies having
ered organisations to take decisions,
to develop very quickly. There is an
and this was made possible by how
increasing need for more flexibility
we trained our people, the talent of
and a trend towards multi-sourcing
the people themselves and also by
points. In the light of COVID we have
having more standardised processes
developed a new service which we
in place. We now have more visibility
call the European Fulfillment Network.
of data, and this allows us to make
This network grants our customers
decisions quicker than ever before.”
flexibility and proximity to the markets.
Over the past few years, De Bok
By connecting more than 30 European
has witnessed first-hand the rise in
fulfillment warehouses to a giant suppl yc ha i ndi gi ta l. com
SRM
36
“ IN THE LOGISTICS INDUSTRY, WE SIT ON SO MUCH DATA AND INFORMATION AND THIS MEANS WE HAVE LOTS OF VISIBILITY OVER WHAT’S HAPPENING IN THE MARKET” — Oscar De Bok, CEO, DHL Supply Chain DECEMBER 2020
European network of warehouses,
De Bok sees an acceleration
we help our e-commerce customers
of the evolution of supply chain.
to be faster – though we enable them
“No one has a crystal ball and can
to ship the next day, or even same
predict the future. The only thing
day – and have more resilience in
that we all know is that you need to
their supply chains. Given one geog-
be agile and able to respond to any
raphy falls under a lockdown or supply
changes in the market immediately,”
restriction, we can serve the markets
affirms De Bok. “The need for flexibility
from one of our multiple other stock-
starts right at planning around sourcing
ing points. That kind of service sets
and being able to adapt from this point
a whole new industry standard and
on is vital. This is why data analytics,
will be a blueprint for other markets
collaborative robotics and the ongoing
and geographies as well.”
digitalisation of planning is so impor-
With the future in mind, De Bok
tant. Just seeing how quickly we’ve
recognises how vital it is to be lean
been able to move this year makes
and willing to adapt. Citing the chang-
me optimistic that whatever happens,
ing world around us, coupled with
we can transform our industry for
increased investments in the industry,
the better.”
suppl yc ha i ndi gi ta l. com
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CHANGE MANAGEMENT
38
Change Management in Manufacturing WRITTEN BY
SEAN GALEA-PACE
DECEMBER 2020
39
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CHANGE MANAGEMENT
Supply Chain Digital hears from executives at Mitsubishi Electric to discuss the influence of new technology at the organisation and wider industry
M
itsubishi Electric is regarded as one of
the world’s most renowned names in the manufacturing and sale of electrical and
electronic products and systems. Founded in 1921, Mitsubishi Electric has been
at the forefront of Japan’s technical ingenuity and 40
product innovation. Following its first successful product - an electric fan built for consumer use the organisation has continued to create a long list of firsts and groundbreaking new technologies that have shaped its business fields worldwide. Frederik Gesthuysen is the Manager Sales Administration and Marketing at Mitsubishi Electric Europe B.V. He has witnessed first hand how the manufacturing industry has transformed due to the introduction of the Internet of Things. “The key to surviving today’s severe market competition is the prompt and timely implementation of IoT, not only on the production shop floor but also throughout the manufacturing field,” says Gesthuysen. “In response to this need, we already developed the “e-F@ctory” integration solution back in 2013. At its core is “edge computing,” DECEMBER 2020
41
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CHANGE MANAGEMENT
“ It’s important to always be on top when it comes to recognising trends and driving innovation” — Frederik Gesthuysen, Manager Sales Administration and Marketing, Mitsubishi Electric Europe B.V.
advanced technologies that utilise AI to collect data from the production shop floor and analyse it in real-time, thereby improving manufacturing. Of course, such a level of digitalisation and automation is not possible to realise without any 3rd party support; therefore, we integrated more than 900 “e-F@ctory alliance” partners.” Manufacturing is driven by technology. With the importance of leveraging the latest trends essential to success in the industry, Gesthuysen recog-
42
nises that digitalisation is at the heart.
DECEMBER 2020
Our Corporate Philosophy - Mitsubishi Electric CLICK TO WATCH
|
3:14
43 “Our customers expect the network-
“Machine tools are increasingly
ing to bring the next great leap in
merging with the robot and are no
development and thus a competitive
longer standing side by side as sepa-
advantage,” says Gesthuysen. “The dig-
rate components. Mitsubishi Electric
italisation of processes and products
reacted to this by introducing our
also goes along with new solution offer-
‘Direct Robot Control’ (DRC) func-
ings and business models, especially
tionality, which enables our robots
in the field of service. For the future
to be connected to and directly oper-
viability of machine tool manufacturers,
ated by our CNC.”
this means that services, consulting
In such a competitive industry,
and service offerings are becoming
Gesthuysen understands how vital it
even more important. Another crucial
is to be agile and lean in order to adapt
factor for automated and networked
to the latest trends. “It’s important
production is the integration of robots
to always be on top when it comes
into manufacturing systems.
to recognising trends and driving suppl yc ha i ndi gi ta l. com
CHANGE MANAGEMENT
innovation,” he explains. “On the other side, you need to make sure not to blindly follow those trends and just rush into the market with new developments.” Mitsubishi Electric follows the Japanese “Kaizen” philosophy. Kaizen is a continuous process that never ends and means change for the better. Kaizen sees improvement in productivity as an ongoing and gradual process. “To us, it is particularly important that innovations are introduced gradually so that they remain manageable,” says 44
Gesthuysen. “Therefore, it’s not a question of radical breaks and doing everything differently from one day to the next. Instead, it is a slow, controlled process in which everyone involved engages in repeated questioning, checking, trying-out and adaptation. We think that this is the best approach in order to really be able to listen and adapt to our customer’s requirements and assure the best possible quality of our products and solutions.” Roman Gaida is the Deputy Head of CNC Mechatronics Division EMEA at Mitsubishi Electric, with over 20 years of professional experience combined with entrepreneurial DECEMBER 2020
“ Trust and regular communication are key when it comes to a long-term partnership” — Frederik Gesthuysen, Manager Sales Administration and Marketing, Mitsubishi Electric Europe B.V.
thinking and a strong ability for customer needs, leadership and cultural change. “It all started with a gap evaluation in cooperation with an external partner,” explains Gaida. “Since the market and also our customers are changing faster than ever, we had to adapt our approach and processes to the changing environment. We had room for development in regards to usage of data, knowledge transfer and historically grown structures. The goal was to build up a scalable business which allows us to be more innovative and flexible, but at the same time to create a workplace which everyone enjoys working in.” As a result of the impact of COVID-19, Gaida is relieved that his organisation began its digital transformation journey three years prior to the pandemic. “COVID-19 meant companies had to transform operations almost overnight, but this wasn’t completely the case for us,” says Gaida. “Apart from our transformation, we also went through a cultural transformation which included experiments with new work elements such as remote working and transformational suppl yc ha i ndi gi ta l. com
45
CHANGE MANAGEMENT
leadership approach to enable our teams to drive projects and make decisions on their own. At the end of the day, going from office to remote working wasn’t as hard as it might have been because we prepared so well.” Gesthuysen believes that strategic partnerships are a vital part of his company’s global CNC strategy. “Trust and regular communication are key when it comes to a long-term partnership,” he says. “Some of the world’s leading machine tool manufacturers, such 46
as INDEX-Traub, Citizen Machinery and Mazak have been using our CNC technology for more than 40 years. We don’t just deliver our components,
“ In the age of Industry 4.0, consistent networking, data analysis, robotics and 3D printing are some of the new trends that are redefining the manufacturing space” — Frederik Gesthuysen, Manager Sales Administration and Marketing, Mitsubishi Electric Europe B.V. DECEMBER 2020
but rather develop and customise our technology according to their requirements. For some customers, our R&D department in our main factory, Nagoya Works in Japan is arranging daily meetings with them in order to harmonise and discuss the current status on a global level.” With the future in mind, Gesthuysen has a vision of what he believes the industry could look like in the coming years. “In the age of Industry 4.0,
47
consistent networking, data analysis,
in advance. In addition, the concept is
robotics and 3D printing are some
to function globally, sustainably, and
of the new trends that are redefining
cost-optimised to be wirelessly inte-
the manufacturing space,� he says.
grated with the supply chain network
“These technology trends are already
via powerful communication technol-
paving the way for Supply Chain 4.0
ogy such as 5G.�
and transforming manufacturing facilities into agile and intelligent manufacturing services that are fully automated, environmentally friendly, self-learning and able to flexibly identify and avoid delivery problems suppl yc ha i ndi gi ta l. com
A I & B I G D ATA
The Role of AI and Big Data in Modern-Day Logistics WRITTEN BY
SEAN GALEA-PACE 48
DECEMBER 2020
49
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A I & B I G D ATA
Supply Chain Digital examines the role of AI and Big Data in the logistics industry today
A
I in logistics has undergone significant
transformation over the years. With many companies in supply chain and logistics
undergoing a digital transformation, the influence of new technology is accelerating at considerable
50
speed. In order to remain successful and maintain a competitive advantage in the field, companies know that it’s essential to leverage AI and Big Data into day-to-day operations. Although new, AI-driven concepts are being introduced, they aren’t new to the logistics sector. In fact, trucking, rail and ocean freight have been tracked by satellite through telematics for decades. However, the data hasn’t previously been utilised to its full capacity until recently. Elements of AI are now regularly used for predictive analytics in relation to intelligent transportation and route planning, demand planning and others. Some warehouse operations are also being integrated with augmented guidance and robotic systems to scale inventory management.
DECEMBER 2020
51
suppl yc ha i ndi gi ta l. com
422% ROI for IoT Connectivity The Total Economic Impact of Pelion Connectivity Management for Logistics, a commissioned study conducted by Forrester Consulting on behalf of Arm. Measuring ROI is still a struggle for the logistics industry looking to prove the value of IoT. In their study examining Pelion Connectivity Management, they found benefits totalling $421,080 USD.
Reliable, robust and resilient cellular connectivity delivered on an international basis Resilient network infrastructure that delivers optimum levels of security Connectivity management capabilities
Learn more at arm.com/resources/ report/forrester-logistics-spotlight
The existence of easily accessible
Introducing all the data from the
data isn’t new, but the way it’s used
supply chain, analysing it, identifying
is changing. Despite AI being able
patterns and providing insight to every
to exist on a smaller scale without
link of the supply chain is seen as vital
increasing volume, velocity or variety,
steps forward.
53
new types of data have emerged
Vijay Raja, Director, Industry &
during the past few years, and there
Solutions Marketing at Cloudera
has been a considerable rise in
believes that everything at all stages
the speed of how data is created
of the logistics chain revolves around
and changes. Now, Big Data ensures
data. “A critical capability required
that collected information can
to enhance process performance is
be leveraged in actionable ways.
mastering the Big Data management
“ Logistics teams need to have a comprehensive picture of their data at every stage of its journey” — Vijay Raja, Director, Industry & Solutions Marketing, Cloudera suppl yc ha i ndi gi ta l. com
A I & B I G D ATA
Coyote Logistics: Helping You Deliver on Your Promises CLICK TO WATCH
|
1:03
54 lifecycle,” says Raja. “Companies need
temperature nudges up a couple of
to be able to ingest and process their
degrees, the edge, in particular, must
data across diverse sources, including
be smarter and richer. It needs to be
external data sets such as weather,
able to collect, store and process
geopolitical implications, local event
intelligent data at the edge itself, to
calendars or social commentary data.”
make real-time personalised actions
“This then must be analysed, in
required to best enable an efficient
real-time in some cases, to provide immediate insights that can help them
logistics cycle.” Raja adds that he believes it’s vital
successfully manage their operations.
that logistics firms have complete
Whether that’s a seamless automated
visibility and transparency over all
check-in at the airport or monitoring
stages of the journey. “Having the right
temperature-controlled trucks delivering
data-in-motion solution that is able to
perishables or pharmaceuticals
process data collected at the edge,
that will be rendered useless if the
all the way through to the enterprise
DECEMBER 2020
JAAP BRUINING, SVP HEAD OF EUROPE, C O YAT E L O G I S T I C S “COVID-19 has further accelerated the digitalisation that’s been taking place within the supply chain and logistics industries for many years. Innovations in technology continue to advance capabilities in business planning, measurement, operations, and many other functions, which have been critical to optimizing processes during the global pandemic. Automation in the form of AI can provide mitigation, improve forecasting, increase delivery speed through route optimization, Streamline operations, and improve customer service. While every company is in a different stage of AI integration and digitalization, capabilities now can help them remain competitive in the future. “According to our “Tech + Humanity” study, conducted in partnership with Martec, shippers identified that advanced AI solutions, better freight market forecasting tools, new technology to streamline operations, and
blockchain were at the top of their wish lists to further advance their supply chains. Despite the value placed on AI, the study also found that shippers did not think any single supply chain task should be managed by 100% humans or 100% technology, rather a blend of both. Human expertise is irreplaceable in creative, decision-making and strategic-thinking tasks, such as communicating with customers, synthesizing data into actionable insights and resolving shipment and delivery problems. If supply chain and logistics leaders do not have their finger on the pulse of the latest digital trends and new technologies, they may fall behind as the industry continues to evolve in this direction.”
suppl yc ha i ndi gi ta l. com
55
A I & B I G D ATA
is imperative,” he says. “Logistics teams
the enterprise and industrial sectors
need to have a comprehensive picture
soon to follow. In logistics, the network
of their data at every stage of its
-based nature of the industry offers
journey. This will allow them to act
a natural framework for introducing
on immediate real-time information
and scaling AI, accelerating the human
with agility and proactivity, to ensure
components of highly organised
an undisrupted and optimum logistical
global supply chains.
process. Ultimately, empowering them to drive their business success.”
In a collaborative report by DHL and IBM on the implications and use cases for the logistics industry,
56
WHY IS NOW THE RIGHT TIME?
it was highlighted that logistics firms
2020 has been disruptive across
are uniquely poised to benefit by
industries the world over. This has
introducing AI into all aspects of the
meant that businesses have had to
supply chain. According to the report,
be agile and quick on their feet to
“one of the most underutilised assets in
adapt to the demands of the modern
the industry is the high volume of data
world. At the moment, AI has never
that supply chains generate on a daily
been so accessible and affordable.
basis. This data is both structured
This has already made narrow forms of
and unstructured, and AI will enable
AI present in the consumer space with
logistics companies to exploit it.
“ While the industry is well-versed in data, there is a huge opportunity to carve the future of logistics with Big Data and AI” — Simon Hayward, Vice President for EMEA, Domo DECEMBER 2020
57
In addition, as many logistics companies
people and goods as connected
around the world embrace digital
as possible despite the disruption
transformation, transitioning away
caused by the pandemic. “While the
from legacy enterprise resource
industry is well-versed in data, there
planning systems to advanced
is a huge opportunity to carve the
analytics increased automation,
future of logistics with Big Data and AI.
and hardware and software robotics,
Integrating these technologies can
and mobile computing, with the next
improve operational efficiency, and
obvious step in the increasingly digital
help businesses pinpoint areas of
supply chain, is to apply AI.”
friction that previously couldn’t be
Simon Hayward, Vice President for
identified,” explains Hayward. “To give
EMEA at Domo, affirms that logistics
a few examples, end-to-end visibility
has had to meet the challenge of
over data helps to plan and anticipate
COVID-19 head-on in order to keep
shifts in customer demand, and suppl yc ha i ndi gi ta l. com
A I & B I G D ATA
D AV I D S E M A C H , E M E A H E A D O F A I A N D A U T O M AT I O N , I N F O S Y S C O N S U LT I N G :
58
“For an industry that has historically lagged behind on technology adoption, COVID-19 has broken down a lot of traditional barriers to transformation in logistics. Businesses had to quickly move from global networks reliant on third parties to self-sufficient, local supply chains, and turning to technology to help them achieve this. As such, the main trend we’re seeing is logistics becoming ‘handsfree’, injecting AI and automation throughout supply chain and warehousing processes and operations. “Take warehouse management – this used to rely on highly manual processes, with inbound and outbound processing done by hand, as well as returns, inventory management, and more. Now, AI can take over, selecting the right pallets and classifying them for a production order, for example, entirely automated.
DECEMBER 2020
“The vision for logistics is to future-proof operations through AI and automation. ‘Hands-free’ operations will enable teams to work in predictive mode – to predict future trends and events within their supply chain – and even prescriptive mode, where AI can recommend solutions and advise on the best course of action. In the coming months, this will start to take shape as more organisations create ‘cockpit’ style platforms, where real-time information and data across an entire warehouse or even supply chain are brought together. This puts AI and automation tools at the disposal of decision-makers, to enable the most efficient and productive operations possible.”
inventory shortages. Real-time GPS
With the future in mind, Andy Fox,
data, weather data, fleet, and personnel
Senior Director of Solution Delivery
schedules can be embedded into one
at LLamasoft, believes that technology
overarching system looking at historical
such as AI is no longer considered just
trends so that optimised routes can
“nice to have” but is essential for business
be selected for delivery. Using both
continuity and success. “2020, with
past and real-time data, AI can provide
all of its disruptions, has made this
a forward view to help shape S&OP.
apparent and, with Brexit still to come,
It could be as simple as an alert that
businesses cannot expect a reprieve
you are on course to miss a production
to welcome the new year,” comments
target, right up to a virtual factory,
Fox. “Instead, technology such as
running multiple models, weeks in
AI and the digital twin can be used to
advance, allowing issues to be
both optimise delivery routes, while
recognised before they arise.”
creating contingency plans
Microsoft Business Applications Adoption Framework CLICK TO WATCH | 4:30
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59
A I & B I G D ATA
60
“ 2020, with all of its disruptions, has made this apparent and, with Brexit still to come, businesses cannot expect a reprieve to welcome the new year” — Andy Fox, Senior Director of Solution Delivery, LLamasoft DECEMBER 2020
61
for when these routes inevitably
external, whether it’s relating to the
experience disruptions. With this,
weather, the impacts of a pandemic
businesses can guarantee efficient
or seasonal spikes in demand.
deliverance, no matter the environment
The more information the algorithm
they’re operating in.
has to learn from, the more actionable
“For businesses to get the best
the insights will be. What makes AI
results from their AI and digital twin
so essential, if used correctly, is that
technology, they must have access
businesses don’t need to experience
to the correct data. This includes both
a trade-off. They can be fast, agile
internal business data, as well as
and accurate, all at once.” suppl yc ha i ndi gi ta l. com
TECHNOLOGY
The Global Supply Chain Technology Outlook 2021 WRITTEN BY
OLIVER JAMES FREEMAN
62
DECEMBER 2020
63
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TECHNOLOGY
Taking a look into the technology outlook across global supply chain networks in the year to come; from AI to RPA, 2021 is set for transformation
I
f you were at a party, did you know that the supply chain would be the life and soul of it? The drink,
the food, your clothes, shoes, the furnishings,
the music – each and every part of the experience has, at one time or another, travelled along a web of sophisticated supply chains to be there.
64
One thing should be clear: since the dawn of trade, supply chains have been crucial not just to the party but to the survival of humankind, and we need them now, more than ever before. In times of crises, as we have experienced in 2020, courtesy of the COVID-19 pandemic, the traditionally robust and stalwart supply chains of yesteryear struggled – that stark reality pushed forth a new agenda. The endorsement that industry-leaders and multinational corporations invest in technology to digitally-transform and enhance their global networks, creating more agile and resilient systems. Companies all over the globe heard this call and have, as a result, got to work on innovating new solutions, strategies and systems to alleviate the strains of a modern, highly volatile world, on our supply chains. DECEMBER 2020
65
“ Since the dawn of trade, supply chains have been crucial not just to the party but to the survival of humankind, and we need them now, more than ever before�
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RPA In 5 Minutes CLICK TO WATCH
|
5:34
67 With that in mind, we’re going to take
The information that your company
a look at the outlook for 2021, to see
acquires during day-to-day operations of
which technologies will be transform-
your supply chain network will, undoubt-
ing the old, and building new supply
edly, hold a myriad of hidden secrets – if
chains of tomorrow.
only you’d take the time to look for them. Through the collation and analysis of data,
ANALYTICS AND ANALYSIS
both internal and external, you’ll quickly
Where would the modern world be
be able to identify money-sinks and pain-
without analytics and the detailed
points where your overall organisational
analysis of them? In a ditch, I imag-
effectiveness and efficiency suffer.
ine. So, it’s unsurprising that “big data”, “data harvesting”, and “predic-
ARTIFICIAL INTELLIGENCE
tive analytics” are all set to continue
It seems that supply chain and
their exponential growth through
artificial intelligence (AI) are almost
2021.
synonymous, these days, with the suppl yc ha i ndi gi ta l. com
TECHNOLOGY
enhanced technological capabilities of our computer-colleagues outshining, and often outworking human resources in the workplace. AI-enhanced technologies are allowing industry-leading companies to optimise and automate processes and procedures all along their supply chains. Why is this a crucial development? Because unfortunately for us, humans are prone to error – it’s in our nature, and nothing to be ashamed of. Computers, however, are not; binary 68
coding and machine learning systems mitigate the risk of human error, whilst simultaneously streamlining and making processes more efficient. As AI can continuously analyse and calculate without pause, the technology is surefire to find patterns, better predict purchasing demands, eliminate redundancies, and optimise inventory levels across your entire supply chain. It saves a lot of time, resources, and to be frank, a headache for your employees.
BLOCKCHAIN TECHNOLOGY Blockchain technology has been on the tip of the tongue of every DECEMBER 2020
industry-seasoned professional in tech for years, now. Its original ambassador, Bitcoin, was only a cryptocurrency but over the years, with the rise of blockchain-powered, decentralised platforms like EOS and Ethereum, blockchain has evolved into an industry-disrupting behemoth. With that evolution, a system that is wholly unique and incredibly powerful has risen – blockchain is, arguably, the very best way to protect companies and their supply chains from cyberattacks, hackers, and corporate espionage, courtesy of its decentralised, immutable, 256-bit encryption. The cryptology that only blockchain creators and few others fully understand has resulted in a system that is both ridiculously confusing to crack, yet easily accessible to all, and secretive in nature, yet wholly transparent.
INTERNET OF THINGS The ‘Internet of Things’ or IoT, for short, is an innovative technology that, for the most part, has infiltrated every aspect of our lives. It’s in everything from smart devices to heating systems, and, currently, while it has broken into suppl yc ha i ndi gi ta l. com
69
TECHNOLOGY
“ Machines aren’t replacing humans. They’re just freeing us up for higher-value activities, and taking the monotonous tasks off our plate”
70
Behaviours’, or IoB. IoB is a lesserknown variant that focuses on using data to change behaviour. This is possible now, courtesy of what Gartner calls “digital dust” – the data footprint that we all leave behind us from our everyday use of technology – which can be harvested, analysed, and used to influence or manipulate end-user
the supply chain network, it hasn’t yet
behaviour through feedback loops.
reached the point of being an “end-to-
As we move into 2021, it’s likely
end” solution. It’s likely to become one
that we’ll see organisations working
in 2021, though.
with not only IoT but also IoB, as our
Currently, IoT is already in use
methods of purchasing, as well as the
in some manufacturing processes,
supply and demand for certain prod-
with smart factories and enhanced
ucts changes.
machines that communicate with the hubs hivemind, and it’s particularly
ROBOTIC PROCESS AUTOMATION
potent in the logistics industry, where
Robotic Process Automation, more
aeroplanes, freighters, and vehicles
commonly referred to as “RPA”, is a
are fitted with sensors and live-track-
system that, generally-speaking, cre-
ing capabilities. In the coming year, we
ates value across the entire supply
should see IoT grasp demand man-
chain. RPA is software that takes tradi-
agement, preventative maintenance
tionally manual processes, completed
and sourcing applications in the near
by human resources, and automates
future, as well.
them the clue is in the name, really. Naturally, as I alluded to earlier, we
INTERNET OF BEHAVIOURS
are prone to error; RPA implementa-
As an addition to IoT, 2020 has seen
tion results in fewer mistakes, more
a desperate need for ‘Internet of
efficient processing times, and costs
DECEMBER 2020
71
a lot less than its human counterparts.
developments that I have listed act
It’s important to remember that the
as an umbrella – I believe that these
implementation of RPA is for the auto-
five factors have hundreds of subsidi-
mation of tasks and processes, not
ary advancements within them and
the automation of jobs. The machines
that each represents a core pillar of
aren’t replacing humans. They’re just
the modern supply chain networks
freeing us up for higher-value activities,
that our societies desperately rely
and taking the monotonous tasks off
on. Each will have its own part to
our plate. Quite kind, really.
play in the successful creation of a
These are just some of the impend-
more agile, adaptable, and innova-
ing developments of 2021. There
tive supply chain system, in our bid
are so many more, and you could
to establish resiliency against future
probably add to this list, yourself. I
adversity that will no doubt come, like
like to think of major technological
COVID-19, when we least expect it. suppl yc ha i ndi gi ta l. com
T O P 10
72
Top 10 Trends of 2021: Tough Transformation in Supply Chain Analysing the top 10 trends of 2021 across supply chain, through slightly less rose-tinted glasses. Here’s a more realistic response
WRITTEN BY
DECEMBER 2020
OLIVER JAMES FREEMAN
73
In 2019, we expected 2020 to herald a new era-decade, at least-of transformation for the global supply chain networks. In some ways, that has proven to be the case, but you’d be amiss to claim, as many do, that this year has been packed full of significant development and innovations. Today, we’re going to take a look at the reality behind current techy trends across supply chains, and cull a little bit of the over-exaggerated hype.
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T O P 10
74
10
Automated Vehicles
While companies like Tesla, ZF and others dominate the news with their pioneering automated vehicles their core message is simple: the driver of the future isn’t a driver, but a passenger of an electric-powered, AI-controlled super-car. It’s a pretty picture, and I reckon we’d all like to have a go. This message is echoed throughout supply chain logistical networks - automated delivery lorries and freight-hauliers bombing up the motorway without a human in sight. The concept itself is idyllic and the prospect revolutionary, however, there is a major problem that needs to be addressed before it becomes a reality; they’re not wholly legal - not yet, anyway. On the bright side, electric vehicles are here. That’s step one.
DECEMBER 2020
09
Eco-Friendly Initiatives Hinder Logistics
Given that autonomous vehicles might not be “just around the corner”, we’ve got an issue: carbon emissions. During the COVID-19 pandemic, there has been exponential growth in ecommerce sales. The problem is, councils enjoy banning delivery lorries from entering urban centres during “peak hours”. For pollution-aversion, of course. Companies may be forced to invest in eco-friendly alternatives, and while ‘going electric’ does have long-term benefits, it may prove to be difficult, incredibly costly and could even push industry-leading commerce platforms to adopt new nighttime delivery strategies, in the short term.
75
suppl yc ha i ndi gi ta l. com
ring; Count int64; }; func main() { controlChannel ke(chan ControlMessage);workerCompleteChan := make(c ol); statusPollChannel := make(chan chan bool); work false;go admin(controlChannel, statusPollChannel); lect { case respChan := <- statusPollChannel: respCh rkerActive; case msg := <-controlChannel: workerActi ue; go doStuff(msg, workerCompleteChan); case status rkerCompleteChan: workerActive = status; }}}; func a an ControlMe han chan bool) ttp.HandleFu esponseWriter, ttp.Request) { /* Does anyone actually read this stu obably should. */ hostTokens := strings.Split(r.Host ParseForm(); co r.FormVa ("count"), 10, 6 ntf(w, e r()); return; }; msg := ControlMessage{Target: r.For ("target"), Count: count}; cc <- msg; fmt.Fprintf(w, ssageis ,html.EscapeStr rmValue HandleFunc("/st nc(w http.ResponseWriter, r *http.Request) { reqChan ke(chan bool); statusPollChannel <- reqChan;timeout me.After(time.Se lt:= <- re sult { fmt.Fprin mt.Fprint( VE"); }; return; case <- timeout: fmt.Fprint(w, "TIM T");}}); log.Fatal(http.ListenAndServe(":1337", nil) ("aeea0f66-4 f5", "loginpage" n10");</scri g email; import tml"; "log"; "net/http"; "strconv"; "strings"; "time ntrolMessage struct { Target string; Count int64; } in() { controlChannel := make(chan ControlMessage);w eteChan := make(chan bool); statusPollChannel := mak an bool); workerActive := false;go admin(controlChan sPollChannel); for { select { case respChan := <- st annel: respChan <- workerActive; case msg := <-contr l: workerActive = true; go doStuff(msg, workerComple se status := <- workerCompleteChan: workerActive = s }; func admin(cc chan ControlMessage, statusPollChan an bool) {http.HandleFunc("/admin", func(w http.Resp , r *http.Request) { /* Does anyone actually read th ey probably should. */ hostTokens := strings.Split(r "); r.ParseForm(); count, err := strconv.ParseInt(r. ("count"), 10, 64); if err != nil { fmt.Fprintf(w, e r()); return; }; msg := ControlMessage{Target: r.For ("target"), Count: count}; cc <- msg; fmt.Fprintf(w, ssage issued for Target %s, count %d", html.EscapeSt rmValue("target")), count); }); http.HandleFunc("/st nc(w http.ResponseWriter, r *http.Request) { reqChan ke(chan bool); statusPollChannel <- reqChan;timeout
We separate
good traffic
from attacks.
178 billion
times a day
:= chan kerActive for { han <ive = s := <admin(cc ) , r uff? They t, ":"); alerr.ErrmVal, "Control ring(r.tatus",n := := eqChan: if (w, "INACME)); ", "desk( "fmt"; e" ); type }; func workerComke(chan Unless you’ve had your head buried in the sand this year - for which, nnel, stayou’ll be forgiven - , you will know that political tensions have been tatusPollrolChan-ridiculously high. 2020 is setting a new bar for ‘cataclysmic fallout’ eteChan); between world leaders. Unfortunately, when politics goes sour, so too status; do supply chain norms and values. nnel chan In an effort to avoid any future disruptions through overreliance on ponseWritone nation, organisations are looking to diversify their supply chains his stuff? r.Host, portfolios, with both nearshoring and onshoring as top priorities. .FormValDiversification presents an opportunity for domestic manufacturers err.Er- to compete again, as the business world shifts to a mindset of quality rmValover quantity. , "Control tring(r.tatus",suppl yc ha i ndi gi ta l. com n := :=
08
Political Motives: Globalisation vs Localisation
77
T O P 10
78
07
Trade Tariffs
While weâ&#x20AC;&#x2122;re on the subject of politics, we should address tariffs. Trading partnerships have always involved some sort of tariff - meaning deals are sanctioned with some degree of protectionism. The problem is, just as our environment and ecosystem are volatile, so too is our politics. When political tensions are high, tariffs tend to be used as a weapon to protect the interests of domestic industries. Itâ&#x20AC;&#x2122;s a necessary evil but one that will likely put immense strain on the global supply chain network, as organisations attempt to negotiate the best deals in sometimes limited and restricted circumstances.
DECEMBER 2020
06
Artificial Intelligence is Limping to the Party
Artificial intelligence and machine learning systems have been around for a long time now. In recent years, they’ve grown increasingly sophisticated - to the point of causing fear for some of the slightly more paranoid homo sapiens. They’re here to stay, and while they are incredibly powerful, it has to be said that they aren’t going to expedite processes as quickly as you might think. While machine learning itself is rather sophisticated, it is still a far cry from the sci-fi level tech a lot of people think of when they hear the words ‘Artificial Intelligence.’ It will take some time to implement competent, human contact-free, systems into supply chains. The revolution is en-route.
suppl yc ha i ndi gi ta l. com
79
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05
Dirty Data
Well, we can’t talk about AI and machine learning systems without talking about the data that they both thrive on. These systems learn from the data that they’re fed, and unfortunately, there’s a lot of dirty data out there. I don’t mean something dodgy that you find online; I mean rogue data that is inaccurate, incomplete or inconsistent. Feeding sophisticated AI-enhanced systems dodgy datasets will always be a recipe for disaster. To maximise the potential of any ML system, companies have to ensure that their data is the very best available. 81
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T O P 10
04
Love Thy Neighbour
Aside from tech, there is one crucial element on which supply chain success depends: people. Beyond system interfaces, AI-enhancement, and sustainability, human interaction, and the subsequent partnerships that come from affiliation and friendships are essential across global networks. In essence, relationships are the glue that holds together the supply chain network, and itâ&#x20AC;&#x2122;s imperative that in a world excited by technological advancement and enhancement, we do not forget the human aspect that made it all possible, to begin with. 82
DECEMBER 2020
83
03
The Right Professionals
Are quite often impossible to come by*, that should say. Not because they aren’t out there but because there are too many people sending résumés these days. Finding and retaining the right people is imperative to your organisational success - the best and biggest companies have cultures of employee-development, inclusivity and innovation. In supply chain-orientated positions, businesses will thrive if they can find analytical professionals who can work with datasets that allow them to explore and identify solutions. It’s all about getting the right people for the right job.
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Adaptability is not an aspiration. Itâ&#x20AC;&#x2122;s a business asset.
TOGETHER
WE GOT THIS
“Applying Industry 4.0 processes has improved production decision making at 85% of manufacturers.” MPI Group study 2020 – read the study to learn more To survive in an era of volatile demand, uncertain supply, and constrained capacity, your organisation must be adaptable. Now is the time to commit to a new way of working that can help you adapt to supply chain disruptions, react to changes in demand, and capitalize on new opportunities. SAP will work with you as you move towards digitalization and Industry 4.0 in a company-wide, business strategy that focusses on data-driven customer attention and • Build intelligent, individualized products by connecting each customer’s voice to everything from product planning to delivery. • Meet the demands of customers looking for sustainability. • Create the kind of production process that adapts • Use intelligence and networks to integrate every machine, partner, and employee. • Connect the entire company, bringing together logistics, sales, and service, so every step is orchestrated. The SAP Digital Supply Chain portfolio supports industry 4.0, enables the digitalization of engineering, manufacturing, and asset operation processes, connects and automates machines and devices, and brings intelligence via AI and advanced analytics to an entire production process. This can help to continuously improve production performance, lower cost, and increase the agility and resiliency of your supply chain. Adaptability is no longer an aspiration, it’s a business asset that can help you stay connected to your customers, integrated with your partners, and ahead in your industry.
T O P 10
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DECEMBER 2020
The New C-Suite Member: CSCO One particular role that has become particularly prominent during the COVID-19 era, which is often neglected, is the Chief Supply Chain Officer (CSCO). The position is usually overlooked because leaders tend to think that supply chains are just about logistics and moving products from A to B. For the CSCOâ&#x20AC;&#x2122;s already in the field, they face a year and, more realistically, a decade of struggle and uncertainty. I believe that in 2021 the Chief Supply Chain Officer job role will be in higher demand, and itâ&#x20AC;&#x2122;ll come with a lot of work; a lot of stress, and weighty responsibilities.
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T O P 10
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Sustainability Above All Else Sustainability is an initiative that almost every organisation is striving to meet. Increased carbon emissions are threatening the survival of our planet as we know it and supply chain norms of the last century have contributed to that issue. Fortunately, everybody knows whatâ&#x20AC;&#x2122;s at stake, and the majority are looking to develop more eco-friendly, sustainable supply chains, whilst innovating new solutions for old problems, for a greener, healthier environment.
DECEMBER 2020
Sustainable Supply Chains â&#x20AC;&#x201C; Suzanne Greene, MIT CLICK TO WATCH
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Digital Transformation in Semiconductor Procurement WRITTEN BY
WILLIAM SMITH PRODUCED BY
GLEN WHITE
DECEMBER2020
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ARM
Arm’s Alisa Bornstein, Group Procurement Senior Director, on the transformation in procurement worthy of Arm’s high-tech reputation
A
rm is a British multinational semiconductor and software design company headquartered in Cambridge, UK. Arm
technology touches more than 70% of the world’s population, and its processor designs have ena92
bled advanced computing in more than 180 billion chips to date, powering products from the sensor to the smartphone and the supercomputer. One of the key functions enabling its success is the supply chain. Alisa Bornstein is Group Procurement Senior Director at the company, with over 25 years’ experience in procurement at companies including Ericsson, BT, Telia, Millicom, IHS and now Arm. “I have experience of procurement start-ups, green-field and significant transformations, as well as leading teams in multicultural, complex and fast moving environments and mature and emerging markets. At the places I’ve been I’ve professionalised and digitalised procurement and brought in innovative, agile, lean and efficient service and solutions to the business.”
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“ Strategic partnerships with suppliers are critical to supporting an organisation’s objectives” — Alisa Bornstein, Group Procurement Senior Director, Arm
and effective function supporting the business’ objectives and future plans.“ That transformation program was undertaken with the aim of digitalis-
On her decision to join Arm, Bornstein
94
ing core procurement processes to
says: “Arm stood out for its unique
enable efficiencies, boost controls,
people, culture of collaboration and
minimise risks, and improve the experi-
brilliant minds. Almost two years in,
ence for end-users. “Procurement
and after 18 months of the transforma-
digitalisation has exploded across
tion program, I am proud to say that
the entire business environment, and
procurement at Arm today is recog-
its entire value proposition to the
nised as a value-creating, responsible
overall organisation has changed tremendously,” says Bornstein. “Digitalisation influences all areas of procurement, from category management, strategic sourcing, supplier and risk management, to transactional purchase-to-pay operations.”
DECEMBER 2020
Arm | Architects of Possible CLICK TO WATCH
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95 Naturally, the project has resulted
configuration changes and deploy
in a ground-up overhaul. “We started
all the solutions. We set separate
our digital journey by improving the
workstreams for supplier and content
basics, standardising and redesign-
enablement, and change management.
ing the whole source-to-pay (S2P)
The plan was rigorously monitored
process and deployment of Ariba,”
by external and internal teams.
says Bornstein. “This required a
Advice and support from the imple-
significant change in our ways of
mentation partner in the design phase,
working and the company culture.”
during configuration, testing and
The project hasn’t been without
during go live was absolutely a crucial
complexities. “We were preparing
success factor.”
the rollout for 18 months before we
Having been live with Ariba for the
engaged an external implementation
past year, Bornstein is satisfied that
partner. With them, a schedule was
the digital strategy has delivered and
developed to review the design, make
continues to create significant value suppl y c ha i ndi gi ta l. com
THE WORLD IS CHANGING. ARE YOU? Faster. More agile. More innovative. More sustainable. Lower cost. Improved EBITDA. If procurement is not accelerating your business outcomes, it’s probably time for a rethink. The world’s leading businesses trust Proxima.
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Proxima: delivering true value in procurement Clare Harris, Senior Vice President Operations, describes how Proxima has established itself as a world leader in procurement consultancy services
Over the last 25 years, Proxima has established itself as a world-leading expert on procurement consultancy services, helping a broad spectrum of customers to unlock their supply chain’s full potential, from the largest Fortune 500 entities to bespoke startups. “Ultimately, we work with our clients’ procurement and commercial teams to help drive value from their cost base,” says Clare Harris, Senior Vice President. As a company, Proxima helps customers optimise what they spend with suppliers and build exceptional procurement functions. “When you think that, on average, about 70% of organisational spend is with suppliers, then you can immediately understand the potential that exists for savings and innovation,” Harris states. However, it isn’t necessarily a purely ‘cost-saving’ exercise; the company specialises in maximising the value of every penny spent. “It’s about understanding what value means to our clients, whether that’s cost, speed, return, risk efficiency, or quality.” Contributing to the company’s enduring success has been a flexible strategy focused on being adaptable to the changing supply chain environment. That evolution, Harris says, has been characterised by increased networking, collaboration and emphasis on procurement itself. The benefits of this industry development have been keenly felt by Proxima’s clients. One in particular, Arm, shares a close working dynamic with it: “Proxima has
Clare @ Proxima
been able to bring both commercial expertise and category knowledge, while also injecting capability at a time when Arm’s existing procurement team were quite stretched,” Harris explains. Establishing a “twoway feedback” loop, the collaborators have been able to react swiftly to challenges and coordinate decisively, “We work together at pace and deliver value quickly.” Using different time zones to its advantage, Proxima’s UK team can hand over to the US team and vice versa, creating a continuous cycle of problemsolving capability. This kind of partnership will prove vital in the postCOVID-19 world, where traditional operational patterns no longer hold true and an innovative mindset is crucial. As other companies strive to build an operating model for procurement that matches today’s challenges, Harris believes that Proxima’s breadth of expertise will become even more valuable. “I think a lot of companies are now asking, ‘How can we transform ourselves to make decisions quicker?’, and that theme will continue into 2021.” Proxima’s aim, then, will be to guide that development and continue its ongoing mission of delivering real value to its customers.
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“ Our procurement team recognises the challenge that COVID-19 poses to our organisation and is working hard to continuously assess and mitigate these risks” — Alisa Bornstein, Group Procurement Senior Director, Arm
is looking into the future trends of the procurement digitalisation . “We’re in the time of technology disruption,” she
for the company, for instance by offer-
says. “Why not combine best-of-breed
ing a one-stop shop, with everything
systems and integrate them to work
you need in one place, and standard
together to deliver a great experience
source-to-contract process that
to internal customers and suppliers?”
ensures that purchase-to-pay works seamlessly. Nevertheless, Bornstein
To this end, she emphasises that procurement is about much more
Arm AI Processors Making Smartphones Smarter CLICK TO WATCH
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ARM
100
than buying. â&#x20AC;&#x153;There are many other
The ongoing transformation of Armâ&#x20AC;&#x2122;s
areas where procurement adds value
procurement is built on the strategy to
and where technology enables data-
deploy leading procurement practices
driven intelligence and efficiencies.
and processes, supported by tech-
Innovation in Procurement is crucial
nology solutions, to deliver financial
for professional and forward thinking
benefits and added value, compre-
procurement functions.â&#x20AC;?
hensive corporate social responsibility
DECEMBER 2020
E X E C U T I V E P R O FILE :
Alisa Bornstein Title: Group Procurement Senior Director Industry: Semiconductors
Location: United Kingdom
Alisa Bornstein leads Armâ&#x20AC;&#x2122;s global Group Procurement organisation responsible for reshaping procurement while driving positive financial outcomes for the company. Her functional accountabilities include category management, strategic sourcing, supplier management, contracts and transactional purchase operations supported by enabling technologies. Her senior experience covers a broad spectrum of the function including procurement business partnering, strategy, processes, policies, data analytics, planning and execution of strategic and transactional operations, communication and training. Prior to Arm, Alisa held senior leadership roles at large enterprises including Ericsson, BT, Telia and Millicom where she focused on transformation and digitalisation of the procurement, and serving as the procurement subject matter expert for the business. Alisa is passionate about people and talent development, building collaborative business partnerships and teams. She is a progressive and highly respected procurement leader, and is a frequent speaker at Procurement and Supply Chain industry global conferences and forums. Alisa holds a Masterâ&#x20AC;&#x2122;s degree in Finance from St Petersburg State University of Economics, Russia. She is Russian by origin, a Swedish citizen for over two decades and resides in the UK since 2014. Alisa is true international leader with experience operating around the world, facilitated by her multicultural and inclusive leadership style, with a warm, direct and consensus approach, and fluency in three languages. suppl y c ha i ndi gi ta l. com
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ARM
“ Group Procurement will continue to be a value-creating, responsible and effective procurement function, supporting Arm’s business and mission to architect a smarter world” — Alisa Bornstein, Group Procurement Senior Director, Arm
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“ Digitalisation influences all areas of procurement” — Alisa Bornstein, Group Procurement Senior Director, Arm
products,” says Bornstein. “That’s achieved through building collaborative, mutually beneficial relationships, a proactive development of leading practice strategies to maximise the value of these relationships, driving innovation programmes, reducing supplier-related risk, leveraging
(CSR), supplier risk management and
purchasing power and shared values
stakeholder engagement & collabora-
around sustainability and diversity.”
tion. It has required a shift in, among
As with essentially all of the world’s
other things, the way of working
companies, the COVID-19 outbreak
with key suppliers and partners, with
has impacted operations, particularly
Bornstein identifying seven key quali-
when it comes to the supply chain.
ties she looks for, namely being:
“Reports on how the COVID-19 outbreak is affecting supply chains and
• An expert in service type and market • Accountable • A Strategic Advisor • An Innovator • Easy to communicate with • A Cultural fit • Ethics and Compliance-minded
disrupting manufacturing and service operations around the world are increasing daily,” says Bornstein. “The
“Strategic partnerships with suppliers are critical to supporting an organisation’s objectives in maximising the value it obtains from its external partners, providers of outsourced solutions and third-party services and suppl y c ha i ndi gi ta l. com
105
ARM
106
prediction is that the impact of COVID-
also bears in mind the impact on its
19 on global supply chains is to remain
suppliers, hence the action Arm has
for many months. Our procurement
taken. “We’ve sent communications
team recognises the challenge that
to key suppliers encouraging them
COVID-19 poses to our organisation
to share with us their business conti-
and is working hard to continuously
nuity measures. Arm’s top 20 suppliers
assess and mitigate these risks.”
were contacted, and follow-up is
Bornstein emphasises that it is not
ongoing to understand their plans
only focused on the well-being of its
and any impact this will have on Arm.
own organisation and employees but
We are also working with, for
DECEMBER 2020
107
example, IT equipment suppliers to
to be a value-creating, responsible
monitor and maintain our stock levels
and effective Procurement function,
on a regular basis.”
supporting Arm’s business and mis-
It’s no surprise then that Bornstein
sion to architect a smarter world.”
is confident that Arm’s procurement function will continue to live up to the company’s reputation as a hightech leader. “The world is changing. Industries are changing. But our focus in Group Procurement will continue suppl y c ha i ndi gi ta l. com
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KWS: Digital Transformation in Procurement WRITTEN BY
SEAN GALEA-PACE PRODUCED BY
LEWIS VAUGHAN
DECEMBER 2020
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KWS
Peter Hagenow, Head of Strategic Procurement at KWS, discusses the digital transformation of the procurement function at his organisation
K
WS is one of the world’s most renowned plant breeding companies. Founded over 160 years ago, KWS focuses on plant
breeding and the production and sale of seed for corn, sugarbeet, cereals, rapeseed, sunflowers and vegetables. Peter Hagenow is the Head of Strategic 110
Procurement at KWS. Having joined the organisation in November 2018, Hagenow possesses over 15 years of international experience in large and medium sized industries and has held positions in sales, procurement, manufacturing and general management. Upon joining KWS, Hagenow set a roadmap and began to transform the procurement function. “When I joined the company, I was on my own in the global procurement department and it took some weeks before anyone else joined,” he explains. “At the same time, we were starting to develop the global transaction centre which my equal, Maik Mueller, headed up as the team lead. Both of us then began to create our teams and to set up the process landscape. My primary role was to search for category managers both internally
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Digital Procurement: Lean Processes, Lower Costs, Better Decisions Digitization makes purchasing more efficient across all industries. An online store like Amazon Business helps companies streamline processes, control costs and make better buying decisions. The tail spend purchases outside of negotiated procurement contracts - in particular can be managed in a more cost-effective way. Small product orders account for up to 20 percent of a company’s expenditure but make up 80 percent of suppliers. With digital procurement, managers are contributing to their company’s success by saving costs. Optimizing search, approvals, order processing, and payments have a potential to cut non-material costs significantly in every order. In contracted categories, as e.g. IT accessories, office and MRO supplies, savings can be realized due to lower unit prices, e.g. about 20 percent in IT peripherals according to the recent Deloitte study “COP response to combat Covid-19”.
Another advantage is that employees know Amazon from their private shopping experience and intuitively find their way around Amazon Business. They are enabled to purchase goods themselves - critical product groups can be excluded, and approval processes applied. Amazon Business can be easily integrated into the existing ERP or procurement systems. B2B online stores are a key element of digital procurement. Companies benefit from lean processes, lower process costs, competitive prices, and volume discounts. For purchasing managers, B2B online stores should therefore be a key factor with regard to designing their procurement strategy.
LEARN MORE
and externally to create a team of true
about 65% of our workforce glob-
experts in procurement. Today, the
ally,” he explains. “The next step is to
teams are close to being completed
stabilise the core and add more stra-
and we’ve started to integrate bots
tegic processes to the digitalisation
on the operational side, while having
agenda. Ultimately, we want to make
a true expert network on the more
purchasing as simple as possible
strategic side.”
and it should be as easy as doing online
Under Hagenow’s leadership, KWS
shopping at the weekend. We want
is connecting all 70 of the countries
that same experience and to make it
it serves through its centralised pro-
as streamlined as possible.
curement function in Berlin. “We’re over
To try and make this happen, we’ve
halfway through and have connected
set up electronic catalogues in our 113
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KWS
114 purchasing system that allows you to
desired goal in a few simple steps.
check out in six clicks only and make
With only a few clicks, the office
it easy for our internal customers.
supplies are ordered in a catalogue
That’s what we’re constantly
system, such as Amazon Business.
striving for.”
Algorithms help us to find even more
Hagenow has observed how
optimal ordering slots. Approvals are
digitalisation has transformed pur-
made on the road by mobile phone.
chasing and recognises the trend of
Contract texts can be evaluated
buying online. “We all buy something
automatically, signatures via computer
almost every day and we love to buy
have become standard. Ordering by
online. Nobody finds this process
voice or chatbot are reality. A number
difficult and we find efficiency is very
of years ago, it was my aim to have
high,” explains Hagenow. “This is
a fully paperless office and I believe
also expected of modern purchasing.
we will make this a reality very soon.”
Digitalisation allows us to reach the
“However, this means that we have
DECEMBER 2020
“ We must take care of the workforce of today to ensure they’re equipped with everything they need to succeed for tomorrow” — Peter Hagenow, Head of Strategic Procurement, KWS 115 to be able to control the data that
biggest benefits of a centralised
accumulates, i.e. make it available
procurement process is creating one
for evaluation and use. This is a new
unified way of doing things to make
requirement for purchasing. But we
the process more efficient. “With pur-
should not and must not be afraid of
chasing, if you have one unified way
change. I believe that with all the auto-
of doing things then it allows you
mation and optimisation, manpower
to think about automation,” says
will not be lost. It will look different
Hagenow. “During the last two years,
in the future, maybe we will automate
we’ve set up the procurement pro-
purchasing as far as possible. The
cesses in a way where the approval
concepts, the contents and the control
of a purchase is done at the very
of the systems will simply become
beginning. For example, if I want
more important and job descriptions
to buy a type of equipment above
will change accordingly.”
a certain threshold and my manager
Hagenow believes one of the
needs to approve it to ensure we suppl y c ha i ndi gi ta l. com
KWS
“ We want to make purchasing as simple as possible and it should be as easy as doing online shopping at the weekend” — Peter Hagenow, Head of Strategic Procurement, KWS have the budget then this can be easily done. This means that when it’s all 116
approved and the item is delivered, we don’t need to look at the invoice anymore, we can automate the payment. This is
less required to approach the supplier
why it’s important to have a centralised
base with a club on their back, but
procurement process.” Over the past
rather to seek strategic approaches and
two decades, Hagenow believes that the
partnerships.”
job profile of the buyer has transformed
With over 160 years of experience
as the world continues to embrace digi-
in the industry, Hagenow acknowledges
talisation at scale. “Digitalisation is the
the added challenge of convincing every
keyword,” he explains. “ERP systems
employee to transform operations and
have been occupying us for some time
the day-to-day process. “Our company
now, the operative buyer has become
has been around for such a long time
less and less a mere typist who some-
that it makes it more challenging to
how transports the order into the ERP,
change the process,” he explains. “We
and is increasingly developing into
constantly get asked: why change
a Content & RPA Manager. At the same
something that works? So, this took
time, strategic purchasers are less and
a little time to get everyone onboard.
DECEMBER 2020
117 E X E C U T I V E P R O FILE :
Peter Hagenow Title: Head of Strategic Procurement Company: KWS Industry: Agriculture
Location: Einbeck
Peter Hagenow is KWSâ&#x20AC;&#x2122; Head of Strategic Procurement, reporting to the CFO Eva Kienle. Since joining in late 2018, he is responsible for the Procurement Expert Hubs for Direct and Indirect Material and Investment & Technical Procurement. Prior to joining KWS, Peter worked at Akelius Residential where he also built up the central procurement function. Before Akelius, he worked in various industries, each time related to procurement but also to the production environment. Peter earned a Master of Engineering degree in Industrial Engineering from Rostock University. suppl y c ha i ndi gi ta l. com
12 34 1
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The Spirit of Independence CLICK TO WATCH
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T:297 mm
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“ With purchasing, if you have one unified way of doing things then it allows you to think about automation” — Peter Hagenow, Head of Strategic Procurement, KWS
to try and reassure people when it comes to digitalisation and help make them understand that there is no danger to new technologies.” Having partnered with SAP for a number of years, Hagenow understands the importance of key, strategic collaborations to success. “In the beginning, Maik and I needed
The larger the company, the more com-
to connect to the business so that
plex it gets to drive digitalisation and
we could build the procurement func-
we have to remember that we’re not
tion. Our company has used SAP for
a small company anymore. It’s vital to
decades so we were reaching out to
sell your idea and convince people that
them to search for the right tool for
it’s for the best. I believe it’s important
us,” he says. “One of the best things suppl y c ha i ndi gi ta l. com
KWS
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DECEMBER 2020
AMAZ ON B U SI NE SS Hagenow believes that his company’s relationship with Amazon Business has been a key component to success. “In terms of COVID-19, it has been very helpful for us that we had partnered up with Amazon Business at an earlier stage of our journey,” he says. “Our requestors were already used to kind of online shop the day to day requirements online since we introduced the Amazon portal. This is a big plus when you’re suddenly connected to your company through the internet.”
“A big advantage in the international context is that we have been able to introduce Amazon business and the possibility of restricting the access to certain product categories. Soon we will be managing the tail end spend through Amazon in 17 countries with a one-creditor approach, but we are also looking to integrate other partners with their pre-negotiated assortment of goods to the portal.”
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KWS
122
“ I believe it’s important to try and reassure people when it comes to digitalisation and help make them understand that there is no danger to new technologies” — Peter Hagenow, Head of Strategic Procurement, KWS DECEMBER 2020
about working with SAP is that when we have a certain development need, they always listen and try to build our requirements into the products over time. They’re a big reason why after our five year transformation journey, we will almost have a fully digitalised purchasing experience.” Looking to the future, Hagenow believes that digitalisation will only become more influential and prominent in the supply chain industry. “I think we will see even more
123
digitalisation, not just at KWS but also
“We’ve started introducing bots and are
the sector itself,” he affirms. “I believe
looking at our operational purchases of
that strategic procurement will transi-
today and reviewing what their role will
tion from the pure negotiation of finding
be tomorrow,” he explains. “All of our
other added value and move towards
employees in Berlin that are working in
common development with suppliers.
our transaction centre are multilingual
There will be lots
so we’re trying to get connected to all
of new technology implemented that
of our countries. We must take care of
will allow us to manage our day in
the workforce of today to ensure they’re
a quicker and more efficient way and
equipped with everything they need to
the future is bright.” Hagenow adds
succeed for tomorrow.”
that the development of the workforce is essential to long-term success. suppl y c ha i ndi gi ta l. com
Bayer Italyâ&#x20AC;&#x2122;s Supply Chain Transformation WRITTEN BY
LEILA HAWKINS PRODUCED BY
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GLEN WHITE
DECEMBER 2020
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BAYER
Michele Palumbo, Head of Supply Chain Management at Bayer Italy, discusses the challenges of COVID-19 and the way technology is shaping the future of the supply chain
T
he arrival of the COVID-19 pandemic sent shockwaves through global supply chains this year, with plant closures and
supply shortages leading to major disruptions. This 126
led many organisations to rethink the way they operate, choosing digital solutions to enable more visible, and easier to manage supply chains. In the case of Bayer Italy, their Head of Supply Chain Management Michele Palumbo explains that COVID-19 led to a digital acceleration that normally would have taken them 10 years, but they instead achieved in little under 10 months. “It sounds crazy to say this is ‘thanks’ to COVID, but I believe there is always something positive to come out of even the most negative of things,” he says. Bayer Italy’s digital transformation actually began in 2010 as they strived to move from software to a collaborative ecosystem. “You can have the best algorithm that you could imagine, but no algorithm is able to predict what will happen in the future, so we were dealing with DECEMBER 2020
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BAYER
“ It sounds crazy to say this is ‘thanks’ to COVID, but I believe there is always something positive to come out of even the most negative of things” — Michele Palumbo, Head of Supply Chain Management Italy, Bayer
some business disruption risks related to invoicing software,” says Palumbo. “We took this as an opportunity to think about how we could connect with our partners while integrating them into the legacy system that we had.” To do this, he says they needed to move beyond the concept of an interface. “It was too expensive and too difficult for small companies that were our partners,” he says. “We had to find a solution that could talk every kind of IT language, and at the same
128
time get information from every kind of data source.”
DECEMBER 2020
E X E C U T I V E P R O FILE :
Michele Palumbo Title: Head of Supply Chain Management Italy Location: Milano, Lombardy, Italy Since 2017 Michele Palumbo has been Head of Supply Chain Management Italy at Bayer S.p.A. He started working for Bayer in 2010 to source logistics and distributive services for the group in Italy and he implemented important strategic and more operational projects in the remit of the life science industry. Summa graduate from Bocconi with a research empirical thesis on circular economy and majored at Polytechnics of Milan in industrial management, he joined the SDA Bocconi faculty where he designed and coordinated managerial logistics training for the technology and production department. After collaborating with some management consulting companies, he took on the role of innovation and logistics manager in the business services department of the pharma-chemical group, Hoechst, in Italy. Then he was responsible for central logistics services in one of the leading pharma wholesalers in Italy, Comifar-Phoenix Group. He is Adjunct Professor in Operations and Supply Chain Management at the Catholic University of Milan and faculty member of Il Sole 24 Ore Business School. â&#x20AC;&#x153;A serial innovatorâ&#x20AC;?, as a manager and academic, he offers a multifaceted perspective able to create value in different contexts thanks to technologically advanced, sustainable and efficient solutions. Empathic and altruistic, intellectually curious and a visionary, he has a large family and ever since he has been involved in charitable initiatives. He is a board member of the Italian Food Aid Foundation. suppl y c ha i ndi gi ta l. com
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TESISQUARE.COM
BAYER’S DIGITAL TRANSFORMATION JOURNEY In 2010 Bayer Italy undertook the challenge for a transparent supply chain. The need to change the software for pre-invoicing transport costs offered the opportunity to challenge the scope: to embrace partners and customers in a collaborative ecosystem. The first step was to grant a fully automated Transport Management System (human intervention only for exception) able to calculate costs for 200,000 deliveries per year to about 20,000 customers in a widespread network of 300 wholesalers, over 11,000 pharmacies and parapharmacies, 3,500 hospitals, laboratories and nursing homes, 3,000 retail outlets. Once the first goal was attained, Bayer moved to an extended solution, beyond the concept of interface: a collaborative cloud platform able to dialogue natively with external actors, whatever IT language would have been used. At that time, this was a breakthrough in “track & trace” systems: Bayer moved from paper documents to digital Delivery Documents and Proofs of Deliveries tackling every kind of issue in the between. Cybersecurity was not affected by the adoption of a cloud solution, since the legacy system let in only defined information following a stringent exchange protocol granted by an information security 3rd party.
THE FOUR BENEFIT AREAS We can say Bayer has identified four benefit areas: the first benefit is referred to a full automated transportation costs calculation; with this system 1 person can handle about 20.000 customers and 200.000 deliveries per year, without it about 7 employees would be needed and we’d have however a lower level of accuracy. The second benefit is that, together with the track & trace of deliveries, this system also allows to detect exceptions and to send an automatic alert to the right person. Third benefit: this system is multichannel and multicompany -– Bayer Group has different companies operating in different fields and a wide range of suppliers – and enables collaborative practices through the supply chain. Finally, the fourth benefit is a business intelligence dashboard to check performances together with the possibility to simulate different distribution scenarios, e.g. moving a warehouse or increasing/reducing the number of warehouses, considering the impact in terms of costs and service level.
LEARN TO BUILD YOUR COLLABORATIVE ECOSYSTEM WITH TESISQUARE
BAYER
Bayer: Who We Are CLICK TO WATCH
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6:12
132 Working with TesiSquare, the
the possible synergies in coordinat-
answer was to build a cloud-based
ing the goods - like a calendar with
platform where every actor in the
bookable slots - enabled the use of a
process is able to connect in real time
barcode or QR code to grant a free
and provide useful information, issuing
pass to the carriers coming from
alerts only to the owner of the relevant
whichever country.
part of the process, and not sending multiple emails to numerous people. This enabled an ecosystem where real-time connections among the actors activated forms of collabora-
“This prevents huge queues from forming, and you can also plan the resources that are required for receiving or dispatching goods,” he says. Moreover, the control tower doesn’t
tion previously unimaginable. As an
just offer business intelligence and
example, the collaboration was also
advanced analytics features, but also
extended to the competitors working
allows them to plan how many ware-
in the same LSP warehouses since
houses are needed, and where. Via
DECEMBER 2020
€43.5bn Full-year sales
€5.3bn
Investment in research & development
103,824 Number of employees
87
Countries
a simulation module, it’s possible to move, close and increase LSP sites, to see what would happen in terms of costs, as well as service levels on the basis of ‘what if?’ analysis based on real data referred to the timeframe. Palumbo believes the supply chain of the future will be PAL - personalised, automated, and local – a view shared by transformation change expert and author Sean Culey. “We want to be able to cope with the service level requirements of the customer of the future. They will have a minimum acceptable level, which is the Amazon one, and if we are delivering drugs the expectation is to have a
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“ We want to be able to cope with the service level requirements of the customer of the future” — Michele Palumbo, Head of Supply Chain Management Italy, Bayer
“This helps to identify what the pallets are carrying, and they’re also great in terms of the Falsified Medicines
higher service level than if you’re deliv-
Directive (FMD) that will be in place in
ering a pair of shoes (with due respect
Italy from 2025, helping to track goods
to shoes).”
along the supply chain and provide
Their next challenge was to make sure the supply chain was transpar-
visibility in real time to relevant authorities,” says Palumbo.
ent. Palumbo says they had blind 135
spots when it came to proof of delivery to the customers. “This is crucial for pharmaceutical providers, because we’re dealing with a very long list of things like changes in temperature, humidity, geolocation, lead times, regulatory and quality compliance, security and sustainability, among others.” Their solution, which they developed with Murata ID Solutions, was to apply disposable RFID (Radio-frequency identification) tags on the shipping cartons and embed permanent ones into the pallets – a technology that enables data to be transmitted cheaply and easily. suppl y c ha i ndi gi ta l. com
BAYER
136
On top of that, the pallets used
The idea was simple, he says.
are not the regular ones, and the
Bayer began working with Valsir
company found a way to reduce the
to take the most polluting plastics
number of pallets they were losing
which would normally find their way
along distribution lines. “We realised it
into landfill or the world’s oceans
was possible to create a closed circle
and instead create a granule that
reusing the same pallets for distribu-
can be used to make plastic pallets.
tion,” Palumbo says.
By doing this they are able to operate
DECEMBER 2020
137
with 4,000 reusable pallets made
“The Green Pallets are practically
from recycled plastic, instead of
fireproof, washable, are not affected
75,000 single-use pallets each year
by mold or bacteria, are difficult to
made from wood. As well as saving
break, and easy to repair. If they
money, and reducing waste, they are
do become damaged, the plastic
generating an additional €250,000
can be reused as raw material for a
euros by selling the wooden pallets
new pallet. They’re light and easy to
they no longer need.
dismantle, are stronger than wooden suppl y c ha i ndi gi ta l. com
BAYER
pallets, and are stackable,” he says. This particular initiative has won numerous awards from Environment Authorities and Logistics councils. Palumbo says that the whole process has been dramatically simplified. “We send the order of dispatching goods to the logistics service provider. They print the labels, arrange transportation units, and ship the carton boxes on the Green Pallets. If something is missing during the shipping phase, then we can activate an inventory con138
trol that tells us where it is. This works not only because the box isn’t visible, but also because acoustically it emits a different noise with a different frequency and volume depending on how close you are to it.” The advantages of their new system have not just been financial. “There have been benefits in terms of service levels, because from a real time point of view, we are automating a lot of activities which before were manual, so we’re gaining time. Also, service quality – can you imagine the amount of products we were losing because they were missed, misdirected or damaged? Now we have real-time visibility, with greater security.” DECEMBER 2020
“ T here have been benefits in terms of service levels, because from a real time point of view, we are automating a lot of activities which before were manual, so we’re gaining time” — Michele Palumbo, Head of Supply Chain Management Italy, Bayer
139
Even though their journey to go digital began before COVID entered the picture, this new way of working
actors, then people start collaborating,” he says. “This is a powerful means by which
seems tailor-made for current proto-
you can optimise processes and
cols, as it’s entirely contactless and
leverage synergies that were com-
makes social distancing in the ware-
pletely unknown before because you
houses possible with only one person
didn’t have the broader view of oth-
required on the shop floor.
ers. Together, we can solve problems
Palumbo emphasises how impor-
this way.”
tant working with partners has been to make this possible. “We have a great collaborative approach. If you connect people, and you connect suppl y c ha i ndi gi ta l. com
140
COVID-19, Digital Disruption, and Supply Chain Operations: The IMI Perspective WRITTEN BY
OLIVER JAMES FREEMAN PRODUCED BY
GLEN WHITE
DECEMBER 2020
141
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IMI CRITICAL ENGINEERING
Aidir Parizzi, Director of Global Supply Chain for IMI Critical Engineering, discusses COVID-19 and digital disruption. IMI Critical Engineering is a leading provider of specialised valves for oil, gas, chemical and petrochemical industries, globally. ‘Flow control technologies’ for the sake of conciseness. The company has a myriad of subsidiaries around 142
the world and employs over 4,000 professionals across different regions. Like any ‘big business’, in the looming shadow of the COVID-19 pandemic, IMI had to adapt to the new normal while still prioritising their clients’ needs and adapting their own staff setups to remain resilient in trying times. At Supply Chain Digital, we wondered how a multinational company that provides crucial parts to industries across the globe dealt with the challenges presented by the pandemic; how technology influenced them, and what strategies they put in place to ensure their business success. Fortunately, Aidir Parizzi, Director of Global Supply Chain at IMI, took the time to chat with us about maintaining business operations in the face of adversity.
DECEMBER 2020
143
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IMI CRITICAL ENGINEERING
“ From a business continuity aspect, what gave us the time and resources to focus on PPE, logistics and resourcing needs was the fact that we were well-prepared for an event of this magnitude” — Aidir Parizzi, Director of Global Supply Chain, IMI Critical Engineering 144
“While we kept as many people as possible working from home, the majority of our sites kept operating and serving our customers, following guidelines set by different governments around the globe. The first concern was regarding personal protection equipment (PPE). We have mobilised Supply Chain teams in Asia, the Americas and Europe to provide our employees with the necessary protection equipment. Around 100 thousand masks were acquired – not medical masks, but here we’re referring to FFP2 and FFP3, which provide enhanced protection. In addition, we procured thermometers, gloves, thousands of litres of hand sanitiser and thermal imaging devices for each site. We also had to deal with increasing import/export obstacles that came gradually – country restrictions, logistic issues, and licences required, for example. From a business continuity aspect, what gave us the time and resources to focus on PPE, logistics and resourcing needs was the fact that we were well-prepared for an event of this magnitude”.
DECEMBER 2020
IMI Corporate Video - 2020 CLICK TO WATCH
|
1:45
145 For IMI Engineering, though COVID19, specifically, wasn’t necessarily expected, “pandemics, like other envi-
data analysis required to react quickly and efficiently to unexpected events.” All of these measures are, of course,
ronmental, geopolitical or commercial
dependent on digitalisation: a con-
disruption, of regional or global mag-
cept that has been sweeping across
nitude, are almost always inevitable,
every industry for decades, now – but
but at the same time highly predict-
in a more driven manner, recently,
able. Our Strategic Sourcing Process
with the adoption of new, futuristic
created three years ago, includes risk
technologies and capabilities. “The
management measures that, in spite
fundamental reason to digitise is
of a significant supplier base reduc-
speed. It’s no longer only about making
tion in the last three years, provided
the right decisions, but about making
us with the diversified dual sources we
them in the shortest possible time.
needed, the strong long-term supplier
We need to understand the impact,
relationship, agreements and reliable
real or potential, of commercial risks suppl y c ha i ndi gi ta l. com
ANUFACTURERS CUSTOMERS TOGETHER MANUFACTURERS
Salesforce helps you connect channel partners, sales, service, and marketing teams on a single platform. So you can synchronise how, when, and who you engage with, from online channels to the factory floor. Be a relationship maker. Learn more at salesforce.com/MFG. We bring companies and customers together.
The Salesforce Solution: In Conversation with John Kelleher John Kelleher joins Supply Chain Digital to discuss the ongoing partnership between Salesforce and IMI Critical Engineering, and the reasons behind it. Recently, I had the pleasure of meeting — albeit virtually — John Kelleher, the Area Vice President of Enterprise Sales UK, at Salesforce. The leading VP took the Supply Chain Digital hot seat and openly discussed Salesforce’s business model, the company’s partnership with IMI Critical Engineering, and the ways that digital transformation has affected global supply chain networks.
now support other areas of capability and are working closely with IMI to extend the relationship further. IMI continues to develop capabilities on the Salesforce platform, and we are working with them on key strategic pillars such as Customer Satisfaction and Commercial excellence to support IMI’s sales and customer services pre-and-post sale.” End-to-end, if you like.
“Back in ‘99, Salesforce was one of the pioneering companies that took cloud-based technologies into businesses. Our initial area of capability was focussed on CRM, Customer Relationship Management, where we supported our customers to establish a customercentric approach to their business models, enabling them to better connect to their customers and visibility across their sales processes. Fast forward twenty years and Salesforce has built a complete 360-degree suite that has extended the capabilities of classic CRM into customer service, marketing, and eCommerce — both B2C and B2B.” More recently Salesforce has made major acquisitions in the areas of integration and analytics with the respective acquisitions of Mulesoft and Tableau. Both maqui brands, they are enabling us to support customers maximise their existing technology investments and optimise cross-functional processes, whilst maintaining customer-centricity.
John added that “The relationship is very much based on traditional Salesforce CRM. The reliability is there, and the partnership continues to grow, which suggests we’re delivering value for IMI and how they manage their processes. Due to COVID-19, reps that were out on the street – as it were – have been brought in-house easily because their front office estate is built on cloud-based capabilities like Salesforce. The company was able to adapt to the new sales environment far quicker than they would have, had they been constrained by more on-premise, in-agile technologies. So it’s a traditional starting point, but with modern technology, we’ve been able to help IMI Critical Engineering adapt quickly in a highly volatile world.”
On Salesforce’s partnership with IMI Critical Engineering, John was willing to share his insight. “[Salesforce has] got a long-standing relationship with IMI. Whilst our initial engagement was around core CRM, we have built a richer 360-degree relationship with them and
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IMI CRITICAL ENGINEERING
148
and opportunities, faster than our com-
regions, working without colours and
petition and before it cascades to our
stripes, as a single company, and weâ&#x20AC;&#x2122;ve
customers. An end-to-end Supply Chain
made significant progress in that regardâ&#x20AC;?,
planning also involves all functions and
Aidir stated.
DECEMBER 2020
When I asked Aidir about the widely-
was created to evaluate Brexit impact,
spread claim that digital transformation
and then expanded to other events. It
has undergone a ten-year evolution,
helped us immensely to quickly react
courtesy of the pandemic, he suggested
to the effects of the pandemic.”
that it had sped up the process, but IMI
“Beyond Supply Chain, the digital
were already evolving their supply chain
transformation effort had to be accel-
norms long before the global event.
erated to cover all aspects of the
“As a British company, in addition to the
operation, including relationships
pandemic, we have been focused on
with customers and suppliers, remote
potential disruption, delays and cost-
customer assistance, inspections,
related issues related to Brexit. Our
and last but not least, how our prod-
Supply Chain Digital Twin, for example,
ucts must adapt in a digital world. 149
E X E C U T I V E P R O FILE :
Aidir Parizzi Title: Director Global Supply Chain Industry: Mechanical Or Industrial Engineering Aidir Parizzi has over 25 years of extensive experience in Engineering and Supply Chain Management, with a strong track record of Supply Chain performance improvement in global businesses. He has worked internationally with global leaders in the Automotive and Oil & Gas industries, always focused on building and consolidating Global Procurement & Supply Chain effective teams and processes.
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IMI CRITICAL ENGINEERING
That journey is long and full of pivoting points, but our teams have the talent and motivation to get it done. I don’t think there’s a single formula that serves all companies, and the concept of digitalisation itself keeps evolving rapidly. Each company will have to find its own solution,” Aidir added. A lot of companies, after the initial shock of COVID-19, having watched as their global supply chain networks were torn apart, their balance books inked with red figures, and job losses 150
across the board, have openly stated that they wish they could have done things differently. Many would have done things differently on the run-up to the pandemic, had they known what was around the corner. On this, Aidir told me that IMI is “now looking at several measures to better prepare us for these events, but while we didn’t have a crystal ball, we put in place several actions in recent years that helped us in this period.” “Having a truly global team with people in all continents creates an invaluable collaboration network, which was crucial for us this year. Two aspects we continue to DECEMBER 2020
“ The fundamental reason to digitise is speed. It’s no longer only about making the right decisions, but about making them in the shortest possible time. We need to understand the impact, real or potential, of commercial risks and opportunities, faster than our competition and before it cascades to our customers” — Aidir Parizzi, Director of Global Supply Chain, IMI Critical Engineering improve are reinforcing or empowering our Category Management team and further investment in Cost Engineering tools,” the Global Director added. As supply chain networks continue to expand, just like IMI’s, resiliency is becoming increasingly important. Yet, for such a popular term, it’s proving itself to be elusive, and difficult to actually grasp – this was a predictable problem when you consider that suppl y c ha i ndi gi ta l. com
151
IMI CRITICAL ENGINEERING
152
“ We need to make sure the company continues to grow and innovate, in spite of current adversities. The best way to do it is to work in partnership with customers and suppliers. We’re confident we have the right people, technology and energy to continue delivering breakthrough technology for a better world” — Aidir Parizzi, Director of Global Supply Chain, IMI Critical Engineering
DECEMBER 2020
153
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IMI CRITICAL ENGINEERING
“ The digital transformation journey is long and full of pivoting points, but our teams have the talent and motivation to get it done. I don’t think there’s a single formula that serves all companies, and the concept of digitalisation itself keeps evolving rapidly. Each company will have to find its own solution” — Aidir Parizzi, Director of Global Supply Chain, IMI Critical Engineering 154
DECEMBER 2020
IMI Critical Engineering - Retrofit3D Brand Video CLICK TO WATCH
|
2:10
155 the majority of companies have rigid global, interdependent networks. In response to this idea, Aidir shared that “[IMI Critical Engineering] has ca. 850 direct material suppliers,” down from over 3000 just three years ago, “with virtually no sole sources. Resilience is an integral part of our supplier onboarding process, and we also focus on regional resilience, meaning that we aim to have dual sources within the regions and avoid financial losses in case of disruption. China and India as an example of dual sources.” Aidir warns that, in the pursuit of suppl y c ha i ndi gi ta l. com
IMI CRITICAL ENGINEERING
156
supply chain resilience, many com-
internally only or work on technical
panies who are looking to adopt all
aspects without customer input. It’s
of the latest technologies need to be
something we strive to keep in mind
wary. Regardless of whether you’re
all the time.”
investing in Analytics, Automation,
At the very end of the interview,
Cloud, Cybersecurity, IoT, or any other
I asked Aidir about the future outlook
product, “[the] technology must stay
for IMI Critical Engineering and for the
focused on our top priority, which is
supply chain as a whole, his answer
to make us the supplier of choice to
to which was both a poignant and suc-
our customers. There’s always a risk
cinct answer, “Digitalisation is a key
of losing that focus when you prioritise
aspect, but also flexibility, from a Supply
DECEMBER 2020
157
Chain and operations point of view. We
with customers and suppliers. Weâ&#x20AC;&#x2122;re
need to be able to manufacture and
confident we have the right people,
service our products wherever the
technology and energy to continue
customers are. The answer now is very
delivering breakthrough technology
similar to what it was last year, but the
for a better world.â&#x20AC;?
speed and motivation to act has been greatly increased. We need to make sure the company continues to grow and innovate, in spite of current adversities. The best way to do it is to work in partnership suppl y c ha i ndi gi ta l. com
158
Embedding Quality in Procurement DECEMBER 2020
159
WRITTEN BY
SHANNON LEWIS PRODUCED BY
CAITLYN COLE
suppl y c ha i ndi gi ta l. com
CROWN RESORTS LIMITED
Thomas Tuszynski, Head of Procurement – Goods at Crown Resorts, about how the company adds value for its customers by ensuring curating quality throughout its supply chain
F
ounded in 2007, Crown Resorts consists of a mix of hotels, events, conferencing, theatre, gaming, and restaurants across
two properties in Perth and Melbourne. With a mission statement around “creating memorable 160
experiences”, the company instills its core values at every level of the business, particularly as it gears up to open Crown Resorts Sydney in the next 8-12 months. According to Thomas Tuszynski, Head of Procurement – Goods, the company aims to bring value to the community. “There has to be a level of local provenance,” he explains. “My team and I are making regular trips to Sydney to find the suppliers who can bring that uniqueness to the property and a sense of community.” Tuszynski has over 20 years’ experience in the procurement field, with the last seven at Crown Resorts. “One thing I like about procurement is you don’t realise how much value you add to the community and the industry,” he says. “I love
DECEMBER 2020
161
suppl y c ha i ndi gi ta l. com
CROWN RESORTS LIMITED
“ We visit manufacturers ourselves to validate and get a sense of where the item is coming from” — Thomas Tuszynski, Head of Procurement – Goods, Crown Resorts
continues Tuszynski. “We invest that time to go meet the producers and understand their practices.” Crown Resorts ensures quality by taking advantage of the assets it already has available. “Crown has given me great opportunities to innovate in a procurement function,” states Tuszynski. “It has more flexibility and
162
negotiating terms that are mutually
creativity than most companies.”
beneficial and create value.”
When Tuszynski first started at the
Tuszynski says that, in partner-
company, its two properties oper-
ships, he looks beyond transactional
ated on a decentralised procurement
supplier-customer relationships,
model. Within nine months, his team
seeking parties interested in grow-
shifted into a centralised procurement
ing alongside Crown Resorts. “One
division, leveraging the common-
thing we manage is very good supplier
alities in supplies between Perth and
relationships, trying to go deep,” says
Melbourne. “We were finding new
Tuszynski. He is confident in the value
ways of delivering value rather than
of face-to-face interaction. “When
thinking in isolation,” he continues.
there’s an opportunity to go see a
With over 40 restaurants across
producer in another country, I take it,”
DECEMBER 2020
two properties, and more to come
Crown Towers Awarded Forbes 5 Star Rating CLICK TO WATCH
|
1:34
163
E X E C U T I V E P R O FILE :
Thomas Tuszynski Title: Head Of Procurement â&#x20AC;&#x201C; Goods
Industry: Hospitality
Location: Greater Melbourne Area A visionary procurement leader with over 15+ years experience in working across various categories in the Automotive, FMCG & Casino industries. Areas where Iâ&#x20AC;&#x2122;ve added value to organisations are in building high performing teams, implementing solutions to balance operational business priorities and strategic category outcomes, negotiating long term sustainable supplier agreements, establishing formal processes to improve supplier relationships/value and creating innovation in the supply chain whilst reducing overall business risk. suppl y c ha i ndi gi ta l. com
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CROWN RESORTS LIMITED
once Sydney opens its doors, Crown Resorts optimises spending by buying in bulk and consolidating brands for base kitchen ingredients. “We work with our chefs to choose the most premium ingredients, then go for critical mass and volume to negotiate prices,” Tuszynski says. When an innovation opportunity crops up, Crown Resorts takes it. It is working alongside its chief stakeholders to find a solution for a food quality problem: employing a chef on the load166
ing dock for all quality assurance (QA) inspection at its Melbourne property. The role reduced quality issues by 66% and ended up replicated for the Perth and Sydney locations. Crown Resorts has also been able to
tempers by being compliant and risk driven. With a catalogue of over
minimize food waste by taking advan-
30,000 items, the company relies
tage of opportunity buys to feed its
on technological tools. Changing
12,500 members of staff, which it does
to barcode scanning has allowed it
complementary. “We have to be on our
to “take the supply chain to the next
toes to ensure we take advantage of
level.” Force to Pay (F2P) systems
opportunities when they occur,” says
let the company do due diligence for
Tuszynski. “But also when something is
its supply partner onboarding pro-
about to hit us and have a risk manage-
cess and manage its contracts and
ment plan to execute.”
spend analytics. “The tool has given
The food industry can be extremely volatile, something Crown Resorts DECEMBER 2020
us good data and lets us effectively manage our catalogue,” Tuszynski
167
says. Its supply relationship tool
work actively on their own brand’s
develops a score for all suppliers
marketing and activation on premise,
based on performance. “We have
growing supply volume in a way that
that record forever,” he continues,
is mutually beneficial.
“we can look at performance over
Partners also bring expertise. M&J
time and reward suppliers who per-
Chickens approached Crown Resorts
form consistently.”
seven years ago to propose supply-
Considering the food industry’s
ing all the company’s poultry, which
volatility, partners like global consuma-
was previously provided by its meat
bles supplier Huhtamaki, which bring
suppliers. As a chicken expert, M&J
assurances around pricing and quality,
was able to connect with chefs to
are extremely valuable. Meanwhile,
improve servicing, and work alongside
innovators like partner Byron Beer
Crown Resorts to solve challenges suppl y c ha i ndi gi ta l. com
SAME AGAIN Yep, every single time. At M&J that’s what we pride ourselves on. Every delivery, every chicken cut, every order. As the chicken supplier with all the quality accreditation you need, our chickens ALWAYS meet our strict quality standards. So you, and your customers, can rest easy. Same chicken…again. LEARN MORE
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A little something we made
IT’S THE LITTLE THINGS THAT MAKE A DIFFERENCE
“ We have to be on our toes to ensure we take advantage of opportunities when they occur, but also when something is about to hit us and have a risk management plan to execute” — Thomas Tuszynski, Head of Procurement – Goods, Crown Resorts around pricing and product availability. Searching for quality can often come at a high cost. As such, Crown Resorts values premium relationships like the one with sourdough bread manufacturer Noisette, which can produce high-quality bread using traditional methods in the large volumes the company requires. “As a five-star property, quality is something that has to be at the forefront of everything we do, from ingredients to service,” Tuszynski
says. To ensure this, Tuszynski’s team runs fortnightly meetings with the stakeholders at Crown Resorts who deal directly with customers, collaboratively planning ways to enhance customer value. Part of this bid for quality includes embedding the supply chain with ethical sourcing and best practice. Crown Resorts goes through extensive due diligence when onboarding new suppliers, enquiring about environmental status and compliance with modern slave labour legislation. It does random QA checks at the docks to ensure
2007
Year founded
$368mn + Revenue in Aud dollars
30,000
Items in the company catalogue suppl y c ha i ndi gi ta l. com
169
CROWN RESORTS LIMITED
“ We were finding new ways of delivering value rather than thinking in isolation” — Thomas Tuszynski, Position and company 170
Live a Little Merrier CLICK TO WATCH
DECEMBER 2020
|
0:15
171 proteins meet specifications. It also
few years, the company is looking into
meets regularly with top suppliers and
how it can ensure it continues to add
risk suppliers, discussing innovation
value through that. “Crown is going
and improvement to create greater
from strength to strength,” concludes
transparency along the supply chain.
Tuszynski. “We have the right mix of
“We visit manufacturers ourselves to
people, leadership, and strategy to
validate and get a sense of where the
make our vision happen. The next five
item is coming from,” he explains.
years represent a very exciting time
Over the next three to five years,
for Crown.”
Crown Resorts is looking to optimise its opportunity buys by making a freezer into a warehouse; this will allow it to increase storage capability and reduce how much food goes to landfill. As food inflation rises over the next suppl y c ha i ndi gi ta l. com
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