Supply Chain Digital Magazine – May 2019

Procurement efficiency through digital transformation

www.supplychaindigital.com

M AY 2 0 1 9

DRIVING PR O C U R E M E NT N TR AN SFORMATIO

SAP on lessons learned from

TOP 10

Supply chain events

Driving sustainability and growth VP Matthew Frost on enriching lives along the supply chain

FOREWORD

W

elcome to the May edition of

facing the organisers of Fyre Festival

Supply Chain Digital!

and the lessons to be learned

For our cover issue this month, we

from its failure. “We plan in the

spoke with Matthew Frost, Global VP Raw Materials Procurement and Sustainability at Anheuser-Busch

perfect world but we execute in the real world, and in the real world, everything doesn’t go according

InBev to discuss the company’s

to plan,” he says.

Sustainability 2025 goals, the four

Also featured inside are interviews

pillars that define its aims, and the

with Applus, WERC Association and

positive impact they have had on

Fresh Hope, as well as a chat with

its supply chain and sales.

co-founder and CEO of Previse,

Elsewhere, we interviewed leading

Paul Christensen, as he explores

companies such as Paddy Power Betfair, Birchstreet, Vantage Drilling,

how Previse looks to fix one of the biggest problems in the global

UnitingCare Queensland and

B2B ecommerce market.

Barclays Bank Mauritius Limited

Finally, our Top 10 this month counts

to find out more about their digital

down the most exciting supply chain

transformation journeys and supply

events of the year.

chain strategies.

Enjoy the issue!

Our Leadership feature this month

Sean Galea-Pace

showcases Richard Howells, Vice President of Solution Management

sean.galea-pace@bizclikmedia.com

of SAP Digital Supply Chain, as he discusses the logistical challenges

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03

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EDITOR-IN-CHIEF

SEAN GALEA–PACE MANAGING EDITOR

OLIVIA MINNOCK

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CONTENTS

12

AB InBev Driving sustainability and growth together

34

44

LESSONS LEARNED FROM

F E S T I VA L

IMMEDIATE SUPPLIER PAYMENT THROUGH AI TECHNOLOGY

52

62

WILL 2019 BE THE WATERSHED MOMENT FOR THE E-INVOICING MOVEMENT IN EUROPE?

72 TOP 10

Supply chain events Lloyds Bank: Better supply chain management

86

Events & Associations

CONTENTS

90

Paddy Power

104 BirchStreet

142 WERC Association

124 Vantage Drilling

150 UnitingCare Queensland

172 Fresh Hope

Covering every angle in the digital age The Business Chief platforms offer insight on the trends influencing C and V-level executives, telling the stories that matter

CLICK TO SUBSCRIBE FOR FREE

w w w.bu si nessch ief.com

Driving sustainability and growth together WRITTEN BY

MARCUS LAWRENCE PRODUCED BY

JUSTIN BRAND

12

MONTH 2019

13

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ANHEUSER-BUSCH INBEV

Matthew Frost, Global VP for Raw Materials Procurement and Sustainability at Anheuser-Busch InBev, discusses the company’s Sustainability 2025 goals, the four pillars that define its aims, and the positive impact they have had on its supply chain and sales

14

C

ompanies worldwide are finding that manoeuvring towards sustainability driven operations is not only boosting profits but

is also enriching the lives of communities along their supply chains and mitigating their impact on the environment. One such firm to experience this is Anheuser-Busch InBev (AB InBev), the largest beer manufacturer in the world, which has accelerated its historic commitment to sustainability with its ambitious 2025 Sustainability Goals. Broken down into four pillars – Smart Agriculture, Water Stewardship, Circular Packaging and Climate Action – the sustainability drive is seeing a revolution of AB InBev’s supply chain operations. Matthew Frost, Global VP Raw Materials Procurement and Sustainability, is passionate about the multifarious, intersectional benefits of this transformative initiative, and firmly believes that strong sustainability practices are intrinsically linked with improved M AY 2 0 1 9

15

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CREATING BUSINESS VALUE THROUGH SUSTAINABLE ENERGY Ensuring you have the best partner at your side.

Follow us

enelgreenpower.com

ENEL GREEN POWER GLOBAL PARTNERSHIP AB InBev joined the RE100 initiative in early 2017, committing to procure 100% renewable energy by 2025.

This is a progressive commitment and companies, like AB InBev, can meet their renewable energy needs in several ways, including purchasing Energy Attribute Certificates (EAC), entering into a long-term Power Purchase Agreement (PPA) or signing up for a Green Tariff. The ways an organization can purchase renewable energy is constantly changing and the contract structures are becoming more complex and innovative each day, including financial hedges and weather derivatives. At Enel Green Power, we work with our partners to help

USA

them understand these different structures and what options are available in each country where they operate.

We spend time understanding the goals and challenges of each organization and walk through the different options available, providing the right solution that meets their goals, delivers cost certainty and minimizes risk. We have worked with AB InBev to find customized solutions in the United States and in Chile. In the US, the contract is a Virtual PPA, which is a long term commitment also known as a Contract for Differences (CfD). In Chile, a Green Tariff provided by Enel Distribution Chile is supplied by an Enel Green Power Solar PV plant.

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PROJECT

OFF-TAKER

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CHILE

AB INBEV NEEDED TO PROCURE RENEWABLE ENERGY TO SUPPLY THEIR BUDWEISER BREWERIES IN THE US

SOLUTION VIRTUAL POWER PURCHASE AGREEMENT (VPPA) ENEL GREEN POWER IS SELLING THE ELECTRICITY GENERATED BY A 152.5 MW PORTION OF THE WIND PROJECT TO AB INBEV THE RENEWABLE ENERGY PURCHASED IS ENOUGH TO BREW MORE THAN 20 BILLION 12 OZ SERVINGS OF BEER EACH YEAR 30% CO2 FOOTPRINT REDUCTION

GREEN TARIFF WITH VOLUNTARY RENEWABLE CERTIFICATION

NEED

SOLUTION

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AB INBEV NEEDED TO IMPROVE SUSTAINABILITY WITH RENEWABLE ENERGY THAT COULD CERTIFY THEIR PRODUCTION PLANT IN THE CAPITAL CITY, SANTIAGO

IMPLEMENTATION OF ENEL CHILE CLEAN ENERGY SUPPLY PROVIDED BY THE ENEL GREEN POWER SOLAR PV PLANT DIEGO DE ALMAGRO, LOCATED IN THE ATACAMA DESERT

19 GWH/Y OF CLEAN ENERGY SUPPLY WITH CONSIDERABLE REDUCTION OF THEIR CARBON FOOTPRINT FIRST BREWERY IN CHILE WITH RENEWABLE SUPPLY CERTIFICATION

ANHEUSER-BUSCH INBEV

CO M PAN Y FACT S business operations and innovation.

“I think the organisation as a whole is learning more and more that sustainability really is our business now,” he says.

Frost notes that, from a commercial perspective, the gradual shift in consumer interests means that this initiative is not only driven by a sense of responsibility, but is also simply good business sense. “Consumers are very much aligned to the message of sustainability, so we find that consumers are seeking out products from com18

panies which are doing something to positively influence the planet through their supply chains. More and more, that’s actually helping us to sell beer,” he adds. “The past two sets of sustainability goals were certainly achieved, but they weren’t as far reaching as our new 2025 ones. They’re helping us to drive growth in the business, innovation, supply security and cost reduction.

The more we get into it, the more we realise how beneficial it is for the business overall.”

SMART AGRICULTURE AB InBev aims to ensure that 100% of its direct farmers, from which the firm M AY 2 0 1 9

• AB InBev directly sources 3mn tonnes of barley each year • AB InBev’s electricity will be 100% renewably sourced by 2025

19

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ANHEUSER-BUSCH INBEV

directly sources 3mn tonnes of barley

they benefit much more from having

each year, are skill connected and

training and direct access to agronomi-

financially empowered by 2025. Frost

cal advice on how to grow crops more

notes that this means different things

effectively.”

in different territories across the supply

22

As one of the largest users of

chain, highlighting the fact that the

malting barley worldwide, AB InBev

skills of its farmers in the US are largely

has established its own Barley

well-established, efficient, and less

Research Centre in Fort Collins,

likely to benefit from AB InBev’s direct

Colorado, to ensure that barley

input. The biggest impact to be made is

remains a competitive crop for their

with its smallholder farmers in less

farmers to grow. “We are constantly

affluent countries and regions. “When

working on breeding new varieties of

it comes to farmers growing cassava in

barley that are more disease-resistant,

Mozambique, for example, these are

capable of surviving droughts and

smallholders, family operations, so

flooding, and able to produce more in

“ Consumers are very much aligned to the message of sustainability” — Matthew Frost, Global VP Raw Materials Procurement and Sustainability

M AY 2 0 1 9

CLICK TO WATCH : ‘HOW AB INBEV IS EMPOWERING BARLEY FARMERS IN UGANDA’ 23

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the field depending on the climatic and

in developing countries such as

soil conditions. Therefore, they are

Uganda and Zambia. “Blockchain gives

able to yield more,” explains Frost. “All

smallholders a digital identity, making

of this makes barley less risky for our

them credit-worthy and bankable,”

farmers to plant, whether they’re in the

says Frost. “They can then take out

Ugandan highlands or in Argentina with

loans, grow their business and become

a fully automated farm.” The unifying

more successful. With farmers in more

element between its farmers, whether

developed countries, like the US or

they are smallholders or large agricul-

Argentina, AB InBev’s focus is on

tural cooperatives, is the digital

providing cost effective crop insurance

platforms that AB InBev provides.

and facilitating access to credit.”

These platforms enable the company’s goal of financially empowering its

WATER STEWARDSHIP

farmers, with one example being a

In addition to ensuring that clean water

blockchain-enabled platform deployed

is available to communities surround-

E X E CU T I VE PRO FI LE

Matthew Frost A British National and trained Chemical Engineer, Frost has 30 years of End2End Blue Chip FMCG Supply Chain experience acquired through roles in Research and Development, Engineering, Manufacturing, Logistics and Procurement. Having worked in the UK, Germany, Russia, Switzerland and Africa, Frost has developed a holistic knowledge of procurement across a range of markets. Having served as Chief Procurement Officer at SABMiller, Frost was appointed as AB InBev’s VP Global Raw Materials Procurement and Sustainability when it acquired the firm in 2016.

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

25

ANHEUSER-BUSCH INBEV

ing its breweries, AB InBev is working

“Saving a few gallons of water in our

to create long-standing change in

breweries isn’t going to change the

water consumption across its supply

world,” he says. “We have to get stuck

chain. “A lot of manufacturers look at

into managing the watersheds in those

their water consumption in their

areas in a literal sense.” In different

manufacturing processes and attempt

countries, water rights vary not only

to drive it down. We’ve got ours down

in entitlement but delivery, limiting the

to a low level already, but that’s kind of

efficiency with which farmers can

the wrong focus,” Frost says, adding

make use of their water.

that 37 of AB InBev’s breweries around

26

In the Bajío region of Mexico,

the world are located in high water

farmers have the right to a certain

stress areas and, with the increasing

volume of water for irrigation. When

impact of climate change, it is expect-

the opportunity to have it arises, they

ed that this will rise to 50 by 2030.

must take all of it at once or risk having

“ I think the organisation as a whole is learning more and more that sustainability really is our business now”

— Matthew Frost, Global VP Raw Materials Procurement and Sustainability

M AY 2 0 1 9

CLICK TO WATCH : ‘HOP SUMMIT 2018’ 27 their entitlement cut. “Because of this, they use what we call flood irrigation, which is very costly and inefficient. You saturate the place with water and only so much of it is used by crops while the rest is -wasted,” explains Frost. The challenge here is that, while AB InBev can advise on the best time and volume with which to irrigate crops, the water regulations throw up a barrier to optimising the process. “This is an area where we’re getting involved by emphasising the issue, demonstrating what can be done to resolve it, and trying to use our corporate affairs w w w.suppl yc ha i ndi gi ta l. com

ANHEUSER-BUSCH INBEV

$54.6bn+ Approximate revenue (2018)

2008

Year founded

28

182,915+

Approximate number of employees

M AY 2 0 1 9

CLICK TO WATCH : ‘100+ 2025 SUSTAINABILITY GOALS’ 29 muscle to get things to change for the

returnable bottle fleet, as we call it,”

common good.”

says Frost. “This is by far the most sustainable packaging; you just send

CIRCULAR PACKAGING

the bottle back to us. In some countries,

As part of its Circular Packaging pillar,

we can get 40 turns out of that return-

AB InBev has set the target of ensur-

able bottle. There are some costs

ing that by 2025 100% of its packaging

associated with transporting the

will be either returnable or made from

empty bottles back and cleaning them

majority recycled materials. Drinks

so they can be reused but, ultimately,

bottles have traditionally had the

that’s massively outweighed by the

propensity for being single use, and AB

fact you’re not remanufacturing those

InBev has been working tirelessly to

bottles 40 times over.”

both enable and incentivise recycling

In markets where there is less of

of its bottles. “We use returnable

a social impetus to recycle, AB InBev

bottles in a lot of our geographies – our

deploys ‘one-way glass’ that it anticiw w w.suppl yc ha i ndi gi ta l. com

ANHEUSER-BUSCH INBEV

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CLICK TO WATCH : ‘BREWERS ON TAP | EXPLORING THREE BREWERY FOUNDERS’ UNABASHED PASSION FOR BEER’ 31 pates will be smashed or otherwise damaged, aiming to reclaim as much of this glass as possible for remanufacturing. These efforts are mirrored by its commitment to recycling aluminium and PET, with AB InBev setting targets for its third-party suppliers to increase their use of recycled materials alongside the optimisation of recycling at its own vertical plants. Its endeavours in this area are given a boost by shifting moods on a generational level. “We are finding that young, legal drinking age

“ We gave those startups some additional seed capital and inserted them along our supply chain” — Matthew Frost, Global VP Raw Materials Procurement and Sustainability

adults are becoming ever more aware of the environmental impact of manuw w w.suppl yc ha i ndi gi ta l. com

ANHEUSER-BUSCH INBEV

“ It’s really a win-win-win: a win for us, a win for the environment and a win for the local grid” — Matthew Frost, Global VP Raw Materials Procurement and Sustainability

32

facturing and the products they

by another significant commitment:

consume,” notes Frost. “People are

ensuring that the company’s energy

more attuned to it, and we’re definitely

consumption is 100% renewable by

trying to push that agenda and

2025. This aim goes deeper than

continuously explain why returnable

simply purchasing green energy

bottles are the better option.”

contracts, however, as AB InBev has invested in purchase power agree-

CLIMATE ACTION

ments (PPAs) that generate additional

All of these factors tie into the overall

renewable electricity for the local grid.

mitigation of AB InBev’s environmental

“Because the unit cost of wind and

impact. They are joined, however,

solar power has been coming down

M AY 2 0 1 9

InBev worked with a carbon disclosure project in 2017 to set a baseline for its supply bases’ CO2 emissions and subsequently set goals for those suppliers to cut their emissions.

Frost adds that realisation of its ambitious goals across each of AB InBev’s pillars has been driven in part by its sustainability accelerator, set up to define the challenges the supply chain transformation poses in relation to those goals and inviting startups to solve them. “We gave those startups some additional seed capital and inserted them along our supply chain, enabling them to grow faster by working directly with the people in it,” says Frost, citing its blockchain platform as an example of the success the accelerator substantially in the past few years, we

has produced. “That’s been extremely

have found that every deal we do leads

successful, so we have a number of

to a guaranteed lower cost of power

startups which are growing very quickly

versus grid-available in each of our

as a result of having that involvement in

locations,” Frost explains. “It’s really

our supply chain.”

a win-win-win: a win for us, a win for the environment, and a win for the local grid.” In addition, the company’s Climate Action pledge includes a commitment to reduce carbon emissions across its value chain by 25%. To tackle this, AB w w w.suppl yc ha i ndi gi ta l. com

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WRITTEN BY

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HARRY MENEAR

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

Richard Howells, Vice President of Solution Management at Digital Supply Chain, SAP, discusses the logistical challenges facing the organisers of Fyre Festival, and the lessons to be learned from its failure

I

n April 2017, the attention of the world turned to the island of Great Exuma in the Bahamas, where a logistical tragedy of spectacular proportions

was unfolding. Billed as a luxury, immersive music

36

festival, held over two “transformative” weekends on the “boundaries of the impossible,” Fyre Festival promised to be the ultimate getaway experience on a private island once owned by Pablo Escobar.

Intended as a promotional event for co-founder Billy McFarland’s celebrity booking company, Fyre Festival boasted an A-List lineup including: Pusha T, Tyga, Desiigner, Blink-182, Major Lazer, Disclosure, Migos, Kaytranada and Lil Yachty. A promotional video filled with Instagram influencers, speedboats and (a true masterstroke) adorable baby pigs.

Tickets sold for between US$500 and $1,500, with VIP packages costing as much as $12,000 for private airfare, luxury accommodation and gourmet meals prepared by celebrity chefs, including Bahamian sushi and roast pig.

M AY 2 0 1 9

“ The fact that they chose a remote island, which was meant to be the attraction, was a major issue” — Richard Howells,Vice President of Solution Management at Digital Supply Chain, SAP

Fyre Festival promotors, Ja Rule (left) and Billy MacFarland

37

To the horror of the several thousand Instagram influencers, paying guests and local Bahamians, the festival weekend unfolded into one of the most dramatic and highly-publicised calamities in recent memory. Pablo Escobar’s private island turned out to be a strip of land on Great Exuma, in spitting distance of a Sandals resort; the luxury accommodation turned out to be a waterlogged shanty town of repurposed hurricane tents; and the gourmet food distributed to guests took the form of a cheese w w w.suppl yc ha i ndi gi ta l. com

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

38

sandwich, which became the most

fined $26mn and sentenced to six years

iconic social media post of the scandal.

in prison, and that, it seemed, was that.

Social media exploded, Instagram

Following the release of two docu-

influencers were scrutinised for failing

mentaries about the event – Fyre by

to disclose their role as paid advertisers

Netflix and Fyre Fraud by Hulu – in

for the festival, co-founder and music

January, 2019, attention has returned

producer Ja Rule tweeted that Fyre

to Fyre Festival, which has become

Festival “was NOT A SCAM” and “NOT

synonymous with disaster and unmet

MY FAULT”, McFarland, Fyre’s CEO, was

expectations. Nevertheless, in

M AY 2 0 1 9

CLICK TO WATCH : ‘FYRE: THE GREATEST PARTY THAT NEVER HAPPENED – NETFLIX OFFICIAL TRAILER

“ The reality is that they didn’t realise how big a job it was to plan this type of event. They announced it five months in advance and to execute an event like this on the mainland is a 12-month exercise” — Richard Howells, VP of Solution Management at Digital Supply Chain, SAP

February, Ja Rule revealed to TMZ

In order to better understand the

that he is working on the launch of

logistical complexities faced by the

a new app-driven booking service

organisers of Fyre Festival, and how an

(which has been noted for its similari-

organisation looking to replicate the

ties to McFarland’s Fyre service)

experience (without brand-destroying

Iconn, and is planning a festival to

backlash) could proceed, we spoke

launch the service. The mogul told

with Richard Howells, Vice President of

TMZ that “in the middle of chaos,

Solution Management at Digital Supply

there’s opportunity.”

Chain, SAP. “I’ve been working for SAP w w w.suppl yc ha i ndi gi ta l. com

39

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

for 15 years. I work in the digital supply chain, which includes the entire vertical; the full life cycle of a product or asset from design to deployment, including the sustainability element,” Howells says. He has worked in the supply chain and manufacturing space for over 25 years and is currently

“ We plan in the perfect world but we execute in the real world, and in the real world, everything doesn’t go according to plan”

focused on driving the market direction and positioning of SAP’s Supply Chain Management and IOT solutions.

Howells’ philosophy at SAP is that customer experience is growing in 40

importance as multiple verticals move away from one-time sales towards a

service model. “It’s not just the automotive industry where you’re leasing cars.

Everything can be leased. If you don’t go to that point, you’re still trying to design smarter products to provide a

better customer service,” Howells says.

“It’s just a different way of engaging with customers, providing a better customer experience and differentiating yourself from the competition.

It’s what millennials and Gen Z have come to expect.”

Turning to Fyre Festival, an event which, according to Howells, failed to meet the expectations of its millennial M AY 2 0 1 9

— Richard Howells, VP of Solution Management at Digital Supply Chain, SAP

Putting out fires: Founder Billy MacFarland attempts to calm a crowd of irate attendees

41 target audience, he explains that the

and it happened to be the same week

event was by no means doomed to

as the biggest event of the year on that

failure, and could have been salvaged

island, their regatta.” Poor planning

by better organisation and understand-

and understanding of the task

ing of its supply chain. “Many of the

undertaken are the first major issues

problems could have been overcome,”

that Howells identifies. “The reality

he insists. “The fact that they chose

is that they didn’t realise how big a job

a remote island, which was meant to

it was to plan this type of event. They

be the attraction, was a major issue.

announced it five months in advance

They didn’t think of the logistics of

and to execute an event like this on the

actually executing an event on that

mainland is a 12-month exercise. They

island where there was zero infrastruc-

had no experience. You’ve got to have

ture. The plan was to import absolutely

accommodation for guests, staff and

everything, from portable toilets to

entertainment, but you’ve got to plan

water, which was a logistical nightmare.

for the right amount of accommodation.

Then they moved it to a bigger island,

You’ve got to plan for the right amount w w w.suppl yc ha i ndi gi ta l. com

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

“ It’s having the ability to see that something has affected the plan, and having the ability to adjust, as well as the visibility across your supply chain and business to detect or predict obstacles”

42

— Richard Howells,VP of Solution Management at Digital Supply Chain, SAP

of food, water and facilities, such as

the space, Howells acknowledges

toilets, that need to be imported. You

that the best laid plans often go awry.

can then work out a schedule of when

“We plan in the perfect world but we

these things need to be ordered and

execute in the real world, and in the real

what they’re going to cost,” Howells

world, everything doesn’t go according

explains. “It’s really a budgeting exercise

to plan. My father always used to tell me

based on demand, to work out the

that if you fail to plan, plan to fail,” he says.

supplies required, in order to plan where

In order to counteract the unpredict-

that supply comes from, and when it

ability, Howells counsels both intensive

needs to be at the specific venue.”

planning and adaptability. For both of

With his decades of experience in M AY 2 0 1 9

those strategies to be executed, he

necessary visibility.” SAP’s integrated business tools, Howells is certain, could have alleviated a great deal of the logistical problems with the festival. “They’d need an integrated business planning tool, to be able to plan and project what is required, when it’s required, and be able to replan as things change.”

Looking to the future, Howells cautions “social media gives companies the ability to create a perception of being much bigger, organized or capable than they are in some cases. You have to have processes that deliver on your promises. That’s the key. You will get found out if you cannot deliver what the customer is expecting.” Whether in the event planning space, digital marketing, or any other vertical, Howells is hopeful cautions, visibility along the supply chain

that all event organisers and logistics

is essential. “It’s having the ability to see

coordinators, at every point on the

that something has affected the plan,

supply chain, have learned the lessons

and having the ability to adjust, as well

of Fyre Festival: plan effectively, leverage

as the visibility across your supply

technology, budget transparently and

chain and business to detect or predict

– perhaps most importantly – don’t

obstacles.” He also notes that, through-

promise the world and deliver a cheese

out the planning of Fyre Festival “there

sandwich in a hurricane tent.

was very little leveraging of technology.

Everything seemed to be conducted via email. There was none of the w w w.suppl yc ha i ndi gi ta l. com

43

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

44

IMMEDIATE SUPPLIER PAYMENT THROUGH AI TECHNOLOGY Paul Christensen, Co-founder and CEO of Previse, explores how Previse looks to fix one of the biggest problems in the global B2B ecommerce market WRITTEN BY

M AY 2 0 1 9

DALE BENTON

45

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

IN

the modern connected world, consumers demand speed. Cashless payments are hardly a new phenomenon, but as technol-

ogy continues to redefine the global landscape businesses are having to embrace this change or

fall behind. The question then becomes one of: if a consumer can receive instant payments or cash exchanges, why should it be any different for suppliers? This is where Previse comes into play.

Powered by Artificial Intelligence (AI), Previse enables corporate buyers to safely ensure they pay all their suppliers instantly – eliminating the 46

need to rely on expensive short-term credit, lowering costs for buyers and giving SMEs the confidence to reinvest in growing their businesses.

For Paul Christensen, Co-founder and CEO of Previse, providing an innovative platform that could enable immediate payments for suppliers was something of an opportunity. Having worked in the fintech space for more than 20 years, he has seen first-hand the biggest challenges the market faces as technological innovation continues to accelerate. “It’s such a huge problem and therefore an opportunity,” he says. “No one has cracked it yet. So, Previse was built on the idea of being able to tap into that opportunity.”

Previse works with large corporates – which receive millions of invoices on a daily basis due to their vast supplier networks – and uses AI to predict M AY 2 0 1 9

“IT’S SUCH A HUGE PROBLEM AND THEREFORE AN OPPORTUNITY” — Paul Christensen, Co-founder and CEO, Previse

47

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

“HOW YOU PAY YOUR SUPPLIERS, YOUR RELATIONSHIPS WITH YOUR SUPPLIERS, YOUR SUPPLY CHAIN AND PROCUREMENT FUNCTIONS ARE ALL REALLY MISSION CRITICAL FOR MOST COMPANIES” — Paul Christensen, Co-founder and CEO, Previse

48

the small number of invoices that are

the world brings with it a level of

unlikely to get paid. It then pays them

bureaucracy that can complicate the

immediately, charging a small fee.

process. Christensen strips it back

Historically, paying invoices to a large

further and looks at the current AI or

supplier base is a complex and labori-

digital conversation that large-scale

ous process. “Previse does something

companies are currently having and

that no one has ever done before: It

highlights that these are mostly

forgets that process,” says Christens-

focused on the front office, such

en. “Every large corporate has a huge

as advertising and customer

amount of data sitting in their ERP

experience. “They aren’t thinking

systems. This goldmine isn’t being

enough about the back office, like

touched by anybody, so we go through

procurement or accounts payable

that data and make predictions.

– the whole supply chain ecosystem,”

Previse allows companies to use

he says. “The back office is kind

data, rather than process.”

of low-hanging fruit, that’s

The premise is simple, but the

where you can make

execution is not without its challenges.

the biggest difference.

Working with some of the largest

We are showing that

corporate organisations from around

we can make the

M AY 2 0 1 9

biggest difference with Previse and companies are starting to realise this.”

While Christensen can point to success on this front, he admits that it is still a gradual process of “changing the way companies think”.

The latest innovation or implementation of game-changing technology is one thing, but convincing people that their business should invest and join the conversation is often met with a little scepticism, even in the midst of the Fourth Industrial Revolution. The importance of being able to demon-

procurement functions are all really

strate the value of what Previse can

mission critical for most companies,”

offer is vital, be it through return

says Christensen. “It cuts across a lot

on investments (ROI) or displaying

of different functions and so that

a strong portfolio of leading

means change is hard. We are working

businesses that the compa-

with big organisations and delivering

ny works with. For Previse,

value to them and we are overcoming

it’s about working with

the barrier to succeed. We haven’t

companies to recognise

cracked it yet, but we are getting there.

how mission critical supplier

This is such a big issue and we are the

payments are to a business.

only one with a solution. We’re getting

“How you pay your suppliers, your

over those hurdles in a big way.”

Previse is powered by AI and machine

relationships with

learning. Through binary classification

your suppliers,

and deep neural networks, the company

your supply chain and

will measure the 20-30 features of information that make up an invoice. w w w.suppl yc ha i ndi gi ta l. com

49

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

“THE BACK OFFICE IS KIND OF LOW-HANGING FRUIT, THAT’S WHERE YOU CAN MAKE THE BIGGEST DIFFERENCE” — Paul Christensen, Co-founder and CEO, Previse

can look at an invoice from somewhere like London and compare it to an invoice from elsewhere across Europe and it analyses the risks involved and where delays could happen.

With technology, there is no silver bullet solution that fits all contexts, and many businesses in many sectors struggle to determine the clear advantages and values of specific innovations.

Christensen acknowledges this and, as a result, places great importance on transparency in Previse’s business model. Transparency allows Previse to

50 This includes the category of spend,

further highlight the value it can bring

identity of the supplier, location of the

to its customers. “Everybody wants

supplier or even the currency in which

transparency, but do they really?” asks

the transaction is conducted. Previse

Christensen.

will then examine past behaviour in

“It’s easier for smaller businesses to

response to that feature to predict the

have greater transparency, but even for

appropriate response. “The concept is

the larger ones transparency is good.

a simple one really,” says Christensen.

Revealing how long it takes to pay small

“We can use this information and look

suppliers is a corporate social respon-

at the next invoice that comes in and

sibility issue and so we work to improve

say ‘well, the probability of this supplier

the transparency conversation.”

being paid on time is X’ and then work

How Previse achieves this is by being

to pay them immediately.” Not only does

very transparent in its own operations.

Previse allow the immediate payment,

The company charges a fee for its

it also identifies risk. By looking at the

service. SMEs that use Previse will

features of an invoice, the AI solution

receive instant payments and will pay

M AY 2 0 1 9

CLICK TO WATCH : ‘INSTANTPAY’ 51 a 1% fee per month for using the

rise and so fixing the “core problem”

service. “Previse is very open about

will prove crucial in the years to come.

this, it’s a simple price that we outline

Christensen hopes that Previse’s

very early in the process,” says

success will invite new entrants to the

Christensen. “If a company has 30

market. “I’d be disappointed if we didn’t

days of payment terms on a £100 bill,

see any,” he says. “This is a ginormous

they can be paid instantly for a £1 fee.

market, it’s not winner-takes-all. There

It’s as simple as that.”

absolutely should be others as it will

Previse is growing fast. In just over

only further the conversation, allow us

three years it has amassed a strong

to offer improved services and ultimately

network of large organisations that

fix that problem.”

utilise its services. But what does the future hold? There is close to US$125bn in B2B commerce in the world right now, a figure that will only continue to w w w.suppl yc ha i ndi gi ta l. com

TECHNOLOGY

52

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WILL 2019 BE THE WATERSHED MOMENT FOR THE E-INVOICING MOVEMENT IN EUROPE? Ruud Van-Hilten, SVP Commercial Operations EMEA at Tungsten Network, explores how e-invoicing is on the rise WRITTEN BY

RUUD VAN-HILTEN

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53

TECHNOLOGY

W

e are living in exciting times when it comes

to the digitisation agenda and financial supply chains. From January 2019, elec-

tronic invoicing, or e-invoicing, will be compulsory for all companies in Italy and in April 2019, the UK Government’s Making Tax Digital programme will come into force. These could be defining moments for the paper-free, e-invoicing movement across Europe as other countries take note and follow suit.

While automating finance departments and moving suppliers to online payment networks has 54

been gathering pace, for those watching closely, it has been a painstakingly slow journey. Our friends in Latin America are much further ahead in the adoption of e-invoicing, primarily because authorities there have made e-invoicing mandatory across all business-to-government and businessto-business transactions. Although Chile was one of the first to introduce e-invoicing, others such as Brazil and Mexico have overtaken Chile due to strict mandates for usage.

Despite the journey to invoicing digitisation kicking off at a seemingly slower rate in the UK, the wheels are definitely in motion and we are only at the beginning of a sweeping European trend.

So, what will this all mean for technology as we currently know it?

M AY 2 0 1 9

“WE ARE LIVING IN EXCITING TIMES WHEN IT COMES TO THE DIGITISATION AGENDA AND FINANCIAL SUPPLY CHAINS” — Ruud Van-Hilten, SVP Commercial Operations EMEA Tungsten Network

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TECHNOLOGY

“ I T’S NOT SURPRISING THEREFORE THAT GOVERNMENTS HAVE DECIDED TO TAKE ACTION” — Ruud Van-Hilten, SVP Commercial Operations EMEA Tungsten Network 56

M AY 2 0 1 9

CLICK TO WATCH : ‘E-INVOICING IN A GLOBAL ORGANIZATION; TUNGSTEN NETWORK INTERVIEW WITH MEG MCGRATH AT SIEMENS’ 57

MIND THE GAP

amounted to €147bn. Italy had the

The main motivation for governments in

largest VAT gap among the EU

Latin America (and Italy) has been

Member States. In 2015, the difference

stopping VAT leakages due to fraud

between the expected VAT revenue

and the existence of inadequate tax

and the amount actually collected in

collection systems. Establishing

Italy was an incredible €35bn. It’s not

real-time or near real-time invoicing

surprising therefore that governments

controls as opposed to the post-audit

have decided to take action.

model which currently dominates Europe means the tax administration

A WATERSHED MOMENT?

can get involved at a much earlier

As well as Latin America, real-time

stage and reduce tax fraud, evasion

clearance models have already been

and avoidance.

implemented in Russia and parts of

In Europe in 2016, the VAT gap was 12% of what should be collected and

Asia and Italy’s decision to join the movement will no doubt lead others in w w w.suppl yc ha i ndi gi ta l. com

TECHNOLOGY

58 Europe to follow suit, particularly

France are already working on their

when they see a tangible reduction

own models suggesting that 2019

in Italy’s VAT gap.

could be a key year for the industry.

According to Trustweaver, by 2025 most of the world will be using some

THE DEATH OF THE PAN-EUROPEAN MODEL?

sort of clearance model to regulate

A big concern is that these countries

invoicing and achieve a tighter control

are setting up their own market-specif-

over VAT. The next six years are clearly

ic and country-specific systems rather

going to be extremely significant for

than developing a pan-European

the e-invoicing industry - the big

model. The vision of a unified Europe-

question is whether 2019 is going to be

an standard is fading and once

the catalyst for the revolution? Will

countries do their own thing it will be

Italy’s change in approach trigger a

very difficult to harmonise afterwards.

domino effect across Europe? Spain,

The existence of dozens of slightly

Portugal, Hungary, Poland, Austria and

different systems could become quite

M AY 2 0 1 9

a headache for global companies as

stand their requirements. We are now

they try to ensure compliancy.

a conduit to the Italian governmental

This of course is where a business-

e-invoicing platform Sistema di

like Tungsten Network can be a lifeline

Interscambio and our Italian customers

for companies trading across multiple

are able to route all their invoices, both

borders. We make it our mission to work

inbound and outbound, via Tungsten

alongside governments as they develop

Network and don’t need to worry about

their systems and work tirelessly to

whether they are compliant or not. This

guarantee all invoices going through

is just one example of how we have

our electronic network are compliant

worked with global tax authorities to

worldwide. To date, we are tax compli-

stay ahead of statutory changes. If other

ant in 48 countries, more than any other

European countries mandate e-invoic-

trading network in the world.

ing this year, we will adapt our system

Most recently, we have been working with the Italian government to under-

accordingly so that organisations are always on the right side of the law.

E XE CU T I VE PRO FI LE

Ruud van Hilten, SVP Commercial Operations EMEA Tungsten Network A process automation expert, Ruud van Hilten has supported global organisations such as HP, GSK, and Siemens re-invent their procure-to-pay function for over 12 years. As Tungsten Network’s SVP Strategic Business Development, he is responsible for high profile partner engagements and accelerating the benefits of the network for Tungsten Network customers. Prior to Tungsten Network, Ruud worked with early e-commerce adopters all over the world at BroadVision.

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59

TECHNOLOGY

60

GOING PAPER-FREE

the right direction. Its Making Tax

Governmental pressure to adopt

Digital programme is aimed to help

e-invoicing is good as it usually results in

individuals and businesses handle their

other efficiencies such as more accurate

tax more effectively and efficiently.

and timely payment of suppliers and a

HMRC wants to become “one of the

reduction in fraud, duplication and error.

most digitally advanced tax administra-

In fact, according to Billentis, e-invoicing

tions in the world� and to transform tax

reduces the costs of handling invoices

administration so that it is easier for

by more than 50%.

taxpayers to get their tax right.

While the UK Government is not mandating e-invoicing, it is moving in M AY 2 0 1 9

By April 2019, it will expect VAT-registered businesses with a taxable

“GETTING EUROPEAN COUNTRIES TO ADOPT E-INVOICING HAS BEEN A BIT LIKE PUSHING A ROCK UP A HILL” — Ruud Van-Hilten, SVP Commercial Operations EMEA Tungsten Network

turnover above the VAT threshold to

Spain, Greece and Portugal predicted

use the Making Tax Digital service to

to follow Italy’s lead. The next year

keep records digitally and use software

should herald some key developments

to submit their VAT returns. This should

in the digital revolution and we believe

help UK businesses begin the move

businesses and governments will never

from paper to digital records.

look back. As always, we are on hand.

Getting European countries to adopt e-invoicing has been a bit like pushing a rock up a hill. But as we look ahead, it feels like we are now at the summit and momentum is on our side with w w w.suppl yc ha i ndi gi ta l. com

61

CONTRACT MANAGEMENT

Lloyds Bank: Better supply chain management

62

Matthew Hurst, supply chain expert, Global Transaction Banking at Lloyds Bank, looks at five simple steps for greater supply chain management WRITTEN BY

M AY 2 0 1 9

M AT THE W HURS T

63

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CONTRACT MANAGEMENT

T

here’s a real push for businesses to expand their global footprint and explore new markets overseas. After

all, furthering exports is good for companies and boosts the economy.

But as businesses broaden their trading horizons, their supply chains get longer and more complex, making it crucial for them to ensure that the new partners they are working

with are resilient. This is particularly important during times of political uncertainty.

64

There is no disputing that managing and future-proofing an increasingly complex supply chain isn’t easy – fortunately there are five simple steps businesses can follow to help streamline the process.

DEVELOP A BESPOKE SUPPLY CHAIN MANAGEMENT STRATEGY Every supply chain is unique, which means firms need a dedicated and bespoke strategy that is defined by their specific business objectives. The strategy should be able to adapt to support both immediate and future priorities, whether that’s risk management, margin improvement or responding to a new opportunity quickly.

M AY 2 0 1 9

“ Every supply chain is unique, which means firms need a dedicated and bespoke strategy that is defined by their specific business objectives” — Matthew Hurst, Supply Chain Expert, Global Transaction Banking at Lloyds Bank

65

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CONTRACT MANAGEMENT

The first step is for businesses to

Our latest Working Capital Index

spend time comprehensively map-

discovered UK businesses have

ping out their supply chain to find any

£680bn tied up in excess working

weaknesses that could compromise

capital. By unlocking capital within the

their organisation’s drivers for success.

supply chain, businesses could be

After this, they should take a holistic

better placed to invest in growth or

approach to address any inefficiencies,

weather turbulent economic conditions

working alongside partners and with

at short notice.

financial provisions and operational improvements considered together.

Supply chain finance can allow suppliers to leverage the buyer’s credit rating and access an agreed percent-

66

USE SPECIALIST TOOLS TO MANAGE WORKING CAPITAL

This means the buyer can benefit from

Once a supply chain’s priorities and

early settlement discounts, or a more

risks have been mapped, there are

substantial payment gap, without

a range of tools available to help them

affecting the supplier’s cash flow.

optimise it. Supply chain finance is one

age of their due payment up-front.

It can also be used in the reverse,

such tool. It can help firms and their

helping corporate sellers by giving

partners improve their working capital

them the opportunity to retrieve

management.

payment quickly by selling off receivables from a portfolio of approved

“ The reason these are so important is that supply chains are, of course, built on relationships” — Matthew Hurst, Supply Chain Expert, Global Transaction Banking at Lloyds Bank

M AY 2 0 1 9

debtors to their lender, enhancing cash flow, strengthening the businesses balance sheet and adding security to the supply chain as a whole.

CREATE WIN-WIN RELATIONSHIPS Outside funding, there are propensity modelling tools that can give corporates an overview of which suppliers

CLICK TO WATCH : ‘A REVOLUTION IN HOLISTIC SUPPLY CHAIN MANAGEMENT’ 67

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CONTRACT MANAGEMENT

will respond well to management techniques and help them anticipate how successful a supplier finance programme is likely to be.

The reason these are so important is that supply chains are, of course, built on relationships. Ideally, any solution should be arrived at and implemented in collaboration with suppliers.

For example, many businesses first decide to use supply chain finance to provide preferential payment terms for key suppliers, while also allowing them 68

to boost working capital.

Its uses can be far more nuanced than this, but the way it is traditionally introduced demonstrates how any tactic aimed at optimising a supply chain –

from geopolitical uncertainty to the

and indeed the whole supply chain

level of working capital available to

strategy – should be about creating

local suppliers. Then there are risks

a win-win arrangement for both parties.

caused by dealing with small and medium-sized suppliers, which might

MANAGE RISK EXPOSURE

be particularly vulnerable to liquidity

When working with international supply

pressures.

chains, larger scale can potentially

What is important is not that firms

generate cost savings but operating

try to eradicate these risks in all

across borders can also increase risks

circumstances, but that these hurdles

around using new suppliers based in

are considered and planned for.

unfamiliar geographies.

This could be caused by anything M AY 2 0 1 9

By allowing key suppliers to secure an earlier injection of cash flow on

“ There’s a lot of uncertainty in the UK at the moment and businesses are wise to make sure their supply chains are as resilient as possible” — Matthew Hurst, Supply Chain Expert, Global Transaction Banking at Lloyds Bank

At Lloyds Bank, we think this holistic approach is best and we work closely with all our clients, their suppliers and other non-financial bodies, such as the Department for International Trade, to inform our recommendations and support.

Experience is also key. We were the first bank in the UK to syndicate a supplier finance programme and our expert teams have access to equipment that can give businesses full visibility and control over all their supply chain interactions. For 2019, we have also committed to lending £18bn to businesses across the UK. There’s a lot of uncertainty in the UK

better-than-normal credit terms, supply

at the moment and businesses are

chain finance can help reduce a buyer’s

wise to make sure their supply chains

exposure to the risk of suppliers

are as resilient as possible.

becoming insolvent, for example, while

Vigilant firms that take a proactive

also encouraging loyalty between buyer

approach to managing their supply

and trading partners.

chain will find themselves well placed to respond to whatever opportunities

SPEAK TO A TRUSTED ADVISER

or challenges the future may hold.

Taking advice is critical. The right lender will work hard to understand the whole business before delivering tailored solutions geared to meeting its specific needs. w w w.suppl yc ha i ndi gi ta l. com

69

Premier Partner

Associate Partners

Award Sponsors

Corporate Table Partner

Business Intelligence Partner

JAPANESE DESIGN & BUILD CONTRACTOR www.kajima.pl

Auditor

Fashion Partner

Media Partners

Supporting Partners

PR & SM Partners

Vodka Partner

Wine Partner

Digital Marketing

Venue Partner

For further information please contact: Craig Smith / +48 604 144 769 / craig@EuropaProperty.com Anna Kaliszewska / +48 601 382 667 / anna@EuropaProperty.com

Beer Partner

Jury Members 2019

Marek Foryński

Kris Bledowski

Karel Zeman

Wolfram Braun

Panattoni Head of BTS Group

MAPI Council Director and Senior Economist

CBRE Global Investors Poland Head of Investment Operations Poland

AVON Operations Poland Vice President Global Manufacturing

Katarzyna Pyś-Fabiańczyk

Phil Goss

Courtney Fingar

Adam Zawadzki

Exeter Property Group Director Leasing and Development CEE

Perła Browary Lubelskie Vice-president of the Management Board

fDi Magazine Editor-in-Chief

Toyota Motor Europe Senior Project Leader

Philippe Beurtheret

Michał Nowicki

Łukasz Niesłuchowski

Bruno Lambrecht

CEETRUS General Manager Hungary

RECARO Director Quality and Deputy General Manager

Rockwell Automation Country Sales Director

CFE Poland General Manager

Dorota Raben

Preston Smith

Marek Potoczny

Adam Janus

CLIP Group Member of The Board

CDDI Founder & Executive

Valeo Group Industrial Projects Director

DHL Head of Real Estate Solutions CEE

T O P 10

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TOP 10

supply chain events Supply Chain Digital takes a look at the biggest procurement and supply chain management events of 2019.

Check out these annual gatherings of the top minds in the industry WRITTEN BY

HARRY MENEAR

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T O P 10

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10

Chief Procurement Officer Summit

Held each year at the end of April, the Chief Procurement Officer Summit took place this year in Atlanta, Georgia, at the Ritz Carlton.

The annual event is an invitation-only forum for key players in the procurement industry, bringing together elite buyers and sellers in an environment designed to promote the focused discussion of key new drivers shaping the industry. The 2019 Summit featured key topics such as Artificial Intelligence, IoT, Blockchain and the importance of accurate data within procurement systems.

M AY 2 0 1 9

09

Women in Procurement & Supply Chain Summit

The fifth annual Women in Procurement & Supply Chain Summit took place in Sydney, Australia between April 30 and May 2, 2019.

The annual event is a unique gathering centred around advancing the careers of female procurement and supply chain professionals.

The 2019 summit focused on the challenges, opportunities and pain points facing procurement and supply chain stakeholders. Some of this year’s keynote speakers included Ann Sherry, Executive Chairman of Carnival Australia; April Palmerlee, Chief Executive Officer at the American Chamber of Commerce in Australia; and Thomai Veginis, Chief Procurement Officer at Telstra.

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T O P 10

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08

Procurecon Travel

Designed as an interactive, peer-led event for senior level procurement executives to learn, discuss and innovate regarding their companies’ corporate travel initiatives, Procurecon Travel is scheduled to take place on May 14-15 in Henderson, Nevada. Aimed at companies ranging in size and maturity from startups to Fortune 500 firms, Procurecon Travel offers intimate networking sessions and innovative workshops centred around taking travel procurement beyond cost-cutting and into a future of value creation.

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07

World Procurement Awards

Hosted at the Intercontinental Hotel in the heart of London, the World Procurement Awards 2019 are a shining highlight of the talent, passion and expertise leading the procurement industry. The event, taking place on Thursday, May 16, will be hosted in partnership with SAP Ariba and, in addition to honouring the best and brightest trailblazers in the procurement sector, will be a unique opportunity for procurement professionals from around the globe to gather and celebrate the progress made over the previous year by the industry as a whole.

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06

Supply Chain Innovation Summit 2019

The eighth annual Supply Chain Innovation Summit will be held in Shanghai on the 16th and 17th of May, 2019. This year’s event is billed as a must-attend for supply chain and procurement professionals looking to do business in China. Organised around the theme of “Moving to the ‘Thinking’ Supply Chain & Logistics Era”, the event will focus on the need for agility, visibility and adaptability in the modern supply chain landscape.

M AY 2 0 1 9

79

05

Global Manufacturing Supply Chain Innovation Summit

As the world’s manufacturing industry continues to evolve alongside Industry 4.0, manufacturing and industrial companies must also innovate in their procurement and supply chain departments. Held on May 30, 2019 in Singapore, the ninth Global Manufacturing Supply Chain Innovation Summit will bring together industry professionals to discuss the theme of “New Manufacturing, New Supply Chain�.

The event will be centred around eight sessions, including presentations on the new manufacturing, iconic brand case studies, supply chain visibility and customer collaboration.

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04

Procurecon Asia

Procurecon Asia will take place between the 9th and 11th of July at the Amara Sanctuary Resort Sentosa. With the goal of “Transforming Procurement. Together”, it will feature inspirational stories from the industry and offer the chance to take part in small, interactive working groups to accelerate and support their procurement transformation projects, grow knowledge and learn how to become ever more agile.

According to Jorge Juan Munoz Fernandez, Head of Strategic Sourcing & Transformation at Maxis, the event delivers “actionable solutions to address the biggest procurement challenges currently facing us.

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03

CIPS Australasia Conference & Supply Management Award

The region’s most prestigious conference and procurement and supply chain awards event, the CIPS Australasia Conference & Supply Management Awards are an annual event, this year taking place once again at the Park Hyatt Hotel in Melbourne, Australia. The conference will feature keynote presentations and networking opportunities concerning leading industry trends, such as optimising costs and adding value through procurement and supply chain innovation. The awards ceremony will celebrate thought leaders, offering attendees the opportunity to network with the region’s leading supply chain professionals.

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02

Procurecon IT Sourcing Helping to round out a jam-packed 2019 is Procurecon IT Sourcing, which will be held in Germany on the 19-20 of

82

November. The event is one of the longest-running in the procurement sector and is aimed at helping attendees benchmark themselves, their procurement departments and processes against other leading players in the industry. This year’s event is expected to focus on new software solutions available to the space, as well as hardware licensing and contracting, data spend, mobility spend, telecoms spend, IT outsourcing and digital transformation.

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01

Asia Pacific Procurement Congress 2019 Finally, the Asia Pacific Procurement Congress, held in November in Singapore, promises to be the ultimate in

84

education, development and networking for supply chain professionals in the APAC region. “To build an agile function that contributes to the top-line, your function’s processes, tools and behaviours need to be re-evaluated,” say the event’s organisers. The Congress is dedicated to discussion and development of the latest global trends in technology, talent and business models that are intended to allow procurement professionals and departments to contribute to their companies’ growth and value.

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

The biggest industry events and conferences WRITTEN BY DALE BENTON from around the world

30 APRIL–02 MAY

Women in Procurement & Supply Chain 2019 [ PULLMAN SYDNEY HYDE PARK, AUSTRALIA ] 86

The annual Women in Procurement

16 MAY

World Procurement Awards 2019

and Supply Chain conference is dedi-

[ INTERCONTINENTAL LONDON - THE O2 ]

cated to advancing the opportunities

Redefining procurement excellence -

for female executives across supply

the pinnacle of professional

chain and procurement. Looking to

achievement, each year the greatest

address specific industry challenges

procurement organisations and

facing procurement stakeholders,

thought leaders from around the world

together with timely, candid and

gather for an evening of anticipation,

thought-provoking insights into the

entertainment, and inspiration at the

future opportunities (and pain points)

World Procurement Awards. Compet-

addressing procurement, the event is

ing for a spot on the prestigious list of

a platform for procurement stakehold-

finalists and winners, organisations are

ers to share experiences, insights,

recognised for being innovative and

stories and best-practice innovations.

transformative players in the industry.

M AY 2 0 1 9

30–31 MAY

[ OXFORDSHIRE, UK ]

9th Global Manufacturing Supply Chain Innovation Summit 2019

A highly focused event that brings

[ SINGAPORE ]

together logistics professionals and key

The Global Manufacturing Supply Chain

industry solution providers, the summit

Innovation Summit returns with a new

consists of one-to-one business meet-

area of focus, New Manufacturing,

ings, interactive seminars and valuable

New Supply Chain. Eight sessions

networking opportunities; in less than

across two days will see leading prac-

two days. The Total Supply Chain Sum-

titioners from manufacturers in the

mit is specifically organised for senior

automotive, pharmaceutical, consumer

professionals who are directly responsi-

goods and logistics and supply chain

ble for supply chain within their

space discuss supply chain strategy

organisation, and those who provide the

and innovation, visibility, agility and

latest and greatest products and ser-

efficiency as well as the digitisation

vices within the sector.

of supply chain and logistics.

20–21 MAY

Supply Chain Summit (UK)

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87

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

10–12 JUNE

88

09–11 JULY

Supply Chain Summit 2019: Atlanta

ProcureCon Asia

[ THE WESTIN PEACHTREE PLAZA, ATLANTA ]

Asia’s premier gathering for global

The Supply Chain Summit 2019 is the

and regional CPOs and Asian heads

meeting place for the forces of innova-

of procurement. Procurecon Asia

tion, transformation and connectivity

2019 brings over 200 attendees and

that will fundamentally reshape the

more than 100 CPO’s and Heads of

supply chain industry over the coming

Procurement to access and explore

years. Over 800 supply chain and pro-

interactive case studies, broad discus-

curement representatives will meet to

sion on industry challenges and

discuss digital transformation strategy

trends and network with some of the

and look at the supply chain of the

biggest names in the procurement

future. Supply Chain Summit: Atlanta

space. Procurecon asks profession-

will look to enable companies from all

als in both direct and indirect

over the world to discover a truly global

procurement to ‘maximise learning

perspective on the current supply

and optimise your organisation’s

chain landscape.

supply chain strategy.’

MARCH 2019

[ SINGAPORE ]

11–12 JULY

Ovation: The World’s Most Exclusive and Renowned CPO Think Tank [ CHANTILLY, FRANCE ] Created to look “far beyond the traditions of procurement”, Ovation looks to the future of supply chain and the key trends that will directly impact the

89

24–26 SEPTEMBER

Supply Chain & Logistics Summit and Expo 2019

group-level CPO. Over the course of

[ HILTON ANTWERP, BELGIUM ]

two days, 50 exclusively invited CPOs

The EMEA Supply Chain & Logistics

from around the world will attend work-

Summit & Expo is one of the most estab-

shops designed to drive divergent

lished events of its kind in Europe. Now

thinking, challenge and enlighten fellow

in its 21st year, it is a highlight in the cal-

thought leaders and learn how to bet-

endar where world-class organisations

ter harness the complexity of global

meet to maximise efficiency and mini-

supply networks and ecosystems in

mise costs through supply chain

the digital world.

strategies of the future.

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90

PADDY POWER BETFAIR TARGETS PROCUREMENT EFFICIENCY WITH DIGITAL TRANSFORMATION WRITTEN BY

SOPHIE CHAPMAN PRODUCED BY

JUSTIN BRAND

M AY 2 0 1 9

91

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PA D D Y P O W E R B E T F A I R

As the company invests more in technology, Paddy Power Betfair is ensuring efficient procurement processes with spend analytics, as Colum Colbert explains

W

ith the gambling industry continuing to evolve with changing legislation and new technologies, Ireland’s

Paddy Power Betfair (PPB) has operations across Europe, America and Australia. The firm manages several brands which have 92

evolved along with the industry. When Paddy Power was founded in 1988, it followed a traditional gambling model with shops on high streets.

As well as growth within its business model, the company has expanded its global presence through mergers and acquisitions. In 2010, Paddy Power acquired Sportsbet, one of Australia’s leading bookmakers. In 2015, Paddy Power and UK-based Betfair agreed to merge. Since the merger, the company has sought to increase its global operations further.

Director of Procurement, Jack McMahon, joined Paddy Power – prior to its merger with Betfair – in April 2015. McMahon has over 20 years’ experience in procurement, operations M AY 2 0 1 9

93

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PA D D Y P O W E R B E T F A I R

“ My advice here is clear and simple: choose your suppliers carefully.

Look for those who truly can be your partners.They can be critical to your success” 94

— Colum Colbert, Head of Procurement Services at Paddy Power Betfair

M AY 2 0 1 9

and supply chain. With this he sought to implement standard processes and procedures to support stakeholders within PPB. “Our focus has always been to support the business proactively in engaging with our supply base. Our job is to maximise value and minimise risk,” Jack says.

“Our long term plan is to operate on a common platform for systems, process and procedures. Hence, our Global team can have a standard language and get to best practice.

This also helps offer opportunities

CLICK TO WATCH : ‘PADDY POWER – STANDING OUT’ 95 to staff to transfer between Regions

arranging supply, making sure that the

and develop within PPB.”

supply chain is uninterrupted and

Colum Colbert joined Paddy Power

monitoring quality throughout. The

five years ago. He has been working

second is achieving good value for

with the procurement team for the past

money within that supply chain. Now

two years. “Within procurement, my

that I’ve worked in the industry in PPB

own area of Procurement Services is

for two years, I think these two activities

not about sourcing. Procurement

are part of a bigger picture. I think they

Services manage the procedures,

both fit into a greater overall context of

policies and the systems – what I would

managing supply chain risk. Besides

call the ‘infrastructure’ – that enables

risks around security of quality supply

and supports procurement.” He argues

and value for money, there are also

that procurement has traditionally

legal, tax and IT security risks.”

centered around two things: “The first is security of quality supply, such as

The Procurement Services Head suggests that since joining the w w w.suppl yc ha i ndi gi ta l. com

PA D D Y P O W E R B E T F A I R

96

M AY 2 0 1 9

company, he has witnessed greater

“With a clearer systems strategy in

embedding of its PO system. Provided

place, we have been introducing various

by Oracle, Colbert notes that the role

tools that enable us to achieve procure-

of this system in the P2P process has

ment excellence, what we call ‘Procure-

become clearer to the wider business

ment 2.0’. A good example has been our

overall. The key message of “No PO –

implementation of spend analytics

No Pay” is gaining traction for an increas-

provided by Efficio. We have achieved

ing share of the company’s spend. The

global spend analytics with spend

PO system has created a greater sense

categorised according to procurement-

of spend governance in the company’s

relevant taxonomy. This facilitates

overall P2P systems strategy.

global category management and

Colbert also observes that over the past two years, operations within his

savings planning,” comments Colbert.

The partnership with Oracle is enabling

team have become more concerned

the firm to transform its process for

with achieving and delivering best

contract preapproval, or Deal Sheet.

practice, policies and procedures.

This process helps manage legal, tax,

E XE CU T I VE PRO FI LE

Colum Colbert A Chartered Accountant, Colum formerly worked for 12 years as a manager in Baxter Healthcare’s Finance Shared Services Centre. Here, he managed areas including Finance Training, AP, Procurement Services and GL. He joined Paddy Power Betfair (PPB) plc in late 2013 as Senior Manager for Disbursements, covering AP and Payroll. Since 2017, Colum has led PPB’s Procurement Services team, responsible for driving Systems strategy.

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97

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STRONG

COUNTRIES

“ Efficiency is critical.We don’t want to invest in anything that — Name of Person, makes life Position and company less efficient” — Colum Colbert, Head of Procurement Services at Paddy Power Betfair

99

IT security and value-add risks in buying.

enabler for people to engage in

By using the Oracle cloud technology,

procurement activity.”

with the help of developer Namos

This concept of partnership with sup-

Solutions, the betting business is

pliers has been key to PPB’s systems

transitioning from a manual to a more

strategy to date. “Many suppliers may

automated process. Paddy Power

claim to be ‘partners’ of their custom-

Betfair are also implementing Market

ers. However, this may often be a mere

Dojo’s eRFx tool to streamline tendering.

cliché or lip-service”, Colbert states.

“Efficiency is critical. We don’t want to

“On our procurement systems journey,

invest in anything that makes life less

our providers truly have been good to

efficient,” says Colbert. “I hope that this

us and for us. I have been astounded

technology and automation develop-

by their flexibility and customer service

ment makes it easier and becomes an

ethic”, adds Colbert. “For example, w w w.suppl yc ha i ndi gi ta l. com

PA D D Y P O W E R B E T F A I R

100

“ Our focus has always been to support the business proactively in engaging with our supply base. Our job is to maximise value and minimise risk” — Colum Colbert, Head of Procurement Services at Paddy Power Betfair

M AY 2 0 1 9

101

PA D D Y P O W E R B E T F A I R

1988

Year founded

2016

Merged with Betfair

190

Shops located in Ireland

102

Market Dojo sold us an eRFx licence.

meet our bespoke requirements. The

They then stayed with us and ‘held our

common denominator among these

hand’ as we actually launched suc-

providers was that they didn’t simply

cessful eRFx events. Efficio, our spend

sell and then leave us”, Colbert states.

analytics providers, have shown great

He adds “my advice here is clear and

agility in quickly turning around requests

simple: choose your suppliers care-

for data loading, analysis and reporting.

fully. They can be critical to your

Namos Solutions, builders of our Deal

success or failure”.

Sheet tool, invested huge efforts in customising Oracle technology to M AY 2 0 1 9

In the coming years, Colbert expects the company to have a more globally

103

integrated procurement function that

of course have to integrate our procure-

collectively encompasses systems,

ment function with these new compa-

processes, policy, and supplier and

nies too,� Colbert concludes.

risk management. “We will globally integrate more of the procurement activity across the existing Paddy Power Betfair entities. There may even be more entities and brands within our business. If Paddy Power Betfair makes further acquisitions, we would w w w.suppl yc ha i ndi gi ta l. com

104

EXPLOSIVE GROWTH: NEW INNOVATIONS, NEW GEOGRAPHIES, NEW INDUSTRIES WRITTEN BY

HARRY MENEAR

M AY 2 0 1 9

PRODUCED BY

ARRON RAMPLING

105

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BIRCHSTREET SYSTEMS

STEVE MARKLE, CEO OF BIRCHSTREET SYSTEMS, DISCUSSES THE NEW INDUSTRIES, NEW GEOGRAPHIES AND NEW, INNOVATIVE PRODUCTS DRIVING THE NEXT PHASE OF GROWTH FOR THE COMPANY

O

ver the past 17 years, BirchStreet Systems has emerged as the leading provider of Procure-to-Pay (P2P) solutions for

enterprises operating in the hospitality space.

P2P is comprised of solutions which automate procurement, accounts payable, invoice & payment 106

processing, inventory management, recipe management and capital expense management.

These solutions can deliver up to 20%-50% back office and food and beverage cost reduction, and achieve over 80% on-contract spend compliance rates, improving rebate capture. With best-of-breed solutions and strong value proposition, BirchStreet is poised to enter its next phase of expansion.

“We’re really entering into a hyper-growth phase,” says CEO Steve Markle. BirchStreet counts such premium hotel brands as Marriott, Hilton, Hyatt, Accor, and Four Seasons among the enterprisewide users of its suite of SaaS on-demand solutions. Markle continues, “having captured most of the major global hotel brands, and a large percentage of the large hotel management companies as enterprise customers, BirchStreet is preparing to M AY 2 0 1 9

107

scale its operations dramatically. We grew in excess of 40% in the last year and can see that growth trajectory continuing for the foreseeable future as we deploy into our customers’ property portfolios, grow alongside our rapidly expanding customer base and acquire additional large enterprise customers. Moreover, we have our sights on growing the company by many multiples in the next few years.�

Following two years as BirchStreet COO, Markle, has served as CEO of BirchStreet since July 2018. In our w w w.suppl yc ha i ndi gi ta l. com

BIRCHSTREET SYSTEMS

“ W E HAVE OUR

SIGHTS ON GROWING THE COMPANY BY MANY MULTIPLES IN THE NEXT FEW YEARS” — Steve Markle, CEO, BirchStreet Systems

geographies through its existing customer base of global brands and an enhanced international selling organization. “Our third growth vector is the new suite of products we have recently developed in our roadmap, which is really exciting,” he continues.

“These solutions go way beyond traditional e-procurement.”

These three elements of BirchStreet’s transformation and growth journey are best illustrated by one of the company’s newest clients, Wynn Resorts. “Working closely with Wynn over the past year, we are quickly

108 sit-down session, Markle outlines an

approaching their goal of becoming

ambitious plan to match the company’s

truly paperless,” says Markle. “Having

bold, dramatic growth targets, sharing

recently gone fully live on BirchStreet,

his vision for BirchStreet’s continuing

Wynn is not only automating its P2P

transformation into a diverse and

processes, but is also utilizing nearly

disruptive global organization.

every tool that we have to eliminate

“There are three major vectors of

paper. Like we did by working with

growth that put BirchStreet into

the leaders in the hotel space in our

context,” explains Markle. “First, we

early years, Wynn has partnered with

are more deeply penetrating our

us as an early adopter to create

traditional hospitality industries, as well

state-of-the-art solutions for the

as entering new industries that are

gaming industry. Innovation through

similar because of the adjacent Food &

collaboration has been the hallmark of

Beverage and direct goods categories

BirchStreet’s development from our

that they share.” Second, BirchStreet is

earliest days as a transformative

rapidly expanding its footprint in new

company”, he explains.

M AY 2 0 1 9

CLICK TO WATCH : ‘BIRCHSTREET CUSTOMER CONFERENCE 2018 HIGHLIGHT FILM’ 109 This new partnership is allowing

BETTER SERVING LONG-TIME CUSTOMERS

BirchStreet to further its penetration of

Over the past 17 years, BirchStreet has

the hotel and hospitality vertical.

continuously sharpened its ability to

Furthermore, it demonstrates that

increase spend visibility & control and

BirchStreet is making a decisive

operational efficiency to significantly

entrance into the gaming, restaurant,

cut costs for its clients in the hotel

managed foodservice and sports &

space. This singular focus on reducing

entertainment events spaces, evi-

the cost of procuring from and settling

denced by customers such as Levy

with their suppliers has resulted in

Restaurants and Delaware North.

BirchStreet capturing the 14,000

The company is also launching a host

businesses that it now claims as its

of new products in order to smooth

customers. BirchStreet’s importance

and improve the operating processes

was cited by AccorHotels CPO

of a world-leading institutional food

Sebastien Brunel in a recent interview

service brand.

with Business Chief. “BirchStreet brings w w w.suppl yc ha i ndi gi ta l. com

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BIRCHSTREET SYSTEMS

CLICK TO WATCH : ‘BIRCHSTEET OVERVIEW’ 112 structure to our process. We have PO

Elaborating further on the value that

approval process, PO management,

BirchStreet brings to its customers,

inventory management, product

Markle says, “There are three big

management and (electronic) interac-

sources of economic value that

tion between (our) hotels and (their)

BirchStreet brings to these organiza-

suppliers. This is essential for AccorHo-

tions besides increased efficiency. The

tels, especially in North America,” he

first big driver is spend control which

explained. “We have been partnered

enables big savings by allowing their

with BirchStreet for 10 years; they’ve

operations to go through a controlled

always supported us in everything

online buying experience that ensures

we’ve done and the platform brings

the properties are buying the right

efficiency, good savings and automatic

goods, from the right supplier, at the

updates to inventory – we probably do

right price.” Second is the prevention

around US$150mn of annual spend

of risks like maverick or off-contract

through the BirchStreet platform.”

buying, and third, BirchStreet’s

M AY 2 0 1 9

platform creates value for its

enterprise customers, rebates and

customers on the revenue side.

allowances add up to big dollars.

“You can increase revenue with us

Our value proposition is amplified

by having tight and efficient controls

when our solution is coupled with a

over your inventories so that you never

Group Purchasing Organization

miss an opportunity to make a sale,”

(GPO) like the one offered by our key

Markle explains. “Suppliers offer

partners at Hilton Supply Manage-

rebates and allowances if you achieve

ment” (HSM), says Markle. “With

certain spend levels with them. Our

HSM, BirchStreet can approach

system automatically tracks all of the

customers in any of their target

spend with each supplier so that the

industries or geographies with

customer can easily capture the

a seamlessly integrated offering

rebates and allowances they earn.

combining P2P technology and

Given annual spend size of our large

supply chain programs” 113

E XE CU T I VE PRO FI LE

Steve Markle, CEO Steve brings over 20 years of technology and business leadership.

His responsibilities include driving the strategy and execution of the company. In addition to Markle’s role at BirchStreet, he will continue as an Independent Director on the Board of MarginPoint, a leading Inventory Management SaaS company. Prior to BirchStreet, he was Vice President and General Manager, CLM and SRM for Apttus, the category-defining Quote-to-Cash software provider. Markle was founder and CEO of BuildBeam, job management software designed specifically for specialty trade contractors (acquired

by DaftLabs). From 2001 until 2013, Steve was an executive at Ariba (acquired by SAP), a pioneer in Sourcing, Procurement and Business Network space where he ultimately served as Vice President of Solutions Management. Markle earned his BSE in Mechanical and Aerospace Engineering from Princeton University.

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

BIRCHSTREET SYSTEMS

NEW PRODUCTS A specific example of how BirchStreet is better serving its existing customer base, while also aggressively expanding into new markets, is the adoption of innovative new products that greatly enhance the efficiency of its customers’ operations. According to Markle, from its earliest days BirchStreet’s focus on the P2P function within the hospitality industry has defined the development of its software platform.

“We recognized early on that the large ERP software companies are excellent 114

2002

Year founded

300

Approximate number of employees

200,000+ Registered Users

at meeting generic enterprise management software system needs. But with its emphasis on food & beverage and other items consumed in delivering its ‘product’, or what we call ‘direct goods’, hospitality has very specific needs that were not being met. There are numerous “pain points” in the P2P process that are specific to hospitality and BirchStreet is uniquely positioned to address those needs. We integrate with all the major ERP systems thereby completing the full ERP functionality required by our large enterprise customers”.

“Two years ago, we acquired AccuBar, a best-in-class, specialist M AY 2 0 1 9

Processing

25mn

Purchase Orders a year

solution provider, for businesses that handle beverage inventory,” says Markle. Since acquiring AccuBar, BirchStreet has combined both companies’ capabilities to create a single inventory management solution for food and beverage organizations.

“It’s very slick,” Markle says. “It has mobile capabilities that allow you to receive goods with your mobile device when it reaches your dock. This is a critical part of the process that enables flow-through automation from receipt to pay. In addition to promoting accuracy in the receiving process, it saves a huge amount of time versus writing things down by hand and then entering data into your accounting system.” Another example is BirchStreet’s investment in infrastructure for global scale. All of BirchStreet’s customer transactional data runs on Oracle databases. By leveraging Oracle’s technology, BirchStreet is able to host more than 2mn logins per month while maintaining a 99.9% uptime. BirchStreet also embeds Softlinx services to send over 50,000 fax pages per month on behalf of its customers to the corners of the globe without internet. By switching to w w w.suppl w w w.busi yc hane i ndi sscgihief. ta l. com

115

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“ W E’RE SAVING OUR CLIENTS SO MUCH MONEY BY ENABLING THEM TO GO THROUGH A TIGHTLY MANAGED ONLINE BUYING EXPERIENCE” — Steve Markle, CEO, BirchStreet Systems

of liquor and wave it in front of your mobile device,” Markle elaborates. “Our mobile app will recognize the shape of the bottle and branding and allows you to take inventory, including partial bottle inventory by moving the fill-line on the bottle image that automatically appears on your mobile screen. Think of the more expensive scotches, or a bottle of Remy Martin Louis XIII Cognac and you quickly understand the power of this quick, easy and accurate inventory management tool.

You potentially have a lot of capital locked up in beverage inventory,

Softlinx in late 2017, BirchStreet

particularly when you consider the final

increased its worldwide success

selling price per pour.” Expanding

rate by 20%. And through BirchStreet’s

further on this proprietary technology,

partnership with CapGemini, the pair

Markle continues: “Once you have the

offers Accounts Payable as a Service

contour of the bottle saved to the

(ApaaS) to joint customers such

system – and some weirdly shaped

as FourSeasons. APaaS is a fully

bottles are hard to calculate by eye

standardized and automated

– our patented technology always

business process for end-to-end

recognises the shape of the bottle. All

invoice process.

you do is swipe your finger where the

In addition to automating the goods

liquid line is and it’ll automatically

receiving process, BirchStreet

calculate how much volume you have.”

provides its customers with a patented

Markle maintains that BirchStreet’s

specialized inventory function. “The

inventory software has the potential to

service’s unmatched take-inventory

revolutionize waste mitigation in

capabilities allow you to grab a bottle

high-value beverage management. w w w.suppl yc ha i ndi gi ta l. com

117

BIRCHSTREET SYSTEMS

118

Responding to the needs of its

restaurants manage recipes and

institutional food services clients, the

ingredients, as well as food costs,

company is also introducing innovative

which is the Holy Grail for business

software to help its food production

owners and chefs. Then, if you

operations track stock and ensure

combine recipes with inventory, our

standards of service across multi-loca-

solution will implement automatic stock

tion operations. “For managed food

replenishment notifications or fulfil-

service companies, we’re also

ment of that inventory item depending

introducing our recipe and production

on the recipes you produce. Just think

kitchen modules,” says Markle. “Think

of the labor savings from automating

about how many recipes a large casino

that aspect of food services opera-

or hotel must have and the process of

tions. If you think about a high-end

making and distributing finished goods

casino property, you think of shops on

to their outlets. Our solution helps

the first floor where they’re selling a

M AY 2 0 1 9

where it also hopes to attract a new roster of clients. “We’re making a very large bet on Europe, the Middle East and Asia,” says Markle. “By all indications it will be wildly successful. There are lots of companies within both our old and new industries that operate outside BirchStreet’s traditional market of North America.”

As BirchStreet breaks into new sectors and brings new offerings to new and old customers, Markle reflects on his own schedule. “I’m traveling around the world three or four times a year,” he says. “I’m about to do an around the world trip, starting in early March. I’ll just keep going East until I wind up back in wide range of items. Working with

California.” Markle holds town halls with

our customers has allowed us to

employees in every BirchStreet office to

create a retail inventory extension of

keep the company engaged and

our inventory module functionality,”

updated on the next stages of its

says Markle.

development. “Change is constant, and you manage change by making sure

NEW MARKETS, NEW REGIONS

your organization knows where it’s

BirchStreet’s new suite of products are

going and embraces the enthusiasm

allowing the company to aggressively

of its leaders.”

penetrate adjacent or nearby indus-

On the subject of BirchStreet’s

tries. Furthermore, its deeper penetra-

legacy as well as his own, Markle

tion into the multi-national hotel

muses: “We look at our industry of

management sector is allowing the

hospitality as we would any business

company to explore new regions,

that provides a ‘product’. Our customers w w w.suppl yc ha i ndi gi ta l. com

119

End-to-End End-to-End End-to-End YOUR ONE-STOP PROCUREMENT PARTNER YOUR ONE-STOP PROCUREMENT PARTNER Hilton Supply Management works with over 2,000 suppliers to manage YOUR ONE-STOP the entire supply chain from farm to Hilton Supply Management works PROCUREMENT PARTNER restaurant, manufacturer room and with over 2,000 suppliers toto manage

project to completion.

We the entireinception supply chain from farm to provide sourcing for 8,000 properties restaurant, manufacturer to room and Hilton Supply Management works (including more than 1,800 non-Hilton project inception to completion.

We with over 2,000 suppliers to manage hotels) leveraging massive economies provide sourcing 8,000 properties the entire supplyfor chain from farm to of scale, competitive contracts with (including more than 1,800 non-Hilton restaurant, manufacturer to room and top suppliers and substantial savings hotels) economies projectleveraging inception massive to completion.

We for hotels. of scale, competitive contracts with provide sourcing for 8,000 properties top suppliers andthan substantial savings (including more 1,800 non-Hilton To learn more about joining the Hilton for hotels. hotels) leveraging massive economies procurement program please contact of scale, competitive contracts with us at HSM@Hilton.com.

To learn more about joining thesavings Hilton top suppliers and substantial procurement for hotels. program please contact us at HSM@Hilton.com.

To learn more about joining the Hilton Prototype Custom Operating procurement program please contact Décor Procurement Supplies Packages us at HSM@Hilton.com.

Custom Procurement

Custom Procurement

© 2018 Hilton

© 2018 Hilton

© 2018 Hilton

Prototype Décor Packages

Prototype Décor Packages

Operating Supplies Operating Supplies

PA R T N E R S

BirchStreet and Hilton Supply Management (HSM) partner to offer integrated P2P SaaS technology with supply chain programs. HSM’s programs can save up to 61% depending on the commodity purchased and BirchStreet’s technology enforces purchasing compliance to ensure that value is captured.

All of BirchStreet’s customer transactional data run on Oracle databases. Oracle is the leading database software manufacture and handles which lets us handle more than 5,000 per second.

By leveraging Oracle’s technology BirchStreet is able to host more than 2 million logins per month while maintaining a 99.9% uptime.

121 BirchStreet and Capgemini have partnered to offer Accounts Payable as a Service (APaaS), a solution offering a centralized mailroom function, process standardization, all integrated using Optical Character Recognition (OCR) for invoice capture with BirchStreet P2P as the underlying technology platform. These two leaders in hospitality, joined hands to create customer value through these shared services and help clients like FourSeasons realize savings up to 40-50% in operating costs and rapid profitable growth.

BirchStreet uses Softlinx services to send over 50,000 fax pages per month on behalf of our customers. By switching to Softlinx BirchStreet increased our worldwide success rate by 20% while cutting costs by 10%.

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BIRCHSTREET SYSTEMS

are enterprises that manage multiple facilities that deliver a wide spectrum of services that make up their ‘product’.

The hospitality ‘product’ is effectively made up of parts and labor. We partner with our customers in multiple ways to significantly reduce their labor costs and increase sales. We do this through automating a whole host of manual processes from procuring to paying for the goods they use at their properties day in and day out, and we provide the tools needed to better manage the ‘parts’ used in their food 122

and beverage operations, as well as in the rest of the customer experience.

In the end, that is what hospitality is all about: the experience. We wake up every day asking ourselves, ‘what can we do to help our customers deliver the best experience possible at their properties?’

By virtue of what we do, we help our customers to take a fresh look at themselves and evaluate whether their processes and internal capabilities fit their vision for where they want to go as an organization. Our approach is not to be prescriptive, but rather to work closely with our customers and innovate together.”

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“ O UR SERVICE HAS CAPABILITIES THAT ARE UNMATCHED IN THE INDUSTRY” — Steve Markle, CEO, BirchStreet Systems

123

Markle concludes: “What we do is

excited about what the future has in

not just about deploying our software;

store for us as we innovate with our

it’s about working with our customers

customers to transform the worldwide

to provide the tools and expertise they

hospitality industry.”

need to deliver their desired outcomes: the very best experience to their customers, while using technology to minimize the costs of delivering their product. We could not be more proud of what we have achieved over the past 15 years and couldn’t be more w w w.suppl yc ha i ndi gi ta l. com

124

Mobile assets: Vantage Drilling’s mature supply chain WRITTEN BY

JOHN O’HANLON PRODUCED BY

DENITRA PRICE

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125

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VA N TA G E D R I L L I N G

Maturing Vantage Drilling’s supply chain function over the last six years, with full buy-in from senior management, has seen the department morph from support to partner, says Director of Supply Chain Andy Poosuthasee

B 126

ased in Houston, Texas, Vantage Drilling is one of the most effective players in that specialized niche of the oil & gas busi-

ness: offshore drilling. Offshore operations are generally not as easy as onshore or littoral operations – major, national and independent oil and natural gas companies require a dependable partner to carry this out. Vantage has five ultra-premium jackup rigs capable of operating in up to 375ft of water and drilling to depths of 30,000ft. It also has three ultra-deep-water dynamically positioned drillships designed to operate in water depths down to 12,000ft and drill to 40,000ft.

It’s no secret that the entire oil & gas sector is on a slow climb back from its boom days. According to the industry analyst Rystad, offshore drilling in particular may not fully recover till 2027. This has affected drilling contractors like Vantage in a number of ways, says its Director of Supply Chain Andy Poosuthasee. The most notable of these is M AY 2 0 1 9

127

Photos Š Greg Williams

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VA N TA G E D R I L L I N G

“ We won’t sacrifice quality or compliance in order to get something quicker” 128

— Andy Poosuthasee, Director of Supply Chain

that where the norm used to be longer term, multi-year contracts, these days contract terms are often counted in months. This in turn means that the company’s assets have to be moved much more frequently than before.

From a supply chain point of view frequent movements call for a greater degree of maturity, says Poosuthasee.

“Probably the major challenge we face currently is that our rigs don’t tend to spend a lot of time in one particular country – we’re jumping around to different locations,” he explains. With seven of its eight rigs under contract Vantage is doing a lot better than its peers – the industry average is around 61% utilization, and there’s no lack of rigs waiting to come out of shipyards to further dilute that percentage. Still, the brevity of contract duration that is the price for high utilization is a supply chain challenge. “Even if we are working in the same country, the agreements these operators have with us and with the country itself are different. Looking ahead, I think we will be seeing more rather than fewer movements and that means that we have to be very nimble from a supply chain perspective.”

M AY 2 0 1 9

CLICK TO WATCH : ‘VANTAGE DRILLING SHORT FILM 10 DAILY SAFETY TOOLS’ 129

KEEPING IT CLEAN

West Africa, customs procedures are

A fact of life for Vantage is that much of

more complicated, fickle and constant-

its business is conducted in countries

ly changing. In addition, countries that

that occupy the bottom 30 percentile

are highly dependent on oil are even

of the Corruption Perceptions Index.

more so severely affected in the

“This brings in a whole new level of

downturn, which has a knock-on effect

compliance and complexity into the

of potential added corruption. That has

supply chain organization where we

affected our supply chain strategy

must absolutely comply with transpar-

tremendously. We will obviously

ency and anti-bribery legislation such

comply with the anti-corruption laws

as FCPA (US). If you are working in

and have no tolerance for any devia-

places like the Gulf of Mexico or

tion. Recognizing that import clearance

Canada it is simple enough to organize

times may be measured in months

a compliant and predictable supply

rather than days, a rethink of strategic

chain, but in other locations such as in

sourcing and inventory management w w w.suppl yc ha i ndi gi ta l. com

VA N TA G E D R I L L I N G

130

strategies is called for,� he adds.

Poosuthasee is not daunted by such

forced offshore drilling contractors to find ways to be more effective, espe-

difficulties though. As a certified lean

cially within their supply chain. Conse-

sensei from his earlier experience with

quently, supply chain has become

the oil & gas services company

more important than it used to be in the

Halliburton, he looks on both the

past. I believe most companies

general downturn, and the rise in

(especially large ones) don’t take the

corruption that in part comes out of

total cost of ownership into account

that, as opportunities for refining best

because it is difficult to calculate

practices. “In the good times, compa-

especially when they may be working

nies tend to stagnate and the focus

in silos. For example, strategic

was more topline driven for offshore

procurement may be negotiating

drillers. I actually think the downturn

global/regional fixed price agreements,

has been a good thing because it

but not considering the import duties

M AY 2 0 1 9

(which in some countries can be up to

We have seen tremendous benefits

30% of the purchase value), customs

from that exercise.” These benefits

clearance times, freight, and inventory

include a significant reduction in lead

impact because that’s managed by

times, eliminating exposure to import

other departments within supply chain.”

duties (which can be as much as 30%) and customs fines, and enabling leaner

PARTNERING WITH OPERATIONS

inventories. In just three years, he adds,

When moving into a new country, the

Vantage’s local content in all categories

first task is for the procurement and

went from 33.2% to 56.7%, while in the

logistics team to go in, find local

same period lead times were cut by

suppliers and set up a local supply

nearly 40%. Another benefit of local

chain. “In challenging countries, where

sourcing is that it grows the local

it is very difficult to import, our strategy

economy, coupled with the fact that

is to source as much as possible locally.

many countries require foreign 131

E XE CU T I VE PRO FI LE

Andy Poosuthasee Andy Poosuthasee is Director of Supply Chain at Vantage, as well as looking after Engineering, Maintenance and Technical Support. Reporting to the COO, Poosuthasee is responsible for a key part of the company’s strategy. He joined Vantage in 2013, having previously worked at Transocean where he was also a supply chain manager. Prior to this, Poosuthasee was at Halliburton, one of the world’s largest suppliers of products and services for the energy sector.

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expect more

Ship Agency Logistic Operator Customs Broker Main Spanish ports, Canary Islands, Gibraltar, WAF

24/7

ops@alfaship.com

T +34 928 247 978

alfaship.agency

133

operators to maximize local sourcing.

Any supply chain organization adds

importation delays or potential ‘penalties’ and ‘fines’. Countries that

value to operations through quality

are heavily dependent on oil and gas

delivery and pricing – in that order of

especially are constantly changing

importance, Poosuthasee believes.

their import/export requirements.

“We won’t sacrifice quality or compli-

Therefore, the potential for significant

ance in order to get something quicker

fines or penalties by local customs is

and we won’t sacrifice meeting our

there if you are not diligent and

internal customer’s operations delivery

focused on trade compliance. Of

requirements just because it’s going to

course among local suppliers, there is

save us some money,” he says. “One of

also a level of corruption so you must

the biggest benefits we see is that

spend a lot of time auditing them and

when you source locally you don’t have

doing due diligence to ensure compli-

to deal with trade compliance issues,

ance with the FCPA.” w w w.suppl yc ha i ndi gi ta l. com

VA N TA G E D R I L L I N G

Vantage now has a mature process for moving into a new market. Its Rig Move Checklist covers 30 logistics actions and 29 supply chain and procurement actions that are done before the rig moves to its new location.

“We are very confident with the process because we have successfully used it so many times before,” he asserts. “I think taking the time to complete these 59 actions in advance is one reason we’ve had such success as we go into new countries. Of course, close liaison with the operations team 134

is very important: they are our customer so we spend a lot of time communicating with them to ensure we cover all of their needs prior to the rig’s arrival.”

TECH TOOLS FOR THE TIMES The priority for Vantage has been to identify cost effective rather than big ticket solutions to deliver automation, data management and reporting in the areas of procurement and inventory management as well as other parts of the business, such as maintenance and engineering. This is no time for heavy investment in this industry, and Vantage’s supply chain team discovered inexpensive, cloud-based M AY 2 0 1 9

solutions at a fraction of the price of managed software to be the answer.

One implemented cloud-based solution has proven to be a collaborative and work management platform with a relatively straightforward user interface. “It is a tremendous tool that has allowed us to eliminate many of our manual processes. The downturn has meant doing the same job with fewer people but we have not seen a degradation in the service that we provide. That’s because we have been able to automate many of our manual processes through the use of simple and really economical applications.”

As a lean six sigma practitioner, Poosuthasee asserts: “One of the hardest things to do is to eliminate a piece of paper from the process.” Even so, a lot of paper processes have been automated by transferring them to this intuitive cloud based system. It’s clear though that he sets more store by the attitudes and commitment people bring to their task than the methodology. “I’ve learnt a lot from mistakes I have made in the past. One of the biggest ones was chasing too many initiatives, too many strategic goals.

Now I tell my team to focus on what w w w.suppl yc ha i ndi gi ta l. com

135

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PORT-GENTIL OFFICE contactpog@artgabon.com

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137

“ We have to be very nimble from a supply chain perspective” — Andy Poosuthasee, Director of Supply Chain

Franklin Covey calls the wildly important goals; focus on less so that your team can achieve more.”

In furtherance of this principle, which Poosuthasee also characterizes as going “an inch wide but a mile deep”, the supply chain team is focusing this year on trade compliance, both to minimize the risks thrown up by different customs regimes and to further automate procurement systems and processes. w w w.suppl yc ha i ndi gi ta l. com

VA N TA G E D R I L L I N G

138

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A PARTNER IN THE ENTERPRISE When Poosuthasee joined Vantage in 2013, the company was still in “start-up” mode, and supply chain was doing a good job, but more as a support function. Since joining, he has worked to build the organization in three phases. The first phase was to strengthen the foundations and streamline the processes to be as effective as possible; the second was to start demonstrating and adding value to the company. “I wanted to show that we could actively impact KPIs and other value-added activities such as on-time delivery, quality, local sourcing, negotiations and inventory management. Show the company we can do more than just transactional tasks such as issuing POs.” Phase three was to become a true partner in the business, being asked to support non-traditional supply chain tasks such as sourcing service personnel and labor, real estate, catering, auditing, compliance, and even marketing right from the bidding stage. “It was truly pleasing from my viewpoint to see us moving from being a support team to being asked for advice on things we w w w.suppl yc ha i ndi gi ta l. com

139

OIL & GAS DIVISION We operate two shipyards in the Canary Islands. Supporting drilling contractors for their SPS, rig reactivation, maintenance, repair and upgrade projects as well as MPD readiness and 2nd BOP Deck Reinforcement in the Canary Islands. We support local workforce knowledge and skills development to meet our global clients

OUR 16,000 yard FACILITIES • Subsea & heavy Mechanical workshop with 126 tons overhead Gantry Crane • Mechanical and Hydraulic workshop

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Our Capabilities • Rig repair and upgrade, SPS projects.

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Ontime safely Delivered projects within fixed price contracts Our facilities and capabilities at Las Palmas are also similar

A member of

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VISIT OUR SITE

M AY 2 0 1 9

+34 922 104 982 gara.socas@hidramar.com commercial@tenerifeshipyards.com

CONTACT US

“ We have been able to automate many of our manual processes through the use of simple and really economical applications” — Andy Poosuthasee, Director of Supply Chain

weren’t involved with in the past and becoming a true partner in the organization.”

Andy Poosuthasee and his supply chain team are certainly finding ways to add value. Even some relatively mature locations have seen some dramatic results. For example, trade compliance turned out to be a big issue in Indonesia where even airfreight imports were taking a fortnight to clear. By developing local suppliers Vantage went from sourcing 47% to 81% locally. A different challenge faced the company in Qatar following the imposition of sanctions by GCC countries from which most supplies had previously been sourced.

In just a couple of years, local suppliers have been brought on, at first being given short contracts but more recently these have been extended and today, he says, it is one of the easiest locations, with more than 80% locally sourced.

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141

142

Warehouse benchmarking study is a top tool for measuring performance

M AY 2 0 1 9

143

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WA R E H O U S I N G E D U C AT I O N A N D R E S E A R C H C O U N C I L

Confronting the talent crisis Re-emphasis, re-prioritization of recruitment, retention strategies and practices urgently required

W

ithout a doubt, the distribution and warehousing sector is at the threshold of a significant talent availability crunch

that only threatens to worsen over time. And it’s 144

not restricted to only hourly floor jobs and operations, but impacts all titles and positions across-the-board, including technical and professional staffs, supervisors, managers and even executives.

For example, between 2010 and 2020, the number of available jobs in the supply chain will grow by 26 percent, according to Kronos.

RAPIDLY DECLINING WORKFORCE POPULATION A report from CBRE cites U.S. Bureau of Labor Statistics data that indicate the ratio of workingage adults to retirement-age adults is projected to narrow from 3.5 to 2.5 by 2020. “A tighter labor supply will have significant consequences for employers, especially those in the transportation and warehousing industry, where 18 perM AY 2 0 1 9

1977

Year founded

1,700+

Approximate number of employees

145

cent of the supply chain workforce is currently at or beyond retirement age, according to the BLS,� the report says.

Another caution in the CBRE report is the growth of the labor force past and present. Between 1970 and 1990 the growth in the labor force averaged 1.9 percent per decade. The growth forecast for 2010 to 2030 is just 0.5 percent. As CBRE concludes: “This trend is particularly alarming for the industrial and logistics sector considering that a single onemillion square foot modern fulfillment w w w.suppl yc ha i ndi gi ta l. com

Nimble.

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center dedicated to e-commerce

PRIORITY ON RECRUITMENT, RETENTION

may require up to 4,000 workers.”

For Jason Minghini, president, FW

A Warehousing Education and

Warehousing, the current strategic

Research Council member recently

focus is in the recruitment of tal-

shared: “For us, 2018 was the first

ent. “Our customer requirements

we really struggled with finding help.

continue to expand and we need a

Retaining has always been a prob-

higher level of talent in place to sup-

lem due to the environment they

port our customer expectations.”

work in and the pay rate in general.

Meanwhile at Murphy Logistics,

However, we are now seeing the ef-

president/CEO Richard Murphy,

fects of baby boomers retiring, and

Jr., states: “Recruitment of talent

we’re struggling with the skills of

and retention are equally impor-

employees that will replace the baby

tant and we’re focusing on both.”

boomers in important positions.”

“In my opinion, it’s the combination w w w.suppl yc ha i ndi gi ta l. com

147

WA R E H O U S I N G E D U C AT I O N A N D R E S E A R C H C O U N C I L

of keeping the good management talent you have, and attracting new talent,” emphasizes Brian Devine, senior vice president, Employbridge.

Minghini’s recommendation on the issue is “slow to hire and quick to fire.”

STRATEGIES, PRACTICES TO CONSIDER Williams and O’Connor recommend a three-step formula to achieve success in recruitment and retention. As

“ In my opinion, it’s the combination of keeping the good management talent you have, and attracting new talent” — Richard Murphy, President/CEO

they explain, “Organizations need to optimize their people resources 148

by building flexibility and agility into their workforce. And they need to put processes and systems in place to track key workforce metrics and

chain. It includes using “great intern-

leverage data to better manage labor

ship experience, creating a culture

costs, performance and engagement.”

to mentor millennials, implementing

Minghini shares that in the current

career development plans and giving

labor market (low unemployment,

access to cross-functional programs.

wage discrepancy) FW Warehous-

Devine suggests attracting new

ing is using peer networking to fill

candidates by providing a “fair, com-

current talent gaps. Also, we are

petitive compensation package. For

using experienced recruiters that

management and executive talent

have 3PL and supply chain experi-

this also includes salary and incen-

ence to help fill the talent gaps.

tives in the top 50 percent of the

A Ryder white paper suggests

market, good healthcare plans, lib-

a multi-prong approach to attract

eral PTO, 401K, and/or some com-

and retain millennials to the supply

pany stock accumulation plan.”

M AY 2 0 1 9

• Create flexible work arrangements • Develop a career path with progres sive pay raises based on longevity • Keep injured workers on the job • Review work processes and eliminate difficult, complex, or unnecessary processes An important tool that Murphy promotes is the annual employee survey. “The survey brings to the surface differences that may exist... and provides us with important knowledge about what’s working and what’s not.”

Finally, Murphy advises:

IT’S ABOUT CULTURE, TOO

“Don’t take your culture for granted.

Murphy is big on culture. “In this

Don’t take your employees for

very tight labor market we feel that

granted. Over-communicate!”

our culture keeps us alive,” he asserts. The Ryder white paper offers a creative list of best practices to retain key employees and top talent: • Treat employees with respect, as talent joins companies but leaves supervisors • Retrain supervisors regarding how to treat employees • Create clear, predictable work schedules w w w.suppl yc ha i ndi gi ta l. com

149

150

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UNITINGCARE QUEENSLAND: A DIGITAL TRANSFORMATION IN COMMUNITY CARE WRITTEN BY

JOHN O’HANLON PRODUCED BY

MIKE SADR

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UNITINGCARE QUEENSLAND

Part of UnitingCare Queensland’s two-year transformation project was the rethinking of its digital strategies under new executive leadership

W

hen BizClik Media last spoke to Nina Du Thaler she was CIO at Queensland Urban Utilities (QUU), the organisation that

provides water to the greater Brisbane area. During her time there she was able to deliver Q-Ops, a platform that aggregates data from business systems into a single location to help operations 152

staff manage Queensland’s sewer and water networks effectively, establish a robust governance framework across the organisation and a mature programme, and deliver a strategic ICT vision and roadmap. The outcome, a better experience for consumers and employees alike, was a great satisfaction to her, though if anything, she’s proudest of her work in improving team effectiveness and culture. She has never been a stereotypical techie, taking a broad view of her contribution, and that of the organisation, in the society at large.

In 2016, UnitingCare Queensland approached Nina. UnitingCare is one of Australia’s largest charities, focusing on health and community services across Queensland and the Northern Territories. It employs 17,000 people assisted by more than 9,000 volunteers to deliver community health services, M AY 2 0 1 9

153

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TRANSFORMING COMMUNITY CARE IN THE DIGITAL AGE

CO-DESIGN PERSONALISED CARE FOR YOUR CUSTOMERS WHILE STAYING AGILE, INNOVATIVE AND CONNECTED. ACCENTURE AND AVANADE SUPPORT UNITINGCARE’S DIGITAL TRANSFORMATION, SO IT CAN FOCUS ON CARING FOR COMMUNITIES.

that a large-scale, digital transformation would be needed to provide the digitally enabled care services that its customers would expect, now and in the future.

UnitingCare ran a competitive process and undertook competitive dialogue with shortlisted vendors to form a panel of delivery partners.

Avanade’s engagement will give UnitingCare simplified financial management, providing a single source of truth for financial information.

This will allow UCQ to become more efficient in resource usage, particularly in back-office functions such as procurement and shared costs.

Transforming back-office technology will improve support services for people from all walks of life, including older people, people with disabilities, children, families and indigenous people.

A

ccenture and Avanade are supporting UnitingCare Queensland (UCQ) on its journey to deliver safe, quality digital health and community services to its communities, clients and patients.

UnitingCare provides skilled, evidence-based interventions for those facing adversity, and uses its reach and vision to confront injustice. UCQ is a leader in crisis response, the protection of vulnerable children, financial resilience and family wellbeing. They meet people where they are and walk alongside them to achieve positive change and growth. Across Queensland and Northern Territory, UnitingCare supports thousands of people living with a disability in redefining what’s possible in their lives.

UnitingCare recently launched its Digital and Technology panel to access high-quality technology capabilities to accelerate the organisation into the digital age. UnitingCare was facing industry disruption, change to consumer directed care and competition, and realised

Australians benefit from a fast-changing world where customer care expectations are shifting.

Organisations need to be future-ready and adapt to changes in the digital age. They need to work in agile ways that continually improve processes and experiences. Customers prefer to stay connected at all times and at any location, meaning care organisations need to transform from paper-based workplaces to participate in a digitally connected ecosystem. Accenture and Avanade supports their clients end to end in their transformation journey, which helps clients connect their businesses with their customers digitally.

With nearly 5,000 combined resources in Australia between Accenture and Avanade, along with extensive offshore capabilities, we have the pool of talent and can provide targeted solutions that deliver on clients’ digital and technology strategies.

At Accenture and Avanade, we value our clients and our people, and we deliver high performance while supporting local communities to build a better future.

CONTACT US »

LEARN MORE »

UNITINGCARE QUEENSLAND

“ We have a great number of extremely effective carers, healthcare and social workers …

I think that is a really positive aspect of our organisation” — Nina Du Thaler, Group Executive, Digital and Technology, UnitingCare Queensland 156

M AY 2 0 1 9

care for the elderly, and acute medical services at its not-for-profit hospitals including The Wesley Hospital, St Andrew’s War Memorial Hospital in Brisbane, and St Stephen’s, which became Australia’s first fully integrated digital hospital when it opened in 2014.

The new position they created was that of Group Executive, Digital and Technology, reflecting the strategic importance of commoditising the groups’ IT environment, digitising the groups’ services and making sense of the huge volumes of data flowing in from its IT platforms.

CLICK TO WATCH : ‘LACEY’S MISSION POSSIBLE STORY WITH UNITING CARE QUEENSLAND’ 157 The organisation was facing a num-

Wearing her CIO hat she particularly

ber of challenges at the time, she

liked it that UnitingCare was leading

explains. “UnitingCare was undertak-

the digital hospital concept, in which

ing a major transformational change.

patient data is captured and directly

It was working on bringing together

fed into the electronic medical record

unique businesses which had diff

(EMR). It represents a quantum leap in

erent IT teams, different back-office

quality, safety and patient experience,

systems, fragmented data and it

transforming healthcare delivery, she

wasn’t working well for the organisa-

says. However the hospital environment

tion.” The businesses - encompassing

is only one place IT can make a differ-

in-home and residential aged care,

ence. Blue Care is Queensland’s leading

lifeline retail stores and counselling

in-home, retirement living and aged

support, child and family services and

care provider. Many of its service users

hospital services had been operating

rely on Australia’s National Disability

in silos.

Insurance Scheme (NDIS), which has w w w.suppl yc ha i ndi gi ta l. com

UNITINGCARE QUEENSLAND

158

M AY 2 0 1 9

proved hard to access and navigate

to align her CIO and relational skills

since its rollout in 2016: one of Nina

with the community and healthcare

du Thaler’s pet projects was the

sector which though new to her was

development of NDIS Planning, an

attractive because of its focus on

app launched in 2019 that simplifies

people and role in society. “This job

the complex documentation and

was enticing to me as much from

the application procedure.

the point of view of culture, human

The digital and technology position

interaction and service delivery as of

was defined during the creation of

technology. The two are inseparable

a new executive leadership team (ELT).

really. This organisation has huge

“We needed to be focusing on how we

potential, a great track record and to

could add value to the business, pivoting

be able to say that I’m helping trans-

into the digital space, and how this can

form it and make it sustainable into

help transform the organisation.” Du

the future is a really positive thing

Thaler recognised this as an opportunity

from my point of view.”

E XE CU T I VE PRO FI LE

Nina Du Thaler Nina Du Thaler joined UnitingCare Queensland in 2016.

She previously held executive management positions across a range of organisations, including Queensland Urban Utilities and Allconnex Water.

She is also a non-executive director in the Industry Advisory Board for the School of ICT, Griffith University. Nina won ‘CIO of the Year (Utilities/Media) at the iTnews Benchmark Awards.

She holds an MBA and a Bachelor of Information Technology (AI). She is a graduate of the Australian Institute of Company Directors

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159

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“ This job was enticing to me as much from the point of view of culture, human interaction and service delivery as of technology” — Nina Du Thaler, Group Executive, Digital and Technology, UnitingCare Queensland

commercial accountability. Not for profit organisations still need to be viable, generating surplus funds that can be used for much needed expansion. Nina Du Thaler recognises that her job, to all intents and purposes, is to maintain the balance and keep close control of IT spending whilst delivering change and value for money and keeping UnitingCare sustainable. “My team have a huge responsibility, oversight of risk and cybersecurity, maintaining the health of the supporting infrastructure and applications – all the usual concerns of

BUILT ON COMPASSION

the CIO’s office – but we also have to

One of the things she likes about

strive to deliver a range of projects

UnitingCare is its mission-led ethos.

focused on new products, services

It attracts people like herself. People

and ways of working.”

who are driven by a desire to improve

The last two years for her have been

the physical, mental and spiritual health

a time of readying the organisation

of the community never just see their

to take advantage of the brave new

job in terms of income generation. “We

world of IoT, automation and AI by

have a great number of extremely

dealing with a host of legacy issues,

effective carers, healthcare and social

notably starting the journey towards

workers: they are motivated by a com-

unifying some of the platforms used

mitment to the people in our commu-

by the different parts of the organisa-

nity and I think that is a really positive

tion already mentioned and transform-

aspect of our organisation.”

ing UnitingCare’s service delivery

Maintaining this ethos is vital, though

model. “Those things have placed

it does entail a balancing act, sometimes

us in a good position to embark on

approaching conflict, when it comes to

a more digital and innovative future,” w w w.suppl yc ha i ndi gi ta l. com

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UNITINGCARE QUEENSLAND

she says, “and we’re now poised for that future.”

UnitingCare’s transformation, stemming from the creation of Du Thaler’s Digital and Technology (D&T) organisation, was recognised by the iTnews Benchmark Awards 2019, in which it is a finalist. The citation points to UnitingCare’s focus on reducing overhead costs while also improving the IT service delivery model in ‘an incredibly competitive marketplace with limited funding streams’. In other words, value for money.

162

ETHICAL SOURCING The outcome is worth some attention: a competitive and comprehensive tender process was embarked on, to replace its fragmented, legacy service delivery model with a managed services partner model. There were many companies that could have helped with this, she acknowledges, but capacity and price were not the only consideration. “This procurement process was a bit different because of the influence and guiding ethics of the Uniting Church.

We looked deeply into the conduct of these companies to satisfy ourselves they had ethical supply chains, M AY 2 0 1 9

processes and labour management credentials. Another consideration was UnitingCare was very interested in whether the organisations we partnered with could support communities in the areas in which we worked.”

The chosen partner was the Indian software provider Wipro, named in 2017 as the most ethical company in the world. “One of the things that attracted us to Wipro was that it is a truly global company, with a large Foundation driven by the company’s chairman Azim Premji. Wipro gives an amount of its revenues back to the community in the form of, among other things, support for education in India, community support programmes in India and the Philippines, and, of course, primary healthcare. We were determined to partner with a large organisation that had the depth and breadth of skills that can help support our growth.”

The transformation, largely completed in mid-2018, has already reduced internal labour, lowered service delivery costs and improved the health of the IT environment. Though projected savings in the current financial year are expected to be minimal, by year 3 of the agreement savings are expected to reach $4.3 milw w w.suppl yc ha i ndi gi ta l. com

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UNITINGCARE QUEENSLAND

165 lion. In addition, the project has shifted operational delivery and the risks associated with this away from the organisation, while also freeing up Nina Du Thaler and her team to focus on value-add projects and “customer intimacy”, a key outcome for future innovation.

DELIVERING THE BENEFITS OF AUTOMATION The in-house team is lean and getting

“ UnitingCare was very interested in whether the organisations we partnered with could support communities in the areas in which we worked” — Nina Du Thaler, Group Executive, Digital and Technology, UnitingCare Queensland

much more focused now. It continues to oversee business critical functions like governance and the strategic w w w.suppl yc ha i ndi gi ta l. com

UNITINGCARE QUEENSLAND

“ One of the things that attracted us to Wipro was that it is a truly global company” 166

— Nina Du Thaler, Group Executive, Digital and Technology, UnitingCare Queensland

M AY 2 0 1 9

167

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UNITINGCARE QUEENSLAND

2000

Year founded

17,000

Approximate number of employees

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M AY 2 0 1 9

direction and design. A lot remains to be done, and many learnings have been surfaced but in some areas, there have been real functional improvements.

A good example is the service desk.

When she came in, Du Thaler recalls, people phoning in to UnitingCare were experiencing an abandonment rate of over 40%, that is to say that calls were either not answered or people were kept waiting so long they hung up. Today the abandonment rate is below 3%, and over 60% of queries are fixed at the service desk without needing to be referred on. That’s a huge improvement, but there’s room for further improvement she says.

Currently, she is targeting her D&T organisation in a limited number of directions. “One of the big ones continues to be bedding in all the new ways of working and frameworks that we have designed over the past 12 months. We are working closely with specific areas of our business that need refinement of the service delivery model and we are realigning many of our service level agreements (SLAs) with business criticality and business need. UnitingCare is also moving to a consumptionbased cost reallocation model: we w w w.suppl yc ha i ndi gi ta l. com

169

UNITINGCARE QUEENSLAND

want to share the drivers of cost with

are implementing foundational technol-

our internal customers so that they can

ogy,” she adds. “Like an integration hub,

manage those themselves.”

an identity management platform and

Customers are going to see further

an information analytics platform, and

service improvements in the coming

we are also replacing some back-office

year, she promises, with more self-ser-

systems like our financial management

vice capability. They might not even

information and CRM systems.” Post

notice some of these changes, but will

implementation, all of these systems

appreciate new ways of engaging

will be transitioned to Wipro for support.

through AI tools such as chatbots,

Nina Du Thaler confesses that her

which she plans to introduce to further

job with UnitingCare takes up most

enhance the service experience. “We

of her resources, but she retains

170

M AY 2 0 1 9

a long-standing passion for education

job allows.� She is also an industry

and the advancement of understand-

advisory board member and adjunct

ing and the entrepreneurial spirit

fellow at the school of ICT at her

especially among young women. She

alma mater Griffith University helping

is the author of a series of cyber-safety

to shape their degree courses and

books called Diary of Elle that address

hopefully bring on the women execu-

issues of current concern like the use

tives of the future.

of mobile phones and the social impacts of our online world, and continues to run her own publishing company Bright Zebra. “The books are a labour of love and I pursue that when my executive

171

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172

FRESH HOPE: Communication and synergy in procurement WRITTEN BY

HARRY MENEAR PRODUCED BY

STUART IRVING

M AY 2 0 1 9

173

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FRESH HOPE

Darrell Johnson, Procurement and Property Services Manager at Fresh Hope, discusses synergy between facilities management and procurement

F

or more than 170 years, a network of over 95 churches across New South Wales and the ACT, has coordinated and led

benevolence services, support for the elderly and community welfare initiatives. Headquartered in Rhodes, NSW, Fresh Hope is a non-profit organisa174

tion dedicated to transforming individual lives and whole communities through aid and ministry. The company functions as a group organiser for Fresh Hope Care, Fresh Hope Venues, and Fresh Hope Mission and Ministry. Darrell Johnson has been in the elderly care space for 10 years, and in the procurement industry for just under a decade. In April 2017, he joined Fresh Hope as a procurement coordinator, and has since seen his responsibilities grow, rising to Procurement and Property Services Manager in March 2019. Excitedly, Johnson explains that the combination of procurement management and facilities oversight in a single role has the potential to create significant benefits for the company. “Procurement and facilities management are really one and the same,” he says. “It’s a journey of synergy between the two; the strategic alignment M AY 2 0 1 9

175

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FRESH HOPE

176

of the two functions really helps an

support from all my directors and the

organisation move forward.” Johnson

team. We’re viewed as an integral part

discusses his role at the com-

of the organisation. We’re a vital piece

pany and Fresh Hope’s journey to

of the puzzle when it comes to strategy:

standardise and transform its procure-

ensuring compliance and governance

ment operations in order to continue

– in many ways, we’re an information

scaling sustainably in the future.

gateway to the company choosing the

Johnson has seen the business

right course of action. All contracts

community’s attitude to procurement

come through me to be double checked

change dramatically over the past

from a legal standpoint and so on.”

decade. “When I first started, procure-

As an organisation that coordinates

ment was always relegated to the back

operations across multiple agencies,

of the room and never really heard,” he

establishing an overarching procure-

recalls. “Now at Fresh Hope I’ve got full

ment infrastructure has been at the core

M AY 2 0 1 9

“ If I can help and make someone’s day easier, that will make my day easier too” — Darrell Johnson Procurement and Property Services Manager, Fresh Hope

of Johnson’s role. “We’ve centralised and streamlined our contracting and tendering process, as well as our documentation, policies and procedures,” he explains. “We’re transforming from an organisation that was very immature in this space, very siloed in its operations and supplier relationships, to a truly centralised company. We’ve transitioned from being all paper based, with a loose association of contract documents spread across the organisation, to being centralised onto a SharePoint site. Now, all of our policies

E XE CU T I VE PRO FI LE

Darrell Johnson Darrell Johnson is Procurement and Property Services Manager for Fresh Hope and has had many years’ experience working in Procurement and Property in an aged care sector. Darrell enjoys a reputation for being a tough but fair negotiator who has made significant cost-savings and process refinements to bring about positive change to organisations.

Darrell strives to continue to learn and evolve in his role using his knowledge and experience from procurement and property and many other environments to bring positive change and insightful ideas to the table. Darrell is also currently studying a Bachelor of Law.

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“ We’re looking at developing more in the age care space and trying to hone in on the best way that we can help the communities there” — Darrell Johnson Procurement and Property Services Manager, Fresh Hope

force change; you have to take people on that journey with you; you have to explain and educate them on the benefits.” Communication not only helps Johnson’s team effect change that will improve Fresh Hope’s procurement process, but also makes changes to the procurement arm of the business that will benefit its other elements.

“It’s about finding out from your stakeholders what would help them fulfil their roles better, because in turn that will make my role easier. If I can help and make someone’s day easier, that will make my day easier too,” Johnson says.

and procedures are readily available,

An emphasis on communication is

all our contracts are searchable with

more important than ever to Johnson

all their insurance documentation; we

and his team, since his expansion of

have access to anything we need from

responsibilities. Responsible for both

a compliance point of view.”

procurement and the management

As a procurement veteran who is

of Fresh Hope’s numerous facilities,

now managing the operations of Fresh

he maintains that if greater exchange

Hope’s facilities, Johnson stresses that

of information can be beneficially harn-

communication, and initiatives and

essed, the role extension will lead to

solutions to enable this communication,

increased synergy in the business.

are the key to success. “As an organi-

“It gives us more of a brief to look at what

sation, if we can’t communicate, we’re

we’re doing with our retirement living

dead in the water,” he says. “We’ve really

age care services. We’re now able to

got to understand who our stakehold-

deliver very strategically on certain

ers are. It’s also important that we don’t

issues,” Johnson says. “We’re looking w w w.suppl yc ha i ndi gi ta l. com

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FRESH HOPE

180

M AY 2 0 1 9

$100mn+ Approximate revenue per annum

1800s established

1,000+

Approximate number of employees

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FRESH HOPE

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M AY 2 0 1 9

183 at streamlining all our renovations so,

but to us as an organisation. It’s part

for example, we will have all our tiles,

of my remit to ensure stewardship

plumbing supplies and so on pre-

and sustainability for the organisa-

selected and included in our contract

tion,” he says.

to the supplier, so we can just say: ‘It’s

For Johnson, sustainability and new

this unit, it’s this colour scheme with

technology come hand in hand. “We’re

these appliances.’” This approach,

always looking at what the next big

Johnson believes, will also create

thing is. I’m looking at new technologies

budget synergies by streamlining and

that can monitor residents’ vitals wire-

consolidating the procure-to-pay

lessly while they’re lying in bed. We

process, as well as further empower-

also have a government grant to install

ing Fresh Hope to create positive

solar power in some of our age care

change in the community. “There are

facilities, and we’re looking at manag-

all sorts of things we can do that are

ing waste,” Johnson explains. “We

beneficial, not only to the community

realised we’ve regularly been throwing w w w.suppl yc ha i ndi gi ta l. com

FRESH HOPE

“ We’re transforming from an organisation that was very immature in this space to a truly centralised company” — Darrell Johnson Procurement and Property Services Manager, Fresh Hope

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away 65 tonnes of food from just one site. By cutting that down we’ve realised we can save money and make our operation more environmentally sustainable.”

Fresh Hope is growing rapidly.

“We’re looking at developing more in the age care space and trying to hone in on the best way that we can help the communities there,” Johnson says.

“With regard to procurement and property, we’re looking to streamline and strengthen a lot more of our systems, policies and strategies for supporting the business.” He maintains that more digitalisation of the business is on the horizon, which will continue to empower Fresh Hope’s employees to focus on their true task: “Caring for our residents, looking after school camps, and working in the conference centre or for our outreach programs.”

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185

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