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April 2018
Qatar Airways Flying high in procurement
FedEx looks to the future Ed Clarke, FedEx’s MD of Hub Operations, on innovation
Brightstar DRIVING GROWTH WITH PROCUREMENT POWER
Are drones failing to deliver? SAP ARIBA’s Shivani Govil on the role of drones in future procurement
MAIN STAGE SPEAKERS INCLUDE:
ELOQUII
Mariah Chase Chief Executive Officer
WARBY PARKER
Dave Gilboa Co-Founder & Co-CEO
HOUZZ
Alon Cohen President & Co-Founder
SETH GODIN
Author
JUNE 5-8, 2018
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HELLO AND WELCOME to the April issue of Supply Chain Digital, appointment reading for executives working in the supply chain, procurement and logistics space. We have another packed edition for you this month, with our cover feature focusing on a very special procurement story at Brightstar. A blueprint for using procurement to add value to a business, the piece starts on page 70. There is also a fantastic case study looking at how Qatar Airways is pushing aviation procurement standards in the face of blockades in the GCC. It is a truly eye-opening example of how a business can continue to thrive in the face of hugely testing business and political challenges. It begins on page 92. Amongst our other company reports this month are the likes of Flybe, Tambour and CBRE – we hope you find them as informative as we do. Elsewhere, we sit down with Ed Clarke, Managing Director of Hub
Operations for FedEx Express, who explains how the delivery giant is leveraging technology and innovation to embrace the future of export in a digitised era. It’s an interview not to be missed and one that starts on page 12. Continuing the theme of interviews with industry heavyweights, we speak with Charles Brewer, CEO of DHL eCommerce about the important of ensuring fulfilment in the ecommerce market. Skip ahead to page 22 for that one. And in this month’s Top 10, we run down a recent report by Accenture to look at the top tips to become a procurement master! As always, if you have any feedback please do join the conversation on Twitter, LinkedIn and Facebook and become part of the world’s fastest growing supply chain community.
Enjoy the issue!
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F E AT U R E S
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FEDEX LOOKS TO THE FUTURE
I NTE RV I E W
PROC U R E M E NT I N S I G HT S
ECOMMERCE IS HERE TO STAY: WHY STRATEGISING EFFECTIVELY IS THE KEY TO SUCCESS
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TEC H N O LOGY
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LOG I S TIC S & D I S TR I B UTI O N
Are drones failing to
deliver?
TO P 10
50 Top 10
TIPS TO BECOME A PROCUREMENT MASTER
60 E V E NT S A N D AS S OC I ATI O N S
EVENTS 7
C O M PA N Y PROFILES
Brightstar
USA
QIA Global
USA
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April 2018
Qatar Airways MIDDLE EAST
70 100 88 128
Tambour EUROPEAN
146 DAS Holding MIDDLE EAST
174
CBRE
EUROPE
188 Wilfred Laurier University CANADA
158
Flybe
EUROPE
202
Crown Resorts ANZ
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Our 2018 Speakers Include
Dr. Dirk Holbach Corporate SVP & CSCO, Henkel
Ivanka Janssen VP Supply Chain, Beverages Category, PepsiCo
Knud Lasse Lueth CEO, IOT Analytics
David Sheldon Head of Global Supply Chain Development, NestlĂŠ
Dario Calderoni SCM Operation Director, Zalando
Anne-Laure Charpenet Director Supply Chain Transformation Project, Le Groupe La Poste
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INTERVIEW
FEDEX LOOKS TO THE FUTURE ED CLARKE, MANAGING DIRECTOR OF HUB OPERATIONS FOR FEDEX EXPRESS UK, TALKS ABOUT HOW THE DELIVERY GIANT IS HARNESSING INNOVATION TO EMBRACE THE FUTURE OF EXPORTING IN A DIGITALISED ERA WHILE SUPPORTING SMES AND ENTREPRENEURS LOOKING TO GO GLOBAL Written by DAN BRIGHTMORE
INTERVIEW
EDEX PIONEERED THE express distribution business – an industry built on speed and efficiency – and aims to continue to be a driving force in the logistics business over the coming decades. It has created a massive digital supply chain network with the sole aim to ship physical objects across the world in the most efficient way. Innovations in technology and digitalisation enable it to build, expand and simplify a physical network designed to move goods around the globe. “As part of our quest to provide ever better and faster service to our customers, we are now busy investigating today’s key technologies in mobility, automation and sustainability, such as drones, robotics and platooning. We consider all elements of the equation, from R&D to execution,” says Ed Clarke, Managing Director of Hub Operations for 14
April 2018
SenseAware empowers FedEx’s customers to quickly intervene when integrity is at risk
FedEx Express UK. “We have long known that information about the package was as important as the package itself. This combination of the physical and digital is at the heart of the Internet of Things (IoT). When we combined that concept with the internet and put tracking information online, we changed the logistics capabilities of the world and our most important innovation in this area is SenseAware, a device that provides near-real time data on packages for factors like location, relative humidity, temperature and light exposure.”
“WE CHANGED THE LOGISTICS CAPABILITIES OF THE WORLD AND OUR MOST IMPORTANT INNOVATION IN THIS AREA IS SENSEAWARE, A DEVICE THAT PROVIDES NEAR-REAL TIME DATA ON PACKAGES FOR FACTORS LIKE LOCATION, RELATIVE HUMIDITY, TEMPERATURE AND LIGHT EXPOSURE” — Ed Clarke, Managing Director of Hub Operations, FedEx Express UK
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INTERVIEW With SenseAware, customers with sensitive shipments are able to monitor their shipments’ environmental conditions, which is crucial across many sectors. For example, Clarke cites the field of pharma where vaccines must be maintained at a very narrow temperature range during shipping. “Customers can use a SenseAware device inside the shipment container to monitor the temperature and make sure the vaccines arrive safely and can be used,” he adds. Digitalisation has made the world more connected and accessible and is transforming the way FedEx does business, says Clarke. “For example, SMEs can now reach new customers and international markets with relative ease. It’s not just technology that’s impacting on exporting, but also the global environment – fruitful exporting markets change constantly, while political forces influence internationalisation and market economies. In the last year alone, exporting has transformed – however, SMEs should not feel they are on their own to navigate this new global landscape. We believe it’s our responsibility along with other 16
April 2018
organisations to support SMEs in making the most of their exporting journey.” Clarke notes that smaller retailers in particular don’t always have the time or expertise to focus on the infrastructure and delivery of products, and are increasingly looking for logistics support; working with a provider who can walk them through the challenges of cross border trading and ultimately deliver
The SenseAware 2000 communicates via a cellular network and supports a dry ice and a cryogenic probe to help monitor the integrity of products at temperatures as low as –195c
How SenseAware monitors sensitive samples during shipping
their products on time, while achieving international expansion. “Across Europe, physical and digital networks are increasingly merging, and logistics providers are helping to fuel this growth, enabling faster, cheaper and more convenient deliveries,” explains Clarke. “As a result, the nature of our relationship with SMEs is evolving, with many placing greater reliance on us to support them in reaching new markets. By working with SMEs, we can help them take advantage of the new opportunities presented by the digital economy.”
According to a FedEx study, approximately 70% of consumers listed shipping-related factors as the most influential in their decision to buy from online retailers in other markets. With the support of an established logistics provider, small business owners are able to seamlessly manage supply chain issues and ensure reliable delivery. “In the context of a global digital economy, an efficient supply chain performs a vital role,” believes Clarke. “It enhances the customer experience and manages costs, thereby helping SMEs win customers and 17
INTERVIEW
See how SenseAware helps United Airlines keep their planes flying high
According to the FedEx SME Export Report, European SMEs acknowledge growth in ecommerce as a result of reaching markets more easily (38%), while 55% of SMEs generate revenue from m-commerce Almost two-thirds (65%) of SMEs are using social media for sales purposes – FedEx SME Export Report
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improve bottom lines – an integral part of how large service providers like FedEx Express can support small companies.” The digital economy encompasses three main platforms – ecommerce, m-commerce (mobile commerce) and social commerce, each providing different opportunities for SMEs to reach customers. According to the FedEx SME Export Report, European SMEs acknowledge growth in ecommerce as a result of reaching markets more easily (38%), while 55% of SMEs generate revenue from
m-commerce. Social media remains an important force in the digital world, connecting businesses with their customers, and almost two-thirds (65%) of SMEs are using social media for sales purposes. Ecommerce has made it easier for anyone to start a business. Clarke emphasises that several FedEx customers who set up with just £1,000 ($1,387) managed to grow their own successful businesses and take advantage of the opportunity to reach a global market. The FedEx report highlights that despite advancements
and the availability of new services, some technology doesn’t change. When exporting, businesses still need to cross borders that are administered by regulators, which can obstruct overseas opportunities. Before exporting, small businesses need to make sure they can operate in a particular market or meet customs’ requirements – if not, this can be a game-changer and they will not be able to export to that location. It’s where organisations, such as FedEx Express, can guide small businesses on country regulations. 19
INTERVIEW FedEx provides support via a dedicated small business team, tailoring its services to providing flexibility for SMEs and their endcustomers through a variety of international shipping options. “FedEx International Priority helps the growing number of exporting SMEs with efficient and customs-cleared global delivery, typically within three business days,” recommends Clarke. FedEx found that the most common business challenges SMEs face include increased competition in other markets (33%), along with increased production costs (27%), which Clarke believes can be overcome with its guidance alongside industry initiatives and government support. To meet their goals in an everchanging digital landscape, what can growing businesses learn from Generation Z? “Generation Z is not swayed by traditional marketing methods, but rather by other media types, especially digital. Currently in their teens, this generation will be many SME’s customers in the very near future,” notes Clarke. “Having recently been a judge for the UK’s leading enterprise and financial 20
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SenseAware and the journey of a CubeSat education charity, Young Enterprise, I acknowledged 11 to 15-year-olds are looking at new marketing types, particularly digitally. They have an expectation for online shopping to be a fun as well as an enjoyable experience. As a result, SMEs need to embrace digitalisation and harness the technology available now to ensure they appeal to this customer base in future, putting pressure to stay ahead and remain competitive.” As technology transforms, so does the exporting landscape, and with the rise of m-commerce, and the
“OUR DIGITAL TRANSFORMATION IS UNDERWAY AND DEDICATED TO REDUCING COMPLEXITY AMONG EXISTING TECHNOLOGIES AND ENSURE SCALABILITY TO SUPPORT FUTURE GROWTH AND BUSINESS NEEDS” — Ed Clarke, Managing Director of Hub Operations, FedEx Express UK
increased acceptance to buying and selling products and services through handheld devices, computers and email are becoming obsolete. “SMEs need to stay on top of new platforms and advancements to retain their competitive edge and continue reaching a global audience,” cites Clarke. “It’s no longer good enough to just have a website; businesses need to have a mobile platform to prevent losing out.” Clarke is responsible for ensuring FedEx provides the very best operational platform to consistently
deliver outstanding levels of service for its customers. “With 15 years’ experience in the logistics sector, I strongly believe the company’s biggest asset is our team members,” he believes. “We consequently place a priority on them, in order to deliver industry leading results and grow profit.” Clarke concludes: “Our digital transformation is underway and dedicated to reducing complexity among existing technologies and ensuring scalability to support future growth and business needs. IT modernisation and simplification will enable us to focus our resources on delivering relevant customer solutions that connect people and possibilities around the world.” 21
PROCUREMENT INSIGHTS
ECOMMERCE IS HERE TO STAY: WHY STRATEGISING EFFECTIVELY IS THE KEY TO SUCCESS Supply Chain Digital speaks to Charles Brewer, CEO of DHL eCommerce, about the key to ensuring fulfilment in the ecommerce market Written by Stuart Hodge
PROCUREMENT INSIGHTS
AMAZON FOUNDER JEFF BEZOS once said: “If you do build a great experience, customers tell each other about that. Word of mouth is very powerful.” And when it comes to ecommerce, ensuring positive customer experiences is one of the absolute fundamentals if you wish to build a successful business. The continual growth in ecommerce that has been witnessed was not entirely unanticipated and a number of the big logistics companies have made it an integral part of their strategic focus. Charles Brewer, CEO of DHL eCommerce, makes no bones about the importance of strategising effectively, saying that it’s essentially “where you win and lose customers” as a company in the market. Brewer, who has held his position for approaching two years now, is adamant that ecommerce fulfilment is something which is not spoken about enough. The point was articulated in an article published exclusively on Supply Chain Digital’s website in January, where Brewer wrote: “When we think of ecommerce we tend to think of booming sales, products zooming 24
April 2018
“ Big data, artificial intelligence and automation will be important and will help businesses become better and more efficient in their processes� – Charles Brewer, CEO, DHL eCommerce
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“ We tend to forget the behind-the-scenes logistics involved in physically storing the products, picking them from the shelves, packing them, shipping them around the world and then delivering them” – Charles Brewer, CEO, DHL eCommerce 26
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from the screen to the doorstep, science fiction-like delivery methods and bigdata making everything more efficient. “We tend to forget the behind-thescenes logistics involved in physically storing the products, picking them from the shelves, packing them, shipping them around the world and then delivering them to a customer’s front door. All of this falls under the term fulfilment and it can make or
break any ecommerce merchant.” Speaking now to Supply Chain Digital, he adds: “The ecommerce demand is definitely increasing, and remember we really are still at the very early stages – we once again witnessed record ‘peak’ volumes last year and I am sure we will see the same this year. The key is to plan, plan and plan again.” There can be no doubting Briton’s
passion and he does not try to hide his excitement at the potential for innovation in what is a growing space. Omni-channel sales is one area which is becoming an increasing point of focus for all of the big logistics companies, with DHL recently opening fulfilment centres in Australia and Hong Kong to supplement its operations. According to DHL research, omnichannel shoppers spend 15-30% 27
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more than traditional shoppers, and given that fact, Brewer can only see ecommerce continuing to be an area of focus for the big companies as technology advances. “Omni-channel will be the norm. Big data, artificial intelligence and automation will be important and will help businesses become better and more efficient in their processes,” he says. “These will enable businesses to learn customer experiences and deliver according to their demands. “In ecommerce, payments and shipping – the two big enablers – will be more and more seamless. It will become easier for shoppers to shop. Cross-border will no longer be a ‘thing’ – people will just shop online regardless of geographical boundaries.” But although it’s growing, omnichannel has created a litany of new problems for logistics companies to resolve as they strive to ensure a positive customer experience. The process can be broken down into three main stages: warehousing, order processing and delivery. It’s the latter of these where a lot of 28
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“ An omni-channel approach requires strong logistics support at the background that allows your warehousing, inventory management, first and last mile delivery to be integrated and seamless” – Charles Brewer, CEO, DHL eCommerce
ecommerce companies fall down, as Brewer explains. “The majority of shoppers are less than satisfied with their delivery experience, from visibility, to choice of delivery day, time, location, etc.” he says. “The opportunity to ‘fail’ is significant, and a poor deliver experience critically impacts the likelihood of the shopper returning.
That is why DHL eCommerce aims to deliver the smile in the last mile – making the delivery as engaging and exciting as the shopping experience.” That all sounds well and good, but how can that be achieved? “An omni-channel approach requires strong logistics support at the background that allows your warehousing, inventory management, first and last mile delivery to be integrated and seamless,” explains Brewer. “For example, when the consumer decides to try in store, shop online and deliver to their office; or any other shopping preferences they may have – the merchant is able to deliver a great consumer experience, not just delivering on time, but also providing shipment visibility, a simplified returns or exchange process, ample payment solutions, flexible re-routing if they change their minds, etc. “All of these work together to provide greater choice, convenience and control for the shopper, and if done right, they will keep coming back for more.” Ensuring said fulfilment is not always easy though, and even for a global 29
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player like DHL, sometimes there is a need to work in partnership with other companies to ensure that orders reach their given destination, on time. Brewer says that building a successful ecommerce operation all starts with good upfront integration and being able to provide the shopper with options. “Getting the last mile right isn’t easy and can create incredible customer pain points as well as inefficiencies. Partnering with the right provider and doing your homework up front is where you can win. “Holistically, businesses now want to move their inventory as close to their customer as possible, and in doing so reduce delivery times and fulfill orders quicker. With our sister company DHL Supply Chain, we are able to provide ecommerce fulfilment solutions on the customers ‘doorstep’. So depending on the requirement, we can provide last mile delivery in country, cross border delivery worldwide with multiple speed options and local, regional and or global fulfilment.” No doubt that ecommerce will continue to grow, but it’s a space where there is still room for other trends and 30
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innovations to come to the fore. Environmental factors will become more of a consideration for customers in the years to come, says Brewer, and he admits he’s interested to see how things will change in the ecommerce space in the years to come. “The ecommerce industry is still incredibly nascent, as such we are all rapidly innovating and learning,” he adds. “Whether it be electric vehicles that ensure we play our part in a ‘cleaner’ tomorrow, alternate delivery methods to delight our customers, or route optimisation to ensure our thousands of delivery drivers have the most optimal routes, we are constantly innovating to ensure we deliver on our goals. The environmental impact that comes with ecommerce and logistics will be one that consumers become increasingly conscious about and they would want to be as green as possible. “DPDHL Group (DHL eCommerce’s parent company) has announced that by 2050 we will reduce all logistics related emissions to zero – as we know that this will be a great concern for both consumers and businesses moving forward.”
“ The environmental impact that comes with ecommerce and logistics will be one that consumers become increasingly conscious about” – Charles Brewer, CEO, DHL eCommerce
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Hans-Georg Kaltenbrunner, VP Industry Strategy for Manufacturing, EMEA at JDA Software discusses the impact of Industry 4.0 on the digital supply chain, future trends and dealing with natural disasters Written by MA R K SPENCE
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S TECHNOLOGICAL INNOVATION and creativity continues at pace, the potential ramifications for businesses and their supply chain are huge. Therefore, building a roadmap for effective performance as well as developing the ability to diversify, adapt and react will all become cornerstones of success within the immediate future. There can be little doubt that achieving excellence within the supply chain is fundamental – but it can also be overwhelming. This is especially the case when we consider a shift in focus towards an agility and responsiveness that is required to achieve genuine end-to-end supply chain visibility. As VP of Industry Strategy for Manufacturing, EMEA at JDA software, Hans-Georg Kaltenbrunner is charged with benchmarking intelligence, strategy setting and definition for JDA’s digital supply chain. As such, there are few people better placed to comment on what the framework for success should look like.
UNDERSTANDING THE DIGITAL SUPPLY CHAIN “The digital supply chain, for most people, tends to begin with enhancing their scope of what traditional supply chains cover,” Kaltenbrunner tells us. “It typically involves the industrial Internet of Things, devices, track and trace of goods and so on. It’s about the incorporation of data sources and big data, such as social media and weather news, to then take a judgement on what all of this information really means 34
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“ The digital supply chain, for most people, tends to begin with enhancing their scope of what traditional supply chains cover” – Hans-Georg Kaltenbrunner, VP Industry Strategy for Manufacturing, EMEA, JDA Software
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TECHNOLOGY for me, my goods and the execution within my supply chain,” he continues. This vast amount of information brings with it a separate issue and a new challenge that Kaltenbrunner has identified: “We have so many big data sources available to us these days that the problem now is there’s almost too much information out there. The challenge these days is making a call on what is important and what is just noise.” This naturally leads on to another topic of discussion that Kaltenbrunner feels is crucial: supply chain visibility. “Everything has become more dynamic and more real time. We’re more active than we were in the past. When things did or didn’t show up it was almost a surprise, because there was little visibility around potential disruption. That is something we can now anticipate and then, where necessary, take counter measures.”
INDUSTRY 4.0 As a business strategy, Industry 4.0 will enable flexibility and agility with the digital supply chain and Kaltenbrunner has some very concrete thoughts on what this will mean in the future and how it will work. “For example, imagine 36
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“ We have more information and data points available to us than ever before. New technology, like machine learning and AI, has come into play” –H ans-Georg Kaltenbrunner, VP Industry Strategy for Manufacturing, EMEA, JDA Software
a piece of metal that will eventually turn into a car body or a part of a car body. That piece of metal has the capability, via a small identifying device, to negotiate its way through the factory and find the operation centre that can do the job required. The piece of metal will tell a robot, ‘I’m becoming a Vauxhall model XYZ, for example, therefore you have to do this or that operation to me,’” he tells us.
supply chain then eventually becomes self-steering and self-optimising. In the past we’ve looked at management philosophies like ‘swarm thinking’, which is similar, but Industry 4.0 shifts this process from mass production to a position of ultimate flexibility where everything can be different,” he continues.
DEALING WITH DISASTERS
“Similarly, on the transportation side, you then end up eventually with metal sheets that have been formed into the right shape for that particular car model and then the metal negotiates with the truck or lorry or vessel or air freighter and tells them, ‘okay, I need to go to this destination on the other side of the country so when do we leave? Can you take me? Is there a better option?’ This is a negotiation process and the whole
Real-time visibility will increasingly become an expected element of an effective supply chain, particularly when it comes to dealing with natural disasters. Arguably, there are three main areas to consider here: preparing for a natural disaster, predicting it and then managing risk within the supply chain. JDA work with its partner TransVoyant and uses its technology which employs advanced analytics on real-time big data curated from sensors, radar, smartphones, satellites, GPS, video cameras, and other devices to produce live and predictive insights to transform their supply chain performance. “TransVoyant provide data streams including track and trace information on where stuff is in the world, be it vessels, containers, trucks etc. Then 37
TECHNOLOGY we know, from a supply chain planning perspective, where things ought to be so we can steer the operator or logistics planner towards those things. Through predictive mechanisms and algorithms we can also predict that there will be an interruption affecting any particular shipment. “You always have to consider proba-bilities,” he continues. “Say a vessel is on its way from the US coast towards a UK port and there’s a storm on the way. This could potentially disrupt the harbour operation. This may also affect the supply to a certain
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factory. With this information you can then make a decision that influences the vessel itself. For example, you could redirect it to a different port.” Kaltenbrunner believes the value of this information is something that cannot be underplayed and will lead to a more intelligent supply chain. Early visibility of potential disruptions will allow businesses and organisations to plan production and distribution more effectively. Indeed, as our conversation draws to a close, he predicts a future spearheaded by innovation that will lead us to a point where previous cost
issues and disruptions will be dealt with on a scale unlike anything we’ve previously experienced. “We have more information and data points available to us than ever before. New technology, like machine learning and AI, has come into play. When a certain type of event occurs, these systems will be able to pick up, over time, what the best reaction towards any situation should be. We can then take precaution in preparing the most likely course of action and the operation needed to approve the action will be just one simple click.”
“ Everything has become more dynamic and more real time. We’re more active than we were in the past” – Hans-Georg Kaltenbrunner, VP Industry Strategy for Manufacturing, EMEA, JDA Software
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LOGISTICS & DISTRIBUTION
Are drones to failing
deliver?
SAP ARIBA’S SHIVANI GOVIL TELLS US WHY SHE STILL BELIEVES THAT DRONES HAVE A BIG PART TO PLAY IN THE FUTURE OF PROCUREMENT Written by STUA R T HODGE
LOGISTICS & DISTRIBUTION
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HE DRONE EXPLOSION seems to have been on the cusp for a while now, and although the adoption of the technology has increased slightly over the past few years, it hasn’t quite happened in the exponential fashion that many industry insiders were expecting. One such individual is Shivani Govil, VP, AI and Cognitive Products at SAP Ariba, who has two decades’ worth of experience in the enterprise software sector, including working extensively with drones as well as mobile applications. Speaking to Supply Chain Digital from her base in San Francisco’s Bay Area in the US, Govil expresses genuine surprise that the adoption of drones by procurement organisations hasn’t happened more widely up until this point, but says it’s still something that’s “coming down the pipeline”. “When I was working very, very actively on this topic a couple of years ago, I actually thought that we would see drones proliferating all over the place,” she says. “I have to admit it hasn’t taken off as quickly as I expected it to. I think there is a lot of interest in what drones can do, if you think about
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The potential for drones to play an increasingly important role in many industries has yet to be exploited how they are affecting the industry; there are a lot of projects going on and there are some companies which are adopting them on a much bigger scale, but I would say that in the mainstream it’s probably not as prolific. “If I talk to the CPOs today they don’t come to me saying ‘drones is a really important space, what do you think is going to happen there?’ I think there are forward-thinking CPOs that are starting to look at how drones impact
“I SEE BOTH THE INVESTMENTS THAT COMPANIES AND THE DRONE MANUFACTURERS ARE PUTTING IN, AS WELL AS THE BEGINNINGS OF MOMENTUM BUILDING UP FROM A CONSUMER PERSPECTIVE” – Shivani Govil, VP, AI and Cognitive Products at SAP Ariba
them, and how they can have a more important role in the space – and they are exploring the actual procurement of drones and the impacts that they can have on things like shipping, logistics and delivery. “I do see a lot of work happening in this space. I see both the investments that companies and the drone manufacturers are putting in, as well as the beginnings of momentum building up from a consumer perspective.
I would say in the next five to 10 years we will see this much more broadly adopted and in play across procurement.” Govil is well-versed in the various ways that drones are already helping companies in the supply chain, and even more potential uses yet to be explored. One common example of drone usage for companies is around tracking inventory. Govil wonders if there is a way that the drones can send signals to procurement applications to 43
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provide updates and alerts as certain supplies run low. This kind of utilisation would involve integration with the drones to be able to get those kinds of demand signals before carrying out the ordering processes. Govil also believes there is great potential in the usage of drones for monitoring the health of oil and gas pipelines or railroad tracks – being able to understand when parts are going to fail and assessing that before ordering the required component from the procurement system. She also wonders how the usage of drones for delivery could potentially overlap into companies’ cost benefit analyses when choosing suppliers. Could a fullscale integration see even more of these processes, even when it comes to ascertaining where there is value to be had? Overall, there are a lot of questions – some which cannot be answered until the technology develops further. Does Govil feel that this uncertainty could be partly to blame for the technology not being more widely embraced within the industry? “There needs to be the ROI to 44
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Drones offer the ability to monitor the condition of infrastructure in difficult-to-access locations
“ SOME PEOPLE ARE STILL DELIBERATING ON THE ROI BEHIND IT (DRONES). THEN THERE IS THE CONSIDERATION OF HOW THIS IS GOING TO BE REGULATED” – Shivani Govil, VP, AI and Cognitive Products at SAP Ariba
demonstrate why this is better,” asserts Govil. “I think some people are still deliberating on the ROI behind it. Then there is the consideration of how this is going to be regulated. We know what’s there today, but how is that going to change in the future? It’s going to become more permissive. Is it going to become a little bit more restricted? I think that’s another piece of it. “Then you have to make sure that it’s a scalable technology. When I talk about scalability, for mass adoption you really need a complete end-to-end solution. The larger companies have their own IT team and they can develop custom solutions, but the smaller companies really want something that works off the bat, and which has that entire end-to-end connectivity across that solution. “I think those are some of the pieces that companies are looking at, and I don’t think we’re at a point where we can say we have those pieces completely nailed and figured out. I see some areas where there has been a wider-spread adoption, but as I look at the mainstream I can see people experimenting with it. I can see 45
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“ W ITH PROCUREMENT BEING AT THE FOREFRONT OF ORDERING OR SUPPLYING, I THINK IT WOULD BE A VERY GOOD IDEA FOR DRONE MANUFACTURERS TO LOOK AT HOW THEY CAN CO-INNOVATE WITH PROCUREMENT AND BUILD JOINT SOLUTIONS” – Shivani Govil, VP, AI and Cognitive Products at SAP Ariba
Drones can be adapted for different approaches to deployment which have yet to be explored
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innovation groups working on it, but it’s not necessarily a fully-fledged deployment across the entire business. “There are a few things that I think need to happen today which would make this technology much more quickly and greatly adopted, especially for enterprise adoption. Having a complete solution is really important, not just the hardware piece of it, not just the data collection piece of it, but also the application piece of it. Then there is the question of how drones tie into existing applications.� Incrementally, all of these things will change and move forward as drone manufacturers and organisations use the technology to collaborate on projects attempting to innovate on all of these fronts. Perhaps there is capability to physically adapt the drones to make them more useful to companies, or different approaches to deployment which have yet to be explored. There can be no doubt though, that drones could potentially provide solutions to some of the logistical problems procurement companies are presented with. Govil believes that the wider 47
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prevalence and popularity of technologies such as artificial intelligence and the application of machine learning can also help to supplement and accelerate drone usage within the supply chain. “With procurement at the forefront of ordering or supplying, I think it would be a very good idea for drone manufacturers to look at how they can co-innovate with procurement, and build joint solutions that in the end benefit the enterprise as a whole and accelerate adoption,” Govil asserts. “I actually think that AI and machine learning can help accelerate the adoption of drones. If you think about it, one of the big things drones do is collect lots of data. There is so much data being collected, and for any good AI or machine learning solution to work effectively, you need access to the data. “I think the AI technologies really help support the value that the data you collect from the drones can deliver. For example, you have your oil and gas pipeline, the drones can be used to monitor the health of the pipeline and they’re collecting data based on visual images on what that pipeline looks like at different stages. 48
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Drones could play a vital role in monitoring the health of remote oil and gas pipelines or railroad tracks “As you now have the data, you can apply advanced analytics and AI machine learning type technologies to predict when a failure might happen even before it happens. Then, in turn, trigger a return to repair it so you’ve prevented it before the downtime actually happens. That way you eliminate the downtime, which results in cost savings for the business. That’s one example.
“THE DRONES ARE COLLECTING LARGE AMOUNTS OF DATA, AND THE AI MACHINE LEARNING ALGORITHMS CAN HELP UNLOCK THE VALUE OF THAT DATA TO HELP DELIVER TOWARDS THAT BUSINESS OUTCOME” – Shivani Govil, VP, AI and Cognitive Products at SAP Ariba
“The other one we talked about, on the warehouse side, is being able to sort through all the images collected and being able to analyse the data and start thinking through when you automatically replenish. To me they actually come together very well, because the drones are collecting large amounts of data, and the AI machine learning algorithms can help unlock the value of that data to deliver
towards that business outcome. “The other area which I also think would be also very interesting for future technology is 3D printing. 3D printing by its very nature based around having local suppliers, having things printed locally, and then having that tied in with the drones for delivery. To me, that’s another technology that I think would have a huge impact on drone adoption.” 49
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Top 10 TIPS TO BECOME A PROCUREMENT MASTER Forget about the processes. It’s not necessarily the first strategy you’d consider when looking to significantly improve your procurement strategy. And yet, according to a recent report from global management consultancy, Accenture that’s exactly what you should be doing Written by MATT HIGH
Accenture has taken an in-depth look at so-called ‘procurement masters’, the top 10% of procurement organisations in terms of their performance and identified just what it is they’re doing that you might not be. According to Accenture, procurement masters deliver a 15:1 ROI across their organisations, while more than 63% of them have better capital efficiency than their peers. Here’s 10 key strategies that can make you a master too.
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Get granular with your cost structures
Procurement masters are, says Accenture, ‘rebasing’ their business cost structure through the use of both innovative technology and immersing themselves in the granular – analysing and understanding the finer details to ensure visibility of the complete picture. Doing so will enable you to develop and implement forward-looking targets and KPIs of exactly what your costs ‘should be’. Do this by using innovative digital technologies to enable improved, data-driven decision-making that can create radically different cost bases.
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Take ownership
Today’s business leaders expect CPOs to be accountable and to accept ownership of budgets. According to Accenture, procurement masters should be as accountable as budget holders. In practice that means making sure that all your strategic procurement principles are adhered to, as well as doing things like placing experts that can deliver on those principles throughout the company and understanding exactly what’s driving demand. 52
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Focus on the bigger picture
According to Accenture, procurement masters work with budget holders to drive towards global outcomes for the company, rather than merely focusing on their own work. They are, for example, increasingly a key part of functions such as product design. “A dedicated new product design sourcing function – a unified effort with product engineering and sales – can protect new future revenue, reduce engineering time by 20% and increase new business win rates by 10%,” Accenture states.
Understand how procurement impacts success
What are your suppliers charging at this very moment? What’s the level of draw-down against the contracts, and the cost base of the business? You should be able to answer these questions at any moment to not only show that you can articulate the P&L impacts on the company as a whole, but that you understand the direct impact of your procurement team on the day-to-day business. There’s a benefit to drilling down on this strategy, too. Accenture notes that procurement masters are as much as 53% more likely enter the c-suite if they have a handle on these wider projections and their implications. Achieve that and you’ll be granted more control on overall buying behaviours.
‘If you want to take procurement to the next level it’s essential to start leveraging the power of robotic process automation (RPA) sooner rather than later’ 53
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Forget the DIY
Let’s get this out of the way now: you CAN’T do it all yourself. In fact, trying to do so can be detrimental to both your role and the business. Instead, outsource in order to clear nonstrategic, more traditional work off your desk and free your time to dedicate yourself to high-value, strategic decisions. Accenture found that by simply getting rid of jobs like invoicing, catalogue management task and spend analytics, procurement masters saved as much as 40% capacity for their procurement team, in turn bringing efficiencies and growth. 54
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Develop a digital vision
Understanding and leveraging the capabilities of advanced digital technologies is, according to Accenture, a fundamental aspect of procurement success. Consider converting core procurement tasks to As-A-Service models or digital technologies – telematics, for example, can manage things like mileage reimbursement, thus enabling enhanced, data-driven decision making. Simply put, correctly harnessing digital tech can transform the way in which procurement organisations operate by working at lower costs and driving considerable strategic value.
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Understand ecosystem management
To be a successful CPO you need to build a strong procurement ecosystem that serves each party involved – both third party suppliers in the case of the outsourcing that we previously mentioned, as well as in-house teams. Any skills, assets or technologies that aren’t directly available in the business must be worked, by you, into a dynamic and active ecosystem of partners that gives a competitive advantage.
Robots are your friends
Forget your doomsday scenarios of robots taking over the world – they’re way off. If you want to take procurement to the next level it’s essential to start leveraging the power of robotic process automation (RPA) sooner rather than later. RPA reduces transactional operations duties and significantly boosts your ROI. Accenture gives the example of a leading global energy company that saved $2.5mn annually by automating over 100 procurement, finance and accounting tasks. Not only that, the business saw a 67% in manual average handling time too.
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Benchmark, Benchmark, Benchmark
The procurement bar rises continuously. If you don’t want to be left behind it’s important to focus on the strategies already mentioned, but it’s equally important to understand where and how you need to compete in the market in order to safeguard your business. Carry out ongoing benchmarking to understand where you rank on the ‘scale of fit’ and to maximise the potential of your procurement team.
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‘…you CAN’T do it all yourself. In fact, trying to do so can be detrimental to both your role and the business. Instead, outsource in order to clear non-strategic, more traditional work off your desk…’
Alter the procurement DNA According to Accenture, achieving true procurement mastery requires fundamentally changing your procurement activity and marrying that procurement to the company’s growth goals. This requires a new breed of CPO, one who is capable of using analytical, financial and strategical skills and developing a digital outlook. Understand that digital procurement is the future, and make procurement the heart of you do, to become a procurement master.
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E V E N T S & A S S O C I AT I O N S
Events The biggest and best events and conferences from around the world‌ Wri t te n by A N D R E W WOO DS
E V E N T S & A S S O C I AT I O N S
Georgia Logistics Summit Georgia World Congress Center 9–12 April
Created in 2009 as an event to bring together all aspects of the logistics industry for lunch, the Georgia Logistics Summit has grown over the last eight years from 400 attendees in its first year to nearly 1,500 in 2017. Each year, the summit brings together nearly 50 speakers from prominent shippers in the industry, leaders in the state’s infrastructure and economic development community, and a keynote speaker from large corporations like Caterpillar, The Home Depot, and Walmart. www.georgia.org
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Home Logistics 2018
AmericasMart Center, Atlanta, USA 18–19 April Home Delivery World 2018 is returning to Atlanta for its sixth year as the forum where retailers, etailers, grocers and solution providers gather to discuss delivery operations challenges and trends. A show that brings together thousands of retail and ecommerce logistics innovators and their solution provider counterparts. As eCommerce continues to explode in growth and sales, this once modest conference has grown ten-fold to welcome over a thousand attendees to our expo in 2017. www.terrapinn.com/conference/home-delivery-world/index.stm
ISM
Nashville, USA 6-9 May ISM2018 is the ‘must-attend professional development conference of the year’. With sessions developed by industry leaders, ISM2018 is the only supply management conference developed by practitioners for practitioners. Guest speakers will include Mitt Romney (CEO Bain Capital), Arianna Huffington (Huffington Post) and John Rossman (ex Amazon). http://ism2018.org
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Internet of Supply Chain Berlin, Germany 15-16 May
The only IoT event for supply chain and logistics professionals, providing you with insights to transform your supply chain strategy, deliver transparency, value and efficiency throughout your business. Leading supply chain and logistics operators are facing a perfect storm as huge technological advancement, coupled with changing consumer habits, drive businesses to adapt to survive and thrive in 2018. If you are a forward-thinking supply chain and logistics professional, this conference is for you, providing you with insight to transform your supply chain strategy, deliver transparency, value and efficiency throughout your business by revolutionising your inventory, warehouse and fleet management. https://iosc-de.internetofbusiness.com
5th Annual World Procurement Congress London
Intercontinental London, The O2, London, UK 16–17 May Agile Procurement: Thriving Through Disruption is a key theme for this year’s Annual World Procurement Congree, and guests include 50 senior procurement professionals, plus more than 100 speakers from companies such as Adidas, Avril and Shell. Topics to be discussed include digital procurement, cyber security, talent recruitment, upskilling and retention. World Procurement Congress has established itself as the foremost global gathering for senior procurement professionals. https://events.procurementleaders.com/events/congress/ world-procurement-congress 64
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9th Annual North American Supply Chain Summit
The Westin Peachtree Plaza, Atlanta, USA 5–7 June The event features 50-plus keynote speakers from companies such as Coca-Cola, Nike, IBM and Schneider talking about the new wave of disruptive digital technologies is transforming processes for businesses and their customers. Discover how leading companies are capitalising on digital trends to update their business strategy, create sentient supply chains and empower the workforce of the future. Organisers have also created dedicated tracks and sessions that address how organisations are driving the responsible business agenda, bringing together experts from sustainability, communications, procurement and innovation departments as well as investors, NGOs, governmental bodies and academics. https://events.eft.com/scsc
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14-16 May 2018 Hamburg, Germany SCIWeek.com
Introducing a New Concept for 2018: 3 IndustrySpecific Events, 1 Week of Cross-Industry Learning. With the rapidly increasing consumer demand for excellence in logistics and the emergence of automation in supply chain, it is now vital for senior executives to get ahead of the latest trends, strategies and techniques while expanding their professional network. Being able to benchmark and leverage best practices with industry leaders is important - however in this current climate, executives now cannot afford to focus merely on the very latest approaches within supply chain as an industry, it is now imperative that they drill down within their specific sector. Taking place at Hamburg’s newest terminal, The Cruise Center Steinwerder - The Supply Chain Industry Week event has been structured for delegates to have a concentrated day of learning and networking while vendors/exhibitors attend on the relevant day for their target audience. Day 1 will focus on Retail, Day 2 will focus on Industrial Manufacturing, and Day 3 will cover Food & Beverage and Chemicals. The conference will offer an interactive format, encouraging lively debate, in-depth discussion and exchange of ideas and best practice.
3 Industry Specific Days
9+ Hours of Networking 60 Speakers
80 Solution Providers 900 Delegates
FREE for Directors
Join us for: • Informative presentations from leaders in supply chain. • Case studies from leading industry figures tackling the same issues you face. • Panel discussions with leading organisations in and outside of your industry discussing topical issues • Roundtable and other formats to encourage peer-topeer learning and benchmarking opportunities across the industry. Maximise your time out of the office – attend for a highly focused day of key learnings or benefit from a whole week of supply chain knowledge.
To join 300 of your peers at Supply Chain Industry Week contact enquire@SCiWeek.com or call +44 (0)20 7036 1357 quoting “Supply Chain Digital” Alternatively, if you are a cutting-edge service or solution provider for Supply Chain and Logistics professionals and wish to increase your presence among the Retail, Manufacturing, Food and Beverage or Chemical industries – please get in touch at +44 (0)20 736 89423
FREE for readers of Supply Chain Digital who register before March. HEAR FROM
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24 – 25 April 2018 Marina Bay Sands, Singapore
Digitalization & Disruption take centre-stage at TOC Asia Join Shippers, Logistics Providers, Shipping Lines, 3PLs, Port Authorities, Terminal Operators to learn, debate and network
Big Box Shipper Debate
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Speakers include
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E V E N T S & A S S O C I AT I O N S
European Procurement Excellence Dresden, Germany 26 June
The 13th European Procurement Excellence Summit will continue to offer a high-level platform for intense exchange and high-quality networking to procurement executives from Europe’s leading companies, bringing together thought leaders, highly regarded mentors and influencers whose experiences benefit their organisations and inspire the business ecosystem they operate in. ‘Through inspirational keynotes and small, interactive working groups we aim to contribute to enable Europe’s procurement executives to meet every challenge ahead’. www.bme.de/en/all-events/epe-european-procurement-excellence
Gartner Supply Chain Executive Conference London 23–25 September
Gartner Supply Chain Executive Conference is the world’s most important gathering of supply chain leaders, discussing how disruptions large and small confront today’s supply chains on a daily basis and how ‘organisational survival depends on the ability to anticipate, adapt, and transform supply chains to deliver reliability and performance’. www.gartner.com/events
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CSCMP EDGE 2018 Nashville, USA 30 Sept–3 Oct
Discover over 100 forward-thinking sessions covering real world strategies implemented to maximise and transform supply chains and learn from some of the brightest academics and practitioners in supply chain today. ‘The Council of Supply Chain Management Professionals (CSCMP) hosts the must-attend supply chain event of the year — CSCMP’s Annual Global Conference, EDGE. From leading-edge content to cutting-edge supply chain solutions, EDGE reflects the unparalleled resources CSCMP offers today and symbolises our unwavering commitment to supply chain in the future.’ http://cscmp.org
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DRIVING GROWTH with PROCUREMENT
POWER
ite Wh len by G |P rod uc ed an rm S tu ath eri ne by C Wr itte n
The consumer need to acquire the best wireless product or service on the market is one which is continually evolving. See how Brightstar Corporation’s procurement team has disrupted this market by delivering cost-effective, bespoke solutions for its customers
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he use of mobile devices in the last 10 years has grown exponentially, influencing the way in which we live, work and communicate. A recent report by the GSMA has shown that the number of people utilizing mobile services exceeded 5bn in 2017, and the number of unique mobile subscribers is also set to reach 5.9bn by 2025 which is equivalent to 71% of the world’s population. Such growth has placed increased pressures on the telecommunications industry. Owned by Softbank Group, Brightstar is an international mobile service provider that is a significant player in the wireless industry. The company simplifies the wireless world, making mobile technology accessible to everyone. To do this, Brightstar looks after every stage of a device’s lifecycle, from the moment it’s manufactured to the moment it’s time to trade it in and re-market it around the world. Whilst it consistently competes with competitors to deliver exceptional, bespoke products and services amidst a complex minefield of consumer buying behaviors, the company has built a solid foundation from which to drive customer engagement. Serving carrier, retail and enterprise customers across 80 countries, Brightstar’s integrated services have enabled it to deliver one of every 23 wireless devices across six continents, where it looks after every stage of a device’s lifecycle.
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Brightstar serves carrier, retail and enterprise customers across 80 countries
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Customer power Seamlessly linking with its customers’ businesses has seen Brightstar gain a significant edge over competitors to become the provider of choice on a global scale. “Brightstar is known for innovation and helping customers solve problems. We listen to our customers to understand what kind of issues they’re facing in servicing their customers, and we innovate a solution to solve their problems,” explains Antony Harrat, Global Vice President of Indirect Procurement and Real Estate at Brightstar.
“It’s never been easier for customers to vote with their feet. Customers are researching and evaluating their purchase online before they step into a store and, in many cases, continue to do so within the retail estate. Working with customers proactively to start to predict their customers’ next moves before they make it – potentially with another operator – is one way we’re enabling the industry to address these challenges.” Universal appeal Witnessing the evolution of its customers’ demands, the millennial
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“IF WIRELESS CARRIERS CAN MOVE CUSTOMERS TO A LEASE MODEL, THE UPGRADE MENTALITY IS MORE IMPORTANT THAN OWNERSHIP” – Antony Harrat, Global Vice President of Indirect Procurement and Real Estate
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BRIGHTSTAR’S MOBILELIFE SOLUTION GIVES EMPLOYEES THE ABILITY GAIN ACCESS TO WIRELESS DEVICES, ANYTIME, ANYWHERE
generation in particular has created a raft of opportunities for Brightstar. The desire for choice and emphasis on budget remain strong drivers in the development of affordable and flexible buying or leasing options. “Millennials have been associated with ‘Generation Rent’. They’ve been reluctant to buy items like cars, music and movies. Instead, they’re turning to new types of services that provide access to products and experiences without the burden of outright ownership,” notes Harrat. “Millennials no longer want to own their device. They want to own
their data and photos, but they also want a new device as soon as it’s released. Generation Rent has given way to leasing plans where the buyer never owns the device and can return it for an upgrade after a contractual time. If wireless carriers can move customers to a lease model, the upgrade mentality is more important than ownership. “We see opportunity in affordability solutions such as device leasing and financing through our Brightstar Flex service, for example, which gives consumers access to the latest devices and lower cost of ownership, and with device protection via our Brightstar Halo service.”
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Multi-use appeal There are approximately 80mn high-end used devices globally, and Brightstar manages up to 15mn of them. With such significant market share, the company has also transformed not only the way it collects devices, but the way in which it grades and returns them to market. “Brightstar enables consumers to trade-in their used devices for a discount on a new smartphone, which makes devices more affordable. In turn, used smartphones are wiped clean and remarketed around the world at an affordable price,” says Harrat. “We also offer innovative payment solutions so consumers can purchase or lease a device using affordable monthly payments. Making technology accessible also includes protecting consumers’ investments in phones by offering insurance, protection and warranty coverage.” Its Echo service therefore grants the opportunity for buying back used devices in-store, online, via apps or over the phone, where customers can receive the best value on used devices through its global re-marketing network. By looking deeper at the enterprise market, Brightstar analyzed all available statistics to further appeal to this segment. Published research by Penn Schoen
ITS INTEGRATED SERVICES HAVE SEEN BRIGHTSTAR DELIVER ONE OF EVERY 23 WIRELESS DEVICES ACROSS SIX CONTINENTS
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A LEADER IN REAL ESTATE SOLUTIONS Newmark Knight Frank is leading the charge in commercial real estate innovation and client solutions. With a global presence of more than 400 offices and 15,000 professionals, NKF remains the authority in real estate advisory, data and technology. Our clients—corporations, property owners, investors and developers—benefit from NKF’s robust platform of services including: • • • • • • •
Leasing Advisory Global Corporate Services NKF Capital Markets Consulting Program and Project Management Property and Facilities Management Valuation and Advisory Services
Newmark Knight Frank is transforming businesses and properties— and exceeding client expectations. Brightstar Corp. Account Lead: Daniel Katcher Senior Managing Director Newmark Knight Frank T 212.372.2012 dkatcher@ngkf.com
ngkf.com
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Berland for Dell and Intel highlighted that 42% of 18-34-year-olds are likely to quit a job with sub-standard technology, in stark comparison with 25% of employees aged 35 and over. 82% of this category would also consider the use of technology on offer when considering whether to take a new job, the research found. In light of such findings, Brightstar undertook its own research and identified that up to 40% of enterprises lack a strategy for mobile. The recent launch of its MobileLife solution seeks to close this gap. Built specifically for enterprises, it gives employees the ability gain access to wireless devices, anytime, anywhere. “Companies are always looking to operate leaner and need to make difficult decisions around emerging workforce technology demands without the headache of managing allocation, in-life management and recycling in-house,” observes Harrat. “Another way we’re saving companies significant amounts of money is through selling or leasing certified pre-owned phones. “Leasing also gives the end
consumer the device they really want for an affordable monthly fee. This does not necessarily mean the ‘latest and greatest device, as even pre-owned devices can serve customer demand. The key to success in a saturated market is consumer choice, after all.” Enhanced flexibility Brightstar has become increasingly innovative in its bid to deliver comprehensive, personalized mobile services, tailored specifically for its respective markets and customer demographics. “Some trends are clear. There are different kinds of phones sold in different kinds of stores, but others are less so,” adds Harrat. “Phones that perform better from a network coverage perspective do better in the metropolitan fringe areas where coverage may not be as good as in the central areas, and those areas are constantly changing. We develop algorithms to understand the choices people are making when buying a handset. “It’s a very complex purchase
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“MILLENNIALS NO LONGER WANT TO OWN THEIR DEVICE. THEY WANT TO OWN THEIR DATA AND PHOTOS, BUT THEY ALSO WANT A NEW DEVICE AS SOON AS IT’S RELEASED” – Antony Harrat, Global Vice President of Indirect Procurement and Real Estate
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when consumers go and sign up to get a new phone. They choose the operator, pre-paid or postpaid plan, make a choice about what sort of store or retailer experience they want to have, online or through a call center,” he continues. “At Brightstar, we use algorithms to train statistical models to make predictions about what an individual customer is likely to do so that retailers can understand and navigate all these nuances and reap the dividends.” Procurement innovation Its vision to make mobile technology accessible to all is fully underpinned by its procurement division, where it has transformed outdated business models to drive a fully integrated, end-to-end customer service. “We are not solely focused on indirect procurement, it is about supporting the business to operate wherever possible. From computers,
to software and office supplies and anything else of that nature – it is important to have an impact. “The money we save by getting the best vendor not only helps us save money and improve our profitability, but we also get to find the best vendor for our clients.” Internal cross-collaboration Looking at further areas of potential, Brightstar will continue working to provide exceptional value by launching innovative and products and services for employees. Its decision to centralize its use of travel agencies to one travel management company which will work across its global functions, is one such example. “With the development of an expense management tool, not only did we reduce our costs and increase compliance as a result, but we reduced thousands of hours spent completing expense reports by scanning receipts that were taped to a piece of paper,” says Harrat. Another important aspect of internal collaboration is working with champions.
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“The key is to work with ‘champions,’” cost, but also for procurement to “These are the experts and final users of bring its added value in becoming the services and/or products we need to more strategic in the way we spend buy,” Harrat continues. “Involving them our money and in our collaboration at an early stage helps us understand with the business,” explains Harrat. our requirements, the market and key The implementation of a new contract players. Then, it’s the communication management system, in addition to about the benefits for compliance and reshaping the approval process, has the benefits for our employees. provided Brightstar the ability to “We also benefit from retain all of its agreements, the expertise of our which will work to support shareholders, both its procurement some of whom are and legal teams. real technology “It makes us aware Brightstar was visionaries.” of the expiration established in Additionally, dates of these Brightstar promotes agreements, where we cross-collaboration can decide to renegotiate to enhance not only its or extend, avoid lapses in communication, but boosts services, and often use the same transparency across its divisions. master agreement,” reflects Harrat. Both the procurement and legal “The legal team is tremendously team consequently work in tandem, important for procurement in providing a number of advantages particular. Many companies make for the business at large. the mistake to think about vendor “Our internal approval process risk management through the value for contracts includes the business of a contract, when in fact it is not owner and our procurement and about the value – it’s the liability for the legal teams. This was initiated not company that is most important.” only to have a better control over
1997
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Strategic partnerships “’Partner’ is a very important word and it’s extremely hard to find vendors that have a long-term goal to work with you. For example, thankfully we consider Newmark Grubb Knight Frank a partner for our real estate transactions,” he says. “Real estate is probably the most collaborative category and the one commodity where a procurement team needs the help of its broker on projects that can take many months to complete. Our relationship is global and goes from disposition of asset(s) to leasing
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new space or even subleasing existing space. They have access to our existing portfolio and help us with market information and how to anticipate and make the best decision for our locations globally.” Untapped potential Furthermore, Brightstar’s strategic sourcing capabilities have enabled it to reinvest increased capital, which will provide further room for innovation. “When you become strategic and have opportunities that show real value, you are empowered to
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transform the way you source your products,” comments Harrat. “For example, you can’t get by for long with day-to-day buying without visibility. As a result, all of our IT teams across six continents buy computers through a single portal. Using consistent hardware and ordering processes saves our IT team a significant amount of time.” The rise of platforms from other industries will also motivate Brightstar to seamlessly deliver products and services which consumers want. “The rise of Amazon is a clear sign of the way people buy and how smooth that process should be for employees purchasing what they need for their respective offices,” observes Harrat. “It should be easy, user-friendly and the internal approval process should be managed on the back end for managers to quickly and easily approve or disapprove purchase requests. We are looking for a platform, but what we’ve seen so
far is that providers are US-centric and not global, which will not work for a company as international as Brightstar, so we will continue looking.” On the business development side, the company views untapped potential in countries such as India, China, Pakistan, Indonesia and Bangladesh, as well as Sub-Saharan Africa and Latin America, where it can gain a further foothold. Nonetheless, by taking full advantage of its global reach, the company is now able to anticipate issues which may be emerging in one region that have already been addressed in another. This will no doubt provide a competitive advantage to Brightstar. Fully enhancing the value of its services, and ensuring its products remain tailored to respective markets at affordable prices, will ensure Brightstar succeeds in its long-term vision to provide accessibility for all, both now and in the future.
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FROM
SOURCE
TO STORE
A company that undertakes the shipping of raw materials and finished products around the world for global manufacturers needs creativity and a culture of analytics. Here is a look at the process OIA Global CIO Jay Hemmady has developed within a company that offers clients a unique combination of global logistics, packaging and materials sourcing solutions Written by John O’Hanlon Produced by Andy Turner
OIA GLOBAL
O
IA Global was founded in 1988 as Oregon International Air Freight. Today the company is a reflection of its success over the last 30 years in meeting the demands of industry for sophisticated logistical services. With over 1,200 professionals in 64 offices in 28 countries, OIA designs innovative solutions that optimise supply chains around the world. Household names in the global footwear, agri-industrial, healthcare, automotive, fashion, retail and athletic sectors outsource their supply chain functions, in whole or in part, to OIA. OIA’s three main lines of business are freight forwarding, third-party logistics (3PL), and distribution. The first of these consists in arranging the collection and delivery of containers using air cargo or ocean cargo and extends to the paperwork and processing requirements for customs, all noncore functions for manufacturers and retailers alike. The distribution division, a vital part of the supply chain, comprises warehousing, cross-docking, and ecommerce fulfillment. Increasingly though, companies that develop IP, design and manufacture goods in different parts of the world – like car makers or footwear brands – look for partners that can take all of the supply chain burdens off their shoulders, from raw materials right through to the customer’s door. A 3PL company like OIA may procure the raw materials for their factories, ship them to the factory, design the packaging the final product is sold in, and deliver
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“WE MOVED INTO THE CLOUD IN A BIG WAY” – Jay Hemmady, CIO, OIA Global w w w. s u p p l y c h a i n d i g i t a l . c o m
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“THIS YEAR WE SET FUNDS ASIDE TO TAKE ANALYTICS TO THE NEXT LEVEL” the packaging to the factories. The client puts packaged goods into an outer carton that goes onto a pallet, and these are assembled into a cargo container, shipped to the destination country, ‘de-consolidated’ and sent to local warehouses for distribution. All of this is handled by OIA on its customer’s behalf. This saves the manufacturer from finding carriers for the goods it
Jay Hemmady | CIO In 2015 Jay Hemmady joined OIA as Chief Information Officer with responsibility for the company’s global information services, network and related technology. Prior to joining OIA, he served as a Senior Business Consultant helping a variety of West Coast Fortune 1000 organisations with technology strategies and implementation. Hemmady earned his technical and consulting credentials at EDS (now part of HP) and holds an MBA in Finance and a Bachelor’s in Electrical Engineering.
produces: and in any case the carriers, whether shipping lines or airlines, don’t want to do the consolidation and de-consolidation work once they have landed the container at its port of destination. For manufacturer, carrier and 3PL provider alike this is a virtuous circle – because of the volumes it handles, OIA can obtain bulk rates that give the client a much lower cost to market.
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Managing the data and the volume of units involved is the work of IT. Three years ago, OIA appointed Jay Hemmady as its CIO, giving him the brief of optimising its digital platforms to meet the realities of the present and future supply chain. “We have to find ways to stay ahead of the industry and these changes,” he says. “As CIO my fundamental responsibility is to keep the IT systems up – to ‘keep the lights on and the trains running’. But at the strategic level we are moving fast into the realm of information and data, and using it to give a reliable service to our clients. In all three of our main business segments I am responsible for maintaining the information systems that ensure there will be no disruption in their supply chain.” The business OIA does with footwear clients is now 100% electronically executed. Footwear factories place orders on OIA’s self-service portal and all further transactions involving transportation of raw materials into that factory, and of finished goods out from it, are handled in the same way. Three years ago, Hemmady came into a
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company that was anxious about IT, not understanding the important job it was doing in keeping the systems up and running, let alone trusting it to lead the way into new territory. “There is a movement away from the old ways to a new way of doing business, and as CIO I have to be on top of that. For example, when I came on board there was a certain fear of developing custom software applications.” The company had had a belief that the way forward lay in commercial off the shelf packages (COTS). But being available generally, these give no competitive advantage, Hemmady says. He had to encourage the leadership that developing business critical platforms in-house would be a good idea but before that, he needed to show the business at large that IT was already doing a good job for it. “For any CIOs the key is to keep the lights on and the trains running. If they don’t get that right, they don’t get the chance to do anything strategic.” In the first year, Hemmady set out to improve visibility into projects and the performance of his department. “We began to
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“THE WHOLE NOTION OF GOING TO THE CLOUD BECAME A MUCH SIMPLER DISCUSSION BECAUSE THEY FELT COMFORTABLE AND THEY HAD CONFIDENCE THAT WE CAN DELIVER WHAT WE PROMISED AND THAT IT WOULD WORK” – Jay Hemmady, CIO, OIA Global communicate and provide status updates more frequently and candidly. That took up a lot of time. Instead of updating the executives quarterly we started doing it with all stakeholders weekly. There was so much to communicate, and more frequently,
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that it required the IT staff to shift gears and speed up considerably, but the benefits were enormous.” The result? The mindset in the user community quickly changed. The relationship improved, and an appreciation for IT materialised. More
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importantly, there was much more for new customers, giving them the collaboration between IT and the supply chain and inventory visibility business units. “For example, the they require,” Hemmady adds. notion of going to the cloud became Over the development period, a much simpler discussion because the spadework of development they felt comfortable and they had was gradually distributed between confidence that we can deliver what the USA, UK, Ukraine and India. we promised and that it would work,” “In addition to delivering software Hemmady says. “The exercise also development, I was able to encourage gave us the confidence to expand us to look offshore with a twofold the use of agile scrum purpose. One is to decrease methodology across the the time to market by board and increase the using the timezones degree of software effectively, and the development other one, of course, initiatives.” is the lower cost Nevertheless, until of ownership.” For Number of employees the first product freight forwarding, at OIA Global was launched, even his teams are the board remained now developing OIA anxious. After a year of Connect, another selfphased development and release service portal that allows OIA to OptiLink, the self-service supply chain present its own and its clients’ data portal on which OIA customers now on a single web portal. “Freight place their orders, was launched forwarding, for example, represents without a glitch. It has since replaced a significant portion of our revenue two of five difficult to upgrade and and profit is operational on a package costly to maintain legacy systems called CargoWise One from the and on a roadmap to retire the rest. Australian application software “We can now easily deploy OptiLink specialist Wisetech Global.”
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OIA Global: Logistics Solutions, Creatively Packaged
Another thing that made the business leaders nervous was the idea of moving data and systems from data centres controlled by OIA into the cloud. But Hemmady was able to convince the CEO that this would not jeopardise the company’s IP and information. “We moved into the cloud in a big way. We have not finished the journey,” he elaborates. “We still have equipment that has not fully depreciated that is still in our
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data centre. We are not reluctant to move everything to the cloud, but it makes economic sense to use both modes for now. We will think twice about buying new servers from here on in.” Going into the cloud is straightforward, he continues: “We signed up with the Microsoft Azure cloud, which provides all the tools and training you require. Though OptiLink is currently running in our data centre, it was migrated to the Azure cloud and proven out so we know it will works there. We haven’t decided yet whether or when we will make that the primary computing platform.” For now, the company continues to store its data at Atmosera, a co-location data centre at Beaverton, Oregon. “We have racks and equipment in there that we manage. Before the advent of the cloud, companies like Atmosera were the best way to make use of third party colocation centres.” On the distribution end of the supply chain, OIA has been using the Softeon warehouse management system (WMS). “It’s a sophisticated and advanced application package that allows us to run our ecommerce
U SA
warehouses,” says Hemmady. The software is robust enough to span over a variety of industries. Modules built into the WMS such as its slotting and loading functionality help add value for many clients. Even more importantly, it provides visibility in a high-churn environment. Companies need to know what is in the warehouses so they can control their manufacturing timing and demand forecasting. In a fast-moving warehouse, knowing how many things you have available is not a simple task. “We are now in a position to give our clients on-hand inventory details from moment to moment,” Hemmady adds. “Companies are trying to minimise their cost of manufacturing
and inventory is a cost to business.” BI Analytics is one of the bigger initiatives for Hemmady and his teams in 2018. “We give our clients a spectrum of business intelligence (BI) graphics but we have not looked at the evolution of BI analytics in a strategic way, so this year we set funds aside to take analytics to the next level. We are looking holistically at the whole data model of freight forwarding, warehousing and the supply chain sector. We want to start looking at the data and the patterns to predict what is coming in the future. Trend analysis and other things is what the customer is looking for these days. We understand that and will be giving them that in the very near future.”
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Procurement amidst a blockade: Qatar Airways is in it for the long-haul Written by Laura Mullan Produced by Heykel Ouni
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Q ATA R A I R WAY S
Against the backdrop of the blockade, Qatar Airways’ trailblazing procurement strategy is helping to deliver a flight experience like no other
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aking off from runways across all six continents, the burgundy logo of Qatar Airways has become synonymous with luxury, excellence and customer service. The Doha-based firm has tirelessly earned its stripes as a five-star airline, gaining accolades for its service time and time again, but perhaps the most distinguishing feature of the Qatari airline is the pride its staff reserve for the company. “Before being a buyer, we are an ambassador of our brand,” says Mr. Liazid Benkoussa, Senior Vice President of Procurement and Logistics – and perhaps it is this belief which is helping the company raise the bar in procurement. Today, procurement is a pressurised discipline to be in, with departments
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under ever-increasing pressure to reduce costs and sustain genuine supplier relationships. However, the pressure is perhaps tenfold for the team at Qatar Airways. Overcoming the blockade It’s been nine months since four of its Gulf neighbours – Saudi Arabia, UAE, Bahrain and Egypt – imposed a blockade on Qatar, posing a challenge quite like no other for businesses across the country.
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“Before being a buyer, we are an ambassador of our brand� Liazid Benkoussa, Senior Vice President of Procurement and Logistics
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Despite this, Qatar Airways has deftly tackled the upheaval and, in doing so, it has demonstrated the talent, expertise, and resolve of its staff. “The blockade has definitely had an impact on us,” notes Benkoussa candidly. “It currently prevents people from having the luxury and the freedom to choose the airline they want to travel with. We would like to enable any kind of client to experience Qatar Airways no matter where they are living. “The blockade not only affects our clientele, it also has a huge impact on procurement activity because we had some key suppliers based in those countries,” he continues. “Fortunately, we’ve been able to work with our suppliers to mitigate this. “We were proactive. We asked our suppliers to change their company registration or asked their sister companies, based elsewhere, to procure the product and this was done very efficiently.” The airline also closely monitored its inventory to ensure that all
Qatar Airways in one of the only airlines worldwide to have earned a 5-star rating by Skytrax
the equipment needed for its economy class, business class and first-class operations was available and it is this proactive approach which has shielded the company from major disruptions. “It was very challenging but it’s with great pride that I can tell you that none of our flights departed without the original Qatar Airways products that we requested,” Benkoussa adds. In the dynamic city of Doha, the blockade may have seen an insurmountable challenge to
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“The blockade not only affects our clientele, it also has a huge impact on procurement activity because we have some key suppliers based in those countries. Fortunately, we’ve been able to work with our suppliers to mitigate this” Liazid Benkoussa, Senior Vice President of Procurement and Logistics
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Voted Airline of the Year by Skytrax in 2011, 2012, 2015 and most recently in 2017 overcome, but it is possible, and Qatar Airways made it happen. Procurement: A critical function In fact, the firm actually used this event as a catalyst to accelerate its existing five-year plan. Where it may have taken other airlines a few weeks or months to recognise the urgent need to adapt, Qatar Airways wasted no time in launching new and far-reaching routes to Turkey, Russia, Oman, Thailand and the Czech Republic, amongst others. After overcoming such mammoth hurdles, it’s clear that the importance of the company’s procurement
function cannot be underestimated. “It’s really linked to the vision of our Group Chief Executive, His Excellency Mr. Akbar Al Baker,” Benkoussa explains. “He has the drive to innovate and evolve our products, but he is also a businessman. “Therefore, he asked himself, ‘how can I upgrade my product, whilst also maintaining cost-efficiency for both the airline and its board members?’ “There’s only one department that can do that, and that’s group procurement. That’s why it’s so important.” Accelerating growth As the national carrier of the State of Qatar, the firm has undergone rapid expansion in recent years, proudly standing as one of the world’s fastest-growing airlines. “I work for an airline that is one of the rarest in the world as it has consistently grown in the market,” says Benkoussa proudly, and it’s clear to see why. The national airline has consistently strengthened its fleet with new
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Video: Qatar Airways Airbus A350-1000 delivery from Toulouse to Doha
acquisitions and it was the launch customer for the coveted Airbus A350-900 and most recently A3501000. Qatar Airways was the first airline to operate the Boeing 787 in the Middle East, is a launch customer for the 777X, and has twenty 737 MAX airplanes on order. In 2016 the airline placed a record $11.7 billion order with Boeing for 30 B787-9 Dreamliners and 10 777-300ERs. This is not only indicative of the company’s growth, but also of its reputation and standing within the aviation community. “Qatar Airways is not only growing in terms of aircraft acquisition,”
adds Benkoussa, “it is also growing in terms of network.” Consolidated, digital procurement As you would expect, this accelerated growth has also had a knock-on effect on the company’s procurement strategy. Today, the Qatari airline has consolidated all its entities and subsidiaries into one procurement group which allowed it to order mass volumes of product and secure competitive prices for the organisation. What’s more, it is also leveraging modern technologies
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to prepare its procurement function for the digital age. “We are in the process of migrating to SAP Ariba,” Benkoussa says. “This procurement system will give endusers within Qatar Airways access to their contracts, their data, and the volume of product they need to target on a monthly or yearly basis. It’s a fully-automated and innovative procurement tool which will definitely enhance our process.
“Qatar Airways is not only growing in terms of aircraft acquisition, it is also growing in terms of networking” Liazid Benkoussa, Senior Vice President of Procurement and Logistics “It’s also important to bear in mind that we are the only airline that will introduce such consolidated IT tools in the aviation industry,” he adds. “How do I know that? Because SAP Ariba is conducting this exercise for the first time with Qatar Airways.” Close supplier relationships However, aside from this, the key to the company’s procurement transformation perhaps lies in the way it creates sincere and genuine relationships with its suppliers. Ensuring consistent communication and setting ambitious KPIs for
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its vendors, sustaining supplier connections is definitely high on the agenda for the Qatari airline. When customer experience is at the cornerstone of its operations, it’s clear that Qatar Airways can’t accept anything less than the best for its customers. “We are meeting the clientele’s demand and supporting group procurement by interacting with our suppliers in a much deeper and professional way,” says Benkoussa. “But it’s important that, when we’re developing these relationships, we clearly present and reflect
what a dynamic and innovative company Qatar Airways is. “It’s not possible to secure our cost-efficiency if you are unable to show the supplier the exact type of airline we represent,” he adds. “We need to be the sellers of Qatar Airways before being the buyer.” Fair, ethical practice Benkoussa also highlights how the national airline takes a fair but thorough approach to ensure that suppliers share the company’s ethical practices. As such, Qatar Airways takes a zero-tolerance approach
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to vendors who are associated with major issues such as child labour, environmental concerns, bribery and discrimination. “We wholly reject these kinds of unethical practices,” says Benkoussa. “We are very fair when we tender a supplier and don’t discriminate based on its location. We make sure we give suppliers the chance to introduce the best offer and best practices that they can for Qatar Airways.” Qatar Airways’ suppliers also recognise its underlying desire to innovate. By meeting its demands and developing new and exciting products, it is these relationships which are helping to propel the company forward, distinguishing it as a customerfocused, customer driven-airline. Q-Suite innovation None of the company’s products exemplifies this more so than its highly-anticipated Business Class Q-Suite. Debuting a year ago at the ITB travel trade show in Berlin, the
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pod-like suites promise more privacy, choice and personalisation to travellers. Benkoussa says that it’s products like the company’s Q-Suite which are helping to up the ante in the travel sector. “Although it’s in business-class, it is very much a first-class product,” he notes. “Qatar Airways is always enhancing and innovating the latest trends in the aviation industry and that is thanks to the relationship we have with the suppliers as well as the entire team at Qatar Airways.” Consistently trying to deliver high-quality whilst balancing a healthy finance book, Qatar Airways also ensures that its economy fliers also receive its renowned five-star treatment. Benkoussa says that this is clearly illustrated by the company’s new and improved economy class menu, which is going the extra mile for its customers. “We introduced cost-saving measures but we also upgraded the product itself,” explains Benkoussa. “The quantity will be upgraded and
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“We’re successful because the clients evolve, the clients demand more and Qatar Airways always listens” Liazid Benkoussa, Senior Vice President of Procurement and Logistics
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QATAR AIRWAYS OFFERS HIGHEST-GRADE FRESH NORWEGIAN SALMON
“We only provide the very best quality fresh Norwegian salmon sourced by family-run companies in Norway and smoked here in Qatar, to produce bespoke locally-smoked salmon for Qatar Airways customers and meet the airline’s exacting specifications.” ANDERS JENSEN, OCEAN FISH FACTORY MANAGER Ocean Fish uses fresh Norwegian salmon, flown on board Qatar Airways flights direct from Oslo to Doha, which is immediately transferred to the airline’s impressive chilled cargo facility by specialised temperaturecontrolled vehicles. Once delivered to Ocean Fish’s new Doha premises, the process to produce locally-smoked salmon begins. www.oceanfish.com.qa info@oceanfish.com.qa +974 44500333
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there will be 30% more food than any other airline in the world. “It will have more expensive items such as salmon and asparagus which is quite rare for economy class,” he continues. “We decided to dedicate a little bit more effort on our economy clients who decide to fly often with us and value our product. We respect them and so we decided to enhance the product for them.” When upholding positive
procurement practices or maintaining supplier relationships, all roads lead back to the customer, says Benkoussa. By putting customer service at the forefront of its vision, Qatar Airways has reinvented its procurement strategy and carved out a path as one of the leading airlines in the sector. Customer-focused, customer-driven Gaining countless awards for its cabin service and more, it is clear that the airline’s sincere, hands-on approach to its customers is what
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Hamad International Airport, Doha
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gives it a competitive edge. “You can see that the relationship between Qatar Airways and its own clientele is quite focused and attentive,” Benkoussa explains. “That’s the reason why we like to be innovative in order to gain our customers’ attention and make sure that Qatar Airways always exceeds their expectations.” Guaranteeing that it is meeting these high standards, Qatar Airways takes on internal and external audits to ensure there is no degradation of service and also consistently collects feedback from its customers. By evolving and adapting, the Qatari airline has side-stepped the series of hurdles in its path and cemented itself as a major player in the fiercely competitive airline sector. The latest chapter in Qatar Airways history is one which has been defined by the national blockade, but looking ahead to 2018, Benkoussa is optimistic about the company’s prosperous, dynamic future. “It would be very difficult for me to even consider working for another
airline after working for Qatar Airways,” says Benkoussa. “The demands and the expectations at the company are so high that I think it would be unsatisfying to work for another entity. “Qatar Airways will always have a prosperous future because this company truly understands the needs of the client,” he adds. “We evolve because we want to attract a wide demographic of customers – whether it’s economy, business or first-class travellers. No matter their profile, they are most welcome on the Qatar Airways to experience our five-star product. We’re successful because the clients evolve, the clients demand more and Qatar Airways always listens.” Against the backdrop of the blockade, the state of Qatar has proved that business is open as ever. The national airline has handled the situation with grit, innovation and dignity, and although the challenges are far from over, it seems that Qatar Airways is in it for the long haul.
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Israel’s
King of Paints Written by Catherine Sturman Produced by Heykel Ouni
Vice President of Procurement at Tambour
Arkadi Rosenberg speaks about the company’s bid to innovate amongst global competition while retaining a proud Israeli heritage
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he growth in competition and emergence of new technologies has led to the disruption of traditional industries on a global scale. It has become imperative for businesses to increasingly innovate and deliver exceptional customer experiences, whilst delivering further value within its products and services at every stage. One such industry is the humble paints and coatings market. With new competition entering the market each year, the industry is witnessing accelerated growth. It has been predicted that figures are set to rise from $150.64bn in 2017,
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to $209.36bn by 2022. Israeli based Tambour remains a leader in the industry. Commanding a global presence, it aims to have a significant influence in the markets which it serves, with a predominant focus on delivering exceptional services to its customers worldwide. “Tambour is a veteran and very traditional brand in Israel. It is so wellknown,that every single person that you will meet, if you say the word paint, they will immediately associate it with Tambour. Our greatest priority is maintaining the strength of our brand, which is terrifically strong,” explains Arkadi Rosenberg, Vice President of Procurement at Tambour. “In a consumer survey, more than 97% of people replied that it’s Tambour which comes to mind when they think about paint,” he says. “Our brand and products are preferred by most of the professionals in Israel, as well as consumers in the home.”
Competitive edge Despite its strong reputation, the company has not rested on its laurels.
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The paints and coating market is predicted to rise from $150.64bn in 2017, to $209.36bn by 2022
Aware that the demand for paints is continually rising, and with new competitors regularly entering the market, Tambour has worked to guarantee increased value across its products and services to cater to ever-changing customer demand. “We need to maintain our position and feed the customer need to be stronger, innovative, better, greener,” reflects Rosenberg. “. Most of our paints are waterbased and not the solvent-based paint from the past. We are always trying to be green and substitute raw materials
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which have low Volatile Organic Compounds (VOC) or zero VOC, so are friendlier to the environment. “To this end, we follow all regulations and instructions from Europe, as well as the local rules in Israel.”
A changing industry Procurement is an area which is particularly reshaping businesses, boosting communication on an internal and external level, and leading the acceleration of future growth. Tambour has recently undergone a procurement transformation of its own, which has seen the relocation of all its teams into one facility, providing a multitude of advantages. “Procurement is a very powerful organisation within the business, where we have the power to influence, particularly from the supplier side. We also have a great power to influence the success of a company, because procurement holds up to 60% of the company budget. Manufacturing companies hold at least 50% consumption of raw materials and packaging,” says Rosenberg.
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KRONOS Titanium Dioxide
Quality and Expertise since 1916 The KRONOS group is one of the world‘s leading manufacturers of titanium dioxide and has been operating as an international company for more than 100 years. The group owes its significant market position to the quality of its products, innovation, technical experience and reliable customer service around the world. KRONOS is certified to ISO 9001, ISO 14001, ISO 50001 and FSSC 22000. KRONOS INTERNATIONAL, Inc. • Leverkusen • Germany Tel. + 49 214 356-2656 • christoph.herminghaus@kronosww.com
KRONOS manufacturing sites are located in five countries on two continents, with European sites at Leverkusen and Nordenham/Germany, Fredrikstad Norway and Ghent/Belgium, and North American sites at Lake Charles, Louisiana/ USA, and Varennes, Quebec/Canada. The company has its own ilmenite mine in Hauge i Dalane/Norway, a key raw material in the sulphate process.
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Through its transformation, Tambour’s procurement processes have been revamped. Its ERP systems are now able to accommodate the scale of Tambour’s operations, as well as the volume of production. New systems to forecast volumes of raw materials and packaging materials have also been implemented, as well as a new system to manage its warehouses. “All of this will help us in procurement to be more efficient and – Arkadi Rosenberg, Vice President give better service to the operation of Procurement at Tambour division,” explains Rosenberg. “We are also using a new technology system to help us manage our relationships with suppliers worldwide. This means housing all our data on the cloud. We keep all data from our suppliers and logistic aspects on
“Tambour is a very traditional brand in Israel”
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‘New systems to predict the forecast of raw materials and packaging materials have been implemented, as well as a new system to manage its warehouses’ there, on top of meeting summaries, performance scorecards etc.” Although Tambour works with hundreds of suppliers worldwide, the company is keen to work with companies which can support, sell, produce or distribute chemicals across its operations, no matter its size. This will therefore enable the company to provide a platform for smaller producers, which will filter into the testing of its materials. “We have a very open conversation
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with suppliers and meet with them up to three times a year to discuss commercial issues, quality issues, but also the development of future business and exploring the basket of products that we are working with,” notes Rosenberg. “If you are strong and powerful, with a very clear vision, statements and rules that you are working with, and it’s transparent to all of your partners, customers or suppliers, you gain a lot of respect. “A month ago we launched a new system, which is helping us to manage our international transportation,” he continues. “It holds all the documentation needed, and differently from the past – we don’t need to sign the documents manually. We have a certification for digital signatures, so can sign documents online and our customs agents can see it online without the need for the original document.” Additionally, by investing in new technologies, Tambour has also steadily embraced automation across
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R&D operations inside a Tambour lab its operations. “For us as a veteran in the paint business, we are still housing traditional manufacturing processes, so this can be a complex process in terms of competition,” reflects Rosenberg. “However, in the last 10 years, we have definitely been steadily moving towards automation in this regard.”
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Providing transparency Whilst the subject of communication has historically remained a thorny issue for the procurement sector, centralising all information and becoming one core department under one roof has strengthened Tambour’s relationships, both internally and externally. “Everything is transparent. All required information about cargo arrival, missing
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materials, claims, etc., are all put into the new system,” comments Rosenberg. “The planning department is now able to see our updates through the ERP system. We are also performing meetings weekly with the planning department, the operations department, and the sales department. We exchange information not just about the business, but personal updates which is important.” All changes to the procurement team have been strengthened through the establishment of robust service level agreements (SLAs), highlighting what the team is responsible for, who to contact for certain enquiries and the times in which the team is available. Furthermore, as part of the management team at Tambour, Rosenberg attends weekly meetings with the management team to provide key information to discuss areas such as price fluctuation, deficiencies in stock, new products and ideas, amongst other areas of interest. “I also report at the beginning of the month
‘Although Tambour works with hundreds of suppliers worldwide, the company is keen to work with companies of all sizes which can support its operations’
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surrounding the previous month’s KPIs – what we did, what we succeeded to reach. But, most importantly, I do not hide negative information,” notes Rosenberg. “We believe that for Tambour, our team need to know exactly what’s going on, especially in the supply chain. I share this information with the management team, and our procurement managers share this information with their colleagues.”
Back to basics However, attracting talent is something which Rosenberg is particularly invested in on a personal level within Tambour’s procurement team. Interestingly, he expresses disinterest in employing those with extensive previous experience in procurement. Instead, he is keen to attract those with limited knowledge, or with experience from other fields, believing it to bring added value to Tambour’s mission to deliver exceptional services. “Most of my time I’m trying to invest in my employees because I think this is the most important thing in what I’m doing,” explains Rosenberg.
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“I prefer to hire people who have basic knowledge surrounding logistics. We are teaching, preparing and encouraging our employees to work in procurement with our methodology regarding how we treat suppliers, customers, colleagues and different divisions, which is very important. “I’m trying to identify unique people, give experience to employees and prefer that they come with different skills and experiences,” he continues. “For example, I have employees from sales an employees who came from the finance industry, chemists, international relations and administration. In order to be successful, you need to be unique. Our team is comprised of nine unique persons, from different generations, genders and backgrounds.”
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“Procurement is a very powerful organisation within the business, where we have the power to influence the success of a company” – Arkadi Rosenberg, Vice President of Procurement at Tambour
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Although the procurement team remains small at Tambour, with 10 individuals in total, Rosenberg has built a team which is significantly strategic. Incorporating two purchasing managers, the team is divided into two sub-groups (or teams) to provide services to most of the departments at Tambour. Whilst one team looks at finished products, the second looks after all spend across the business. “This can incorporate office products, catering, car leasing, telephones, procurements for marketing, sales, HR, IT, finance, laboratories etc. Within the core of the business, this can include raw materials, packaging materials, finished goods, produced finished goods, purchased finished goods etc.,” reflects Rosenberg. “The success of Tambour depends on our performance. And my people feel it with every single millimeter of their bodies that they have the chance to influence this. Every good performance is directly influencing the bottom line of the company.”
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Brand presence Working very much as a family unit, the procurement team at Tambour consistently supports one another despite ongoing challenges in such a dynamic market. “Such challenges are the euro and dollar rate exchange, as well as the market for materials, crude oil prices and energy prices, which are continually rising, to name a few,” comments Rosenberg. Nonetheless, the strength of Tambour remains strong, where people connect the brand to quality and employee satisfaction. “Despite a lot of previous owners, we remain an Israeli company, which makes us unique,” concludes Rosenberg. “Even if we are selling globally and have facilities in other parts of the world, we will continue to retain this original Israeli asset now and in the future.”
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Inside a Tambour plaster factory
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Generating procurement power in the Middle East Das Holding is building and developing its procurement proficiency, at the same time growing the profile of the industry in the region Written by DALE BENTON Produced by HEYKEL OUNI
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industry in the Middle East is growing at an exponential rate. Historically, as a function, procurement across the region has significantly lagged behind many of the leading industries across the world but, as Sam Achampong, Regional Head – Middle East and North Africa (MENA), The Chartered Institute of Procurement & Supply (CIPS) believes, the tide is beginning to turn. “A larger number of experienced professionals are being put at the top of procurement functions to start filtering down and embedding best practice across all their staff and all their functions and the way they do things,” he says. “That’s what’s happening exponentially across the Middle East and if it continues to happen then I firmly believe that the region will become the centre of excellence for procurement.” One such example of this is Das Holding. In 2014, as part of the DAS Group of Companies, it embarked on a journey of centralising its procurement function and services within the Middle East. This journey was driven 148
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by one clear vision – to become the leading UAE holding company and the preferred partner of choice for institutional investors, governments and multinational corporations. Overseeing this journey is Christopher Bentley, Head of Procurement at Das Holding. “I have a procurement mission,” he says, “to support Das Holding’ business vision by delivering a preferred, dynamic and strategically aligned procurement service. One that will work closely with the company’s business units to
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optimise cost space and provide department charter, designed to a sustainable, competitive advantage analyse the market to find best practice in every aspect of its local business.” in order to deliver sustainable, compAs the company looks to build a etitive advantage through a process of mature, leading edge procurement continuous improvement. function, doing so in a market that is But how does this translate into the still growing in its proficiency and day to day operation? capabilities is not without its challenges. “We adopt an adherence to a one Bentley recognises this and looks to team, no barriers policy,” says Bentley. break down the overarching vision to “One that will practically involve a global be the leading holdings company across supply base and be based on leading the UAE, recognising and extracting just edge technology, coordination of supply how procurement can support this. decisions and the application of global This saw the forming of a procurement supply chain processes.” w w w. s u p p l y c h a i n d i g i t a l . c o m
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LEADING GLOBAL EXCELLENCE IN PROCUREMENT AND SUPPLY CIPS, THE CHARTERED INSTITUTE OF PROCUREMENT & SUPPLY, IS…
CIPS CLIENTS IN MENA INCLUDE:
THE PROFESSIONAL BODY A not-for-profit organisation that exists for the public good, promoting and developing high standards of skill, ability and integrity among procurement and supply chain professionals.
QUALITY GUARANTEED CIPS qualifications are recognised by regulators across the world, including the Knowledge and Human Development Authority (KHDA) in Dubai, demonstrating that they meet specific quality standards.
THE GLOBAL STANDARD CIPS Global Standard in Procurement and Supply sets the benchmark for what good looks like in the profession.
A COMMERCIAL ORGANISATION CIPS helps businesses and governments around the world to excel in procurement and supply, supporting them to improve and deliver results and raise standards.
A GLOBAL COMMUNITY We are the world’s largest professional body dedicated to procurement and supply with a community of over 200,000 professionals in over 150 countries, and offices in Africa, Asia, Australia, the Middle East, Europe and the USA.
WWW.CIPS.ORG | MENA.ENQUIRIES@CIPS.ORG
GEBAL GROUP L.L.C gebalgroup
Est. 1978
gebalgroup
www.gebalgroup.com
All of which, of course, while ensuring the ongoing support of Das Holding’s business units. This is where Bentley feels his particular way of working can truly generate added value along this journey. “It would be easy to sit in a position at the top and bark out procedures and policies,” he says. “But I don’t work that way. I like to open myself up to our staff and I want procurement to work in a way that is able to look at key objectives, analyse our performance and understand where we can improve and grow. And I’m right there with 152
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sales@gebalgroup.com
Abu Dhabi \ Dubai \ Oman
them in the trenches.” An organisation can only thrive and succeed through its workforce. Das Holding as an organisation is a firm believer in empowering its employees, empowered employees that will contribute to the exponential growth of the company. Bentley is a firm believer in this, ensuring that all members of his team feel a part of the process by asking them simple questions. Where are we going? How are we going to get there? What part will you play? How can you make a difference?
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The value of this approach, for Bentley, “ I have a procurement is second to none. mission to support “Das Holding promotes a selfDas Holding’ business rewarding mentality, so that when an vision by delivering employee gets paid at the end of the a preferred, dyna mic month they can really see where they and str ategically earned that and how they played a key aligned procurement part in our growth,” he says. service. One that will “My door is always open, but I work closely with encourage them to push themselves, the company’s business and if there is an issue then we work units to optimised cost collab-oratively to locate and remove space and to provide that pain point, and to me the results a sustainable, competitive of this mentality and approach speak advantage in every aspect for themselves.” of its local business” This approach is one that Bentley – Christopher Bentley, Head of Procurement, DAS Holding practices, and does not just preach. In 2017, he was awarded fellowship from CIPS, being fast-tracked as a result of the work he has done to grow the and more opportunities to grow, procurement profession. Das Holding has been recognised “Receiving fellowship not only pushed as a reputable, market leader in the me to develop my own capabilities, it procurement space. exposed my procurement team to much In supply and procurement, you are more,” he says. “A whole new skills only as good as your suppliers and cabinet, one that has enabled us to grow vendors and the partners that you and develop our staff far beyond what work with. For Das Holding, this was we ever could achieve without it.” one of the very first things it looked to This was a process that worked both ensure in creating a reputable ways – as Bentley was exposed to more procurement function. w w w. s u p p l y c h a i n d i g i t a l . c o m
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Christopher Bentley, Head of Procurement, DAS Holding The company rates its suppliers through five different categories: Alliance Partner, Preferred, Approved, Conditional and Eliminate. This is decided through conversations with the procurement arm that discusses the business relationship, the value and the capabilities and efficiencies that partner can bring. “So, you look at the business 154
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relationship this supplier has with me and DAS,” says Bentley, “and then you break it down further. That supplier has to be the first choice for new business, so what can we do to enable that? This model allows us as a business to be wholly central, to have full control where possible in order to create an efficient procurement supplier model.”
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For Bentley, this model “revolutionised” “ Das Holding promotes a selfthe way DAS operates through procure- rewarding mentality, so that ment overnight. It improved relationships when an employee gets paid at the end of the month they can and generated cost savings and truly enhanced the reputation that DAS was really see where they earned that and how they played a key already establishing. part in our growth” In the four years since Das Holding embarked on this journey, the company – Christopher Bentley, Head of Procurement, DAS Holding has already come a long way in its quest to be a procurement partner of w w w. s u p p l y c h a i n d i g i t a l . c o m
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choice. Through the way it engages with its suppliers, Das Holding has played in a key role not only in the development of its own procurement, but supporting the development of the procurement industry across the region. Das Holding works with suppliers through open, transparent communication. “We invite them into the office and we talk about a number of things,” says Bentley. “What’s going on in the market? What’s happening to the local economy? How are you
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using that to shape how you work as our partner? “Increasing that transparency makes a better relationship. We are recognising their achievements, their attitudes and their capabilities as they grow our business and the wider market.” It is this approach to suppliers, and to the procurement industry, that makes Das Holding a key player in the maturing market as recognised by Achampong of CIPS. “As a procurement player, Das
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Holding really are an example of what procurement in this region can be,” he says. “In Chris, the company has hired an experienced and professional to setup a function, professionalise and grow the competency of that function and then instil best practice across the organisation.” Achampong feels that it’s an exciting time for procurement across the Middle East. “Expand that across the region and that’s exactly what’s happening,” he
continues. “Experienced leaders are working at the top of procurement functions and filtering down and embedding best practice across the industry. “That’s really what’s happening exponentially across that region and if it continues to happen, it really will be a procurement centre of excellence in no time at all.”
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Propelled by procurement Inside Flybe’s supply chain overhaul
Written by Catherine Sturman Produced by Richard Durrant
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lying from more UK airports than any other regional airline, Flybe offers a customerfocused, cost-effective and time-saving advantage over its competitors. The company has undergone a significant transformation to become the airline of choice. Recognising the growing importance of procurement across its operations, Director of Procurement & Finance Business Partnering, Richard Young has streamlined Flybe’s internal processes to become more seamless and deliver increased value to its customers. Responsible for engagements relating to all commercial and contracting matters with external suppliers, Young has undertaken a thorough overhaul of Flybe’s direct and indirect spend, including its aircraft fleet acquisitions, disposal and financing activities. Driving efficiencies Young has spearheaded transformational change across the procurement department, helping to
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Flybe’s fleet consists of 81 aircraft
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ensure its position as an increasingly pivotal participant in key strategic decisions made by the business. “We’ve undergone quite significant transformation, a part of which has been to centralise procurement. It’s moved away from individual departments doing their own buying to a much more strategic function. We are now involved in all activities relating to supplier expenditure, be it IT or marketing, engineering or maintenance, becoming a business partner to all our internal stakeholders. “We support all departments to improve security of supply and drive better value,” he continues. “We’ve also organised ourselves in a category management structure, where individual procurement team members are accountable for chosen areas of spend. Their specialist knowledge adds value that makes a more effective procurement experience for our business owners.” As a result, Flybe has gained increased clarity across its procurement functions, enhanced its knowledge and capabilities and delivered significant cost reductions across the business. “Technology has really been at the heart of these changes, and it’s been an enabler to help us improve delivery,” says Young.
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Technological capabilities The company’s three-year transformation has impacted all areas of the business. Throughout its ‘Back to Basics’ project, Flybe enhanced its back-office capabilities, focusing on three main areas – finance, HR and procurement functions. “Driving out cost was only part of the motivation,” notes Young. “One of the key aims was also to improve
governance and compliance and improve the general quality and availability of data that, in turn, would better support decision making.” As such, the overhaul of Flybe’s centralised procurement systems has been a key part in contributing towards an improvement in sustainable business processes. “In actioning these improvements, we conducted a comprehensive
“Technology has really been at the heart of these changes, and it’s been an enabler to help us improve delivery” RICHARD YOUNG, Director of Procurement & Finance Business Partnering, Flybe
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sourcing process involving a Request For Information (RFI) and a Request For Proposal (RFP), looking at both integrated enterprise resource planning solutions as well as best of breed systems with the added need for them to be integrated with one another,” explains Young. “We elected to go down the last best of breed route as we felt that presented a better
overall fit for our business.” In the procurement area, investing in Wax Digital’s web3 source to pay (S2P) solution has enabled Flybe to gain meaningful cost savings, streamline sourcing and purchasing processes whilst establishing improved governance and controls relating to supplier engagement. “We have also invested in Cleardata’s off site invoice
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Flying high with Sage Business Cloud Why Europe’s largest regional airline designed its business transformation with Sage Business Cloud Enterprise Management at its heart When Flybe launched its ‘Back to Basics’ initiative, the quest to build a fully integrated solution using best-of-breed technology for finance, HR and procurement led to the airline adopting Sage Business Cloud Enterprise Management (formerly Sage X3). “The ultimate goal was more visibility and control by refining and redesigning how we did things across the business,” says Flybe’s finance systems manager, Matt Julyan. “We wanted to make things faster, more efficient and eliminate any potential failure points in our procedures.” To accomplish this, Flybe designed an integrated network of best-of-breed business software solutions, including web3, AMOS, Airpas and iTrent, with Sage Business Cloud Enterprise Management’s finance capabilities at the heart of these interconnected solutions. “Sage is at the core of our system’s design,” Matt says. “It monitors the financial performance of everything we do, so any interconnecting software has to work with Sage.” Supported by the real-time data integration solution Talend, Flybe has created a platform that integrates with industry-specific functionality from a carefully selected range of software – including Sage’s enterprise management.
A platform for progress Placing Sage’s enterprise management solution at the centre of its system provides Flybe with numerous benefits, including the ability to introduce best-practice financial processes. “Sage’s finance functions are built around industry best practice,” adds Matt. “We are now planning to improve, and Sage will be a valued partner to help us on this
journey so our employees can really see how much it benefits what they do.” This ties into Flybe’s aim of driving business-wide consistency and uniformity, as Matt explains: “One of our objectives was to implement a solution that could automate as many financial processes as possible to ensure process consistency. Where needed, the Sage system gave us effective controls to steer and limit those processes.” But the creation of Flybe’s Sage-centred system brings far more than a change of process for the airline. “It’s much more than a change of method,” Matt explains. “The usability of Sage Business Cloud Enterprise Management means employees are far more self-sufficient. “For example, we’ve now got the ability to create bespoke reports within Sage. People no longer have to rely on a specific person to do it for them.” And continuous business improvement is a core focus for Flybe, as Matt explains: “Where there are changes to the business, we have people dedicated to managing them. My team takes responsibility for making sure the finance system can deliver exactly what the business needs now and going forward.”
Partnering for success To ensure Flybe could achieve the aspirations of its ‘Back to Basics’ initiative, the company turned to its long-standing Sage Business Partner Datel to evaluate Sage Business Cloud Enterprise Management. The solution was selected as best-ofbreed for the financial element of the solution. From there, Flybe and Datel embarked on implementing the Sage software and integrating it with the other selected applications.
“Datel has been our Sage support partner for over 25 years,” Matt says. “We had built trust in them from previous experience and knew Datel could deliver what we wanted.” Flybe also decided to adopt Datel’s Managed Services offering to support the business in its focus on continual improvement. “Sage is such a core component for us, and it’s key for us to embrace the rich functionality and best business practice it offers,” says Matt. “Datel’s managed service is absolutely critical and gives us access to the expertise we need, allowing us to further develop our knowledge of the Sage software. We’ve become more self-sufficient and confident in Sage Business Cloud Enterprise Management thanks to the Datel team.”
The same partnership that supports Flybe’s Sage system also assisted with the integration into that system, as each solution constantly exchanges vast volumes of critical information, “Sage’s integration flexibility has been beneficial as we have designed interfaces to fit with the wider systems design,” says Matt. “Having a partner that understands and can implement Sage on that basis is proving to be very beneficial, especially given the complexities of a best of breed solution. “Datel’s support gives us the confidence we need to continue to improve our processes and drive business efficiency.”
Your industry. Our expertise.
Expert implementation, accomplished integration, dedicated support As the UK’s largest Sage Business Partner, Datel has the expertise and outreach to support your business wherever it goes and however it grows. And with a highly accredited technical support team, we’re dedicated to guiding your success with minimum disruption and maximum uptime. Datel is here to help you align your business operations with your business aspirations - powered by Sage Business Cloud.
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F LY B E Employee engagement is valued highly by Flybe
Flybe operates a fleet of 81 aircraft – 56 Bombardier Q400, nine Embraer E195, 11 E175 & 5 ATR 72s and was recognised as the most punctual UK-based airline in the latest report on ‘Best and Worst Airlines’ issued by leading consumer watchdog Which? in January 2018.
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processing solution to reduce on-premise invoice handling and also Sparefinder’s data tool to help standardise our non-aircraft materials and service master data.” Additionally, Flybe has invested in new technology in its HR areas, procuring iTrent from Midland HR along with a new Finance platform utilising Sage’s X3 software. Lastly, the decision to implement specialist airline aviation system AMOS (in the engineering maintenance arena) and Airpas to process direct operating cost transactions, will further enable operational efficiency. Young explains
CASE STUDY
Procurement automation takes off at Flybe Optimising spend, streamlining supplier management, reducing risk and ensuring best-value purchasing across the business; why Flybe has implemented Wax Digital web3 Source to Pay.
Integrated supplier master data All master supplier and contract data is hosted in web3, fully integrated with Flybe’s Sage X3 finance system Procurement time and cost savings An end-to-end electronic procurement process cuts manual workloads and administration costs Increased efficiency and output
Powering our source to pay processes with web3 brings around 2,000 vendors with an annual spend of several hundred million pounds under management. All our supplier and contract master data is managed in web3, fully integrated with Sage X3 and our airline-specific direct procurement systems such as Airpas and AMOS, so we’re now in total control of supplier data quality and risk management. We expect significant and ongoing cost savings for the business. Richard Young Director of Procurement and Finance Business Partnering, Flybe
Flybe is doing more with less, running sourcing events more frequently to identify cost savings for the business across a wider category set Improved compliance and risk mitigation Electronic supplier due diligence and on-boarding, with all supplier master data stored centrally, alleviates supply chain risk in a heavily regulated industry Enhanced supplier negotiations Using web3 Contract Management, automated alerts stop contracts rolling over so Flybe can renegotiate terms and prices to ensure suppliers continue to deliver great value Supporting strategic initiatives As part of a long-term aircraft fleet review, web3 drives efficiencies in purchasing process with manufacturers across the world
Hello. We are Wax Digital For the past 17 years we’ve been providing innovative procurement and spend management solutions to help organisations reduce costs, achieve greater efficiencies and improve spend compliance and control. Our web3 software is used in over 100 countries, with 260,000 users managing £23bn of spend annually.
Let’s talk about your next eProcurement project. Call us on 0333 323 1187 or visit waxdigital.com
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“We employ different sourcing strategies and test the market more frequently when looking at commodity products” RICHARD YOUNG, Director of Procurement & Finance Business Partnering, Flybe
that as part of the ‘Back to Basics’ project, all new systems are being integrated through the use of data extraction technology from Talend. “We’re now at the benefits realisation stage,” he says. “The majority of the systems are now implemented. We selected solutions based on a number of factors including functional and cultural fit, vendor flexibility and cultural alignment with Flybe’s core values.” Enhanced value The investment in technology and subsequent benefits
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has also transformed Flybe’s relationships with its suppliers. “We have relationships with over 2,000 suppliers, many of which are, of necessity, strategically long term when relating to the supply of mission critical goods and services,” notes Young. “For others, where there may be multiple supply options, we employ different sourcing strategies, testing the market more frequently when looking at commodity products like office supplies and IT hardware. “Being a publicly-listed company, it is critical that we adhere to agreed corporate governance and that the
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new technologies we have employed are paramount in achieving the overall compliance that is so necessary in managing and maintaining relationships with both new and existing suppliers,” he continues. “This allows us to mitigate any potential credit risks on the supply side whilst at the same time making the overall source to pay cycle more operationally efficient.” Customer focus With the General Data Protection Regulations set to become enforced within Europe in May,
how will this impact Flybe’s operations going forward? “This is mission critical to our business and we are taking it very seriously,” observes Young. “To ensure compliance, we continue to invest in talented people and technology across all relevant areas of our business to ensure that we have covered off all foreseeable eventualities. “We are also naturally monitoring Brexit developments closely,” he adds. “The most important thing for us is to receive clarity from the Government; however, we don’t fly
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point to point within mainland Europe, which means we are less exposed than others. “Of course, no one really knows truly what the impacts are going to be, but nevertheless, because we do operate in Europe it is something that we are preparing for.” Flybe would not be where it is today without the commitment of both its dedicated staff and loyal customer base. “We are passionate about the regional communities we connect and serving them is at the very heart of our business. This is our purpose – our mission,” concludes Young.
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Richard Young MCIPS, MBA, BA(hons), has over twenty years’ procurement and supply chain experience gained in a number of industrial and consumer facing businesses across manufacturing and service sectors. He started his career recruited onto the graduate management scheme of British Steel plc (latterly part of the Tata group), where he was quickly promoted and moved through the ranks being sponsored to complete an MBA at Warwick University. He spent several years in the third party logistics industry managing operations for Sainsbury, Pedigree Masterfoods and Nestle, before moving on to senior procurement leadership positions for Ideal Heating (formerly part of Caradon plc) and African Minerals, where he worked extensively overseas. He joined Flybe Group plc in 2014 where he has led the transformation of the procurement function having more recently taken on additional responsibility for property & estates, aircraft fleet financing & trading and finance business partnering. Married with two children, outside of work he enjoys cycling, hill walking, music and travel.
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REVO LUTI O NI real estate supply chains with a state-of-the-art supplier portal Written by Laura Mullan Produced by Richard Durrant
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Unveiling its trailblazing CBRE MySupplier platform, the real estate giant is set to meet the supply chain demands of the future
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ransforming the supply chain of the world’s largest real estate services company is no easy feat, but thanks to its innovative thinking and technological ingenuity CBRE is making it look easy. With acquisitions of Norland Managed Services and Johnson Controls GWS under its belt, the Californiabased company has undergone a mammoth supply chain transformation in recent years. Thanks to these purchases CBRE now offers a diverse range of real estate services which gives the firm the platform to not only guide businesses about how they should invest their money, but also how they should run a building – whether that means advising them on their space management or actually running the facilities for them. B E S P O K E S U P P LY C H A I N S Despite such far-reaching changes in its supply chain, one thing has remained the same at CBRE – its commitment to its customers. Anna Williams, EMEA Supplier Engagement Director, says that the
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ANNA WILLIAMS EMEA SUPPLIER EN GAG E M EN T D I R E C TO R
Williams has over 10 years’ experience in senior supply chain roles, spanning a number of industries including Facilities management, Rail, Pharmaceutical, Construction and Professional Services. In her eight years at CBRE, she has worked in different supply chain functions and currently oversees the Supplier Engagement and Compliance Programmes. In this role, she has designed and worked on the development of CBRE’s industryleading Supplier Portal, CBRE mySUPPLIER.
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COLLABORATION /kelabe’reijn/ noun
A purposeful relationship in which all parties strategically choose to cooperate in order to achieve shared or overlapping objectives.
The CBRE Combustion Partnership is a collaborative partnership comprising of CBRE and a group of their preferred suppliers and manufacturers, this ensures delivery of a consistently high standard of quality, innovation & value in all aspects of commercial gas and heating services to their client.
Delivering engineering excellence www.jdservicesltd.co.uk Info@jdservicesltd.co.uk Tel: +44 (0)1322 315588 JD Services (JDS) are specialists in the design, installation, commissioning, service and maintenance of air conditioning and Heating services. With expert advise and response to match any of your service requirements.
UKS
Keeping the Customer in Focus
Keeping the Customer in Focus www.uksouthservices.com Info@uksouthservices.com Tel: +44 (0)1252 549 272
UKS delivers its customers, a smooth and seamless experience from survey to job completion through our paperless management system. We oer responsive, dynamic, knowledgeable and tailored solutions to our customers through our Operations team.
Maintaining our excellent reputation within the service industry www.protech-heating.com Info@protech-heating.com Tel: +44 (0)141 771 9567 We specialise in high quality bespoke technical solutions, for all types of heating / water systems and complex boiler and burner applications delivered by a professional team focused on customer care and excellent client communication.
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company’s downstream business model is vital to this customer-centric ethos. By not centralising its procurement activities and offering bespoke supply chains to its customers, CBRE ensures that the spotlight is truly on its customers’ needs and wants. “I think what gives us a competitive edge is that we treat each supply chain as an individual organisation,” Williams explains. “We take our time to understand our supply chain. We make sure it fits within each of our client’s requirements and we offer bespoke supply chain partners rather than having a one-size-fits-all solution. “I think that helps us to create a worldclass solution for our clients and it also makes suppliers want to work with us because we recognise their core skills and competencies across
“I think what gives us a competitive edge is that we treat each supply chain as an individual organisation” A N N A WI LLIA MS, EMEA SUPPLIER EN GAG E M EN T D I R E C TO R
CBRE’s supply chain transformation has been a customer-focused one
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geographical areas and utilise them,” she adds. The real estate market is a fiercely competitive one, but CBRE distinguishes itself by also offering sector-specific solutions. “We operate across a wide range of sectors such as industrial, healthcare, life sciences, heritage, stadia and education,” notes Krys Stanton, Supply Chain Solutions Director. “Our strategy is to tailor the supply chain to the sector so that clients know they’re buying into a company which is not only a reputable brand but also understands the sectors that it’s operating in.” A DIVERSE R ANGE OF SUPPLIERS With both its global footprint and bottom line set to soar, the company has gained a well-earned reputation as a market leader in commercial, leasing, investment sales, and residential project managing. Such renowned success has come about for a culmination of reasons, but it can partially be traced to the way CBRE works with both large corporations and SMEs alike. “This means if the client has requirements to use local suppliers or diverse suppliers such as women-owned businesses. We can adapt the supply chain to make sure they’ll get what they want,” Williams says. “On the other hand, some clients may want to use international players, so we also adapt to that to ensure that we offer a
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R ACH EL LEE V P, G L O B A L S U P P LY C H A I N T R A N S F O R M AT I O N
Lee has over 30 years' experience in senior supply chain roles in the UK, New Zealand and Australia, spanning a number of industries including Facilities management, FMCG, Pharmaceutical, Retail, Manufacturing, Telecoms, IT and Airport management. In her 10 years at CBRE, she created the supply chain function from green fields, integrated key acquisitions, and established the supply chain team as a critical business partner. In this role, she has built an industry-leading approach to supply chain management which sets CBRE apart from its competitors in the FM market.
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solution tailored to the customer.” A L E A D I N G S U P P L I E R P O R TA L With a global spend in excess of $50bn provided by more than 85,000 global suppliers, delivering a revolutionary supply chain transformation was by no means a simple task. To take on such a mammoth function, CBRE looked to the marketplace to find a supplier portal which would help it streamline its operations and drive operational excellence. When it couldn’t find one, it made CBRE MySupplier. This digital tool isn’t an
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off-the shelf-package – it was specifically designed by CBRE, and it is this innovation which has been the cornerstone of the company’s supply chain journey. Whether it’s making the firm’s supply chain more transparent, encouraging supplier engagement or offering supplier feedback, it seems the leading compliance tool has elevated the firm to new heights. “Our supply chain strategy involves not consolidating or solely spending with big suppliers,” explains Rachel Lee, VP, Global Supply Chain Transformation. “We continue to use SMEs to fully support our local customers and that means we have a huge network of
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suppliers that we work with in Europe. We wouldn’t be able to manage such a large network without our supplier portal. This is a problem that many other companies have, and nobody’s solved it until now. “This means we’re putting decisionmaking back into the hands of our client teams rather than a centralised procurement function making the decisions,” she continues. “We’re giving business managers the tools they need to make the right decisions around which suppliers to use.” C O M M I T T E D TO C O M P L I A N C E Compliance is one of the most deeprooted challenges in the supply chain discipline today and with a broad footprint spanning across continents, CBRE has ensured this
“We build relationships with all suppliers, small, medium, or large. It's not a process, it's not SRM in its theoretical term, it's about how we deal with suppliers on a dayto-day basis. SRM to us is a real living and breathing philosophy that everybody is involved in, it's not just a process run by the procurement function, it's our dayto-day business” R ACH EL LEE, V P, G L O B A L S U P P LY C H A I N T R A N S F O R M AT I O N
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portal adapts to local language and legislation requirements. Already launched in the UK, the portal is now set to roll out in Europe, the Middle East, Africa and Russia (EMEAR) and by the end of this year, it will be linked to the company’s ERP system to ensure its supply chain is fully compliant. Going a step further than other portals in the market, CBRE MySupplier also acts as an engagement portal. It allows suppliers to understand CBRE as a business, who they need to contact to help with their business development and how they can attend CBRE’s renowned events. Transparency, engagement and feedback are just three ways in which CBRE MySupplier is helping the firm wholly transform its supply chain capabilities. The portal also provides suppliers with feedback to see if they
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are performing well, how they could improve, and how they compare to their market competitors. “Suppliers receive their performance rating and this allows them to see how they rank against other suppliers in their field or marketplace,” explains Lee. “It sets up a competitive environment. If a supplier wants to win more business in CBRE, they know what they need to do because they can see how they’re ranking against their competitors in our portal.” Contending with the ever-increasing pressure to achieve savings and sustain supplier relationships, the global property firm has taken a relationship-driven approach to its supply chain function. As a result, it has invested capital in creating a supplier engagement team, which is responsible for not only managing compliance but also managing relationships with CBRE’s suppliers. S U S TA I N I N G S U P P L I E R R E L AT I O N S H I P S Embedded in the company’s fabric
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is a commitment to developing deep and long-lasting relationships with vendors. Therefore, the team meets with suppliers at company events to keep them updated with the latest CBRE knowhow. “Supplier relationship management (SRM) is generally approached with large suppliers only because it takes quite a lot of investment from both sides,” explains Lee. “We take a different approach. We build relationships with all suppliers, small, medium, or large. It’s not a process, it’s not SRM in its theoretical term, it’s about how we deal with suppliers on a dayto-day basis. SRM to us is a real living and breathing philosophy that everybody is involved in – it’s not just a process run by the procurement function, it’s our day-to-day business.” CBRE’s technological ingenuity is exemplified by its leading supplier platform, CBRE MySupplier, and for
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Lee, Williams and Stanton, it is this genuine commitment to developing supplier relationships which gives the company a competitive edge and allows it to offer leading supply chain solutions to its clients. “We want to make sure our clients recognise that we’re a world-class supply chain function,” explains Williams. “We want clients to come to CBRE to outsource their real estate needs to us not just because of our own in-house
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capability, but also because of how we manage the supply chain on their behalf. Our supply chain has experienced growth with CBRE. From a supplier perspective, it’s been a positive journey. Even our small SME suppliers have come on a journey with us and as we grow through acquisition, we’re moving forward and upholding our best-in-class approach.”
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K R Y S S TA N T O N S U P P LY C H A I N S O L U T I O N S D I R E C TO R
Stanton joined CBRE in November 2013 as the Procurement Director for the UK Services Division and has recently been promoted to Supply Chain Solutions Director for UK and Ireland. He is responsible for defining and supporting the strategic development of the Procurement function within the business and is focused on four key priorities; developing downstream procurement capability, service quality, continuous client benefit and innovation. Stanton joined CBRE from another key FM provider where he led the Soft Services category management team and was responsible for delivering global procurement strategies that provided assurance and continuous improvement of client value. Previous roles include heading up the procurement function for a UK wide care sector business and managing M&E in the water industry.
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Tracey Ens Director of Procurement
LEVERAGING THE POWER OF PROCUREMENT TO THE STUDENT EXPERIENCE Embracing new digital tools, Laurier aims to remain ahead of the curve and deliver student-focused procurement solutions Written by Catherine Sturman Produced by Glen White
WILFRID LAURIER UNIVERSITY
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ith exchange agreements with more than 70 universities and 25 countries around the world, Laurier offers not only an intimate student experience, but global opportunity for its students. The student experience is one which continually drives Laurier to deliver essential student-focused solutions. Its excellent reputation has seen it ranked as number one in student satisfaction in Canada by the Maclean’s Ranking of Canadian Universities for the second year in a row, and second in experiential learning. Additionally, its students and alumni were ranked number one for volunteerism by LinkedIn in 2015, which is part of its core mission. But Buthow how does does procurement procurement come come into play into play across across its operations? its operations? Supporting more than 19,000 students, the procurement team has overhauled its traditional ways of working and implemented new digital tools to remain ahead of the curve. “We support the students in procurement by working with the faculties and departments, making sure they get what they need at the best possible value to facilitate teaching and research. Our students are the core of everything,� explains Director of Procurement, Tracey Ens. Joining Laurier in 2011, Ens has witnessed how the procurement function has changed, which
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“WE SUPPORT STUDENTS BY MAKING SURE THEY GET WHAT THEY NEED AND TO ADD THE BEST VALUE POSSIBLE. OUR STUDENTS ARE THE CORE OF EVERYTHING” – Tracey Ens, Director of Procurement
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Tracey Ens Director of Procurement
Tracey Ens joined Wilfrid Laurier University in 2011 and is currently the Director of Procurement after spending 10 years at the University of Waterloo as a Senior Research Buyer. Prior to entering this sector, she spent six years as a Production Controller in manufacturing. Ens recently stepped down as President of the Ontario University Procurement Management Association and currently serves as Past President. She is an active member in the Canadian Association of University Business Officers. Ens holds a Bachelor of Theology Degree and a Bachelor of Arts degree in History from the University of Waterloo and has obtained her Certified Supply Chain Management Professional Designation in Canada and the Certified Professional in Supply Chain Designation in the United States. In her free time, she is active in sports including skiing, scuba diving, crossfit and is learning golf and tennis.
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has been revolutionised through contract value over $100,000. the use of new technologies. Nonetheless, the establishment “It’s in the last five years that of Ontario’s Broader Public Sector procurement has shown that we Accountability Act in 2010 provided deserve to be at the table. I think ample opportunity for Ens to deliver what’s really driven that entire key direction within procurement, entity is technology,” she says. whilst strengthening relationships “When I arrived, it was how with Laurier’s partners and suppliers. procurement 20 years ago used to Doubling in size has also supported be. The faculty and staff on campus the evolving role of procurement at wanted to do things Laurier. Although the right way but really the team remains didn’t know what that small, Ens states way was. Procurement that this remains OFFERS EXCHANGE were seen as rule advantageous, PROGRAMMES IN enforcers. Whilst this particularly in avoiding 25 COUNTRIES is true to a certain any duplication extent, we needed of work. Each to make sure people member remains understood the ‘why’ of what we need able to cover for one another, to do and how it could help them.” and each individual is able to make their role their own without Relationship building the need for micromanagement, The use of public funds has seen leaving them empowered. the value of transparency become Such an approach has also increasingly vital throughout influenced the university’s the transformation of Laurier’s relationships with its end procurement function. The users on campus. organisation is required to run formal “Laurier is a small campus. By process for any contract with a total taking the time to learn about people’s
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LAURIER’S
EXCELLENT REPUTATION HAS SEEN LAURIER RANKED #1 IN CANADA BY MACLEAN’S UNIVERSITY RANKINGS TWO YEAR IN A ROW
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roles, you can ask them to try out new ways of working,” comments Ens. “Most people will say, ‘yeah, I’ll give it a try’, because they know I’ve done X for them and this is how they can reciprocate. That’s been a huge plus, knowing that I have people on campus I can call who are willing to try things, even though it might
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“IT’S IN THE LAST FIVE YEARS THAT PROCUREMENT HAS SHOWN THAT WE DESERVE TO BE AT THE TABLE.
WHAT’S DRIVEN THAT ENTIRE ENTITY IS TECHNOLOGY” – Tracey Ens, Director of Procurement
not be easy while we’re working out the kinks – that’s been critical.” Technological advancements With an aim to add value across Laurier’s services, Ens notes that the right mindset remains essential, particularly when investing in new technologies.
Partnering with Jaggaer has enabled the organization to transform its procure to pay (P2P) system. Meeting with all departments individually and providing essential training to all staff has been paramount to its successful implementation and demonstrates how digital tools can further enhance its procurement operations.
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“The Jaggaer system has been incredibly instrumental in reporting data analytics and contract management,” notes Ens. “The cost savings we were able to obtain by putting in this P2P system was much better than anticipated. Jaggaer has erased a lot of our past redundancies and streamlined the whole process. “It’s also difficult to put a value on soft cost, so we also hired an external consultant, Huron Consulting. Through their consultation on campus, we were able to realize how much of a benefit it was to end users to use this system on campus and how much time was saved by using this new system. Our return on investment (ROI) went down from four years to two.”
LAURIER HOUSES OVER 19,000 STUDENTS
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“THE JAGGAER SYSTEM HAS BEEN INCREDIBLY INSTRUMENTAL IN REPORTING DATA ANALYTICS AND CONTRACT MANAGEMENT” – Tracey Ens Director of Procurement “Electronic Fund Transfers (EFT) and cheques can become an expensive way of paying vendors, so we’re also now in the midst of implementing Visa Payables Automation,” explains Ens. “Along with our Accounts Payable department, we have started a drive
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to get vendors on campus to take Visa as a method of payment and it’s been very, very successful to date. “Our suppliers have been a big part of our success. They also were willing to try things because of the relationships which have been built
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PARTNERING WITH JAGGAER HAS ENABLED LAURIER TO TRANSFORM ITS PROCURE TO PAY (P2P) SYSTEM
over the years. When it comes to credit card payments, Big Kahuna, our athletic supplier, was one of the first ones to sign on for that, as well as Telus Mobility,” she continues. “Whilst we have transformed different areas of our department, we have also overhauled the audit function for our corporate card program through partnering with Scotia Bank using VISA’s Visa Intelligence Compliance Audit tool. We have approximately 1,400 cards, and procurement has to accommodate the size of that.
“There was a need for a better audit programme, and so we hired someone who could help us transform the function to be what I consider the best university credit card audit programme in Canada.” Ongoing developments Although the procurement team at Laurier has delivered numerous benefits to its students, the industry is facing a number of uncertainties surrounding developing regulations. The establishment of the Canadian Free Trade Agreement and the
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LAURIER STUDENTS AND ALUMNI WERE RANKED NUMBER ONE FOR VOLUNTEERISM BY LINKEDIN IN 2015
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Comprehensive Economic Trade Agreement in Canada will bring new levels of complexity to Laurier’s procurement operations, as well as Laurier’s internal governance. “It’s also interesting to watch the
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negotiations with the North American Free Trade Agreement (NAFTA), and it’s too early to tell exactly what the ramifications are going to be,” reflects Ens. “It’s also very early when it comes to the Comprehensive Economic
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Trade Agreement with Europe to see how this factors into Canadian public-sector procurement in reality.” Nonetheless, Laurier’s procurement team will continue to navigate the procurement of goods and services its students will need, particularly around research and teaching. Encompassing complex research grant requirements for the buying of goods, coupled with a multitude of other legislative requirements, Laurier will also continue to support professors in the training of students and drive further
student engagement for the future. “Enrolment continues to increase and we’re seen not as a viable alternative, but as students’ first choice,” concludes Ens. “We have great student experience, great facilities, world-class teaching, a small campus, tonnes of student groups and intramurals, and it’s a great region of Canada to live in. “Laurier is absolutely one of the best schools in Canada. I personally think it’s the best school in Canada - who wouldn’t want to go here?”
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INSIDE THE SUPPLY CHAIN OF CROWN RESORTS
Crown Resorts is known for its first-class casino, hotel and entertainment facilities in Melbourne and Perth. But how is procurement for such a complex enterprise handled? Written by John O’Hanlon Produced by Jeff Debicki
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rown Resorts is a much larger business than it first appears. Crown Melbourne, a feature of the city since its opening in 1997, is a massive gaming and entertainment complex boasting more than 45 bars and restaurant spreading across multiple city blocks. It’s become a major destination for Victoria and a magnet for tourists from around the world. Far from being just the best and largest place for gambling in the entire Southern Hemisphere, it offers its visitors cinemas, retail complexes, luxury accommodation and global food experiences from outlets such as Dinner by Heston Blumenthal, which can be found at Crown Towers, one of three hotels on the site. Though city-based, Crown Melbourne is aptly called a resort since it delivers everything a visitor could need, all on one site. Whilst the Melbourne property is more of an urban resort, Crown Perth has a traditional resort feel. Though it first opened in 1985, it has been renewed and hugely expanded since Crown acquired it in 2007. Situated a little further out, it is a major
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destination for the fast expanding city of Perth and is now the largest single-site private sector employer in Western Australia with approximately 5,800 people on its books. It too has a Crown Towers hotel, which opened in December 2016 and features 500 luxury hotel rooms and suites, villas, private gaming salons, restaurants, bars, a grand ballroom, convention centre, luxury retail outlets, resort pool and spa facilities. The success of the business over the last couple of decades is going to be replicated in years to come, and Crown’s energetic chairman James Packer has announced his determination that Crown Sydney, to be built on the waterfront at Barangaroo, will be the best hotel in the world. Food and beverage requirements for a business of this size form a major part of the supply chain across a very diverse range of categories. Making sense of the complexity of this procurement challenge is the job of Procurement Systems and Compliance Manager Justin Purss, who reports to Ben Briggs, the Group General Manager of Procurement
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“THAT NIMBLE INSIGHT WE GET VIA ZYCUS IS A GAME CHANGER FOR THE COMPANY” – Justin Purss, Procurement Systems and Compliance Manager
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“WE TAKE EVERY and Supply. Purss has more than two decades of experience in the gaming and hospitality sector and has managed analytics and reporting, ERP and procurement data management, cost control and inventory management teams across Crown’s Australian resorts since 2014. At that time, he says, the available data was held in a disparate manner – each site was responsible for its own information and with very little crossfertilisation within the business. “There was really no consistent reporting ability on our expenditure. Getting the information out of the ERP system was difficult unless you had knowledge in that area, and when management called for an overview there was a lot of telephoning.” He recalls that there was just one individual within the group who knew how to access it all – the spend data was reconciled annually, and preparing that report took up to four months. Enter smart procurement What was needed was a smart procurement management system (PMS) that would permit the team
OPPORTUNITY WE CAN TO IMPROVE OUR FOOTPRINT AND OUR RELATIONSHIP WITH SUPPLIERS, REDUCING COSTS ON BOTH SIDES WHILE BEING MORE ENVIRONMENTALLY FRIENDLY” – Justin Purss, Procurement Systems and Compliance Manager
to standardise sourcing processes, give clear visibility into the different categories of spending, and streamline the time-consuming manual processes that were being used. The major benefit from this would be that it would enable analytics to be applied through artificial intelligence and introduce a UNSPSC (United Nations Standard Products and Services Code) taxonomy of
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products and services, carry out meaningful supplier performance evaluations across the board, and streamline business processes. The system chosen to manage all of Crown Resorts’ upstream procurement activity was Zycus. It was selected for its sophisticated functionality, ease of use, interoperability, scalability, and had a local, Australian presence who understood Crown’s challenges and needs. As a result, says Purss, his team can now make sense of category data across all sites. “They have visibility into supply rationalisation
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opportunities, for example, to try to streamline some of our business processes and create efficiencies and savings by leveraging that information.” It means better visibility within the company too, he
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explains. “We have the spend data extracted from our ERP system sent through to a spend analytics module within the PMS, and that runs through a classification AI computer learning platform that understands the data.” Many of different items are purchased every
day. Some are commodity items from a large, contracted supplier, while others are one-off purchases from a small local vendor. The tool understands each of those purchases and categorises them, giving total and immediate visibility. Now, thanks to the spend analytics tool, the data that could only be assembled periodically can be assembled in minutes rather than months, and the same insight gained into the 90% of the vendor base that accounts for just 10% of the spend. “That nimble insight we get via Zycus is a game changer for the company,” Purss adds. “We can
“BECAUSE WE HAVE THE ABILITY TO LOOK INTO OPPORTUNITIES, WE CAN JUMP ON THEM QUICKLY” – Justin Purss, Procurement Systems and Compliance Manager
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react very quickly. For example, if in a meeting someone needs to know the details of a particular vendor we can check that on the spot instead of having to ask for a week to get the data together.” It has also enabled the procurement team to set up dashboards for each of the category streams so purchasing staff have visibility into the category for which they are responsible. There’s a wider spend dashboard that gives them the ability to look at specific metrics by setting their own filters. “Because we have the ability to look into opportunities, we can jump on them quickly,” says Purss. “We have saved the company tens of millions over the last couple of years by just having better insight and being able to identify opportunities that we might previously have missed.” In addition to Analytics, Crown’s PMS also includes Supplier Information Management (SIM), Supplier Performance & Relationship Management, Contract Management, Project Management and Sourcing. “We have thought about the long term here. For example, in
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our vendor profiles for the SIM module, we have created a place where we can truly understand our vendors. This has been a big change for Crown and will create efficiencies by allowing a centralised location where all of their company related information and documentation can be maintained,” Purss explains. This has been a major push by Crown to not only ensure compliance but to give their suppliers a sense of inclusiveness and support. Checking them inward and onward All of this is about business process improvement. It is vital to the health of any modern company: it involves a lot of change management and training and enables employees to be more
productive and happier in their work. But what about the concrete nature of goods received? Crown Melbourne in particular is located at the centre of a busy and congested city, and getting supplies in when they are needed without trucks backing up at the loading bay is a challenge, especially if for each item paper delivery notes have to be checked against orders and invoices. Replacing that system with a modern warehouse management system (WMS) became imperative, so the company is currently implementing Peacocks WMS, a highly configurable system that will significantly increase efficiency in delivery receipting and dispatch to the right end-user. It’s a big change for the vendors,
“WE NEED TO BE VERY FLEXIBLE AND HAVE A WMS THAT WILL FIT EVERY SUPPLIER FROM A MULTINATIONAL TO A LITTLE PRIVATE LOCAL BUSINESS” – Justin Purss, Procurement Systems and Compliance Manager
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Crown Melbourne – Welcome to a World of Entertainment
so they were called in to a forum in November 2017 to take them through the innovation and explain the new partnership opportunity it gives both sides. “It creates a lot of efficiencies for them too,” states Purss. “There’s a new labelling system with 3D barcodes on all items, automatically scanned in on arrival, speeding up that process and immediately pushing that information into our ERP to go on to the payment system. “We need to be very flexible and
have a WMS that will fit every supplier from a multinational to a little local business. We needed to spend time to think through the problem of how to deliver a programme they can all use. But the system is scaleable. Our larger international suppliers can print their own labels in a way we can accept at the loading dock, while for smaller suppliers we provide a portal they can log into and find all the purchase order information and print labels locally from that order, at no cost to them.”
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DRINK RESPONSIBLY
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Peacocks WMS will be trialled from the end of April 2018 and will be fully implemented by the new financial year in July. This is a tight schedule that has called for close coordination between the Group Warehouse and Distribution Manager and the IT ERP team, which had to ensure smooth connection between the new systems via an API (application programming interface) and the PeopleSoft ERP system. Purss takes his hat off to vendors large and small who have put effort into understanding the system and pretesting the end to end process. As the new PMS beds in, the benefits of Crown’s existing inventory management system will come to the fore. Stocktaking will always have to have an element of manual input into checking the number of
bottles of gin at a bar, for example, but it no longer involves closing down for the day as staff members tick off items on a paper record. Each month a stocktaking pack including a handheld PDA (personal digital assistant) is sent out to the sites and the inventory recorded in an hour, with the information sent to the ERP system. Managers have instant access to the stock at their site, and the procurement team always have the company wide figures available – just one member of Purss’ team is able to coordinate the stocktake process at 50 different business units in Melbourne. There’s better information, less room for error, and any anomalies are quickly seen, he says. “It is all tied into our POS system which depletes the inventory daily.”
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Responsible procurement for an effective supply chain Readers who saw the Business Chief report on Crown Resorts’ environmental and sustainability performance will not need reminding about the company’s record on CSR and green issues. However, it is worth noting the contributions of supply chain management. Some are simple, like the substitution of returnable and reusable crates for
fruit and vegetable supplies. “We take every opportunity we can to improve our footprint and our relationship with suppliers, reducing costs on both sides while being more environmentally friendly.” Purss also draws attention to Crown’s Reconciliation Action Plan, which monitors its involvement with indigenous Australian businesses and encourages supplier partnerships with them. “We seek them out, and help
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them with a development plan,” Purss adds. “Many are small scale, niche businesses supplying seafood, herbs or fruit for example, but they are just as important as the multinationals we deal with. We help them to partner with a large concern like us and compete with bigger companies.” When dealing with larger concerns a full supplier profile is drawn up that covers compliance, energy use, emissions, waste policy and human rights among other things, and of course indigenous engagement. Despite the huge purchasing clout of a company with a multiple billion-dollar market capitalisation, it is a matter of pride for Crown that 90% of its spend is within the state in which each site is located. Crown Resorts is a reliable company to do business with, Purss
emphasises. 80% of transactions at Melbourne, and 70% at Perth where the system was introduced more recently, are completed through evaluated receipt settlement (ERS) matching. This is a paperless solution that automatically transmits a recipient-created tax invoice upon receipt of goods, and schedules payment. “Those vendors with an ERS agreement don’t need to invoice us. A delivery automatically generates an invoice so we will provide an electronic invoice to the vendor. Once they receive their payment they will get a remittance advice.” This is just another example of an innovative, end-to-end business process that cuts out paperwork, making the transaction easier and more transparent for both parties.
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