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Driving towards quality LEVERAGING TECHNOLOGY

to maximise your return on excess stock

LOGISTICS Spotlight on the US freight broker industry

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May 17 – 19, 2016 | Phoenix, AZ gartner.com/us/supplychain SAVE $425 Register with code GARTSCD

The World’s Most Important Gathering of Supply Chain Leaders The Bimodal Supply Chain: Tackling Today, Preparing for Tomorrow

Learn from 46 Gartner supply chain research analysts and hear from more guest speakers than ever before, including:

Michael T. Duke Retired President and CEO of Wal-Mart Stores, Inc.

Joby Ogwyn Mountain Climber, BASE Jumper and Wingsuit Flyer

Chris Tyas Head of Supply Chain, Nestlé

View the full supply chain agenda and speaker lineup at gartner.com/us/supplychain. © 2016 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates. For more information, email info@gartner.com or visit gartner.com.

2016 tracks A. Strategy and Leadership B. Supply Chain Innovation C. Supply Chain Planning D. Logistics E. Supply Management and Manufacturing


EDITOR’S COMMENT

Advancing the Supply Chain the March issue of Supply Chain Digital! Our cover story this month explores how Deutsche Bahn AG became the second largest freight transport and logistics provider in the world. Howard Rosenberg, CEO of B-Stock Solutions, explains how technology can benefit those looking to maximise returns on their excess stock. We also feature a piece penned by Todd Bryant, President and Founder of Bryant Surety Bonds, which takes a look at the American trucking industry over the past 12 months. His professional angle, as a freight broker, tracks a number of key trends that anyone involved in the industry should certainly be aware of. Last but not least, James Hyde, founder of sustainable fulfilment company James and James, explores the top 10 logistics trends for 2016. We hope you enjoy the issue, and if you have anything to add, don’t hesitate to tweet @MrNLon and @SupplyChainD HELLO AND WELCOME TO

Nye Longman EDITOR nye.longman@bizclikmedia.com

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CONTENTS

Features

LOGISTICS Spotlight on the US freight broker industry

10 TECHNOLOGY Leveraging technology to maximise your return on excess stock 4

March 2016

6 16 TOP 10 Logistics Trends for 2016


Company Profiles EUROPE 22 Deutsche Bahn AG 44 LPP

MIDDLE EAST 56 SKA International Group 68 Hepworth

AUSTRALIA

22 44

Deutsche Bahn

56

LPP

SKA International Group

76 VicRoads

BRAZIL 96 ABOL

LATIN AMERICA 104 Renting Colombia

VicRoads

96

76 68

Hepworth

ABOL

104

Renting Colombia

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Spotlight on the US freight broker industr

Todd Bryant, president and founder of Bryant S Bonds, takes a look at the American trucking in over the past year through the lens of a freight W r i t t e n b y: To d d B r y a n t


ry

Surety ndustry broker

LOGISTICS FOR A NUMBER of reasons, freight brokers have been enjoying increased revenue in the past year. The ongoing economic recovery is bringing an increase in demand for trucking services, and the good news is that this trend is expected to continue for several more years. A report by the American Trucking Association (ATA) predicts that by 2022, overall revenue in the trucking industry will increase by 66 percent, while tonnage will see a 24 percent growth. Another reason for increased revenue is improved logistics efficiency. The further use of lessthan-truckload (LTL), a territory reserved for freight brokers, means speedier shipments for shippers and more profits for brokers. Entry into freight brokering When the freight broker bond amount was increased to $75,000 in 2013, one rationale for the increase was to raise standards for freight brokers and, in retrospect, the strategy seems to have been successful. It’s true that a small percentage of brokers were forced out of business. However, the remaining brokers were people with good credit and reliability 7


LOGISTICS in the industry. This in turn raised overall trust in freight brokers, so entry into the profession has eased a bit. And the numbers are proving it– the number of brokers has been steadily increasing since 2013, and this year is no exception. MyCarrierResources. com reports that in January there were 15,023 registered brokers, whereas in October the number had jumped to 15,916. Truck driver shortage The driver shortage has been plaguing the industry for some time now, but where is it headed? Unfortunately, experts predict that the shortage will get worse before it gets better. In 2015 the driver shortage worsened, but steps to alleviate it were also taken, so there is reason to be hopeful. Carrier companies are increasing pay and benefits in an effort to attract more people into the profession. The government is also taking steps – after a lengthy debate, Congress took steps to make it easier for young drivers (less than 21 years old) to enter the industry. Furthermore, the controversial CSA scores will be removed from public view for the present, until the FMCSA 8

March 2016

‘The fact is, demand for trucking services is poised to grow in the next several years. A 24 percent increase in tonnage is not something that will be easily accommodated, especially since the driver shortage won’t be resolved any time soon’ finds a solution to its drawbacks. Needless to say, more steps should be taken to address this serious issue, but hopefully the next year will bring some good news. With the driver shortage, it’s more important than ever for brokers to foster strong partnerships with good drivers. Tightening capacity The fact is, demand for trucking services is poised to grow in the


SPOTLIGHT ON THE US FREIGHT BROKER INDUSTRY

next several years. A 24 percent increase in tonnage is not something that will be easily accommodated, especially since the driver shortage won’t be resolved any time soon. So how will carriers respond, and what are the implications for freight brokers? A likely scenario is that carriers will increase rates, and they may choose to work only with selected shippers. A resourceful broker, however, can turn this to

their advantage. High rates can mean higher profits– even if margins are reduced slightly, the increased demand will compensate for it and translate into a higher overall profit. As for carriers becoming more selective, this would reinforce the need for freight brokers in the eyes of shippers, as they will find it increasingly difficult to secure transportation without outside help.

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Leveraging techno maximise your return on e

Howard Rosenberg explains why keepi latest technology is not merely profita to keeping up with high customer e

Writ ten by: Howard Rosenberg, CEO of B-Stock Solutions Ed

LACK OF INNOVATION over the past few decades around how organisations approach disposing of their returned, excess, and obsolete stock has resulted in billions of pounds lost unnecessarily. With an ever-expanding marketplace that continues to gather pace, this business critical function can no longer be left to inefficient, 10

March 2016

reactive, or out-dated methods. Considering 15 percent of all goods are either returned or never sold to begin with, and that retailers and manufacturers end up selling more than 95 percent of their excess stock on the secondary market, it’s essential for them to understand the real value of this merchandise and rethink the programme(s) they


TECHNOLOGY

ology to excess stock

ing abreast of the able but essential expectations

dited by: Nye Longman

have in place. An important first step to improving the process is implementing a solid remarketing plan. The primary objectives of most remarketing plans should include: maximising recovery, tight disposal turnaround, and protecting the brand. Most likely, there is already a robust secondary market for your product; in every major city in the UK and

around the globe for that matter, there are businesses that purchase customer returns, excess stock and discontinued goods for resale. That said, if you’ve historically sold your stock to one or two liquidation partners it’s a safe bet your recovery value is low as liquidators are experts at negotiating prices down in order to maximise their own profits. Not to mention, time spent negotiating deals for every pallet or truckload of stock takes time away from core business activities. While this solution may score well on the targets for quick disposal, remarketing to a liquidator can mean a lack of control over who is eventually buying the stock and how your brand enters the secondary market. Cut out the middleman and go ‘virtual’ The best solution to tackle all three objectives involves bypassing the middleman and assembling a robust base of business buyers who sell directly to consumers. So the question becomes: how can you aggregate thousands of such buyers and how can you possibly manage selling to them all? While it seems like you would 11


TECHNOLOGY

‘Considering 15 percent of all goods are either returned or never sold to begin with, and that retailers and manufacturers end up selling more than 95 percent of their excess stock on the secondary market, it’s essential for them to understand the real value of this merchandise and rethink the programme(s) they have in place’ 12

March 2016


LEVERAGING TECHNOLOGY

need an army of sales people hitting the phones, this isn’t the case. A complete, online liquidation auction solution is one way to make this happen. The best solutions available can be customised, integrated, and scaled based on your unique needs. They will also come with thousands of active, interested buyers who will compete for your stock via online auctions. When done right, this type of remarketing solution can boost recovery by 30-80 percent and sometimes much more. It also automates the sales process, delivers a faster sales cycle, and generates proprietary market intelligence in the form of real data on market prices. Take this example: one of the world’s largest home furnishings and décor e-retailers was experiencing higher volumes of customer returns due to explosive growth in primary sales. The inventory was being sold to a small group of buyers for a pre-negotiated price but as the amount of merchandise grew, so did the need for more buyers. By launching a branded B2B online liquidation marketplace, the e-retailer made its inventory accessible to thousands of new

business buyers who were able to bid directly on it via competitive online auctions; this boosted recovery rates by more than 30 percent despite a 138 percent increase in stock volume. What’s more, this platform allowed the e-retailer to offload most all of the operational work associated with selling their stock while accelerating the cash cycle. Refurbish before resale? While demand typically exists for products across all conditions, certain products are better suited to be sold as refurbished or remanufactured. This means you can invest money in repairs, cleaning and repackaging to gain a recovery that is much higher, even after those costs. Keep in mind that refurbishing takes longer to realise recovery and requires more oversight but should certainly be considered if product value is prioritised over expediency. If bandwidth to handle such repairs doesn’t exist in-house, consider leveraging a trusted partner to handle the process. Finally, even if your product itself is not in demand in the secondary market there are options for recovery through parts harvesting, as there 13


TECHNOLOGY is a buyer base that exists solely to facilitate repurposing or recycling. To realise the highest value for this salvage stock you need a thorough understanding of all materials contained in each product. Be sure to compare the price per pound you’re getting from the whole unit versus doing a partial breakdown so you can market components separately. That said it might be worth giving up a few pounds of value to let the buyer deal with breaking the product down. A major benefit of establishing an effective remarketing plan is realised once the merchandise ends up back in your warehouse. Once your strategy is in place you should set up rules for how the product is handled upon receipt and move it quickly through the designated process: liquidation, refurbishment, sell for parts, etc. Ideally this is done at the SKU level where there should be enough detail in the SOP for any receiving clerk to make a proper decision on disposition. This will reduce the number of steps and, more importantly, shorten the amount of time that returned inventory sits in your warehouse. Be sure to closely track all costs involved and the ultimate recovery achieved in order 14

March 2016

‘Investing resources to better understand your remarketing channel will have a direct and meaningful impact on the bottom line’ to monitor progress and establish key performance indicators. This will enable you to report accurately on your reverse logistics process and tweak the model to improve recovery or reduce expenses. Investing resources to better understand your remarketing channel will have a direct and meaningful impact on the bottom line. If in-house bandwidth is tight, sometimes the best choice is to work with a trusted partner whose primary business is providing remarketing solutions for returned and overstock merchandise. The best partners will have a low cost structure, a great reputation among clients, extensive knowledge of the secondary market, and a datadriven, analytical and transparent approach. Be sure to look for:


LEVERAGING TECHNOLOGY

1) Online marketplace expertise: The sales platform offered must be well designed, flexible and scalable. Make sure your partner has extensive experience in managing marketplaces and developing auction strategies to maximise your results. 2) Targeted demand generation: A good partner will have a proven track record of growing custom buyer bases across all product categories

and conditions. This is not only about quantity as buyer quality matters too! In today’s competitive landscape, driving cost out of the returns process and taking the time to analyse the real value of your returned, excess and obsolete merchandise on the secondary market can mean the difference between winning and losing. Every pound increase in recovery value, or reduction in expense, equals another pound of profit. 15


Written by: James Hyde Edited by: Nye Longman

Top 10 Logist

Trends for 2


TOP 10

tics 2016 17


TOP 10

2015 was an important year for logistics and fulfilment, with online retailers kept particularly busy on Black Friday and in the run-up to Christmas. James Hyde, founder of sustainable fulfilment house James and James, outlines the top 10 trends to look out for in 2016

1

Real time technology will rule It’s accurate to the minute and you’ll always know exactly what’s in stock and where. Real time stock tracking eliminates any doubt as to your current stock levels, so customers and staff alike can be confident about what’s available in your store. It’s a no-brainer to help drive efficiency, so we predict a big rise in the use of web-based technology and live data in 2016.

1 8 M arch 2016

2

Returns will become easier How you deal with returns is a reflection of your entire business and one that customers will remember. It’s a mark of outstanding customer service, and the great news is that it’s about to become easier to handle in 2016. Improvements to returns handling technology and RMA (Return Merchandise Authorisation) will make it easier to track a return, with more data available and visible to the customer.


T O P 1 0 C O M PA N I E S O N S O C I A L M E D I A

3

Better tracking for shipments Online shopping has come a long way since its infancy, but shipment tracking is one area where there’s still room for improvement. Advances in warehouse technology, combined with customerfriendly communication by email and text, mean that it’s now possible to keep your shoppers informed about exactly where their order is, and when it will be

with them. That’s what the best companies are already doing, resulting in increased customer satisfaction and loyalty - so we expect more online sellers to join them in offering better tracking options in 2016.

4

Intelligent reporting for better inventory control Keeping on top of your stock levels is vital, but if your data isn’t easy to read and analyse, it can be time consuming. In 2016 19


TOP 10

we predict a rise in intelligent reporting – intuitive, graphical data with automated alerts to let you know when stock is low or nearing its expiry date.

5

Supply chain tracking will be important Live inventory updates and tracking of movements in the supply chain help companies to ensure that they have the stock they need on their shelves at all times. It’s a technology that will become increasingly important in 2016, particularly for 2 0 M arch 2016

B2C eCommerce companies.

6 7

Low value grocery orders will become more common With the introduction of services like Amazon Pantry, this year customers will increasingly look online to shop for basics, without necessarily buying in bulk.

The world will get smaller Today’s global society is a world in which anything is possible. And in the world of logistics, it’s one where we need to deliver. Customers ordering


LOGISTICS TRENDS

from overseas are no longer willing to wait for weeks for their goods. In 2016, it will become more important to offer a quick turnaround to other countries.

8 9

The cloud will be commonplace Cloud-based fulfilment services will be the industry standard, side-lining traditional fulfilment technologies that can no longer compete.

10

The customer will still be king

The best logistics operations are those that can provide a seamless connection between the click of a customer’s mouse and the package through their letterbox. In 2016 the most successful companies will be those that succeed in this endeavour.

Planning ahead will be important Don’t get caught unprepared in 2016. Your busiest periods are probably predictable. Stay ahead of the game and stock up to ensure that you can meet demand throughout the year.

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Image Author: Christian Bedeschinski Image copyright: Deutsche Bahn AG

The drive towards qu

Written by: DB Central Procurement Produced by: Richard


quality

d Durrant

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DEUTSCHE BAHN AG

Image Author: Oliver Lang Image copyright: Deutsche Bahn AG

Procurement at Deutsche Bahn AG is changing together with the whole company

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March 2016

T

he history of the railway in Germany began in 1835 with the opening of a six-kilometre line between the cities of Nuremberg and Furth, in today’s federal state of Bavaria. Some of the milestones in the now more than 180-yearold German railway history include the end of World War II and the rail reform in 1994, the year Deutsche Bahn AG was founded in a form of joint-stock company. The rail reform heralded a renaissance of the railway in Germany, and the facts are impressive. Today Deutsche Bahn (DB) is active in all segments of the transport market with great success. DB is Europe’s second largest carrier in the passenger transport market, bringing 4.3 billion passengers from A to B each year on buses and trains. We run 25,000 passenger trains each day, providing a wide variety of


S U P P LY C H A I N

connections between cities and regions. DB is also the second largest freight transport and logistics provider worldwide. We have locations in 130 countries, where we operate 5,000 freight trains a day, transporting nearly a million tonnes through Germany and Europe. DB’s subsidiary company DB Arriva is active throughout Europe with buses and passenger trains. DB operates the largest rail network in the heart of Europe. Nearly 5,700 stations in Germany serve as gateways for our customers to our rail network of over 33,400 kilometres. However the company’s performance suffered considerably in the recent months, and customers’ expectations have not been fulfilled. The company has been put under increasing pressure on the markets, with economic consequences. DB is currently facing

3 million

Number of jobs supported by Deutsche Bahn

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Global and local – supply chains tailored for every customer

Our competence in transport by rail, road and multimodal transport chains make TRANSA DB Schenker’s European full load specialist. TRANSA is a one hundred percent subsidiary of Schenker AG. DB Schenker, as the brand of the Transport and Logistics Department of Deutsche Bahn AG, offers logistical competence, integrated networks and rail know-how from one single source. TRANSA works successfully in this strong operative network as a specialist for European transport logistics in road and rail.


With 1500 locations in 150 countries, DB Schenker is one of the leading transport and logistics providers worldwide. Gateway into the DB Schenker World! TRANSA Spedition GmbH Sprendlinger Landstrasse 175 D-63069 Offenbach Phone +49 69 84007-120 Fax +49 69 84007-232 salessupport@transa.de www.transa.de


DEUTSCHE BAHN AG

Image Author: Claus Weber Image copyright: Deutsche Bahn AG

major challenges due to the increasingly tough competition in passenger transport because of the liberalisation of the long distance coach market and various new sharing models, for example, as well as in freight transport because of the dramatic drop in fuel prices and reduced lorry tolls. Additionally, there is no doubt that digitalisation is fundamentally changing mobility as well as working environments, making it necessary for DB to adapt fast. DB has therefore started the ‘Zukunft Bahn’ programme (Future of the Railway), with the objective of considerably increasing quality, punctuality and operational reliability, to start winning over more customers again and to noticeably improve our economic results. This programme will be a major lever to achieve the economic, environmental and social performance goals of the DB 2020 strategy.

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S U P P LY C H A I N

We are convinced that rail transport has the potential to become the most important mode of transport for the 21st century – it is dependable, comfortable, safe and environmentally friendly. Rail is not only an important part of life for millions of people and a reliable partner of Germany’s economy; it is also plays a key role in reaching climate targets in Europe. The ‘Zukunft Bahn’ programme requires the involvement of all divisions of DB, working together for better quality, more customer focus and greater success. Central Procurement has a direct impact on EBIT and can thus make an important contribution to achieving success, which is why we have decided to realign its business in line with the rest of the group.

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Image Author: Vanessa Pur Image copyright: Deutsche Bahn AG

DB Procurement – on track towards ‘World Class Procurement’ Central Procurement has developed a mission statement to guide us in its work: We guarantee that the DB Group’s business units worldwide are supplied with materials, capital goods and services – economically, on time and with the right quality – and, in so doing, ensure DB’s innovative capability and sustainable market success. Central Procurement has developed its own ‘World Class Procurement’ roadmap based on our DB2020 Group strategy and in line with our Procurement 2020 programme. Our roadmap was developed based on the results of a performance assessment and benchmarking 29


DEUTSCHE BAHN AG

passion ‌ TO BE THE SERVICE PARTNER OF CHOICE. Providing innovative and competitive aftermarket solutions for our rail customers worldwide. | www.knorr-bremse.com |


S U P P LY C H A I N

On this basis, Central Procurement will move from a classic corporate purchasing department to a ‘World Class Procurement’ unit over the next few years. To do so, Central Procurement has defined four central strategic directions as part of its roadmap. • ‘Increasing Procurement’s value added’: Aimed at achieving a close dovetailing of the targets of various Group subsidiaries and those of Central Procurement. Only through close coordination can all possible commercial and technical means be utilised to generate maximum added value for the Group. • ‘Comprehensive business partner management’: Aimed at establishing Procurement as a part of the customers’

Key Personnel Uwe Günther Chief Procurement Officer

Uwe Günther studied Electrical Engineering and Business Administration. Before joining Deutsche Bahn (DB) in 2007, he was active in various procurement leadership positions in the aviation as well as in other industries. From 2011 to 2014 he led the infrastructure procurement department of DB. Since July 2014 he is Chief Procurement Officer of the Deutsche Bahn AG.

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mage copyright: Deutsche Bahn AG

process carried out by a renowned external consultancy. “The results of the assessment conferred us ‘professional’ status (top 25 percent of all assessed companies), which is a source of pride for us and our employees and motivates us to reach the ‘World Class’ level. We are working with our business partners to develop a roadmap through 2020,” says Jan Grothe, Head of Procurement Principles and IT-Systems.

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DEUTSCHE BAHN AG

Searching for experts in Procurement and logistics? You’re in good company.

We work hard to offer the best possible solution and achieve the maximum performance for our clients. In the last 5 years we have worked with more than 100 satisfied clients in 31 countries and optimized over € 25 billion in spend volume. You‘re in good company.

Consulting | Procurement | Supply Chain www.drozak.com

Committed to results


S U P P LY C H A I N

management team and initiating and developing product group strategies within competency and cross functional teams in cooperation with stakeholders and technology and quality assurance units. • ‘Effective Supplier Management’: Aimed at actively developing suppliers and the market on an international level and, when necessary, regaining or ensuring stable supplier performance levels with regard to quality, punctuality and cost. • ‘Efficient (digital) processes and organisation’: Aimed at optimising and streamlining processes and regulations as well as IT support.

‘We want to win customers with reliable suppliers and sustainably shape the supply chain’

Image Author: Bildschön, Silvia Bunke Image copyright: Deutsche Bahn AG

Special focus on the supply chain – our Supplier Management approach Our suppliers serve as valuable partners as we strive to achieve greater safety, quality and innovation. “We want to win customers with reliable suppliers and sustainably shape

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Image Author: Jet-Foto Kranert Image copyright: Deutsche Bahn AG

the supply chain,” says Uwe Günther, Chief Procurement Officer (CPO) of Deutsche Bahn AG, in describing the goals of his team and suppliers. Effective supplier management has thus been included as one of our four central strategic directions on our path to becoming a World Class Procurement unit. DB’s standardised Supplier Management process includes four phases: Supplier Qualification, Supplier Development, Supplier Appraisal and Supplier Adjustment. The first two phases help us to prepare suppliers to work with DB. Supplier Qualification includes an assessment of the supplier’s technical and commercial suitability. Different supporting documents must be provided in this process depending on the requirement category of the specific range of products and services. In general, we want to complete Supplier Qualification prior to the bidding process and we see this as beneficial to both us and the supplier. In the optional Supplier Development phase, steps are taken to further develop suppliers who do not yet meet our criteria for qualification, independent of any contracts. Our Supplier Development phase is designed to improve our suppliers’ performance through a shared dialogue and to expand their potential, minimise risks and ensure that they can take part in competitive bids going forward. The following two phases ensure the high performance of our core suppliers and serve to 34

March 2016


Image Author: Jet-Foto Kranert Image copyright: Deutsche Bahn AG

S U P P LY C H A I N

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MOCG-A10002-00-7600

DEUTSCHE BAHN AG

Intelligent infrastructures don’t just react. They anticipate. Thinking mobility further through advanced software solutions. siemens.com/mobility

New ideas, concepts, and technologies are in great demand with our ever-increasing need for mobility. With over 160 years of experience in passenger and freight transportation and our IT know-how, we are constantly developing new and intelligent mobility solutions to provide greater efficiency and safety. Prescriptive monitoring systems reduce train downtime and increase availability. Dynamic control systems optimize

traffic flow and throughput. And electronic information and payment systems improve passenger experience. It’s in how we electrify, automate and digitalize transport infrastructures that we’re setting the benchmark for tomorrow’s mobility – today.


S U P P LY C H A I N

‘Effective supplier management has been included as one of our four strategic directions’

Image Author: Claus Weber Image copyright: Deutsche Bahn AG

integrate new suppliers. The Supplier Appraisal phase includes an evaluation of contract fulfilment according to defined criteria. In this phase, we evaluate suppliers along the supply chain in terms of quality, costs and punctuality. We assess suppliers based on their strategic importance to DB. We always evaluate promptly and throughout the entire business relationship. We inform our suppliers at least once a year of their rating as we see this exchange as quite important. In the Supplier Adjustment phase, we monitor the suppliers which whom we have current contracts and projects to be able to respond quickly to changing situations. Our standard process is rounded out by an incentive programme for suppliers with

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DEUTSCHE BAHN AG For people. For markets. For tomorrow.

Supplier Innovation Award 2016

For the first time ever, Deutsche Bahn is honouring its most innovative business partner with the Supplier Innovation Award 2016. Is your company an innovative supplier of Deutsche Bahn? Then it is your chance to show us how your products or services can help us to make our service offers more sustainable. Apply now for the Supplier Innovation Award. The closing date is 10th March 2016. All information about the award, terms and conditions are available at www.deutschebahn.com


especially high performance. We show our appreciation of excellent suppliers with our DB Supplier Award and especially with our Supplier Innovation Award, which will be given for the first time in 2016. Building alliances and strengthening networks – Internationalising DB Procurement The increasing internationalisation of both the Group itself and procurement markets represents both a challenge and an opportunity on our path to achieving better quality in the Group and in Purchasing. Based on our World Class approach, we see the role of our department as follows: International DB Procurement bundling demands globally to achieve the best conditions by

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Image Author: Jet-Foto Kranert Image copyright: Deutsche Bahn AG

S U P P LY C H A I N


DEUTSCHE BAHN AG

‘China plays an especially important role here, since over 80 percent of the market growth for high-speed trains over the past few years has been here’

sourcing from the best suppliers world-wide with a significant benefit for all business units. We have developed specific measures to achieve this goal Our concept of a DB-wide Global Procurement Network is intended to enable all internal customers, staff members and managers who are involved with procurement centrally or locally to deal with the challenges and opportunities posed by the global markets. We are developing new formats to this end, from qualifying courses at our DB Institute of Procurement to regular discussion groups. “We can only reach our ambitious goals

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S U P P LY C H A I N

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Image Author: Silvia Bunke Image copyright: Deutsche Bahn AG

if our colleagues are highly qualified and have the specialist and language skills to analyse markets, innovations and risks within their product group on an international basis,” says Arne Oehlsen, Head of the Procurement Customer Portal and Qualification Unit. He continues: “In our newly integrated qualification programme, we are also bringing together purchasers, managers and internal customers to learn about specific product groups and tendering issues as a team.” The opening of our International Procurement Office in Shanghai in November 2015 is aimed more at the supplier market. “Global Value Sourcing is one of the main procurement levers for a globally active group like DB. Together with experienced staff, we want to develop relationships with existing and new suppliers here locally in the Asian market,” says Michael Boback, Head of DB AG’s International Procurement Office Shanghai with regard to the office’s objectives. “China plays an especially important role here, since over 80 percent of the market growth for high-speed trains over the past few years has been here. The production, development and testing capacities in China are state-of-theart. We are looking to intensify contacts with companies who offer high-quality and innovative products at competitive prices, even though the price is not the sole decisive criterion. As a driver of innovation, DB supports the cross-sector ‘RailSupply’ programme as a pioneering step towards comprehensive 41


DEUTSCHE BAHN AG

â‚Ź 40 billion

Image Author: Volker Emersleben Image copyright: Deutsche Bahn AG

2014 revenue of Deutsche Bahn

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March 2016

digitalisation of the supply chain. This solution makes daily collaboration between customers and suppliers more transparent and allows for cooperative processes across all levels of the industry, from rail operators to system providers and suppliers on different levels. Central Procurement can thus maximise supply security, innovative power, process stability and supply chain transparency for DB AG and can recognise bottlenecks at an early stage. We are a founding member of the ‘Railsponsible’ sector initiative. Within this initiative, we are working together with our competitors to improve the sustainability and efficiency of our supply chain. As part of the initiative, suppliers are assessed based on defined standards, for example with regard their compliance with human rights, labour


S U P P LY C H A I N

standards, environmental protection and activities to combat corruptions. “In this way, we as a group can fulfil our social obligations and create transparency and trust,” says Jan Grothe. “We are also encouraging all of our competitors to actively work to achieve these goals.” The ambitious goals we have set as part of our World Class Procurement vision have put DB’s Central Procurement on the right path for the future. Whether through our standardised process for Supplier Management, our measures to qualify suppliers or tapping new markets in Asia through our International Procurement Office in Shanghai, we are contributing to the Group’s success through innovative approaches and are doing our part to deliver top-notch product and service quality for our customers, as part of the ‘Zukunft Bahn’ programme and the DB2020 strategy.

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In fine style Written by Nye Longman Produced by James Pepper

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LPP

Having grown into a major fashion retailer, Poland’s fast fashion network is cresting the wave of its success, expanding its brands into new markets and leveraging its optimised supply chain network

The flagship store in Stuttgart for the RESERVED brand 46

March 2016

LPP

is perhaps the best example in the European fashion retail market of what can be achieved in 20 years. Following consistently high growth – especially over in the past few years – the Polish fashion retailer has pushed the limits of its global supply chain in order to deliver both quality and value to its customers. In just under a decade, the company has seen its sales swell from €170 million to over €1.13 billion, significantly grown its number of stores and accelerated logistics facilities and solutions. We speak to Sebastian Soltys, LPP’s International Logistics Director, about how he and his teams have ensured that the company’s supply chain has accommodated rapid geographical expansion, as well as evolved to serve the addition of new clothing brands. Operations and expansion LPP is the most popular fashion retailer in Poland – and it is by far the largest. Its size and popularity have enabled the company to look beyond its borders for revenue opportunities. Following the entry into Germany, Croatia and the Middle East, it currently has stores in 18 countries serving three continents. Over the years, LPP has developed six well-known fashion brands which consist of: RESERVED; Tallinder; MOHITO; House; Cropp; and SiNSAY. The RESERVED brand is perhaps the best example of LPP’s diversity and


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Key Personnel

Concept work for the new LPP Headquarters

supply chain capabilities and is little wonder that the company chose to launch this as its premier brand in the German market in 2014 –it is maintained by extra value added services such as garment ironing or hanging garment distribution. Later this year, the retailer is planning to open a high-profile store on London’s prestigious Oxford Str. House and Cropp offer clothing lines for fashion-conscious young people; its SiNSAY brand specifically targets the younger female market. The company attracts customers over 30 through its newly rolled-out premium brand Tallinder - while it focuses specifically on the female market with its MOHITO brand whose autumn/winter collection in 2014/15 was designed in collaboration with Polish supermodel Anja Rubik. Somewhat fondly, Soltys recalls a time when the company was small enough to be managed from a single location he says:

Sebastian Soltys International Logistics Director When Sebastian joined LPP back in 2005 as Project Manager he had a clear goal - to set up LPP’s first automated distribution centre. Having achieved that, he took charge of processes optimisation and throughput development, attaining the role of Logistics Center Director and advanced to Supply Chain Management Director further down the line.

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LPP

The flagship store for the Cropp brand

The flagship store for the House brand

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“I remember when I joined the company 10 years ago - we used to have 10,000 square meters of warehousing - our turnover and the store collateral were both small back then.” Back in 2005, LPP had just over 200 retail stores, but by 2015 this number had shot up to over 1,600 supported by a 70,000 square metre logistics centre. He explains how the youthfulness of the organisation had actually facilitated rapid growth and had given LPP the freedom to create modern solutions: “We had the luxury of creating our logistics operations from scratch, which differs from many retailers; when they need to scale their operations for periods of constant growth, they often have to squeeze them into existing facilities. Saying that, we were able to expand production at our site from 250,000 pieces per day in 2008, to 1,200,000 in 2015.” Supply chain strategy Soltys also explains that, in order to accommodate the massive growth of its retail stores network, LPP had to ensure that its entire


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“Alongside the growth of our company, in terms of logistics and supply chain it was enormous, very rapid growth that actually forced us to be very dynamic and flexible to keep up with organisational changes” – Sebastian Soltys, International Logistics Director supply chain was able to adapt and grow, he says; “Alongside the growth of our company, in terms of logistics and supply chain it was enormous, very rapid growth that actually forced us to be very dynamic and flexible to keep up with organisational changes.” “With growth in both the number of our stores and the destinations we serve, the challenge is to orchestrate on a daily basis in terms of time, cost and quality the supply from hundreds of manufacturers which are placed in more than 20 countries, spread across more than 120 different landing points.” “Every single day we have a multitude of goods landing, as well as goods in transit and coming in and out from sea ports, airports, and roads. All in all, it is a constant flow from one supply chain side to the other, represented by 1600 shop floors. Adding additional disruptive layers to that global network means that my team and I have very difficult jigsaw to put together.” And how does LPP ensure that the entirety of its supply chain is up to scratch? Soltys explains: “The key to success is ability to be flexible

The flagship store for the MOHITO brand

The flagship store for the SiNSAY brand

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LPP

Reliable partner for value-added warehouse automation

Vanderlande is a major player in the warehouse automation market and specialises in solutions for food retail, fashion, parts and components and e-commerce. It cooperates closely with its customers to optimise their supply chain and enhance the efficiency of the processes in their distribution centres. The company is a one-stop shop for innovative systems, intelligent software and life-cycle services. This integrated approach results in an optimum performance throughout the system‘s lifetime. > vanderlande.com


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with the strong eagerness on driving process improvements. You need to also remember to be reliable when collaborating with your vendors. “The biggest advantage for LPP is that we can react at a fast pace to cope with any environmental changes. When expansion was booming in Russia three years ago, we set up a distribution centre in Moscow and created a separate supply chain model for the reason of strengthening reaction against the market demand and to bring stock closer to the end customer.” “A year and a half ago, when the political and economic situation in Russia deteriorated, we were able to very smoothly balance what we were bringing out in the Russian market directly, and what we bring to the other countries. So we were just very dynamic with goods between the countries where we operate.” Jacek Kujawa, Vice President of the Board at LPP, adds: “More than ever before, excellence in supply chain and logistics is about bringing the real contribution into the revenue growth and enhancing customer

An extra layer of efficiency gained by the Automatic Storage and Retrieval

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LPP

TRANSFORM

YOUR COMPANY. THE CAPABILITIES TO ACTUALLY DO IT.

Generated at: Thu Sep 3 17:13:44 2015

© 2015 Accenture. All rights reserved.

THE INSIGHTS TO KNOW HOW TO


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satisfaction. Being innovative in terms of advanced logistics technology and IT systems in reasonable fields really pays off. Although all logistics developments made required much capital investment, they brought us a continuous cost to serve decrease.” Ethical expansion In recent years LPP has worked hard to ensure that its supply chain is as transparent and ethical as possible, which culminated with the creation of a dedicated CSR department last year to provide oversight on this initiative. This endeavour may be relatively new to the company, but due to its inherent speed, it has been able to take it on board with gusto. LPP’s spokesperson Marta Chlewicka says: “We are initially concentrating on implementing the right controls and auditing our factories. While we don’t actually own any factories, we are focusing on being precise with the ones we use – we will be conducting more audits and social audits in our supply chain, especially in Bangladesh this year, and in the future we would like to also control our factories in China.” “We are the only Polish fashion retailer who joined the Accord on Fire and Building Safety in Bangladesh initiative whose aim is to improve the safety in the clothing production facilities in Bangladesh.” Soltys adds: “We also take into account the transport we currently use; we ship via

20,000

Number of staff employed by group

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LPP modern ocean ultra-vessels, which are currently the best on the market and have reduced carbon dioxide emissions. We are also starting some trials with rail connections from the Far East to Poland which will make the supply chain smoother and faster, and no doubt much environmentally friendly. “I would say that nowadays supply chain visibility is crucial, but it’s going to be very challenging for the next couple of years, and only those companies that have full supply chain advanced visibility would gain any advantage facing the volatile macroeconomics. We aim to enhance the supply chain supporting systems to clearly see and analyse every single step of chain, because that helps you to mitigate the impact of the global disruptions and keeps you a step ahead.” “We operate in a total of 18 countries, across three continents and supply roughly 120 million pieces of garments and accessories yearly.

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Tallinder – the first premium brand in the portfolio of LPP

Such a distribution scale would definitely not be feasible without a well synchronised supply chain, supported by the advanced intralogistics technology and systems. He concludes: “On top of that, I would emphasise the human element, because you might have an ideal system but there need to be personnel to understand the process and the data and combine it to achieve the best results. In the end, it’s all about synchronising every supply chain link well with the previous and the next one.” Having grown at an unbelievable rate in the past decade, LPP has shown that a newcomer to the market can not only move with unmatched speed, but can do so without compromising on the quality of its products and build a strong yet flexible supporting supply chain. As the fashion retail space continues to evolve, the company can be sure that the systems that it has in place are more than capable of accommodating them.

“More than ever before, excellence in supply chain and logistics is about bringing the real contribution into the revenue growth and enhancing customer satisfaction” – Jacek Kujawa, Vice President of the Board

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Fuelling

success Written by Nell Walker Produced by Dennis Morales


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S K A I N T E R N AT I O N A L G R O U P

Logistics company SKA International Group is ahead of its game, providing many essential services to war-torn countries. CEO Mike Douglas discusses the impact and responsibilities of his business

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ny company which requires external acquisition and transportation of products or parts knows the difficulty of logistics organisation; this is why many businesses choose to outsource responsibility of their operations to a logistical solutions company. Mike Douglas is the CEO and owner of Dubaibased SKA International Group, which specialises in logistics solutions – primarily for fuel supply – and works predominantly in difficult areas. Founded in 2003, most of SKA’s work currently occurs in Iraq, where Douglas has been based for the past 11 years. “In earlier days it was primarily the responsibility of the US government and military to undertake reconstruction projects here,” Douglas says. “Recently we’re more geared towards the oil and gas business


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that’s been developing in Iraq. We’ve also operated in Afghanistan, and in Somalia we’ve spent the last six years investing money and effort developing infrastructure and logistics. We’re currently involved in Uganda too, and here in the UAE at the Ras Al Khaimah airport.” International relations What Douglas describes as ‘difficult areas’ often means post-conflict zones, and he understands the importance of employing the right people when becoming involved with such countries: “Not everyone wants to work in the kind of countries we work in,” he explains. “We tend to get quite a few ex-military types who function well in these

800 Number of jobs supported by SKA International Group

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S K A I N T E R N AT I O N A L G R O U P


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environments, but we have a big mixture of people from different backgrounds.” At one point, staffing at SKA spanned 27 different nationalities, and Douglas has a policy of developing a management and employee team in every country that the company operates in. “We invest a lot of effort into training and employing local nationals, with a mixture of expatriate expertise within management. That’s where the emphasis lies. We attract people through advertising, recruitment firms, and most successfully via recommendations from other companies. It’s a challenge sourcing good people, but our cross-culture operation ensures we find them.” SKA’s procedures are unique, allowing its employees to gain huge amounts of valuable experience within a niche market. Since it specialises in potentially dangerous environments, there is a huge emphasis on health

‘It’s a challenge sourcing good people, but our cross-culture operation ensures we find them’

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“We highly value the security of our people, and we have a very good track record in keeping them safe, we take risks, but not unnecessary risks because safety and security is paramount. It’s risky work, but in a controlled environment” – Mike Douglas, CEO

and safety: “We highly value the security of our people, and we have a very good track record in keeping them safe,” Douglas explains. “We take risks, but not unnecessary risks because safety and security is paramount. It’s risky work, but in a controlled environment.” Health and safety SKA believes in the concept that all accidents are preventable. The company works hard to identify HSE risks that arise from its activities and lower them as much as possible. This is a policy that the business observes closely throughout all aspects of its work, and alongside that it takes a serious interest in environmental protection and corporate responsibility. SKA recognises that it has an obligation towards the protection of the communities it operates within, as well as to the people involved, and maintains a high standard of ethics. This protects the reputation of the company and encourages public confidence. Technological advancements Managing logistics on a large scale requires advanced, state-of-the-art technology, particularly for a company which utilises many forms of transport in its operations. “We’ve invested a lot of money in technology,” says Douglas. “SKA has the first ever privately-owned fuel storage terminal in Iraq, and two years ago we signed a joint venture with BP to build an additional facility which has a 30,000 cubic feet

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capacity. That requires a huge amount of money and the latest fuel management technology. Then there’s tracking the truck fleets with satellite technology, asset tracking, and accountancy software. We have a very good IT system throughout every aspect of the company.” As well as having a firm presence in Iraq, SKA is established in Uganda, where the company is working on a project to potentially build another vast fuel terminal. “It’s still at negotiation stage; this is a very ambitious project, but we see Uganda as a huge opportunity. We’ve bought land in Somalia and we’re building a terminal there as well.” Aid work However, SKA’s work extends beyond its various logistical and fuel supply projects; passenger services, aviation, safety and security, accommodation, and life support also fall under the company’s umbrella. The business holds various contracts with the United Nations in Somalia and Yemen to supply food and life support to civilians: “We have huge camps in these countries. We also cover logistics support for the British Embassy and the European Union in Somalia, including use of a fleet of trucks to assist with UN missions.” SKA continues to expand its repertoire of services, and is working to develop its relationship in Africa and the UAE. In Iraq, SKA had already built a terminal in the major industrial port of Khor

Mike Douglas CEO Mike Douglas is the founder and owner of the SKA Group of companies and during the past 12 years Mike has developed a diverse portfolio of business interests focused primarily in logistics, oil and gas, and fuel supply chain as well as aviation support services working mainly throughout the Middle East and African region. The SKA Group currently operates in 6 different high-risk countries, employing over 800 staff with extensive experience working in Iraq since 2003. SKA Energy is currently involved in a JV project with BP, investing in a fuel storage terminal project in the South of Iraq

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S K A I N T E R N AT I O N A L G R O U P

‘We still see huge opportunities for SKA, especially in these developing markets’

Al Zubair, and is continuing to develop its venture with BP there. The aim is to facilitate the import of refined gasoline and gas oil products: “This is a big infrastructure project,” Douglas says, “and will benefit Iraq in terms of the ability to import refined products efficiently. There’s nothing else like this; Iraq will be a net importer of refined products for the next 10 or 15 years.” Such is SKA’s faith in its systems that its own logistics model is applied in the same way it runs supply chains for client companies. For example, it develops storage facilities in Somalia for fuel, brings the fuel in from elsewhere, and takes take the fuel to Mogadishu airport to fill aircrafts using the logistical format its customers are offered. The future for SKA As of now, SKA’s strategy is to improve its following by continuing and expanding on its quality of work: “We’re improving our certification all the

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time. We adhere to ISO 9000, and we’ve invested a lot of time and effort into training employees and upping our standards. With the kind of people we work with – like BP – and others in the oil and gas world, if you don’t comply with certain criteria, you can’t really be in the business. A big focus for us is improving our ISO certification.” While the business will certainly grow further, Douglas’s goal is for SKA to continue to develop within the territories in which it’s already wellknown: “We’re continuing to focus on those areas, and see opportunity for growth in all of them. The amount of investment that’s going on for infrastructure, oil, and gas projects has been cut significantly in the last six-12 months. However, we still see huge opportunities for SKA, especially in these developing markets. We’re very confident that where we are, we’ve already made significant investments and will see the returns on that over the next few years.”

2003 The year SKA International Group was founded

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Leading

Written by Lucy Dixon Pro


g the way

oduced by Dennis Morales

Geosynthetics

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HEPWORTH

Hepworth keeps a competitive edge thanks to its investment in developing new manufacturing facilities with state-of-the-art technology

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hmad Wassin Al Gendy is Corporate Supply Chain Director for Hepworth in the UAE, an organisation that produces integrated piping systems for the construction and civil engineering industries. It is part of Corys Building Materials, a holding company based in Dubai, which manages two other leading regional construction and building materials businesses: Corys Build Centre and Corys Geosynthetics. Al Gendy is responsible for the end-to-end supply chain operations and deals with a global network of suppliers, as he explains: “We source our raw materials from within the region as well as importing from Europe, India and the US. If we don’t have a secure raw material supply source with good supplier relationship management in place we are risking our business.” To avoid this risk, Al Gendy says, Hepworth works with a


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diverse list of suppliers. He adds: “We have primary, secondary and tertiary suppliers and usually we are working with the three supplier lists, each with a percentage based on the supplier control management. So we are always minimising the risk of supply issues from our raw material suppliers.” The company currently has one factory in Qatar and one in Dubai, and is in the process of expanding its manufacturing facilities. Al Gendy says: “We will have two factories in Qatar, one in Abu Dhabi and we already have the land for a new factory in Oman.” This increase in production capacity reflects the buoyant construction industry in the Middle East region, which needs Hepworth’s products

Hepworth is headquartered in Dubai, UAE

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HEPWORTH to build luxury hotels, hospitals and essential infrastructure, including the work going on in preparation for the 2022 World Cup in Qatar. “We have our brands targeting the top tier of projects as the demand is very high in this part of the world. Because of the infrastructure projects and expansion by the government and big projects taking place, we are building our new factory in Abu Dhabi and we are investing in new lines to meet the ambitious focus in the region,” he says. This high demand is in spite of the low oil prices, says Al Gendy: “Projects are not blocked. Maybe the process might be a little bit delayed, but because we are market leaders

Success Through Solutions

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Polyplast Compound Werk

‘We have a lot of great management around the people and we offer the best technical training on a regular basis’


S U P P LY C H A I N

we are not stopping our investment plans.” To make sure it stays competitive, Hepworth is making the most of what technology can offer in its existing and new factories. “We are investing in new machines that improve our efficiencies and output with new technology. We have a new extruder that is the first machine of its type in the GCC, which we will commission it in a couple of weeks. We are the market leader for this technology.” Hepworth is also a market leader in fittings technology and its socketed pipes have a special design that gives another competitive edge. It covers all market sectors with its product range, focusing on the top tier segment of the market. But, Al Gendy explains, new product developments mean it is increasingly working on second tier projects. He says: “It is the same high quality but we had some value engineering in the product to reduce the cost so we can be competitive in the second tier segment. We are trying to work some value engineering projects to reduce our costs that makes us competitive against the lower market players. Not everyone has seven-star hotels, so we need to have good market influence in other tiers.” Specialised products and innovation are clearly important to Hepworth and, says Al Gendy, it offers a service that simply isn’t replicated by any similar company in the region. “We have the edge of technology. We have the edge of know how. And because we don’t just sell pipes or fittings, we sell these systems plus service. You don’t w w w. h e p w o r t h . a e

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HEPWORTH

‘Because of the infrastructure projects and expansion by the government and big projects taking place, we are building our new factory in Abu Dhabi and we are investing in new lines to meet the ambitious focus in the region’ 74

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find this complementary approach in any other GCC companies.” He is particularly proud of the company’s key partnerships with European and American organisations such as Georg Fischer, Wavin and Filmac, which help it stay up-to-date with industry innovations from across the globe. The added service Al Gendy talks about means that the company works very closely with its clients. He says: “We work with the consultants at the design stage of the project to give them a better understanding of our products and systems, we go the extra mile. It’s an education service. As an example, I’ll give you one of the great successes we have had recently – we have a partnership with the number one oil and gas company in GCC and we are the only approved supplier to install seven kilometres of pipes under water for gas supply in Abu Dhabi.” Hepworth was the only company in the region with the expertise needed to produce this underwater system. “It’s very difficult technically, it might sound easy but it took nine to ten months to make the design and we were the only approved company to take


S U P P LY C H A I N

the project because we were part of the design process, so we understood all the ups and downs that can happen. We understood the risks and how to mitigate these risks.” Al Gendy says that developing the technical capabilities of Hepworth’s people has been critical to its success. “It’s a great place to work, the culture is very good. We have a lot of great management around the people and we offer the best technical training on a regular basis. So every newcomer who joins the company will have technical training every month. We also have companies coming from Europe giving us new technologies and we are funding our people to develop further skills. Our staff turnover is low.” w w w. h e p w o r t h . a e

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VicRoads ta at


IMPROVING THE STATE OF TRANSPORTATION

IN VICTORIA

ackles the issue of population growth with a fresh look the state’s roadways and public transportation needs

Photo by Misheye

Written by: Sasha Orman | Produced by: Andy Turner

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VICROADS

The West Gate Bridge with traffic management active on the overhead gantries

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hen Nick Fisher joined the VicRoads team at the start of 2004, the agency was known for a handful of vital but standard functions. Beyond the licenses and registrations it issues, most customers knew VicRoads primarily as a road builder. “That was its business,” he explains. “Pretty much every solution VicRoads offered as a core group of 78

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engineers was to build its way out of congestion or traffic problems.” More than a decade into the future, Fisher has risen through the ranks to his current role of Director of Road Operations, and Victoria’s roads agency has evolved as well in both vision and scope. With its latest efforts, VicRoads aims to ensure that customer journeys are safe, reliableand enjoyable


AUSTRALIA

throughout Melbourne and beyond. Forecasting t he future to improve the present Each year the Victoria State Government’s Department of Environment, Land, Water and Planning releases Victoria in Future (VIF), a document that projects population and household growth trends in Victoria up to 40 years

into the future. The purpose of this forecast is to anticipate the various needs of that future population and start the planning process far in advance. Current projections see Victoria growing to 10 million people within the next 40 years, with Melbourne in particular expanding from today’s population of 4.3 million to as much as 7.8 million by the year w w w. v i c r o a d s . v i c . g o v. a u

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AS4801


SUPPLIER PROFILE

Established: 1960 Industry: Towing & Transport Strategy: Nationwide has chosen a very deliberate path to build a quality-assured business platform based around ICT, WH&S and comprehensive training in support of our fleet and people that sets the benchmark for the industry. Services: Nationwide is the industry leader and completes over 300,000 tows per annum for all types of vehicles, a wide range of plant & equipment and other unique items. Other specialty services include clearway and emergency related towing and salvage. Nationwide services a broad range of customers such as state-based automotive clubs, police, road authorities, local councils and large Australian and multi-national corporations. Projects: During the past five years Nationwide has invested more than $30m in ICT, WH&S, quality, training, fleet and people. The ICT investment includes the collection of a wide array of data including video streaming from in-truck cameras, GPS tracking, speedometer reading, duress management and job status. Key to success: Nationwide attributes its success to its heavy focus on ICT, Quality and WH&S in support of its people, industry knowledge, fleet and supplier relationships. Nationwide has a partnership with a premium supplier, Prestige Hino, which extends over 10 years. This supplier relationship has developed due to the reliability and durability of over 150 Hino vehicles which is critical to enable Nationwide to deliver customer expectations. Management: Tony Re – Managing Director; Rob Nicholls – Chief Executive Officer; Lennie Jerliu – National Sales Manager Website: www.134tow.com.au


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2051. Melbourne is consistently ranked as one of the Top 10 livable cities in the world, and agencies like VicRoads are charged with the task of maintaining that mobility, productivity and livability for a growing population. “One of the big challenges for VicRoads is preserving our livability with a population that’s almost going to double in a 40 year period, but with a transport network that won’t double in a traditional form,” says Fisher. “My team at Road Operations is tasked with dealing with that particular challenge around journeys, where we must

preserve both well being and productivity.” Meeting needs through communication To achieve this task, VicRoads is taking a fresh look at the way it approaches problem solving. This includes working directly with the communities it serves to find out exactly how to meet its needs. “VicRoads recently released its new four-year strategic commitment, which includes our vision and how we intend to deliver on that vision,” says Fisher. “Unlike in the past, where we’d typically

The old Mitcham Road level crossing approaching Whitehorse Road in Mitcham


The beneďŹ t of an extra freeway lane at a fraction of the cost *

* Travel time using the STREAMS ITS platform on a 15-km section of the M1 Monash Freeway was reduced by more than 42% during peak periods which equates to travel time s lane (based on a four-lane cross-section) at a fraction of the cost and with minimal impact to road users.


savings achievable by adding almost an extra freeway

TRANSMAX Transmax is a full-service Intelligent Transport Systems (ITS) solutions provider that develops, deploys and supports the international award-winning ITS platform STREAMS. Transmax offers customers systems engineering, software design and development, along with a range of consulting and support services throughout the entire ITS lifecycle. We place our customers at the centre of everything we do. We are committed to the highest standards of quality, and work collaboratively with our customers to ensure our products are purpose-fit for their specific needs. Our products and services are innovative and unique – designed by experts and delivered with customer service excellence. With over 40 years’ experience developing, implementing and managing ITS, we help our customers realise the community benefits of optimising transport networks by providing smarter, more sustainable ITS solutions.

For more information, contact Transmax: +61 7 3355 8700 info@transmax.com.au transmax.com.au


SUPPLIER PROFILE

The Australian Bureau of Infrastructure, Transport and Regional Economics forecasts that, without improvements in the management of congestion, rising traffic volumes in Australian cities are likely to result in the doubling of the net social costs of congestion from $16.5 billion in 2015 to more than $30 billion in 2030. To alleviate this congestion, road authorities are increasingly turning to the Intelligent Transport Systems (ITS) rather than the traditional approach of simply widening roads. Not only can ITS be implemented at a fraction of the cost of building more infrastructure, their deployment is much less disruptive to the transport network. VicRoads engaged Transmax to undertake a trial of STREAMS (Transmax’s international-award winning ITS platform) coordinated ramp metering on a 15-kilometre section of the M1 Monash Freeway, Melbourne’s most congested freeway. Before and after studies demonstrated the following benefits: • Peak hour flow increases exceeding 10% and average peak hour speed increase of 20kph • Travel time reduction of more than 42% during peak periods which equates to travel time savings achievable by adding almost an extra freeway lane (based on a four-lane cross-section) but at a fraction of the cost •

Accidents were reduced by 30%

Daily fuel savings estimated at 16,500 litres of petrol

• Greenhouse gas emission reductions of 11% (approximately 39,800kg per day) • Economic benefits estimated at more than $1 million per day and the payback period relative to the project cost was just 11 days. ‘In Victoria, STREAMS now also manages the M80, and 75km of the M1 which includes 64 ramps and 40 lane use signal gantries,’ says Transmax Managing Director, Mark Williamson. ‘As well as the quantifiable benefits, STREAMS Managed Motorways realises social benefits including: community satisfaction through noticeable improvement; reduced stress; financial savings; increased comfort; and improved availability and quality of information on road networks.’ STREAMS Managed Motorways has the ability to maximise the capacity of existing road infrastructure and reduce travel times while improving day-to-day reliability and safety outcomes. Through the implementation of STREAMS Managed Motorways, road traffic authorities are able to benefit from the capabilities of a fully integrated ITS platform that can deliver substantial improvements in traffic management and safety. Website: www.transmax.com.au


VICROADS

AUSTRALIA

come up with an engineering solution that we would then tell the public and the customer about, we’ve substantially changed our approach. We now engage with our customers, understand what it is about their local area that they enjoy most, and then build a solution around the needs of the community.” This approach, which includes annual satisfaction surveys, has yielded communication around which VicRoads can build concrete action plans and goals. “What our customers are telling us is that they would like the ability to plan their journeys in an easier way before they make them, and

to ensure that those journeys are more predictable. If something does happen, they want to be told what we’re doing about it and find out easily what their alternatives are. They want to know that their journeys will be safe—and postjourney customers are telling us they would love to be able to give feedback on how their journey went.” Short term and long term goals To address these customer needs as well as business needs, VicRoads has first identified several short term priorities including delivering more predictable journeys

“VicRoads recently released its new four-year strategic commitment, which includes our vision and how we intend to deliver on that vision.” – Nick Fisher, Director of Road Operations w w w. v i c r o a d s . v i c . g o v. a u

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SUPPLIER PROFILE

COMPANY NAME

Employees: Xxxxx Established: Xxxx Industry: Xxxxxxxxxxxx xxxx xxxx xxx xxxxx xxxxx. Services: Xxxxxxxxxxxx xxxx xxxx xxx xxxxx xxxxx. Ongoing Projects: Xxxxxxxxxxxx xxxx xxxx xxx xxxxx xxxxx Management: Xxxxxxxxxxxx xxxx xxxx xxx xxxxx xxxxx Website: address goes here as the last entry


VICROADS

and moving freight more efficiently. As a key part of realising the goals in these priorities, VicRoads is looking at transportation altogether in a different way. “We’re in the business of moving people and goods. We recognise a diverse choice of transportation modes for our customers—cars, trains, buses, trams, and active transport modes including walking and cycling,” says Fisher, noting

AUSTRALIA

that use of public transportation in Melbourne is growing rapidly at a double-digit rate, each 5-year census period. “If we’re going to be successful in moving people in such a rapidly growing city, as a roads organisation we have to really embrace public transport as a solution to the future for moving people, as opposed to just more cars.” VicRoads is taking several steps

Overnight works to lift beams into place for the bridge over Cheltenham Road in Keysborough as part of the Dandenong Bypass

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Photo by Misheye

VICROADS

The Tullamarine Freeway and M80 Ring Road hosted a visual tribute to commemorate the centenary of ANZAC

toward improving journeys for both driving and public transport options. Some of these steps include installing Bluetooth readers at traffic signal sites to accurately measure and predict travel patterns and travel times, capital investment into Victoria’s successful managed motorways, and the development and impending relaunch of the VicTraffic app. “Some years ago VicRoads 92

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released its first version of VicTraffic to provide customers and travelers with some data around congestion levels on the network,” says Fisher. “By next year, we’re looking to relaunch that app with substantial improvements. For example, Victoria Police can close roads during incidents. When there are such unforeseen circumstances, how do we get this information to customers and then provide


Photo by Misheye

AUSTRALIA

available alternatives? That’s a gap we want to be able to fill using the VicTraffic app and other communication channels.” Looking ahead at what’s nex t VicRoads has significant plans for the year ahead, especially at the Intelligent Transport Systems (ITS) World Congress taking place in Melbourne in October 2016, where

“We’re in the business of moving people and goods. We recognise a diverse choice of transportation modes for our customers—cars, trains, buses, trams, and active transport modes including walking and cycling” – Nick Fisher, Director of Road Operations w w w. v i c r o a d s . v i c . g o v. a u

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VicRoads recently installed 70 concrete bridge beams over the Princes Freeway to form the new Sneydes Roda interchange in Werribee

the agency will display some of its biggest initiatives and engage the industry for collaboration. “One thing that’s very important to us is that we need to partner with the industry to make this successful,” says Fisher. “The Congress is one place where we’ll be showcasing some of the 94

March 2016

initiatives that we want to deliver on, but also we want the industry to better engage with VicRoads to help Victorians.” VicRoads is also turning a strong focus to freeway improvement to support the region’s large population of motorists, and has partnered with Public Transport


AUSTRALIA

Company Information NAME

VicRoads INDUSTRY

Transportation / Construction HEADQUARTERS

Kew, Victoria - Australia ABOUT

VicRoads purpose is to deliver social, economic and environmental benefits to communities throughout Victoria by managing the Victorian arterial road network and its use as an integral part

Victoria to support the growing population of mass transit users. “We’ve partnered with PTV to understand how we can prioritise public transport movements, particularly public transport modes that are on-road,” says Fisher. “At the moment we have a tram system that’s the biggest in the world. There are a lot of opportunities, and we will be working with PTV to see how we can make that far more successful. That is the future for us.”

of the overall transport system

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AS C F


LOGISTICS OPERATORS

CRITICAL SUCCESS FACTORS FOR 2016 Written by: Cesar Meireles | Produced by: Donovan Herbster

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ABOL

B

razil has immeasurable growth potential. However, in the last years it is facing a recession, having closed the year 2015 with a GDP drop of 3.5%. Herculean efforts and management exercises will be imperative in 2016. Brazil is the world’s fifth largest country in territorial extent, with a land mass of 3.3 million square miles (8.5 million sq. km). Its population of 204.5 million

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inhabitants is concentrated in a roughly 180 mile (300 km) strip of coastal area, mainly on the southeastern and southern states. Unlike the US, which has a wellbalanced transportation network encompassing 43% railways, 32% road and 25% waterways, Brazil is highly dependent on roads, with 67% of all transportation done by highways, only 18% by rail and 11% by waterways; the remaining


BRAZIL

4% is handled by ducts and air transportation. A cause for concern is that in the early 2000s the country had attained some success in balancing the transport matrix, giving the impression that it had in the past decade a proper strategy for developing the transport infrastructure. Brazil features over 5 thousand miles (8000 km) of coastline

and navigable rivers, with open possibilities for the integration of the hinterland. Sadly, the coastal shipping and inland navigation system is severely underdeveloped, having meager participation in cargo transport. Brazil, which in the early twentieth century had ramped up its rail network deployment, now struggles to keep cargo railways as a sustainable growth inducer. w w w. a b o l b r a s i l . o r g . b r

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ABOL

Despite having a huge bias toward roads, Brazil has a low road density of 300 miles of motorway per square mile of land area (185.7 km per 1000 sq. km). For the sake of comparison, the United States has 3.6 times 100

March 2016

more, India 5.4 times, France 9.8 times and Japan 17.1 times. Even worse, only 11% of the 1 million miles (1.7 million km) of the country’s public roads are paved. This is a truly challenging


BRAZIL

scenario. In view of the fact that many of these issues require political will to break the inertia built over many years, to lead the country’s economic development has become a task for the private

sector. Third-party logistics providers (3PLs) hold the key to this goal. A recent study by the Brazilian Institute of Logistics and Supply Chain (ILOS) shows that domestic expenditures with logistics in w w w. a b o l b r a s i l . o r g . b r

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2014 amounted to 11.7% of GDP, compared to 8.7% in the US. Spending in logistics in that year totaled $176 billion (R$ 694 billion). According to the latest ThirdParty Logistics Study, the activity of logistics operators reduced worldwide logistics costs by an average 15%. Taking into consideration the Brazilian infrastructure’s anachronism, bottlenecks, bureaucracy and legal obstacles, Brazilian logistics operators are capable of achieving a cost reduction of 9.9%, according to estimates from Dom Cabral Foundation (FDC) . It was already pointed out that the total expenditure on logistics in Brazil is around $176 billion (R$ 694 billion). Without the efficiency gains attained by logistics operators, it would rise by 9,9%, totaling $193 billion (R$ 762.7 billion). Thus, the value generated by logistics operators in 2014 through cost reduction was $17 billion (R$ 68.7 billion). Given this scenario description, it becomes clear that the logistics operators, with their trained 102

March 2016

staff, technological innovation, customized project management, risk management and proper application of resources, make a sizable difference in the implementation and management of logistics operations in the various business sectors and productive chains where they operate. Nevertheless, it needs to be


BRAZIL

Company Information INDUSTRY

Logistics HEADQUARTERS

S達o Paulo - Brazil E S TA B L I S H E D

July 2012 NUMBER OF MEMBERS

Top 20 logistics companies operating in the Brazilian market KEY PEOPLE

Executive Director of ABOL, Cesar Meireles

stressed that the logistics operators and shippers must establish a fundamental, symmetric and convergent action with transparency in contractual elements, in order to manage Service Level Agreements (SLAs) that are feasible and consistent, showing clearly where cost and risk reduction opportunities may ensure greater competitiveness and predictability in their operations.

President: Gennaro Oddone Executive Director: Cesar Meireles

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DRIVING AVAILABILITY AND EFFICIENCY Renting Colombia brings value added for companies and individuals through their vehicle renting service

Written by: Mateo Rafael Tablado Produced by: Taybele Piven Interviewee: Carlos Mario Santa Restrepo – Marketing and Communications Manager for Renting Colombia


RENTING COLOMBIA

R

enting Colombia has become a benchmark operation in Latin America for vehicle rental services, evolving toward perfection in both customer service and in internal operations. For 18 years, Renting Colombia has provided continuous improvement in user experience, making the most of developments in auto technology, including data analysis to signal improvement areas for clients. Renting Colombia is partnered with Localiza, an auto rental franchise created in Brazil licensed to Bancolombia. Both businesses deliver added value by displaying operational efficiency of every unit in every fleet.

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L AT I N A M E R I C A

Key People

Renting Colombia’s awards include those from Avianca airlines, SAB Miller breweries, SOFASARenault manufacturing, and Logyca (logistics enterprise, affiliated to MIT). “We have evolved from a traditional rental model to a productive rental enterprise,” said Carlos Santa Restrepo, Marketing and Communications Director for Renting Colombia. Santa Restrepo is a marketing specialist who graduated from the School of Management, Finances and Technology Institute (EAFIT University, Colombia). Santa Restrepo has worked for Kimberly Clark, Zenú meat packaging and DEDECOL (food and drinks), as well as for advertising agencies.

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Carlos Mario Santa Restrepo Marketing and Communications Manager for Renting Colombia

Santa Restrepo is a marketing specialist who graduated from the School of Management, Finances and Technology Institute (EAFIT University, Colombia). Santa Restrepo has worked for Kimberly Clark, Zenú meat packaging, DEDECOL (food and drinks) as well as for advertising agencies. 107


RENTING COLOMBIA Client-centered functionality

Awards from the company’s clients increase the company’s motivation in offering excellent services

Renting Colombia’s business model is a clientcentered operation, which has become a key factor for the company’s success and longevity. Vehicle availability — which is covered in 95 percent — is the first of many attributes displayed by the company, a trait that does not affect a client’s productivity. Renting Colombia’s share of vehicles is relatively balanced between 60 percent light vehicles and 40 percent heavy vehicles. These same figures are reverted revenue-wise, as heavy vehicles bring the company 60 percent of its earnings. The Localiza operation is mostly for individual clients who need a vehicle, both on a short- and on a long-term basis. Replacement cars from auto insurance companies fall in this category, as well as cars rented by tourists, corporate rentals for personnel transportation. “Our strategic vision allows us to think from each client’s perspective,” Santa Restrepo said. Technology and big data for clients’ benefit Any vehicle renting company is able to offer GPS tracking, but Renting Colombia goes farther with onboard systems that transmit vehicle

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L AT I N A M E R I C A

Renting Colombia offers a centralized fleet monitoring system, able to obtain reports from irregular use of every unit

operation data to a central monitoring location. This allows tracking of irregular operations such as drivers exceeding speed limits, engaging in a sudden jam on the brakes, idle vehicles and other abnormal behaviors. “We deliver a report to our clients, suggesting areas for driver improvement,� the executive said. A total of 18 integrated programs and apps make up Renting Colombia’s software portfolio, improving operational and managerial vehicle control. These programs include invoicing, drivers w w w. re n t i n g c o l o m b i a . c o m

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RENTING COLOMBIA

The forecast for Renting Colombia includes aggressive growth strategies and increasing their fleet of electric vehicles

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L AT I N A M E R I C A

dispatch, vehicle logistics and other data fields. Frontline for a set of value added services Renting Colombia’s main commitment is supplying vehicle units from the country’s best manufacturers, with whom long-lasting business relations have been established. Working with the best vehicle manufacturers goes farther than operating with fine quality end products; it also is directly related to receiving aftermarket support such as reliable vehicle maintenance. Auto insurance for Renting Colombia’s vehicles is provided by SURA, one of the most important brokers in Colombia and the region. “We have surrounded our clients with a network of allies able to provide the best possible services in the name of Renting Colombia,” Santa Restrepo explained. The crown jewel of Renting Colombia vendor services is the “En Route to Service Excellence” program, which evaluates, trains and rewards these companies’ abilities. Environment and CSR, hand in hand with purveyors

“We have

surrounded

our clients

with a

network of allies able to

provide the best possible

services” – Carlos Santa Restrepo, Marketing and Communication manager for Renting Colombia

Renting Colombia and its supplier network work together in lessening the environmental impact w w w. re n t i n g c o l o m b i a . c o m

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RENTING COLOMBIA

Renting Colombia maintains its ranking with Great Place to Work by having excellent talent detection and being open to current staff ideas

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Bancolombia, Renting Colombia and the Localiza franchise: three united fronts offering excellent services

derived from their operations. The company monitors and evaluates the way its suppliers handle residuals such as used motor oil, filters, batteries and other materials. Other efforts led by Renting Colombia include reforestation programs, in which suppliers also take part. These efforts have resulted in 20,000 new trees being planted in the Colombian territory during the last three years.

Fleet availability is a key factor to increase client loyalty

Company culture: environment for collaboration and development Renting Colombia consistently ranks high in the Great Place to Work polls in its country. This is no surprise, since the company has programs to w w w. re n t i n g c o l o m b i a . c o m

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L AT I N A M E R I C A

support its staff members as they complete their educations, as well as providing credit and travel opportunities to represent the company abroad.

Company Information NAME

Meanwhile, management is always willing to receive improvement suggestions from its team members.

Renting Colombia INDUSTRY

Vehicle renting

“We are keen to detect the talent in our younger staff. We include them in specialized tasks according to the attributes we see in them, benefitting their development within the company,” the executive explained.

HEADQUARTERS

Medellín, Antioquia, Colombia

Future: augmented value and sustainable efforts Renting Colombia’s goals for the upcoming years imply an aggressive growth scheme, with the purpose of tripling its fleet value by 2018.

FOUNDED

A partnership with Medellin’s power supply company will result in the acquisition of 50 electric vehicles for Localiza’s fleet.

REVENUE

1997 EMPLOYEES

500

$220 million WEBSITE

“We are happy to engage in an environmentallyconscious practice by Renting Colombia, which will be displayed through Localiza,” Santa Restrepo said.

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www.rentingcolombia.com

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Profile for Supply Chain Digital

Supplychain Digital Magazine - March 2016  

Supplychain Digital Magazine - March 2016