“The adventure of life is to learn. The purpose of life is to grow. The essence of life is to care. But the true beauty of life is to give. Thank you for giving me the opportunity to be here.”
With those words, Michael “Pinball” Clemons opened the 16-annual Supply Chain Management Association (SCMA) Ontario conference in Toronto. The two-day event kicked off October 18 and boasted over 300 delegates.
Clemons, a former Toronto Argonauts team member and head coach, was the event’s keynote speaker on October 18. He told the group that he had pondered what to say to supply chain management professionals beforehand, but decided to speak to them about value. He jokingly compared them to offensive linemen (football’s “big guys”) since few spectators know who they are until something bad happens. He used the team metaphor again when noting that no one member is as good alone as all members together. “It’s incumbent upon us to know that our input is significant,” he told the audience. At the same time, Clemons noted, each member must act as if the team’s success relied on them completely.
Clemons spoke about a fullback he played with, who was one of the most consistent people he’d ever known—the player coached his children in football and never missed a day of either coaching or work in eight years. During that time, Clemons said his friend battled brain cancer and died the same day Clemons was inducted into the Canadian Football Hall of Fame.
“What I want to say here is, without [that player] and the other big guys, I couldn’t have run for 100 yards,” Clemons said. “I ran for 25,000 (yards) but I couldn’t have run for 100 if it wasn’t for them. I want you to know that that’s your role in the workplace.”
During another presentation, John Weigelt, chief technology officer for Microsoft Canada, addressed staying competitive. The productivity gap, he noted, was a shortcoming of innovation. But “innovation” is an overused term, he said, and people don’t often see innovation within their own organizations.
When referring to the “digital economy,” Weigelt noted areas such as the gaming industry, the medical field or banking. But other businesses like the oil and gas industry have adopted digital technology, with companies in Fort McMurray using systems that manage staff right at the wellhead. Another example is agriculture, where farmers use robotic tractors to harvest food.
To remain innovative, look at how technology can change business, Weigelt said, with transformational trends like mobility, social media, big data and others coming one after the other. He also cited “the internet of things,” in which computers and systems are more connected than ever before. Commercial industries have led the way in this area, he noted.
There’s an evolving interaction with computers, he said. For example, some computers can be manipulated with gestures rather than touch. Robots are also finding new places within various industries. Teddy Bear robots are being used to sooth children in hospital, home service robots can help the elderly stay in their homes longer and robots can even hand equipment to surgeons.
“This is a big transformation that’s happening and I’m not sure many people are paying attention to it.”
Innovation came up again during a presentation on building an RFP, by Ian Brennan of PPI Consulting. That spirit of innovation is important in procurement, Brennen said, noting a one-size-fits-all approach often doesn’t work. Don’t be afraid of using the RFI process, Brennan said, as the process allows procurement to approach a vendor with key questions. Brennan stressed the importance of building an RFP team from the outset. He cited several key people to include on that team, such as strategic procurement experts; subject matter experts; the legal department; and senior management.
Begin an RFP with the business outcome in mind, Brennan recommended. Beginning with “process paralysis”—focusing on process rather than outcome—usually means an unhappy client whose needs remain unmet although there was an open, fair and transparent RFP process, he noted.
“If you build a model, at the end of the day you’ll get better results,” he said. Constructing models helps clients focus on what they’re buying and picture that product—especially when multiple stakeholders are involved. Models also help vendors better understand deliverables.
For procurement, models help to focus on business outcomes, avoid scope creep and aid in articulating the deliverables in the RFP. Also, Brennan noted, use models that align with industry best practices where applicable. A model helps to provide a clear and concise view of what the organization expects through the RFP.
The majority of an organization’s money (about 60 percent) flows out through procurement when payroll and treasury are put aside, said Cameron McCaw of McCaw Consulting, during his presentation on fraud prevention on the conference’s second day.
“By shear definition, where you have the majority of the funds flowing out is where the majority of fraud is occurring,” said McCaw.
McCaw noted that the average fraudster has usually been doing it for two years at the time their actions are discovered and has taken $145,000. “It’s usually not a one-off situation.”
Frauds usually occur when there’s a breakdown of internal controls or with something that started as an error. These are called “points of vulnerability,” he said, noting they were places where things could “slip through the cracks.”
Fraud involves asset misappropriation or corruption, McCaw told the audience. Misappropriation tends to have direct evidence, such as cheques or vouchures pointing the way. Corruption involves conflicts of interest, bribery or kickbacks and the evidence is circumstantial. For example, an employee might set up a business supplies company then buy from themselves on their employer’s behalf.
“The key to preventing fraud is through trying to ensure you have an ethical work environment where everybody knows the expectation for honesty,” he said. “If you set the right tone at the top it goes a long way to ensuring that things run effectively.”
For that, organizations need internal control systems, McCaw said. If employees feel they work in a positive environment, fraud is less likely; organizations with low morale are more likely to experience fraud. Fraud red flags include unusual trends or close relationships between procurement and suppliers, or when an employee’s lifestyle suddenly improves without explanation.
Improving the RFP process
Hugh Lawson of Staples Promotional Products led a session highlighting tips for improving the RFP process. Doing so has become more important recently, he noted, since many organizations aren’t seeing much growth and a better RFP offers organizations value without additional staff, Lawson said.
With RFPs, collaboration is key, Lawson noted. To get the best performance from participants, make them an extension of your organization. By collaborating, vendors can take on a “help us help you” approach to producing the RFP, Lawson said, which is better than making the process entirely about price. “If you make it all about price then you’ll get price,” he said. “But there’ll be strategies put in place to get it back over time.”
Using emotional intelligence during the process is helpful, Lawson said. He recommended getting internal staff, stakeholders and vendors involved in an RFP. “At the end of the day, you’re leading a mass of people on both side to get the right outcome,” he said.
Lawson also recommended allowing about three weeks as a timeline for an RFP. While a tight timeline often means an RFP writer is waiting for information from other sources, it can also mean that vendors are unable to offer their best.
The conference wrapped up with Bill Zakarow, director of procurement for the Toronto 2015 Pan/Parapan Am Games. Zakarow took the audience through what it takes to procure for an event that host 41 countries across over 40 venues with 450 staff, 51 sports and a budget of $1.4 billion.
Zakarow focused on the impact of the supply chain on large, multi-sport events and what happens behind the scenes. When it comes to logistics, Zakarow said, collaboration is critical. With 100,000 SKUs warehoused, the games can’t afford mis-shipments.
“We can’t have equipment coming into Canada prior to the warehouse being opened,” he said. “In the games, warehousing and logistics are extremely important.”
Zakarow highlighted the transportation of horses as one area with logistical complexity. Choosing the right supplier and working with sports federations in each country is complicated, he said, as is the reverse logistics afterwards.
“It’s another complexity that, when I took the job I didn’t know how to do,” he said. The games have also worked to engage diverse suppliers, Zakarow noted, as well as supporting the local economy. Workshops have been held to help diverse suppliers participate in bidding, as well as encouraging large companies to work with SMEs and diverse businesses for servicing the games.
Themes such as the importance of innovation and collaboration emerged at the conference. While procurement and supply chain practitioners must keep an eye on emerging trends in technology and the field overall, they must pay equal attention to core skill sets in order to be successful.
