Vanguard Magazine

"I expect the Trump Administration to pursue an array of policies designed to restore supply chains and encourage domestic content in public procurement. So far, much of this guidance has been rhetorical in nature, but look for policies to emerge soon." — Scott N. Paul this connection between local supply chain and their success, the CEO of Suncor, Steve Williams said, "Businesses and economies are at risk if we fail to meet society's rising expectations for our performance". I believe that with shifting geopolitical attitudes towards "bring- ing jobs home," "reshoring" or just "buying local," the light is going to be shone there more formally. In March, I met with Scott N. Paul, the President of the Alliance for American Manu- facturing and an Advisor to Trump on Trade at supply chain con- ference in the United States. For this article, he clarified: "I expect the Trump Administration to pursue an array of policies designed to restore supply chains and encourage domestic content in public procurement. So far, much of this guidance has been rhetorical in nature, but look for policies to emerge soon." Scott Paul has also commented publicly that we can no longer assume the World Trade Organization is all that matters. I also spoke to Robert Baines, the President & CEO of a board that I sit on: the Canadian NATO Association. Robert forecasted that "President Trump could conceivably implement a favoured supplier scheme whereby American defence firms would be di- rected to only seek procurement contracts from countries fulfill- ing the 2 per cent promise, or that countries could only receive access to procurement opportunities pro-rated to how much they contribute." Baines went on to add, "While it would be a night- mare for NATO industrial defence collaboration, it would enable the United States to react to the NATO member defence bud- get deficit on a bilateral basis with each individual NATO mem- ber and would add an incentive for countries to increase defence spending in order to save industry jobs." You can also expect more scrutiny to be placed on labels such as "Crafted in America" or "Assembled" in America, where signifi- cant portions of the manufacturing process are still done offshore, shipped to the U.S. and then assembled. The emphasis will be on proving how much of the work was actually done in America by American citizens. harmonized Tariff codes I remember when I was running my factory in the Dominican Republic, we were importing raw materials from China into our Free Trade Zone, converting the materials into final prod- ucts, and, under the new Harmonized tariff codes, were able to ship them to the United States and pay that relevant tax. If a product changes its tariff code, it then becomes that country's content. For instance, a Honda engine block cast in Japan is not an en- gine. It is a casting. When all the parts are bolted on in the United States, it becomes an American-built engine. I have a feeling the World Customs Organization (WCO), that classifies traded prod- ucts, will need to be involved. Here, the more you can back up with hard data, the more legitimate your claim to being "Made in America" will be, and that is where your supply chain and pro- curement efforts will come into play. Looking at how the Cana- dian offset program calculates Canadian Content could be a good place to start. Based on our understanding of Canada's sophisti- cation, we have built electronic calculators throughout OMX for measuring domestic content around the world. local Sourcing I recently spent a week at the SAPAribaLIVE conference where the CEO of SAP, Bill McDermott, spoke. As the leader of one of the world's largest software companies selling to the world's largest corporations, it was interesting to see how much of his focus has shifted to understanding the social impacts of supply chains. We've since signed a partnership with SAPAriba, which is the division of SAP focused on B2B supply chain. They have up to a million opportunities within their platform at one time, which will be continuously filtered and sent out to suppliers in the OMX network starting in May 2017. Companies already using SAP Ariba for procurement will now also get the added benefits of regular OMX users who are tracking and reporting on their local spending through OMX's tracking and supplier management tools. Below are some screenshots of the data analytics OMX generates in local content. So, as you can see, sourcing locally is getting serious, and so are we. nicole verkindt is the technology editor of Vanguard magazine and founder and president of oMX. She is a board member of the Canadian Commercial Corporation and was recently appointed to the board of the peter Munk School of Global Affairs. T TechnoloGy WAtCH www.vanguardcanada.com AprIL/MAY 2017 39

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