2025, ProcureCon MRO. Panel_Navigating Change – How Should MRO Respond To Regulations In The New Administration

Announcer: Welcome, welcoming Peter Benson, back to the stage as our moderator, as well as Anna Geller. Pierre Bou Chenin and Maria Greaves.

Pierre Beaulieu, Head of Strategic Sourcing, Canada – JLL: Perfect.

Peter Benson, Founding and Executive Director – ECCMA (Moderator): Oh, good morning. It's still morning. We haven't got the afternoon yet.

Announcer: Okay.

Peter Benson, Founding and Executive Director – ECCMA (Moderator): And this is, I realized we're between you and lunch as well, which is always a challenging place to be so hungry for knowledge, right? Yeah that's the main thing. So I'm really honored to moderate this session.

We have 40 minutes. I would like to try to keep the last 10 minutes for questions so you get maximum benefit of them. So in, Pierre and Shannon, and Anna and Maria, we have some excellent knowledge about, supply chain in general, MRO specifically. And really what I'm asking them to give us is some insight into how their organizations are responding to these MRO challenges.

And we talk about administrative changes. We're talking about tariffs here, right? So how are their organizations managing that? But is there a silver lining? Is there something that we can look forward to that maybe dealing with this is gonna be to our advantage? Pierre, do you wanna kick us off?

Pierre Beaulieu, Head of Strategic Sourcing, Canada – JLL: Sure thing.

So there's a couple things that happened recently with tariffs. It really highlighted similar to what we had during COVI, which is the resiliency of our supply chain to really understand, to have risk mitigation strategies to be put in place, to really understand where the tariffs are impacting our supply chain, how they're impacting our suppliers as well, because.

Sometimes it's just components of their finished product that comes to us that are impacted by tariffs. So understanding the impacts on our suppliers is really key.

Anna Geller, MRO Category Manager - Venture Steel: So for us, the biggest challenge come from the tariff is the cost. It definitely increased the cost in some areas such as electronical supply power transmission and bearing, and also some raw materials.

It's really difficult with the budget predictability. Also, it challenges our relationship with. Strategic vendor not have trouble to maintain a competitive pricing.

For us, what we do is we focus on near shoreline and supplier diversification. So we leverage the US MCA, which allows the free trade between the us, Mexico, and Canada.

Despite all the noises the fat is 80% of goods currently come from the Canada and Mexico are tax free. By leverage lease U-S-M-C-A, we are seeing like shorter lead time and also we have better control of our spending. I would say the the civil lining is a first innovation.

So for us the tariff actually speed up our procurement digital efforts. It leads to a better contract. It also leads to a better initiatives to work with the internal stakeholders. I would say the pay is real, but the long term gain is we will have more resilient and more agile supply chain.

Peter Benson, Founding and Executive Director – ECCMA (Moderator): Thank you, Anna.

Chen Lin, Senior Category Manager, Indirect Site Purchasing – Saint-Gobain: Yeah. For, like me personally, because I work for a steel company tariffs have impacted us quite a lot. We're Canadian based and we ship out to the US quite a bit. So it's been quite a challenge, but I will say that the opportunity was that we were got very granular into understanding all of our SKUs.

So we took a whole database and said, okay, where are all our SKUs coming from the country of origin and broke it down to all the components. So let's say. There's, it could be a 25% tariff on one item. It's not a blanket 25%. Once you break down the components of that item, it could be like 70% plastic, maybe 15% metal, like depending on so then you can divert your strategy from there.

Another thing that it opened up for us. Was reviewing like a make or buy analysis. 'Cause we had one product that we were buying from the us, shipping it into Canada, processing it here, and then delivering it over to the us. So then we were trying to think, okay, is it possible that we can buy locally and then ship out because we were taxed incoming into Canada and then opened to the us.

So it reframe things to say, okay, can we vertically integrate anywhere? And where does you know, maker by analysis fit into that?

Peter Benson, Founding and Executive Director – ECCMA (Moderator): Thank you, Maria.

Maria Greaves-Cacevski, Category Manager - Canadian Blood Services: And I'm working for Canadian Blood Services, so I work in the healthcare sector and I think the silver lining that we take away is never to be lackadaisical or non-compliant.

What is very important is when tariffs first started, the healthcare industry was zero. Now, as you can see, the healthcare industry is also impacted. Not only that, but almost every global country is impacted in some means. So when I say there's a silver lining, we have to, as professionals take this as a resiliency opportunity to determine what we can do better in terms of how we buy.

So smart strategies as we're identified, but also your strategic partnerships. Predominantly in a healthcare industry, we are very much. Sole source or single source, and it's heavily regulated. So some of you may not be in healthcare, but some of you may have sole and single source vendors, and you also have to develop that working relationship because you can't always just pass the buck.

Sometimes you have to learn to absorb it. Sometimes you have to learn to mediate, win-win strategies. So for us, the opportunity is one to get more knowledge into how tariffs are assigned. Also to learn more of the makeup of our vendors, where they are sourcing from, who are their tier one and tier two vendors.

So developing that more open door communications with your vendors right now. So that is our takeaway and that it's continuously evolving. So I really wanna share that with you. If you do have single and sole source vendors to really start that open, transparent conversation.

Peter Benson, Founding and Executive Director – ECCMA (Moderator): Thank you. And again, I was asking the panel again.

I had the opportunity to talk to them before and I learned a lot from our discussion and from a high level strategy, there's a lot that has to be thought through and of course this is forcing us to do it. Things we hadn't done before. But I wanna go one step lower. Looking at actual how, what techniques, technologies, what do you bring to the play?

What, what has helped you solve the problem?

Pierre Beaulieu, Head of Strategic Sourcing, Canada – JLL: I'll give an example for hvac, right? HVAC is made out of aluminum or aluminum depending who I'm talking to. And you have this headline tariff of 50% and so everyone panics and, our HVAC is gonna be 50% more. So having discussions with our supplier understanding.

The percentage of the manufacturing of an hvac, yes, it's an aluminum, but you have labor component to assemble it. You have circuit boards, you have refrigerants, you have a whole bunch of other components within the unit. So the 50% impact is only on 20% of the cost of the unit. So now when you have the conversation with the supplier, it's really a 10% increase. It is not a 50% increase. And I think what's also important is our internal stakeholder, right? We need to have conversation with internal stakeholders that we are looking into it, we're having discussions with the suppliers, and yes, there's gonna be an impact in some shape or form, even if there's no, there's uncertainty.

There's people hoarding equipment. We had the. And the purchase of 15 units of hvac they're like $20,000 a pop. And the client in front just bought 70 just in case. So emptied out the stock of our supplier.

Peter Benson, Founding and Executive Director – ECCMA (Moderator): Do you have any specific tools or things that you use to, to manage this information?

Pierre Beaulieu, Head of Strategic Sourcing, Canada – JLL: So I would say it's more, internal communication tools that we have, and then we communicate within our sourcing team so that everyone has this information. I think it's important that even if you're not touching a specific category to be aware of, like Maria mentioned, categories that weren't impacted.

It's important to know what tariffs are so that when it comes to your category, you're not like, oh my God, what's a tariff?

Anna Geller, MRO Category Manager - Venture Steel: I will focus on what we did from like digital procurement perspective. So we leverage both in the market intelligent and BI tool to track the visibility and planning and also doing the scenario modeling.

First we relied on a borough. It's a market intelligent platform that can give us a real time, alert of. What's the change of tariff and administration change? And it also flag everything that is MRO category related or our vendor region related. So it give us, feasibility to evaluate our exposure in lad and internally we developed a Power BI tool.

That track the 20% of items that accounts for 80% of our total spend. The process start with, we send out a standard template to our vendor and ask our vendor to fill in specific information such as manufacturer, part number, country of region. Expected quantity we purchased this year.

What's the current pricing and what's the expected type of adjusting the pricing on a monthly basis? Waste list two. We have a clear visibility by vendor, by country of region, down to the line, either level of what our impact is. One great example is. With the tool, we are identified that Suki chain that we are currently purchasing, the price is up to 14% because of the tariff.

By spotting this information, we work with vendor and find on a Suki chain, actually have a US manufacturing site. By doing this, we avoid 14% of the tariff impact.

Chen Lin, Senior Category Manager, Indirect Site Purchasing – Saint-Gobain: Yeah.

Anna Geller, MRO Category Manager - Venture Steel: And you guys might ask what if my vendor refuse to gimme this information? So in here we become more creative. Most of my strategic amount vendor, I have a guarantee saving program with them.

So that guarantee saving basically means they need to deliver the savings by doing initiatives such as process improvement, inventory management. Or, skill optimization with our sites to deliver the saving by the end of every contract year. If they couldn't make the guarantee saving that per they committed, they need to send me the check for the shortfall.

So for all of list vendor, if they want to pass 100% of tailored to us, I tell them, fine, you can pass the tablet to us, but you need to deliver extra saving to upset. The difference. So in this way it is a like win-win solution. We hold our vendor accountability and the same time, we defense our baseline.

And the third things we do is we have some sort of simulation tool. So it's a simulation engine to simulate what if na tariff increase 10, 15 or more, and what will impact to my, budget and we can adjust the sourcing. Strategy accordingly. Last but least, we incorporate all WS two into one, BI two to connect with the procurement and operation so that all my internal stakeholder is easy to assess the tariff impact and can make cooperative decision.

Peter Benson, Founding and Executive Director – ECCMA (Moderator): Thank you.

Chen Lin, Senior Category Manager, Indirect Site Purchasing – Saint-Gobain: That was very well, said there. We implemented something similar as well. And we also have weekly meetings because everything can change week over week. But we're looking at the highest impact on products. And with that we're saying, okay, what is our strategy moving forward?

And what are we doing, week to week? Another thing is we're also, we're asking the supplier to justify. And we're looking back to our contracts. What do our contracts say with that supplier? And asking them for alternatives as well. Do they have alternative products that they can offer us that may not have tariffs or might have a lesser of a tariff, and how does that impact?

Maria Greaves-Cacevski, Category Manager - Canadian Blood Services: Yeah, so in addition to some of the things that my colleagues highlighted. What we have also started to do was really partner strongly with our import and export brokers. They are our knowledge owners. They have a lot of firsthand real time information transparently. We currently broker with f with FedEx.

So FedEx is a very world renowned and knowledgeable vendor. So if you have a. A freight forwarder or a broker of record, they are someone that is also another source of information to help guide you on best practices help educate you and your internal team. 'cause oddly, we become the subject matter experts for anything called tariffs.

So our CEOs, our C-Suites, they don't know what's going on, so they come down to the procurement level and it's expected that we go out. And find this information and share this information. So on top of everything that my colleagues have highlighted what their organizations are doing, we also try to partner with the subject matter knowledge seekers, which are outside, which help with us expediting those shipments releases.

That helps with informing us the proper documentation. HS codes is very important in Canada. And also making sure that we're able to get real time updates, which is very critical.

Pierre Beaulieu, Head of Strategic Sourcing, Canada – JLL: Yeah. And just quickly just to piggyback on this what was said it's also a good opportunity to establish good relationship with the other departments within the organization.

So you're gonna have, if you're working with real estate as an example, selfishly of course, it helps saying, okay, here's the impact of terrorists, here's the impact on supplies that are coming within the country. Let's start planning our CapEx expend like our capital projects so that we can plan in advance, talk to our suppliers, have them find mitigation strategy, because I'm gonna have a need for additional units.

I'm gonna have, motors I'm gonna need in six to 12 to 18 months. So let's start planning, let's start having those discussions because otherwise it's always. I'm changing this unit tomorrow. Can you get me this part A, B, C, right? So now we can have this discussion with the suppliers in advance and start mitigating those costs because instead of going to China, they might go to have time now to search a manufacturer that's within country or that is exempted from those type of tariffs.

Peter Benson, Founding and Executive Director – ECCMA (Moderator): So starting on the way back on. Again, suppliers have come up again and again. The relationship with the suppliers. Tier one, not a problem. You'd expect they're all contract bound. You meet with revenue, but as you move down particular MRO, you're moving down tier two, tier three suppliers. How do you automate that process?

How do you make sure, because the bandwidth is tough. You've got a lot of information coming in, a lot of changes, a lot of people, all of a sudden you have to negotiate with, you didn't negotiate last week or the week before. How do you manage the scope of that? Are you able to cope with that? Do you wanna start it?

I.

Maria Greaves-Cacevski, Category Manager - Canadian Blood Services: So I am saying that we're not coping well. So it's a learning process, so you have to make sure that this is new to everybody. So it's new to you, but it's also new to your frontline or your end users. So it's trying to work collaboratively with them to understand their reorder trigger points because for MRO is indirect.

It's not always in a demand planning system, it's like they went into the back office to pull something and it's just not there. So it's going back to them and educating them. So what one of the techniques is to give a high level overview of what's going on, have an area and I think Chen spoke about some of the tools that her organization's using in terms of automating the process.

So once you've identified that there is an item, it's starting to build upon that list, but it's evolving daily, monthly, and weekly. So what we started doing is we started doing a supplier risk assessment. We also started to do a monthly check. And we're also identifying high risk pro products that will either shut down, limit or impede business.

And because again, frontline our end users are patients, doctors, donors. So it's very critical that we're very communicative in all of our processes and we have a layer of transparency.

Chen Lin, Senior Category Manager, Indirect Site Purchasing – Saint-Gobain: Yeah, so I think like for not your preferred suppliers, but the suppliers that you may not have contracts with I think you also have to be careful that you're not single source there because they may not have the, financials to be able to sustain those tariffs.

So you have to check to see how viable they are as a business after the tariffs.

So that's something we look at as like more of our higher risk suppliers.

Peter Benson, Founding and Executive Director – ECCMA (Moderator): Yeah.

Anna Geller, MRO Category Manager - Venture Steel: I will focus on how do we use the contract management to mitigate in the tariff in here. So right after this tariff happened, we negotiate contract with all strategic vendor to include the tariff adjustment cross.

So it works like this way. If any item there's a tariff being applied to an item. The vendor need to first provide, notify us, then provide us evidence at the same time they need to propose an alternative item item within three to five days. So lab give us the time to review and respond to.

If there is no alternative item or the alternative item they provided, we could accept it. Lease is in the time that we agreed on vendor can pass the tariff impact to us, but cap to certain percentage or the certain dollar amount. The other way we do here is. We asked the vendor to separate it the tariff charge into a different line item, so not buried into the final price.

A lot of vendor they, refuse. They don't want to provide you levels of detail. They only provide high level info, but this is the time, like you push them. Basically you're saying like, how can I pay you to the of impact if you don't tell me exactly. What we are paying for.

And we also reserve the audit rights in least way. We can come back to track, monitor and audit those charges. We are not just focused on the pricing. We also include the first major cross into our contract, but to the benefit of buyers. So basically, if only of our vendor want to claim the relief.

Because of a tariff, they need to show us there is a real material impact happening and they have taken the best, they could to mitigate the wrist. So in this wind, they cannot just use the tariff impact as a blanket excuse to increase the price or delay the shipment.

Pierre Beaulieu, Head of Strategic Sourcing, Canada – JLL: Yeah, no, I I agree. I think that's the importance of transparency in the relationship, right?

So understanding. The difference between the actual price, the manufacturing cost, and the tariff, because those tariffs do fluctuate depending on the relationship of the country. And so you don't want to agree to a plus 25% cost increase and then two days later that tariff has been null and void, but you're still paying the 25%.

We've seen this time and time again with the fuel surcharge when gas was getting higher and then. The fuel surcharge somehow mysteriously stayed and price the oil drop. So we just wanna make sure that we have visibility into it. Yeah I think that's a, an important feature and it's really also to understand alternatives for the suppliers as well.

So understanding, I give an example of janitorial supplies where they're making cleaning products in China, sending it to California. And then to Canada. So we were getting like double tariffs everywhere. Turns out they were also having a manufacturing site in North Carolina, so why can't we just, switch?

And frankly, it was just the easy route for them. So they just said, yeah, no, it's from China. So plus 20%. So now having this discussion, understanding their supply chain, their components really mitigated the cost increase.

Peter Benson, Founding and Executive Director – ECCMA (Moderator): Yes it does come down to data, to the point that you need the information, you need transparency to get the information and make sure clear with it in the different countries every, we're dealing with it.

In the US we have a, the Department of trade has a really good service that monitors tariffs and effects. And one of the issues which we haven't really dealt with is the non tariff measures and tms. We usually expect to see a lot more of those non tariff measures or there's no tariff, but there is a standard or a rule that makes it difficult for you to export or import from a certain area or certain product.

And the example I use a lot is, it's an old one, in used to exporting US vehicles to Japan, there was no tariff, but there was a local standard that said there should be no protrusion on any of the lights. If you bought a headlight from Lucas and that was who your supplier was, Lucas imprints their name actually on the light.

That's a protrusion. So every US car going to Japan has been spent $5,000 to hand polish all of those protrusions off. That's a non tariff measure. I do a lot of work in Saudi Arabia. They have introducing new standards for collar fat fastness and temperature effect on plastics. So any item that arrives in the kingdom.

And that has a plastic component that's gonna be outside, must comply with this local standard. If you look on your power supply that you have on your computer, we don't have as many bricks these days, but all those marks on the back of it are non tariff measures that local standards you have to comply with.

And of course, beyond our tariffs and non tariff measures, we have sanctions. I was looking at the sanction list, which is published in the US and all of a sudden I find a company that we do s with on the sanction list. It wasn't the company, it was one specific factory. So the sanction was applied to one specific location.

So you're not need to scramble and see, where's this stuff coming from? 'cause if it's coming from here, I got a problem. So again, these are things that affect our. Purchasing on the Amarillo side, it's, not as easy. Oh you make it great. What's the price? Can you ship it? Fantastic. Oh, wait a minute.

No. I do the fact that it is the buyer, typically the shipper, the supplier is responsible for assigning the tariff code. But I was very interested that you take an active and proactive role in looking at the tariff code that's applied. Looking at that description and and in, in the work that we do with data particularly as it comes to tariff codes and HS codes, you know there are national HS codes and international HS codes, and your description will determine what codes applied.

You can describe things slightly differently. That description will make a big difference. And as I was said in my presentation, customs are now using AI to look at that description and say, we're gonna challenge. Your HS code and the tariff that applies and one group you do not want to have discussions with if you can avoid it, are customs.

Yes they're not exactly tolerant. It just sits there until everything is ready to go, and that could take a long time. And if you're paying marriage fees. You'd be surprised how quickly the bill can go up.

Pierre Beaulieu, Head of Strategic Sourcing, Canada – JLL: Yeah. And you have to that point there's also tools that are out there to look into anti-money laundering, anti-terrorist

Peter Benson, Founding and Executive Director – ECCMA (Moderator): absolutely

Pierre Beaulieu, Head of Strategic Sourcing, Canada – JLL: sanction busting service providers.

So having a list of those and running your supplier list against those lists. And to your point, like. Half of the time, there's always this random supplier that shows up on the list. And as you dig deeper, you're 99% of the time in the clear. But there's always that chance. And then wanna make

Peter Benson, Founding and Executive Director – ECCMA (Moderator): sure Yes, as I me, my presentation, we run the Know your supplier databases, open public database, but it's based on government databases around the world.

300 million businesses registered with governments around the world provide data automatically. That you can check. So there's no excuse for anybody to be buying from a supplier if you do not know who they are. And the number of times somebody sends me a supplier list and it's based on names, alright?

And they spelt Grainger three different ways, right? So there's three different suppliers today in the world we live in. That's not acceptable. So there is a very easy way to just as the banks have know your customer, right? They have to know for anti-money laundering. Andon applies to know your supplier as well.

So if you haven't done that, do it. It's not hard to do. Every supplier has a international identifier that's issued by their government. Know who that supplier is. They have a legal name. And surprise. Just like we as individuals, we have a date of birth. So when you go to a healthcare network where they ask for your name and date of birth, every corporation has a date of birth.

And it's very useful in just d differentiating between two suppliers that may have the same name in different countries or different states, different date of births. So if you don't have that on your database, you wanna look into that as well. So yes, it's know your suppliers, that's obviously their first step.

Better descriptions of the items is critical to be able to know. Mush tariff code applies. Now, somebody approached me before he came in saying, in certain countries are using different tariff codes, and that is actually how the system is designed. In the US we have the US tariff code, which is A-I-H-I-S, whatever it is, right?

But basically it's in two parts. It's an international component and a local component. So it's actually not that difficult. But it is something you need to be aware of and pay attention. 'cause that's really how all of the sanctions and all of the tariffs are applied. They use that code and that code is based on the description of the item.

Up until now, it was too labor intensive for customs to verify the application, the code. Guess what? With AI and machine learning, it's not to onerous, and what we're seeing is a spike in challenges. That the HS code is not the correct code and all of a sudden you get a bill for a tariff you weren't expecting.

So that's, again, is something we can mitigate as well.

Pierre Beaulieu, Head of Strategic Sourcing, Canada – JLL: Yeah and to, again, you talk about knowing your supplier,

Peter Benson, Founding and Executive Director – ECCMA (Moderator): absolutely.

Pierre Beaulieu, Head of Strategic Sourcing, Canada – JLL: It's not necessarily that you have to reach out to your supplier every two minutes and get this information from is as you onboard a supplier, as you renew your contract, include all those requests for information as part of it.

Leave yourself a, an audit, right? Just in case there's something new. But it's part of a vendor code of conduct. They need to have, make sure that they're not, busting any sanctions and that they have all the codes, the appropriate codes, they have to provide it as part of the contractual documentation.

Provide me as much information as you have so that. When new situations are gonna happen, new tariffs are gonna happen, or change in tariffs, you'll have all the information you can visualize. What are the risks to your organization?

Peter Benson, Founding and Executive Director – ECCMA (Moderator): Yes. And one thing we do find is that as companies onboard new suppliers, they collect all the data and all the information, and they give them a, supplier ID and start working.

And you ask them, a year later, did you check your supplier's record? So part of the system,

Pierre Beaulieu, Head of Strategic Sourcing, Canada – JLL: You have to,

Peter Benson, Founding and Executive Director – ECCMA (Moderator): part of what we do is we have automatic warning systems that when a supplier their registration of the government becomes inactive and they do, by the way, right? That means it's an early warning sign.

You may have a problem. We notify our members that this suppliers, their government registration has become, been labeled inactive. You may wanna take a second look. So it's not something, it's not once and done. We live in a very dynamic world. Everything changes. You have to know your suppliers. You have to check with them.

The other thing we've recommended from an MRO perspective, all those part numbers that you have from that supplier, ping them. Ask them to verify are they active? Are these part numbers active? That's the quickest, lowest level verification you do. But issuing a purchase order with an A part number on it, which is no longer active, just as cause you headaches and problems.

That are unnecessary. So again, relationship with the suppliers, but the data is not fixed. It's gonna be, gotta keep this flow of data between you and the supplier to be able to do that. So we basically track what we call a technical point of contact. Somebody we can ask about the item and an administrative point of contact, which we use to verify if anything changed on that supplier that we need to know.

So it's a constant communication and we do that on behalf of lots of companies.

Pierre Beaulieu, Head of Strategic Sourcing, Canada – JLL: And another point that I think is important is this re, and I think everyone touched on this, is the resiliency rate.

Peter Benson, Founding and Executive Director – ECCMA (Moderator): Correct.

Pierre Beaulieu, Head of Strategic Sourcing, Canada – JLL: We talked quite a lot during COVI about, everyone got caught and scrambling to buy mask from somewhere.

Yes. Colleague,

Peter Benson, Founding and Executive Director – ECCMA (Moderator): don't go

Pierre Beaulieu, Head of Strategic Sourcing, Canada – JLL: there. I was lucky to have someone on my team that was Beck and knew someone in Uzbekistan that could ship me mask and, it is just, it's just crazy at that time. But then it helped us put risk programs in place. Put mitigation strategies to, to your point, knowing your supplier is key, right?

So you're gonna be able to understand what are gonna be the challenges when. They are faced with adversity and you might have a, a mitigation strategy or you might just have, at least you'll be aware, you don't need to have a mitigation strategy for every supplier you got, but you need to understand that when those type of impacts on tariffs, on non tariff barriers or, they get into an argument with India and now India is on the blacklist, right?

How's that gonna. Impact your business. Just knowing that it's gonna impact your business, I think is one of the key things that sourcing team

Peter Benson, Founding and Executive Director – ECCMA (Moderator): can do. The scale is low as a challenge. That typical, have three to 5,000 suppliers. How many do you have in your department managing that?

That's a big, that's what automation comes in as well.

Pierre Beaulieu, Head of Strategic Sourcing, Canada – JLL: Yeah.

Peter Benson, Founding and Executive Director – ECCMA (Moderator): Questions? Any questions? Burning questions that anybody has at this stage that I think they're gonna give you a mic.

Audience: I think this is a comment and a question also because we have somebody from Canada, I'm also from Canada. We are based out of Montreal. Yeah.

Pierre Beaulieu, Head of Strategic Sourcing, Canada – JLL: Represent.

Audience: So I think what I've seen as a trend is a lot of US suppliers are still, prone to be supplying out of the US to Canada.

And that's prone to, tariffs.

Because even if it's coming from any other country, it's coming to us first and then it's coming to Canada. That creates, an additional layer of indirect taxing, et cetera, so I think what we are trying to do is trying to convince suppliers to maybe give us our share of respect now and start moving their warehouses to Canada, just to save on the tariffs.

And of course that's a bigger opportunity for them to also grow their businesses.

So I just wanted to put that on the table, have you experienced, especially yourself, working there? Have you had these communications with your suppliers to think about Canada as a separate entity now and.

Establish their storage setups and distribution networks.

Maria Greaves-Cacevski, Category Manager - Canadian Blood Services: So there's two things that we did. First, we understood what type of tariff it was. Was it a retaliated tariff or was it a true sanction tariff As we spoke about, and once we fully understood who was paying that's when we moved to what's our government doing for us.

So do not be shy to reach out to your area representative, to your government, to your province or state. To see if there are programs that they're offering and within Canada, I can speak to the healthcare industry because there are programs where as Chin was mentioning about DI putting it as a line item on your invoice.

That, yes, you're gonna pay it. We have to pay it up front. We can't get away with it. We urgently need the material. However, there is a way to backtrack that, accumulate your data, and then see if your organization, your industry, or your government agency is doing something to reimburse Companie. Within Canada, we're struggling economically, so small companies, mom and pops, there are initiatives to help with them.

So I don't know the size of each of your organizations, but this is where you need to go in and investigate what your regional, federal, and provincial, and state agencies are doing. So it's not a clear answer. We can't push back and tell all 600 vendors to relocate your stuff. What we can do is to keep those lines of communication open, offer some suggestions that were volunteered.

If that doesn't happen, because we urgently do need the product, pay it up front, register it, log it, track it, and then see what your government agencies are doing to help you. And

Peter Benson, Founding and Executive Director – ECCMA (Moderator): that in, in the workovers in internationally, in Saudi Arabia, they actually have a program for import tariff exemption.

So if you cannot find, if you. The ministry say, I could not find this product in Saudi. I request to be exemptive import tariff. That's how they fund it. So it's a very well funded program, and it's a process for that. Yes.

Pierre Beaulieu, Head of Strategic Sourcing, Canada – JLL: Yeah. And just to add to this, it's, we talked about planning, demand planning as well, right?

So we had suppliers that are manufacturing in China for furniture. So screws and everything. So instead of having them going to California, train to Toronto we help them reroute to Vancouver.

But the lead time was like six weeks more. So you need to make sure that you have conversation with your team.

You have opportunity to stock more, right? So if you can stock more on site and you can reroute and have. Mitigate your tariff exposure by having additional delays. That's also potential.

Peter Benson, Founding and Executive Director – ECCMA (Moderator): The challenge of course is be agile. These things are changing all the time. We don't know how long they're gonna last.

But I think the one thing clear of is, we have to be able to deal with these changes and disruptions and they're not just physical disruptions. Just a ship in the Swiss canal that went across with. Was not helpful to anybody, now our governments are piling onto it and having fun and games as they do what they do.

So we need better data. And again, you need better data from your suppliers and that comes from a cooperation, a trust. It also comes from an agreement on standards of how you exchange data so you can reduce the cost of getting data by all using the same. Formatting of data, and that's really what we try to do is help reduce the cost of it.

And Anna mentioned that we have to have a supply chain data manager course, which is free and online, which you try to educate people on supply chain data. And how do you improve the quality data without increasing cost? It's an online designed for people working in supply chain to learn how to manage data.

Pierre Beaulieu, Head of Strategic Sourcing, Canada – JLL: Cool.

Peter Benson, Founding and Executive Director – ECCMA (Moderator): So any other questions? I've got one here.

Okay. Yes.

Yeah, there you go.

Audience (2): So just a quick question. If tariffs go away we're all wanting them to go away, but what would you think? How would you approach that once it's gone? We've already got impacted. We've had that increase. We've had a couple of manufacturer plus tariff increases now, so trying to keep up with all those, but how would you approach the vendor once the tariffs are gone?

And we've already have, are paying that higher price. And

Peter Benson, Founding and Executive Director – ECCMA (Moderator): you were correct.

Anna Geller, MRO Category Manager - Venture Steel: So one way you can do is incorporate the tariff clause in your contract. That is if the tariff go away, that's the moment they need to stop charging your guys.

Peter Benson, Founding and Executive Director – ECCMA (Moderator): Yeah.

Anna Geller, MRO Category Manager - Venture Steel: And if you already pay a fund, you can pull in some sort of clawback clause into the contract.

Peter Benson, Founding and Executive Director – ECCMA (Moderator): Line item detail, the tariff costs, you try to make sure that's in your line item detail. So when it goes away, that line item detail goes away. That's on everything. When they have these external costs like that, if you can get it detailed where the tariff is applied.

You been successful, feasible? Yes. In some cases, yes. Yes. Yeah. Yes. Fact, when you get to contracts in your contract, it specifically should, and the number, the word tariff is appearing almost in every single contract. And what you wanna do is look at your contract. So the word tariff does not occur.

You may wanna go back and revisit the contract.

Pierre Beaulieu, Head of Strategic Sourcing, Canada – JLL: Yeah.

Peter Benson, Founding and Executive Director – ECCMA (Moderator): But

Pierre Beaulieu, Head of Strategic Sourcing, Canada – JLL: you, in your contract documents. Please include government change or government legislative change.

Peter Benson, Founding and Executive Director – ECCMA (Moderator): Yes. '

Pierre Beaulieu, Head of Strategic Sourcing, Canada – JLL: cause it's tariffs this week, next week it's minimum wage going up 30%. Yeah. You just want to have this so that we're talking about this.

You're not using force measure every two seconds as part of your contract clause.

Peter Benson, Founding and Executive Director – ECCMA (Moderator): And government is a player.

Pierre Beaulieu, Head of Strategic Sourcing, Canada – JLL: Yeah.

Yeah.

Peter Benson, Founding and Executive Director – ECCMA (Moderator): And the weather is, that's mother nature. But then we have to deal with our government, then we deal with the rest.

Pierre Beaulieu, Head of Strategic Sourcing, Canada – JLL: Yeah.

Audience: Yeah. I think we're at time. I just wanna give this panel a great round of applause for a great discussion.

Peter Benson, Founding and Executive Director – ECCMA (Moderator): Thank you.

Audience: Thank you. Thank you, Peter, for leading that.