How to Negotiate With Your Existing Suppliers

“If you know the enemy and you know yourself, you need not fear the result of a hundred battles”

       Sun Tzu, The Art of War

 

When it comes to negotiating with a supplier you know versus a supplier you don’t, the tendency is to prefer the one you have an existing relationship with.

 

There could be several reasons as to why this would make the most sense:

 

       Renewing an agreement for goods and services that are already being provided.

       Engaging a supplier who is already on site for time-sensitive work

       Leveraging pre-negotiated terms, conditions and/or pricing

 

However, these are not the most common reasons for businesses to prefer their incumbent suppliers to new ones.

 

The main reason we negotiate with incumbents is because we know them.

 

When I needed new tires I asked my mechanic what he would recommend, since he had been servicing my car for the last 6 years. Tires were not his specialty and I knew I would pay a premium by having him find and purchase the tires for me. But I also knew that he would recommend the best tires based on his knowledge of my car and the way I drive it.

 

Similarly, we tend to prefer looking to our incumbent suppliers for solutions to our problems because we feel that they will recommend what is best for our organization based on their knowledge and experience from having worked with us.

 

This makes complete sense, and in most cases would be the recommended approach. The goal should be to have 80% (or more) of your annual spend go through your top 20 suppliers.

 

But this should not mean that we forego the negotiation. A healthy supplier relationship is built not only on trust, but also on transparency and mutual benefit. Good suppliers understand this and are willing to open up discussions for a mutually beneficial agreement. The rest are looking to make a quick buck at their customer’s expense.

 

I recently had the good fortune and misfortune of representing a client in negotiations with two very well known software suppliers. The client had acquired another company through a divestiture and both suppliers were incumbents of the divested entity.

 

One supplier came to the table in the full spirit of partnership. Their team brought forth all of the knowledge they had gleaned over the years in licensing their products to the divested entity. They understood the architecture and proposed solutions that would allow my client to maximize their investment. They also provided industry insight that demonstrated an understanding of my client’s business beyond what their software did.

 

The other supplier pointed to their existing license agreement with the divested entity and stated that, since it did not allow for assignment of licenses, my client would need to re-purchase all of the licenses that were currently installed or face legal recourse.

 

In the end, we negotiated a short-term agreement with one supplier and established a longer-term strategic partnership with the other.

 

I will let you guess which supplier my client no longer uses.

 

Leveraging existing relationships doesn’t mean giving in to the incumbent’s demands, but rather negotiating mutually beneficial agreements with the suppliers that want to be true business partners and not just vendors that sell you things.

 

Have you recently negotiated with an incumbent supplier, or are you preparing to do so anytime soon? If so, I would love to hear about any challenges you’ve had to overcome or tips you may have for the rest of us.

 

OneView

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We are all facing Austerity…and here’s how procurement can help

A friend of mine recently asked me to explain austerity measures to him

 

So I said it’s like this…you know how you told your wife you needed a new set of clubs because that’s what was missing from your golf game

 

And she said fine, but then you should also let me know which of your three daily meals you’re going to give up 

 

Because we can afford to have you running around on a golf course pretending to know what you’re doing AND eat like a king at home

 

Well, that’s austerity. Now the term’s typically used in reference to governments that are finding it hard to borrow money or pay back loans

 

So they introduce austerity measures like increased taxes and spending cuts which then impacts a households disposable income…breakfast or golf?

 

But austerity doesn’t just impact the public sector or limits itself to the Federal government 

 

Like when corporations find they have to pay more taxes, they try to counter-balance that with either more revenue or less spending

 

But it’s always easier (and faster) to cut costs then it is to increase sales

 

And this is where our jobs as procurement and supply chain professionals becomes so critical

 

Never has it been more important to make that shift from tactical purchasing to real strategic sourcing and vendor management

 

Before the pandemic, that shift would have occurred in one of two ways

 

Either the organization would mandate a greater focus on strategic, cost savings activities while maintaining business as usual on the tactical purchasing side

 

Or they’d bring in outside help for the strategic stuff while their existing team focused on tactical purchasing

 

But we’re in a post-pandemic world and most organizations I’ve spoken with don’t have the appetite to spend money in order to save money

 

They need cost savings now, not 6 months from now or a year from now…so they need the people who are already there to find a way to do more with less

 

And that could be a tough ask for procurement departments that were already understaffed and struggling to just keep up with the day to day stuff

 

Unfortunately, I don’t have a magic bullet to fix that problem. But I do have a suggestion, based on my experience and what’s worked for me over the years

 

I suggest taking a look at your procurement process to see where you can create some efficiencies

 

Because those efficiencies will give your team the extra time they need to focus more on cost savings activities

 

And you don’t need some big shot consultant, or even a little shot like myself, to review your process for you or point out the inefficiencies

 

You can do it yourself, and you could probably do it in one day. The harder part will be in convincing your people to give up some of the administrative tasks they spend time on every day

 

The reality is that, as much as procurement people complain about not having enough time to get everything done, they love their SharePoint folders and Excel spreadsheets

 

It’s mindless busywork but it gives the appearance of a really complicated, IQ-intensive task

 

Have you ever walked by someone in procurement who’s staring intensely at a massive spreadsheet and thought “man, I don’t wanna be that guy”

 

When I see that I think “man, there goes a couple of thousand dollars in salary down the drain”

 

If you’re a procurement person managing your work on a spreadsheet…you’re doing it wrong

 

And you’re wasting time that could be used to focus on more strategic, cost saving activities

 

If you don’t believe me, check out some of the testimonials on our website …or feel free to reach out to me directly for a chat

 

Mohammed

[email protected]

 

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Pandemic/Epidemic Business toolKIT

We are deeply focused on keeping your employees, customers, and suppliers safe while working, visiting, or conducting business at your facilities and supporting your business operations.

The Michael White Group International and Hilt International Security have partnered together in order to create a dynamic resource that is continuously growing, developing, and being  revised to keep you informed of the latest requirements, new best practices, and procedures.

As we all continue to navigate our  ‘new normal’, we have tapped into our global resources to develop a toolKIT that lays out processes to raise awareness of new health and well-being protocols and potentially helpful practices for cross-functional teamwork, operating discipline, and training for employees.

While it is not a one-size-fits-all approach, the Pandemic/Epidemic Business toolKIT includes practical recommendations, based on guidelines from Health Canada and World Health Organization, that could be tailored for different  businesses (when required) to address various scenarios they may face when returning to work. Regular updates will be made to the toolKIT based on real-time feedback. The toolkit covers a wide range of topics, including:

•      Step-by-step guides for setting up a pandemic response team

•      Cleaning and disinfection procedures

•      Staggering shifts and lunch breaks and other physical distancing strategies

•      On-site health screening

•      Protocols for isolating employees who become ill at work

•      & more.

This has been a difficult time for everyone, and re-establishing a workplace where employees feel comfortable performing their jobs safely is a multi-faceted challenge. It is our hope that by developing and providing this resource we can help your organization accomplish and adapt to the new operating protocols in today’s still ever challenging conditions.

Should your Municipality be open to exploring the need, whilst accessing our  toolKIT to assist you during  the re-opening, and re-populating of your facilities, contact Michael White Group International today, and in partnership with Hilt International Security we will be happy to assist.

 

 

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Even the Best Technology Needs Good Process

We know that technology is the backbone of any successful organization and, as a company grows, it must constantly add and change the internal tools that will enable it to stay competitive and profitable.

 

This applies as much to Procurement as to any other department within an organization.

 

But new technology on its own can’t overcome gaps in a broken or non-existent Procurement process.

 

In fact, some Procurement groups will actually create redundant steps when forced to incorporate new technology solutions into an overly complicated, inefficient procurement process

 

Case Study: Procurement Process Redundancy

 

Many years ago I worked for an organization that was using:

 

        i.         A home grown Purchase Requisition system to create and track internal requests for goods and services

       ii.         An add-on document management module from the corporate Print solution for Contract Management

     iii.         An add-on module from the corporate ERP system for Purchase Orders; and

      iv.         An add-on module from the corporate help desk ticketing system for Asset Management.

 

Since none of these disparate systems were integrated, the Procurement team had created a series of processes to manually input information into each of the systems for every purchase.

 

The overall process was incredibly redundant and full of vulnerabilities.

 

Purchasing agents would print out fully approved Purchase Requisitions and manually input the information in the ERP systems to generate Purchase Orders.

 

Contracts would go through several redundant approvals before final approval and signature, only to be stored in a standalone document repository with limited search capabilities.

 

Assets were received and tracked in a separate Asset Management system that required manual receipt of products and a 3-step invoice approval process.

 

Having failed several audits, the organization purchased very expensive Purchasing Requisitioning and Contract Management add-on modules from their ERP supplier, who assured them that their solution would provide an airtight Procure-to-Pay solution for the company.

 

What the supplier failed to highlight, and the organization failed to address, was cost and effort to redevelop processes, retrain employees and re-input years of historical data across 4 different legacy platforms.

 

So several years, and millions of dollars later, the add-on modules are collecting dust and the organization continues to limp along with even more redundant process bandages to stop the bleeding.

 

There have been exponential advances in Procurement technology over the past 20 years. And in the hands of skilled Procurement professionals the results have been amazing.

 

But Procurement tools are very closely integrated with Procurement processes.

 

Before investing in new technology an organization should evaluate the processes that are in place and then determine what, if any, new technology can be easily integrated into organization without creating redundancies or complexities that will increase costs.

 

Is the Procurement technology in your company an asset or a crutch? How has Procurement process, or a lack of it, affected your organization?

 

Please download our free report on Procurement Process Innovation here -> http://oneviewnow.com/report and see if there are potential cost savings opportunities hiding in your Procurement process

 

by: OneView

 

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The Negotiators Toolkit: 6 Roles for Effective Contract Negotiations

Contract negotiations are often complicated processes that can take several weeks or months to finalize.

 

The responsibility of the negotiator is to not only engage with his or her counterpart on the other side of the table, but to also oversee and manage the overall process.

 

While this may sound simple and intuitive, a closer look at all of the roles and responsibilities of a negotiator shows just how complex the management of a negotiation can be.

 

More importantly, not giving each of these distinct roles its due diligence and attention could be the difference between a mutually beneficial negotiation that mitigates risk and a lopsided negotiation that benefits one party while setting up the other for failure. 

 

When representing my clients in a negotiation, I typically wear a few different hats.

 

The Negotiator

This is the obvious one. The role and responsibilities are fairly well defined. My job is to understand the requirements of the business and negotiate the most favourable outcome while mitigating as much risk as I can in the contract.

 

The Lawyer

All lawyers are negotiators but not all negotiators are lawyers. I’m not a lawyer, but I’ve been negotiating for over 20 years so I know my way around the legal terms and conditions of a contract. That doesn’t mean I don’t need a lawyer on the team, but part of my job is to know our lawyer’s threshold of acceptability and negotiate terms as close to that threshold without going over it.

 

The Accountant

Two of the most important business terms in a contract, for both sides, is a description of what goods and/or services are being transacted, and for how much. Because of their importance, a lot of focus is given to making sure the “what” and “how much” in a contract is well defined. But there are other aspects of the agreement that also require some level of financial analysis such as payment terms, taxes and delivery fees.

 

The Decision Maker

A good negotiator takes the time to really understand the business requirements before getting into a negotiation. Because as much as we try to put structure around our negotiating strategy, there will always be unstructured moments when one party puts something on the table and the other party needs to make a decision. There have been times, during a meal or a round of golf, when my counterpart has casually offered up or conceded a key point in a contract and I’ve found myself having to make a quick decision on behalf of the business

 

The Project Manager

As a negotiator, I’ve often found myself at odds with project managers, and to some extent they’re my nemesis in negotiations. Gantt charts, timelines and status updates define their world. But contract negotiations are hard to manage on a Gantt chart because I don’t know if it’ll take 4 hours, 4 days or 4 weeks to agree on Warranty language or an Indemnity clause. However the reality is that project managers are there to make sure things are moving forward on time and on budget, and since they can’t sit in on every negotiation, I often find myself taking on that responsibility.

 

The Admin

This is probably the most overlooked and challenging role I’ve had to assume in a negotiation. It’s also the reason why I believe a good administrative staff is the backbone of any successful business. Even simple contract negotiations involve a lot of paperwork exchanging hands. In addition to several iterations of the contract draft circulating internally and back and forth between parties, there are also emails, meeting minutes, term sheets, schedules, addendums and other miscellaneous notes that need to be tracked and summarized

 

So all of this begs the obvious question: How does one person handle all of these responsibilities?

 

The short answer is that in most cases they shouldn’t, at least not directly.

 

Good negotiators are also good delegators. They have a keen sense of their strengths and weaknesses, and will move other resources in and out of their negotiations as the need arises.

 

When I’m working on a deal with a strong emphasis on protecting my client’s Intellectual Property, I’ll lean a little more heavily on our lawyer to help negotiate key legal terms and conditions.

 

Similarly, if my client’s business requirements seem high-level or somewhat undefined (which is a very common occurrence) I’ll make sure to involve a decision maker from the business in key discussions with our counter-parts.

 

What hats do you wear as a negotiator? Which ones do you find most challenging?

 

By: OneView

The only platform built for managing contracts!

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Security Risk Assessments; high level breakdown

Critical Infrastructure Protection

Security Risk Assessments are a vital insight into your organizations security gaps, vulnerabilities and most importantly strengths. To not dive too deep into the technical structure and methodology of a comprehensive Security Risk Assessment, we provide this brief and mostly non-technical article to break down the basic components.

Recognize – more commonly stated as Identify the hazards or risks. Before you really can do that, you need to know and understand the difference between what a hazard is and what a risk is. A hazard is “something” with the potential to cause you, your organization, your employees, your reputation harm. A risk that “likelihood” of that harm actually happening.

Impact – more commonly known as deciding who is going to be harmed and how. Who’s going to feel it, how is it going to happen? Almost like trying to figure out whether or not it is the butler in the den with the candlestick …for those who appreciate a good game of Clue.

Bump – So you’ve recognized the hazards and risks and you’ve figured out where the impact is going to be. Now what? Now you have to protect it or at least put some form of management or control piece in to either slow it down or stop it completely from happening and affecting you. The virtual or very much physical speed bump.

Note it – Write it down, digitally record it, take pictures, tell a few people. Do what you need to, to record it. Why…because you want to monitor your success. You want to know that the bump you’ve put in place is working or needs to be re-recognized because the impact may have changed. It’s also due diligence. You can show that you know that there is or was something that raised whatever level of concern, you thought about it, did something about it and continue to watch it.

Recognize it again – Plan the Work. Work the Plan. Once you’ve done the assessment you need to do it again. You need to understand what is working, what has changed, what is new and what are you doing about it.

This article is to serve as a high level awareness tool. Unfortunately it doesn’t remove the complexities of your operation or the complexities of the security risk assessment. But boiling it down to it’s barest components allows you to understand the varying phases or steps that are taken during a security risk assessment. It’s important to note and understand that each of these components can be expanded and contracted as necessary to have a myriad of steps or components within each of them.

Nevertheless it all falls back to these high level principal components.

Should your Municipality be open to exploring the need, the application and benefits of a Security Risk Assessment, contact Michael White Group today, and we will be happy to answer your questions or provide quotations.

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Is Road Salt Really Worth the Risk?

If you live somewhere that has a snowy winter, there is no doubt you are familiar with ‘ice-melts’ or ‘road-salts’ being used to create traction and melt ice build-up. Using an ice melt or salt makes it safer to get around outside, both on foot and while driving during these cold, snowy months. You can pick up a bag of salt at most corner stores, hardware stores etc. When a storm is coming, you’ll see fleets of large trucks spreading salt across the city streets and parking-lots alike. But – What is the ‘salt’ being used to melt the snow? Is it safe? Below we will outline 3 of the most common ingredients of ice melt products, and the potential effects on humans, children, pets and the environment.

Sodium Chloride:

Sodium Chloride is the natural mined mineral form of table salt – rock salt or halite as it is sometimes referred. Sodium Chloride is “one of the most abundant minerals on Earth and an essential nutrient for many animals and plants. It is naturally found in seawater and in underground rock formations.” Source Sodium Chloride is generally inexpensive in comparison to other types of ice-melting products, however its “lowest effective temperature [is] 20°F (-7°C), [making it a] relatively slow and ineffective ice-melter when temperatures are coldest.” Source

Section 6 from Sodium Chloride or Salt Safety Data Sheet from Compass Minerals showing accidental spill measures

Every year in Canada, “5 million tonnes of road salt is used to de-ice roadways.” Source This salt “dissolves into sodium and chlorine ions” which often make its way to waterways, posing risks on aquatic life.  Other negative side effects can include “harm […] to plant life, so it shouldn’t be used near vegetated areas.” Rock salt is also “similarly dangerous to pets [and wildlife] since it causes disorders when ingested.” Source

Calcium Chloride:

Unlike Sodium Chloride, Calcium Chloride works in quite extreme temperatures. Calcium Chloride is “able to melt ice at a lower temperature point of -20°F (-29°C) … Over exposure […] can harm lawns and other plants if deicer is over applied.” Source Calcium Chloride not only melts ice at a lower temperature but it also melts it quicker, this is due to the heat it gives off as it dissolves after contact with water. “[A] study found that at -7 C (20 F), [Calcium Chloride] has 22% more penetration after 10 minutes and 38% after 30 minutes than [Magnesium Chloride].” Source

Section 6 from Calcium Chloride Safety Data Sheet Revere Pioneer RIM showing accidental spill measures

Magnesium Chloride:

Similar to Calcium Chloride, Magnesium Chloride also releases heat when it encounters moisture. It can work in temperatures as low as -5°F (-20°C). Unlike other forms of salt or deicer, Magnesium Chloride dissolves quickly when it is on ice, making it effective for a shorter period, in turn causing it to be more expensive. Source  However, the water created from the rapidly melting ice also dilutes the magnesium chloride at a quicker rate than other products, making it less corrosive on roads, parking lots and other surfaces.

Section 6 from Magnesium Chloride Safety Data Sheet from Innovative Surface Solutions showing accidental spill measures
Dogs playing and walking in the snow with their owners above a list of the dangers road salt and ice melt & dogs

Each of the three ice-melt products listed above have PROS and CONS when it comes to their impact on human health and the environment. While Calcium and Magnesium Chloride were oftentimes in my research being described as less harmful to the environment – as shown on the Safety Data Sheet sections above – in large quantities they can all be dangerous, especially to pets, wildlife and aquatic life. When it comes to choosing which product to use, it is best to consider your specific scenario before deciding on your ice-melt product. Location, quantity, temperature as well as checking for other toxic ingredients are all things to consider when making your decision. Many cities, businesses and environmentalists have experimented with alternative solutions; everything from pickle brine to molasses to volcanic rock! Until an alternative replaces the use of road salts altogether be sure to take the appropriate precautions when working with ice-melt/salt products this winter.

MySDS Inc. can assist you with hazardous material compliance in your workplace… contact us for more information! 1-855-282-4537 | www.MySDS.ca

Sources:

 

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Canadian Government Entities Under Scrutiny for Lax Cybersecurity

Canada’s government sector is increasingly coming under scrutiny for both lagging privacy and security both in legislation and in practice

 

In a sign of the times, figures released in February to the House of Commons reveal that the personal information of at least 144,000 Canadians was mishandled by Federal department and agencies, including the Security Intelligence Service and Department of National Defense.  The breaches were widespread, impacting over 10 separate departments and agencies, with evidence indicating that these figures are being underreported due to inadequate reporting requirements.  The Canada Revenue Agency led the pack with 3,020 identified breaches over the last two years impacting at least 59,065 Canadians. 

 

Helical’s offerings meet the “Baseline Cyber Security Controls for Small and Medium Organizations” published by the Canadian Centre for Cyber Security and can be scaled up according to need.  You can learn more about how we meet these requirements here or for more information about Helical, visit our website.  

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SDS Breakdown: What, When, Why & How?

What is an SDS?

SDS stands for Safety Data Sheet (previously called MSDS • Material Safety Data Sheet)

When do you need an SDS?

Safety Data Sheets are created for any product that is “classified as a “hazardous product” under WHMIS that is intended for use, handling or storage in a workplace in Canada.”

Hazardous product means any product, mixture, material or substance that is classified in accordance with the regulations made under subsection 15(1) in a category or subcategory of a hazard class listed in Schedule 2 Source

Safety Data Sheets are to be provided by the manufacturer or supplier. They can be a hard copy given in-person or mailed, or a digital copy on a USB, a disc or sent via email.  It is required that workplaces in Canada maintain an SDS library, whether hard copy or digital, and that it be readily available to all employees.

Metal worker wearing PPE at work with fumes surrounding him

What is on an SDS?

A Safety Data Sheet is separated into 16 sections, below is a brief outline of what information goes into each section.

SECTION 1 – Identification

SECTION 2 – Hazard Identification

SECTION 3 – Composition/Ingredients

SECTION 4 – First Aid Measures

SECTION 5 – Fire-fighting Measures

SECTION 6 – Accidental Release Measures

SECTION 7 – Handling and Storage

SECTION 8 – Exposure Controls / PPE

SECTION 9 – Physical and Chemical Properties

SECTION 10 – Stability and Reactivity

SECTION 11 – Toxicological Info.

SECTION 12 – Ecological Info.

SECTION 13 – Disposal Considerations

SECTION 14 – Transportation Info.

SECTION 15 – Regulatory Info.

SECTION 16 – Other Info. (Dates, etc.)

How can you manage your SDS library?

Depending on the number of hazardous materials in your workplace, maintaining your SDS library can often end up being a full-time job! Because Safety Data Sheets are not always provided as easily or up-to-date as they are required, locating the correct copy often takes research, correspondence with the manufacturer and more.

Why do you need help managing your Safety Data Sheets?

Instead of taking up the time of a valuable employee in your company, hiring professionals for your SDS Management is the best way to go. We hire a lawyer to assist with our legal matters, and a plumber to assist with our plumbing, so why not leave this to the professionals as well. Managing your Safety Data Sheets is a matter of not only compliance with legal requirements, but they also provide the needed information to keep your workplace as safe as possible.

MySDS.ca can build and maintain your SDS library which can give you peace of mind, save you money and keep you compliant!

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Case Study – 44HA Drone Topo Survey for E.R. Garden O.L.S.

Scope of work:
44 Hectares, Orthographic Image 3cm, 3m DTM, 1m Contours

Purpose:
To identify drainage and topography for a new development site in Markham.

Conditions and Requirements:

Overgrown farm lands had been neglected for several years, creating a very rugged, muddy landscape. Normal survey methods by foot or ATV would have been extremely cumbersome and slow going.
Accuracy requirements were +/-10cm on bare earth and +/-30cm in wooded and wetland areas. (excluding bodies of water)

Methodology and Timeline:

2 Aerial surveyors were deployed with an eBee+ RTK and Propeller Aero point.
Crew laid the Aero point as an independent base to ensure proper calibration between E.R. Gardens Data and Canadian UAV Solutions RTK eBee data

7 Aerial Ground Control shots were used in the model..

Processing took a GIS Photogrammetrist 3 days to build, edit and QA/QC the 3D model.

The Completed Drone Survey was delivered in approximately 4 business days.

Summary:

Canadian UAV Solutions was able to provide accurate data in a timely manner where it would have been extremely time consuming using traditional methods.
By adding a few extra aerial points within the workflow of the boundary survey, significant time was saved and resulted in considerable savings for the OLS.
The number of crew required was significantly less, and the amount of time on site was reduced from approximately a week to a single day.
QA/QC reports a RMSE on check points found on bare earth and wooded areas no greater than 3cm on the Z and 1.5cm on the XY, well within specified accuracy requirements.

Testimonial
“I had heard several horror stories regarding drones over the last few years, and up until recently had decided to stay away until the hype had died down.
I had done my research, and although we could have started our own drone program, it became increasingly obvious that it was a lot more complex the further we investigated it.
Many people were doing it, but were either struggling or getting bad results.
After several in-depth conversations with Canadian UAV Solutions, I was assured they knew my requirements and would be able to achieve them.

We developed a workflow which fit well into our operations, and has allowed us to utilize drone data in scenarios where it performs beautifully.

Their Drone survey ties right into our calibration points, and we have done our own QA/QC to confirm the legitimacy of the info.

In areas where we are looking for drainage information, we could not do it faster or for less.

The value added from the aerial photo alone speaks volumes. By adding the image to the topo, we are able to answer questions without sending anyone back to the field.

Bottomline is, we are able to take on more projects as it is increasing the efficiency of my crew. We intend to continue to work together with Canadian UAV Solutions on future projects.”

Edward R. Garden O.L.S.

E.R. Garden Limited, Ontario Land Surveyor

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