Case Study: How a logistics business wins with on time delivery as its every-day competitive event.

Having materials delivered in a supply chain is as vital as leaving and arriving on time in the passenger airline industry. Many know the renowned British Airways case that in the 1980’s, saw this loss-making nationalised flag carrier, converted to a highly successful airline. To do that it used just one key performance measure, “Leaving On Time.”

That was the element of customer satisfaction, Chairman Lord King, concentrated on when he set about turning around the ailing carrier. A simple process had King notified if a plane was delayed. A senior British Airways official at the relevant airport would then receive a personal call from the Chairman. It was not long before British Airways had a reputation for always leaving on time.

Around that time, a local business was started in Australia. Its mission was simple, Customers will get an always on time and cost-effective logistics service that gives them control. With that ideology embedded into its day to day operations culture, over the years since, the company flourished in the good times and rode out the storms, by always being on time. Their differentiator also drives innovation, to keep them always planning ahead for continuous improvement. Their purposeful watch call translated to,

 “We plan for change to what people consider is “on time” now, because we know it will be late in future when it gets there.” That ambiguity is designed to expose the paradox of complacency,   so “On Time” always gets continuous attention.”

Our firm was invited to help them update their planning system. That work is the foundation for this case study.

At their National Office, which always has an air of relaxed efficiency, we met their Chief Operating Officer. He is a veteran transport man in an industry he helped form. His passion for business was infectious, as he outlined his mission critical need to ramp up his planning process.

“Our service is what keeps customers happy, but what keeps our competition out of our accounts and wins new ones needs three things:

  • Knowing our main competitor is ourselves means we are constantly alert to our own weaknesses and as we plan ahead to beat where we are now,
  • Keeping a handle on unit costs of each service, and maintaining an acceptable return on investment for each customer, and
  • having a living planning process as an everyday activity with dashboards and predictive measures on vital business processes that alert the company to be always ready to re-benchmark customer services.

We know even the big end of town struggle on these items. So having that gives us an edge. In summary, our aim in updating our planning process is a flexible living budget so we can maintain the competitive confidence we need and our pencils always sharp.”

With their new planning and control system, the company got a more sensitive finger on a more confident pulse. In turn, they are able to proactively help customers deliver their business more efficiently and find offsets for them when they came under strong competition pressure . This continues to see the company grow organically through efficiently with regular wins of significant new business. All round quality of service is the competitive advantage it now enjoys in both prosperous and awkward financial periods.

Their planning and budgeting is no longer an arduous event but more like a good conversation. It uses an enterprise level corporate performance management tool, which handles all  that with ease .

With CPM systems being longer reserved for the big end of town, this business has costing and measurement processes equal to the best of the best. Their design pivots on customer-centric processes, driven by service pricing standards. This lets them plan and compare actual operations and financial results to forecasts and budgets with ease.

The culture now is natural as a look-ahead one with operational managers better informed and confident as they collaborate with ease to make balance decisions faster.

With managers emancipated from spreadsheets, they enjoy being able to get reliable information on demand, in the ever increasing rhythm of their business.

Seamlessly delivered reports support that with ease being a key to their CPM system. This, in turn, to achieve that, routinely integrates core system data to update service costs and pricing associated with customer sales and profit.

When you visit them now you see:

  • A fully consolidated database that rolls up details plans budgets forecasts and business intelligence all in one place and with reporting perspective at all accountable levels in the company.
  • Previous monthly reviews are now a weekly and daily as needed in sync with customer operations.
  • Do it now routines are the norm using online updating with real-time reporting done at the branch, state and national levels with online collaborative sessions simple to initiate, as needed.
  • Everyone has an ability to get to the heart of issues right down to customer and service level in seconds and all using the same information
  • Third party systems for logistics operations billing and disbursements, subcontractor payroll and general ledgers, are all integrated.
  • Be it sales, operations or finance perspectives, simplified reporting, and alerts, keep an eye on the day-to-day detail while also taking care of what is important, longer term.
  • Reading the Income statement is no longer the domain of just finance. At its heart is a drill down and multiple perspectives capability used daily by all the managers, to update their plans and as they understand and react to customers service performance alerts.
  • The shift to a planning-centric focus means plan revisions are updated as circumstances change.

Like Lord King, the key is a process to plan and communicate what is expected and have a reporting and mitigation process to manage it when it gets off track.

Having that planning certainty with a smooth control process, means spot fires get dealt with in a business as usual way before they become uncontrollable and burn valuable business. The firm’s name is not important, but the secret of their success lies not only in knowing their numbers and planning but in the discipline process they used for that.

This story is found repeated in good businesses everywhere. Conversely, when a business fails, and more often now with business relying on data and being done at great speed, it is often because of a lacking in one of these basics.

They say walking, chewing gum and talking all at once is near on impossible; But not if you have a modern CPM tool, with collaboration deep dive capability. Then you can keep an eagle eye on the detail to find any devils in there that can bring you down while being able to have an updated picture of how the future looks. What is key, while all this is going on, is you can also concentrate on what is  important now.

For more information, please feel free to contact me via the comments, where my replies will be public, or if you want to more specific detail on where to go and what to look for,  please contact me or our team at Shernox Group.

 

~000~