No matter how good you think you are, you have to keep pushing forward, says Gist’s chief executive. He explains the strategy to Malory Davies.
Third party logistics providers have found life as tough as everyone else over the past couple of years, but some like Gist have managed to thrive. And chief executive Martin Gwynn is clear that developing and motivating people is key to that. “You want your people to be passionate about what they do and get a real buzz out of it,” he says.
When Linde bought BOC in 2006, there was plenty of speculation that Gist would be sold off pretty rapidly. But six years later, it is very much part of the group and the ties are getting stronger. In fact, Gwynn points to a leveraging of skills across the whole group.
The company built its reputation as a key supplier to Marks & Spencer. Today, it has more that 1,000 customers and annual sales of some £500 million, managing UK, European and global end-to-end supply chains from Europe, Asia, South America and South Africa.
Gwynn points out that the logistics market is challenging – and price driven in a lot of areas. While recognising customers’ need to focus on price, Gwynn argues that this can cause significant problems for chilled distribution networks. A customer switching one leg to another supplier can take a critical piece out of a network seriously damaging its financial viability.
He points to the number of networks that have simply disappeared. “You have to look at the whole picture,” he says, arguing that the aim should be to deliver real value across the whole supply chain. “Everyone is under a lot of pressure… you need some common sense to prevail.”
A supply chain partner should be looking at the whole supply chain. That’s where you can see real value being delivered. That’s what your are trying to do rather than price-matching down legs.”
He highlights the importance of the network in the work Gist has been doing with Starbucks. It won the contract in July last year and set about the task of welding three supply chains into one.
It is the first time within the Starbucks organisation that it has consolidated daily deliveries of ambient, chilled and dairy products through its retail stores across the UK and Ireland. Individual store orders are picked and delivered to more than 700 Starbucks locations across the UK and Ireland through the chilled network.
The new system is resulting in a significantly reduced numbers of store deliveries undertaken overnight. This reduces traffic congestion and cuts disruption to store teams who are freed up to focus on delivering service to customers.
Starbucks will also benefit from reduced operational costs, increased flexibility and improved environmental performance through network optimisation. The new solution has cut the number of deliveries to each Starbucks store by more than 50 per cent.
“By looking at it differently, you can make big savings and improve the customer proposition to their customer,” says Gwynn.
Philippe de Grivel, Starbucks director of supply chain operations, made the point: “Consistent and consolidated deliveries will enable our partners (employees) to provide even greater levels of service for our customers.”
Gwynn says that, as Gist has developed, it has identified four areas where a logistics provider needs to be good. This starts with the customer – and understanding the customer’s customer proposition because the supply chain really comes off that and comes back to source, he says.
Next is operational excellence. “We often sit in the middle of the customer’s supply chain,” he says pointing out that the robust processes are vital to maintaining customer service in the face of any challenge. Innovation is the third area. “The world doesn’t stand still. No matter how good you think you are, you have to keep pushing forward. I would like to think we are looking at where we would like to be in three, five and ten years.”
He points out that you are only in a good position to do that when the core business is trading profitably.
But the biggest differentiator is people, he says. “You can get the same vehicles and systems. The key differentiator is what you do with them.. You want your people to be passionate about what they do and get a real buzz out of it.” Equally, he says, focus is important – concentrating efforts on what really makes a difference. Another factor is leading and energising. “You need people who can not only energise themselves but also energise others.”
And, says Gwynn: “If you are not getting results, you may find you have highly driven people, but they are not focusing. Or they might not be taking people with them. It’s where you get the three to line up that you get results.”
Treating people properly is also a vital issue for Gwynn. “How do you want your son or daughter to be treated by an employer? That’s how we want to treat our people.”
Looking ahead Gwynn sees continuing growth in food, particularly chilled. Last year the company won a £50m contract with Tulip, the supplier of cooked meat products, providing regional distribution of raw and finished products between factories – as well as delivering to final customer destinations including wholesalers and retailers.
“What other things could we be doing in three to five years time? We are looking in terms of where is there good business to be done – including beyond the traditional sectors.”
There are opportunities to drive the European business forward, he says. And, while much of Gist’s growth has been organic, Gwynn does not rule out acquisitions in the future.
