Logistics Tool Kit
Every New Client is a Project Get It Right the First Time
There is virtually nothing in business that is more gratifying and enjoyable than earning the business of a new client. Someone who has many options has chosen to believe that your organization and your people can do the best job for them. In the third party industry that means a significant amount of the client’s key business processes, inventory, customer relations and interaction are placed in your hands.
The euphoria you feel from that win can turn in to a nightmare very quickly, if you are not careful. The key word here is careful. The size of the opportunity does not matter, that will only determine the resource level you assign to the implementation. The care, that word again, and attention to detail are everything to having a success and building on your initial triumph.
In the spring of 2000, Burnham Logistics, one of our companies, was successful in obtaining a total outsourced warehousing and fulfillment operation, in Toronto, for Mine Safety Appliances Company (MSA), based in Pittsburgh, PA. Their business involves the manufacture of a wide range of safety related equipment, including gas detection instruments, supplied air and air purification respirators and hard hats for such customers as fire departments and emergency first responders, national defense agencies, utilities, and oilfield drillers.
MSA is a major supplier to security organizations that use their products to protect people at civil disorders, such as those recently experienced in Quebec City and Seattle and the tragedies of September 11th in the United States. A worldwide company, selling highly sophisticated products to a diverse customer base. The transition of this business would need to be carefully managed by a cross functional team from Burnham and MSA.
On projects of magnitude Burnham always appoints a dedicated Project Manager. This is someone who totally comes out of his or her existing role or is hired on a contract basis due to his or her particular skills. On occasion the contract Project Manager has joined the organization and become part of the business they assisted in establishing.
The key to success is focus; there can be no substitute for having a high caliber individual spending all their time delivering the implementation. That person will pay for themselves in ways you will not anticipate at the outset. If you are responsible for the company, and have a competent Project Manager involved in the details of a complex client implementation with hundreds of deliverables through all facets of your business, you can consider sleeping at night.
The primary contacts at MSA were Judy Colfer, Director of Logistics, and Millard Humphreys, Director, Supply Chain Management & Logistics, both based in Pittsburgh but responsible for logistics in Canada as part of their North American responsibilities. The balance of the MSA team was composed of people responsible for customer service, technical support and repair, technology and quality assurance. These were people from the Canadian business and the U.S. operations.
A full time Project Manager from the Burnham side was appointed from within the existing management team. Individuals from operations, IT and solutions were brought in as members of the team representing their disciplines. The Project Owner was the General Manager of Burnham Logistics’ Ontario business who would be responsible for the business long term.
The principle in place here is that everyone, regardless of rank, is accountable to the Project Manager for his or her particular activities. As the President, I was responsible for securing a new facility for the business and was part of the team reporting to the Project Manager, for the real estate section.
An initial meeting was called and the rules agreed to by everyone. Now the real fun begins! A Project Charter was established, outlining purpose, objectives and key outcomes. As well, a detailed Project Plan, using project management software was completed. This included tasks, resources, start/finish dates, key timelines and milestones, along with cost estimates, where applicable.
A schedule of status meetings was established to review progress and solve problems. This was part of the structure but only a small part of the communication that went on at every level on a daily basis. The communication was a key factor in the success of the project and the positive team dynamics that developed between the groups facilitated the problem solving that needed to occur.
MSA was involved with Burnham on the final real estate decision as they were planning to occupy space for their Technical Support, Testing and Quality Assurance function. This would be a separate area within the facility but needed to be proximate to the inventory. A building in Toronto was found and all parties were satisfied that it met their needs.
The information technology coordination is always a vital part of every new relationship and always seems to occupy significant time and resources. This was no exception. It was agreed that EDI would be used to communicate order and inventory information between the companies. This would require mapping between the systems of MSA and Burnham to insure precise, accurate and timely movement of critical business information.
Very shortly after the commencement of the new MSA/Burnham relationship MSA’s operations in Canada were moving to a new ERP system so a bridge technology plan was established to communicate with the old and new systems. This was one of the issues that tested the patience of all of the project team. However, the flow of information, electronically, is fully functional and working as planned.
As MSA was closing an existing operation there were many people issues that needed to be closely managed. A major way to positively kick-start a newly outsourced business is to attempt to retain key people from the clients existing operation. They are already up the learning curve and if committed to the business can become a focal point for the new relationship.
On this transition a number of MSA employees were offered and accepted employment with Burnham. The balance of the staff was Burnham employees transferred from other operations and new hires.
There is always a culture transition to be managed. If this is disregarded or overlooked, problems will surface in many unanticipated locations. It needs to be someone’s role to make the people feel wanted and explain the goals and expectations of the new entity.
Frequently people that move to a logistics company from the distribution department of a manufacturer see a positive career opportunity and welcome the change. The excitement and positive momentum created assisted with the typical transition issues that were faced in the early days.
The cut over date and the physical movement of inventory were planned extensively so that customer service at MSA would be maintained throughout. Millard Humphreys reminded the team frequently that this change should be transparent to MSA’s Canadian customers and that was an absolute through this period of the project!
Judy Colfer had managed the transition to an outsourced relationship in several locations in the U.S. and her knowledge and understanding was helpful in anticipating issues and arriving at creative business solutions. Burnham had several outsourced contracts and relationships to draw from; clearly experience was a strength on both sides.
While this was happening we were negotiating a contract that would guide the business and provide structure to our relationship. The contract was completed and ultimately signed by both parties. However, the documents that truly drive the business are the Standard Operating Procedures (SOP’s) and the Key Performance Indicators (KPI’s).
A detailed SOP document was prepared and went through several iterations until both sides agreed to the final version. The SOP’s were completed at a very detailed level so as Judy said “Any new employee could take them and perform the basic processes that operate the business.”
The KPI’s were designed to the specifications of MSA and the drivers that were important to them. Those KPI’s are reported and discussed monthly and posted on a bulletin board in the facility for everyone to review. This forms a key element of Burnham’s Visual Management System.
From the beginning of the relationship regular scheduled meetings occur with a dynamic list of issues and review of the KPI’s as the baseline agenda. The positive communication that began at the start of implementation has continued and expanded over the past months.
There are so many issues and activities that can harm your new business, particularly in the fragile transition and implementation phase. Leadership at the top of the organization is essential particularly when priorities are many and resources are stretched.
You cannot substitute for the commitment and focus of a competent person dedicated solely to the success of the venture. This individual backed by an experienced inter disciplinary team, who will ‘hit their marks’ and do whatever it takes to get the job done will give you the best chance for success.
The strong relationship that MSA and Burnham have enjoyed in Canada is a result of the effort and care taken by both organizations during the start up and throughout the life of the business. Joe Bigler, Vice President North American Sales for MSA, stated the goal for the operation succinctly and directly; and that was “improved service to MSA’s Canadian customers.” That continued improvement goal will never change.
I cannot end this without special mention of Judy Colfer. She was on the 55th floor of the World Trade Center the morning of September 11th. The story of her escape is truly frightening for those of us who know and care about her. It made the terrible tragedy that occurred that day scarier, if that’s possible.