When Mike Branigan joined TDG some eight years ago it was to develop a new concept – a supply chain consultancy business within a traditional third party logistics organisation – under the name SCIO.
The name may have gone, but many of the concepts developed in SCIO have become core to the business approach of the whole group. One spectacular example of this is the innovative contract to manage transport operations for steel giant Corus.
Branigan points out that historically TDG has been seen as a safe pair of hands: “We have developed long-term relationships with many customers and we are recognised as being operationally excellent.”
He also points out that there are specialist sectors such as chemicals where TDG is the market leader.
Since taking over as chief executive, Branigan has been reviewing the business and has put in place a new structure creating one single business from the old divisions – Contract Logistics and Chemicals.
“The single operating company will allow TDG to maintain its focus on operational excellence and continue to provide the very highest levels of customer service to all its clients.”
The top team is completed by Geoff Bicknell, the interim finance director, and HR director Ian Pringle. Parent company LIT plc is also strengthening its supply chain expertise with the appointment of Lawrence Christensen to its advisory board. For many years Christensen was supply chain director of Safeway and in 2004 was drafted in by Sainsbury’s to get its supply chain operations back on track after the failure of costly new facilities to ramp up quickly enough leaving stores running out of stock.
Going forward, Branigan sees plenty of scope for building on the strengths that have been identified.
He points out that TDG had been honing its supply chain management proposition with a number of smaller companies before it won the huge Corus contract and it has since won a £50 million a year contract with Aggregate Industries’ Building Materials division.
Under the eight-year contract, which covers all of AIBM’s UK road transport operations, existing hauliers are contracted and managed by TDG via a central platform using TDG’s integrated transport management systems.
The platform procures haulage, plans routes and provides real-time web reporting for planners, hauliers and customers. The supply chain systems used for the Corus and Aggregate Industries operations rely on in-house expertise and technology to manage the sub-contracted transport operators. And, says Branigan, this technology and expertise can be applied to other operations with similar characteristics.
He also points out that this supply chain management proposition fills a need in times of recession as it gives scale to the flow of goods as well as high utilisation of equipment.
The international market is another growth area – international road services showed particularly strong growth last year.
“We are doing more end-to-end work,” says Branigan. This includes traffic from the manufacturer in the Far East to the end user in Europe. “We can give visibility of the entire supply chain and we can move anything from a full container to a parcel.”
A key part of the growth strategy is to move into new geographies – the Middle East and Eastern Europe are two areas that have been identified. Branigan is looking particularly at strategic partnerships as a way of developing operations in these regions. He also sees opportunities to leverage its existing businesses more fully.
While it is the expansion plans that will make the headlines, Branigan points out that core to the company’s strategy is working with existing customers to respond to the current tough trading conditions. With the UK moving into recession, companies are increasingly looking for ways to cut costs in the supply chain. “Customers want the lowest cost and the highest level of innovation,” he says, “it’s very price competitive.”
However, he says: “You have to be very careful. You don’t want the business to be unsustainable.”
There is an argument that, in this climate, a 3PL would be advised to move towards an assetless approach. Trucks and sheds represent a large investment for most 3PLs and the basic transport and warehousing operations have very tight margins.
It’s not an argument that impresses Mike Branigan. “We are a service business and we have to balance investment with servicing our customers’ needs to remain competitive.”
And the move from plc to private ownership? There are some real benefits, he reckons. No more six-monthly reporting cycle, more time to plan, access to new skill sets.
“Also, being out of the public eye, you can be bolder,” says Branigan.