Any company can say they are world class, but what does that really mean? Stationery giant Office Depot is ready to prove it has what it takes. Lucy Tesseras talks to the man behind the plan, Ross Kavanagh.
Failure is not an option – that is the motto procurement and supply chain director Ross Kavanagh drums into his team at Office Depot UK. “I will never allow people in my direct team to fail, but their job is to make sure they never allow their people to fail. And we have that philosophy right the way through our supply chain. If nobody fails it means we can only be successful in what we do.”
Kavanagh was born and bred in Zambia and before coming to the UK in 1991 spent two years in the military in Zimbabwe before going to Namibia where he served in Angola for three and a half years.
Kavanagh runs Office Depot’s supply chain with similar military precision. “I have two mantras which I live by. ‘Talk is cheap, money buys the whisky’ – don’t tell me you’re going to do something – do it. And ‘the definition of insanity is doing the same thing over and over and expecting a different result’ – if we don’t change what we’re doing we’ll never change the results.”
Office Depot has always been keen to measure its performance, but shortly after Kavanagh joined the company introduced a new metric for measuring performance – On Time, Accurate and Complete.
“We used to measure our business before OTAC and thought we were great – we had a 99.5 per cent service level,” says Kavanagh, “but when we started measuring it as a holistic approach we found that our 99.5 per cent dropped to 74 per cent. So we were failing one in every four customers and customers were leaving us. And it’s no surprise – if you don’t have good service in this industry you’re dead.”
A target of 95 per cent was set against the new measurement and within three months the company was back on track and has maintained that level ever since.
Kavanagh puts the turnaround down to focusing on root cause analysis and having a strong team behind him. “The old people that were directors of the business that reported into me, they probably found the heat a little bit too hot [to handle [when Kavanagh took over]so they got out. Everybody in the team now has been promoted from within the company.”
The following year, Office Depot again set about analysing its supply chain and came to the conclusion it had more capacity than needed so closed its Belvedere site, providentially just as the recession hit. The move not only increased service levels, but reduced costs by about £10 million.
It was at this point Kavanagh decided Office Depot needed a long-term strategy, and after discussions with his team, came up with two words: world class. “Anyone can say they’re world class, but I want to be able to say we are world class and actually have something that is measurable to demonstrate that.”
After a number of preliminary meetings Office Depot, working alongside Warwick University, which operates the World Class Research Programme, carried out benchmark analysis over a number of months. World Class is measured on a scale of one to five, World Class being five. Office Depot’s first DC measurement was 4.65, transport was 4.23 and procurement and inventory was 4.16.
After analysing the gap, Kavanagh reckons it will take the company three years to get fives across the board, although ever the competitor, he hopes to reach this target in just two years.
The World Class journey is measured by a balance score card. There is a strategic balance score for the whole region, a departmental score card for Kavanagh which is a functional balance score card for the supply chain, and then each area in the supply chain has a departmental score card. The company runs a traffic light system on all projects within each section and if any flash up red or amber there is an action plan against it with the deadline it must be completed by.
“We have a very boxed off approach to everything we do… It’s not an ‘if’ or ‘but’ – we will deliver.”
As part of the World Class initiative Office Depot is also dedicated to upskilling its workforce. There are 14,000 people within the supply chain so to keep employees engaged and focused, the company launched its SEALS programme – Specially Selected Associates giving Leadership Support.
There are currently 104 SEALS who have been on a two-day boot camp and had project management training. They are now running a number of business initiatives which are presented to a project management board on a monthly basis.
“We’re bringing the ground floor up through the business…we’re cross fertilising the whole team,” explains Kavanagh. By the end of next year Office Depot is hoping to have between 500 and 600 SEALS.
Kavanagh himself did not have a background in supply chain when he joined Office Depot, but he has evidently taken on the role with gusto. “It’s been a steep learning curve,” he admits, but he has transferred a lot of the disciplines he learnt in his previous role as managing director of an envelope manufacturer. “You are producing 18 million envelopes a day in one factory. If you make a mistake, just of 0.01 per cent it’s a big number. So you’re quite focused on cost, and you’re quite focused on efficiency and effectiveness, and basically those are the rules I’ve brought to the supply chain.”
- Ross Kavanagh was born in Zambia and schooled in South Africa and what was then Rhodesia.
- After leaving school he joined NCI as a computer engineer.
- He was then in the military in Zimbabwe for two years before going to Namibia and serving for three and a half years in Angola.
- Kavanagh then went to South Africa and got into sales and marketing which he says is his true background.
- He moved to the UK in 1991 and was the sales director for a print broker in the North West before setting up his own sales and marketing consultancy business in 1994.
- In 1999 he joined print and facilities management company Parigon as sales and marketing director.
- Between 2002 and 2008 Kavanagh worked as managing director of European envelope manufacturer GPV.
- In 2008 he took on the role of supply chain at Office Depot UK & Ireland.