Richard Hunt has sorted out industrial relations problems in the oil industry, and led a major 3PL. But, as chairman of the London Ambulance Service, he is dealing with some of the toughest logistics challenges around. He talks to Malory Davies.
If you had to come up with the toughest logistical challenges, the London Ambulance Service must come very close to the top of the list. Lives depend upon the service, but resources are severely constrained and there is no way to control demand. That is the challenge faced by Richard Hunt, who has been chairman of the service for the past six years. It’s far from a traditional logistics operation, but he is clear that innovative logistics solutions are a key ingredient in ensuring that the service meets the needs of Londoners.
Hunt, who took the Individual Contribution Award in last year’s European Supply Chain Excellence Awards, is no stranger to challenging tasks. He started out as an airline pilot, and has held executive roles in the oil business and drinks industry, but he really came to prominence in the logistics industry at Exel Logistics.
“I chose to be a general manager in a logistics business rather than specialist director in a general business,” he says.
He went into Exel as part of the turnaround team led by Gerry Murphy in 1995, initially as executive director-operations and finally as chief executive officer for Europe. In this role he was responsible for six business units and central support covering all major European countries involving some 25,000 employees.
“We had just under £1bn turnover. We were probably the logistics service provider to pretty much all the major retailers, manufacturers and so on.”
He points out that logistics providers were just beginning to deal with many of the issues that are still being debated today.
Collaboration is a prime example. “We talked about collaboration between the retailers. We were delivering three loads to three separate distribution centres on the same site. And we thought why are we doing that – why weren’t we delivering on a consolidated basis. That remained a holy grail.”
However, he says: “The big retailers were not yet of a mind to collaborate with anyone. Therefore although we got them together in our headquarters they clearly weren’t going to do that.
“We made some progress on consolidation.. but there were three barriers; skills, information and technology; and culture.
“We were a little ahead of our time,” he says, pointing out that some of these ideas are now coming to fruition. He highlights the way that Unilever created its UltraLogistik control tower at Katowice in Poland to consolidate its transport capacity – for which it won a European Supply Chain Excellence Award in 2010.
“Ten years before that we were struggling to do the same thing,” says Hunt. However, there was real progress was in the automotive sector. “We were instrumental in making Cowley the operation it was under the last Rover ownership before the Mini went in there. We went in for benchmarking, and took time out of the manufacturing cycle, including sequencing of parts to the line.”
Exel made progress in the late nineties on two key supply chain objectives – removal of time and removal of stock, he says. And it tried cross fertilising into other sectors – although he admits that had less success. “We tried with the NHS. We managed to get the Park Royal consolidation centre into operation and it was a great success. But we couldn’t get it adopted elsewhere.”
He suggests that it might take a combination of circumstances to bring some of these ideas to fruition. And he argues that there are two kinds of organisation that tend to drive innovation – those that are world class and those that are struggling.
“I used to give the example of Rover Group and Toyota. One fantastically strong, world class leading – Toyota – and one struggling to compete – Rover. Both were innovative in terms of supply chain – one because of a crisis and one because of a strength. Those two circumstances drive change. Those who are fat and happy in the middle and doing OK tend to be sticking with the way they do things.
“This is when you get into the concept of second curve,” he says referring to Charles Handy’s recent book. “In the end everything is cyclical. If you have just stayed doing the same thing in the same way, then in the end you are going to get caught out and find things have moved on.
“But those in crisis are driven to change. Those who are highly successful can invest in the new.”
Hunt points to John Lewis as an example of a strong business that has been able to invest in its omni-channel facilities at Milton Keynes, and introduce a new way of retailing. Others with some strength are following suit, he says.
In 2002, Hunt went back to aviation as chief executive of Aviance, which provides ground handling support and aviation logistics to major airlines at 17 UK airports including Gatwick, Heathrow and Stansted.
Hunt was appointed CBE for services to logistics and transport in the 2004 New Year Honours.
He also became involved with the Chartered Institute of Logistics and Transport, becoming International President in 2007.
The past few years have seen the rapid development of e-retailing and home delivery. “We couldn’t make home delivery work in the late nineties – economically,” he says. “We set up a small business unit for home delivery for M&S and others in Exel. We had serious misgivings about whether the economics of that would ever be worthwhile.”
He points out that is wasn’t possible to envisage that development two decades ago. “We only dimly grasped what was going to happen. It’s the internet that has been the game changer. There is just light year’s difference.
“My challenge would be: it’s a better widget – it’s not a different widget.”
But the speed of change means that professional development becomes ever more important. “My challenge to the industry would be to keep people up to speed with the technology, he says, arguing that technology has sometimes got ahead of people’s ability to deal with it in logistics.
“That’s not something that happens in other professions. Surgeons will be competent to deal with the technology they use. In aviation, the people are up to speed with the technology capability. I think our responsibility is to make sure that the same is true in our sector.”
He points out that supply chain and logistics still has a problem recruiting the calibre of people it needs, giving as an example the driver shortage.
“We need some sparkling leaders to improve the attraction of the sector.
“It’s no surprise that Apple and Google get the best people because they paint a very attractive picture – I’d like to see us do the same thing. However, he admits that this is “a bit of a wild ambition”.
These are challenges that are all to familiar to Hunt in his role as chairman of the London Ambulance service.
The service fundamentally involves the deployment of skilled people and equipment. But, he says “There is one crucial difference – it is about peoples’ lives.”
There are a number of factors that put enormous pressure on the ability to drive efficiency. The service works to very tight standards, it has no control of demand, and operates in a public sector environment which is financially constrained.
“In everything else I have done we have been able to manage demand. We would decide that we wanted to be a certain scale and then be as efficient as possible at that scale. In this world we have to respond to everybody that rings us.”
The biggest problem is a shortage of qualified front line staff – paramedics – both nationally, and most acutely in London.
He points out that it takes three years to train a paramedic – and the individual has to pay for it. And a market for paramedic’s skills has developed so they have more options. London also has cost of living problems.
“This is as difficult a time as I have experienced in my six years at the service. We need to innovate our service response – how we deliver care and reassurance.”
At the time of writing, the service needed 400 front line staff. One innovation has been to recruit paramedics from Australia and New Zealand where the training is very similar to the UK. The plan is to bring in a couple of hundred people.
But Hunt is quick to point out that it is not a long term solution – it simply helps deal with a short term problem. He argues that there are real strategic issues about how to go on providing the service. If you don’t have the right resources available it’s not rocket science that you are going to struggle to deliver the sort of service that the users expect. And that is where we are right now.
“It’s very much a logistics challenge. It’s a privilege to be involved with it, and it’s a pressure. It’s also a frustration because you want to do so much more.”