It's people versus profit
There should be no doubt that 2009 will be tougher for many logistics companies than last year. In such testing economic times companies tend (not surprisingly), to focus very hard, indeed, on keeping the cash flow positive and securing what profit they can. Because of this, the 'balanced scorecard' approach to measuring business performance can become a little less even-handed. Measures such as employee satisfaction, environmental impact and sadly very often, health and safety performance, can take more of a back seat.
The logistics business depends heavily on its people, both in good and challenging times, and it is the responsibility of business leaders and managers to keep them safe. When times are tight, staff numbers can reduce, employee working shifts grow longer, time between vehicle services stretched, etc. All these carry a risk, a risk too high for any respectable logistics company to take.
During my tenure in the Middle East, I have seen and heard about many incidents of injury, and I am afraid sometimes even fatalities. Many of these sad and avoidable occurrences could and should have been prevented. The causes of these have ranged from falling goods from backs of lorries or containers, collapsed stacks of pallets or racking, speeding vehicles on open roads or in tight yard areas, fork-lift or mechanical handling equipment falling off platforms or colliding in warehouse aisles, and parked hard-shoulder vehicles being rammed into from behind. No accident or near-miss is acceptable and logistics companies, must do everything they can to minimise these; in what is in many ways a very hazardous business.
What can a business do to reduce the risk and keep its people safe? Clearly every logistics company and its managers have a responsibility to maintain equipment properly and employ properly trained staff. But in addition to the basics, they must 'challenge' unacceptable health and safety practices all day and every day – I have seen too many fork-lift drivers pass-by a shift leader without a seat-belt on and no action been taken; and far too often I have seen vehicles speeding in transport yards, or setting off onto the public roads poorly loaded, without preventative action being taken from the yard supervisors or gate security staff. This is just unacceptable, and it is up to all or us to play a role, and keep our people safe, even if sometimes they themselves seem to be doing their utmost to raise their own risk levels.
The best logistics companies I have seen in the region don't only tend to be the best at the basic elements of logistics, such as transport management and warehouse management, but also across all areas of business, and encouragingly in their approach to health and safety. What do these companies do differently? They do a great number of things, but there are some common trends – they communicate about the risks at all levels (from warehouse to board room), they measure incidents and perhaps even more importantly 'near misses' and 'hazards', and they more often than not, have an open style of management, where staff are comfortable airing any safety concerns they might have.
Customers have a role to play, of course, and they will naturally be looking to reduce costs this year, but is it worth cutting corners and using a service provider for example, with a poorly maintained fleet, or an overly full warehouse and therefore risk their own reputations? Basically, it comes down to business ethics and business leadership; and about just how much managers and leaders of the business care for their people; the people that work hard for them not just in the good times, but the much tougher times too.
- David Christmas is the CEO for DHL Exel Supply Chain
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