GLM interviews Gideon Hillman, MD of Gideon Hillman Consultingby From the Top on 2012-11-03 01:26:37
Global Logistics Media interviews MD of Gideon Hillman Consulting, Gideon Hillman:
I have been following the progress of Gideon Hillman Consulting for a couple of years now and have seen some tremendous growth in your Business, not only in the UK but across Europe, tell us a little bit about what you do and what makes Gideon Hillman Consulting tick.
I established the business in 2004, which is now an ISO 9001:2008 accredited company for the Supply of Specialist Supply Chain and Logistics Consulting and a corporate member of UKWA (United Kingdom Warehousing Association), as well as being a recognised member of the Institute of Consulting.
We provide Supply-Chain, Logistics, Inventory, Management, Materials Handling and Warehouse Consulting expertise to our clients (from major corporations to SMEs) across the UK and Europe in all industry sectors.
The last two years have shown very strong and consistent growth for us, with over 60 projects carried out with a total of 43 clients, including many new clients and repeat business from some existing clients, examples of which can be seen on our website client page.
I attribute our continuing growth and success to a number of key factors which are testament to the significant expertise and capabilities of our Directors and consultant team, repeat business and referrals from our existing clients, increased brand awareness and our ever growing reputation in the market. These are tough times for many companies and we have proven time and time again that we can provide practical and implementable solutions that yield significant value to our client’s logistics and supply chain operations. Proof of this is demonstrated with the excellent feedback we get in the form of client testimonials.
Q2: Over the last two years in particular you would have seen some dramatic changes in how companies view their supply chain, what impact do you think the recession has had on businesses and their approach to their supply chain.
Never has so much attention been focused on taking cost out of all aspects of the supply chain as well as reducing the effects on the environment, whilst of course achieving higher levels of customer satisfaction – a tall order for any business especially during recession.
The economic downturn has forced a number of businesses to reduce or integrate resource and infrastructure in some areas to such an extent that they are now finding they are unable to operate to maximum efficiency and potential. This, in most cases, has provided a short term cost saving solution, but unfortunately has a medium to long term adverse effect on the business as the supply chain optimisation and the key business objectives are diluted; reducing their effectiveness and worth, preventing the business from achieving a fully optimised supply chain.
Q3 - When you get approached by a Company to review various areas of their supply chain what are the trending issues that seems to be arising.
Many organisations fail to truly coordinate their supply chains and often ‘sub optimise’ by treating each supply chain function as a silo e.g. targeting reductions in finished goods inventory without balancing the implications on economic production batch sizes, or bulk purchasing raw materials without considering the impact on either physical resource or working capital. Consequently, where one cost is driven down, another is increased.
During good economic growth businesses can prosper and grow financially focusing on sales and revenue, without perhaps the operational emphasis to ensure that best supply chain practice is implemented as the business grows. It is only when the growth slows down and the business is analysed in more detail that one realises that the supply chain has become fractured, cumbersome and expensive. This is a potentially very damaging situation for businesses that have grown quickly without true understanding of the impact of their supply chain operation on to their costs.
Q4 - I want you to paint a picture for us, say a potential client wants you to review their warehousing and distribution functions, what would you talk about in the initial meeting
The initial meeting (prior to any proposal or subsequent contract) is our opportunity to really get an understanding of the potential client’s ultimate objectives and desired outcomes of a warehouse and distribution review. Too many consultancies are happy to provide quite simply a review of the current operation, which on its own is of no real benefit to the client without an implementable strategy to improve and optimize.
So the meeting will be an information gathering session for us in terms of their company structure, product and customer profiles, levels of activity and seasonality, an overview of their current warehouse and distribution operations and of course their ultimate goal. It is quite common during this initial discussion for us to identify what will really benefit the client, which may in fact be different to their own initial expectations and quite often a simpler approach (therefore less costly) than they thought.
Once we have enough information to enable us to structure a project proposal we will discuss our intended method of approach and agree the deliverables so all parties are in agreement at an early stage.
Q5 - What are some of the triggers a company needs to be aware of that indicates their Supply Chain needs attention?
Supply Chain Management is the strategic coordination of business functions within a company, with the aim of achieving the most efficient movement and storage of goods from point of origin to point of consumption. Unfortunately many companies do not realize that their supply chains need attention until they have a problem such as insufficient production or warehousing/ logistics capacity, too much capital tied up in stock, unable to meet customer service requirements and so on.
Where a company does not have a cohesive interdepartmental or cross functional Supply Chain Management policy it is difficult to have an overview of inter-dependencies and impact within the business. The result is a ‘sub optimised’ supply chain with limited visibility, hidden costs and fragmented teams working against each other.
A prime example is inventory, a critical element to most businesses, but different functions within a business have different perceptions of how much inventory there should be. Sales tend to want large volumes of inventory to guarantee service; finance want the inventory minimised to reduce working capital and operations want sufficient raw material to keep equipment operating efficiently. In addition, all inventories need to be positioned in the right place, at the right time and in the right quantity which is a logistics function.
The difficult task of inventory management is to balance and satisfy all of these needs. A fact-based inventory policy can be developed in any business. There are proven methodologies and formulae that can optimise the level of inventory against all of the service, working capital and equipment utilisation criteria. These policies can be developed and introduced with consensus from all functions; they can demonstrate clear rationale and logic behind the resulting inventory levels and they can balance and satisfy all of the needs of the business.
This example of an inventory management policy is just part of an overall Supply Chain Management policy/strategy which all businesses should have in place. Supply chains have always been around and there has always been a desire to ensure they are optimised. However with the increased complexity of a truly global market place and an increase in global sourcing from Eastern Europe and the Far East it has become more of a challenge to optimise the supply chain. This in itself has proven that a supply chain management strategy, with a proper process for regular review and change, is more important now than ever and will continue to be so. This enables a company to identify potential issues before they impact on the business and enable the correct course of action and infrastructure to be implemented with the benefit of a longer term planning horizon.
Q6 - Technology is certainly playing an important role in today’s supply chain, how do you as a Consulting Business stay abreast of Technology Changes and New Innovation?
It is crucial for us to be aware of and understand the application of the latest technology that is available in the market place. However most important is how that technology can be applied or is relevant to the client’s needs. We have good relationships with many of the Supply Chain Management, Warehouse management and transport management system developers and integrators, who keep us updated on a regular basis and of course we work with a number of these companies on projects that we are involved with.
In terms of innovation it is important to identify what is true innovation or something that is a nice idea, or worse still existing technology or process just ‘re-packaged’. The very nature of the highly competitive logistics and supply-chain industry with a huge amount of people involved in it means that there are relatively few true new innovations as say compared to 20 years ago when I first started in the industry. It is of most benefit and importance for us to understand the cost effective application of technology and innovation to practical real life.
Q7 - What is one of the most challenging projects you have had to date and talk us through what it was and how you solved the problem?
That’s and easy one for me to answer without further thought as at the time it was very challenging. “Is our proposed new build warehouse going to be fit for purpose for the next 15 years?” was the question posed by Technology Supplies Ltd in 2009. Investment into a New Build Warehouse is always going to be a substantial one, regardless of the prevailing economic climate. It is the longevity of the facility design and the return on investment over time that is important; so how do you know whether you are building the right size facility for your business needs now and in the future? We considered it and quickly developed a sound methodology with which to provide the answer to present to their Senior Management Team and parent company, which were to make the investment.
It is equally undesirable to build a facility that is either too big for current requirements and/or too small for future ones and a ‘fear of the unknown’ in some cases is the reason companies do not progress with their freehold purchase, or even commit to longer terms on leased premises, despite the benefits. The ‘risk’ factor can be mitigated if you have a clear business vision and can rely on your growth projections over the 5, 10 and 15 year planning horizon. However things do change and the growth and business strategy will undoubtedly alter over that period. Therefore the only possible solution was to design a modular building that could adapt to incorporate changes in organic growth as well as acquisitions.
We carried out a detailed review and assessment of Technology Supplies’ requirements for a new facility to ensure that whatever we proposed was fit for purpose and met the company’s needs in terms of their planned organic growth. This required a provisional warehouse layout concept including type of racking, MHE and automation where appropriate.
The review, requiring input from key operational personnel and management at Technology Supplies Ltd, included the interaction between various operations and departments within the business, not just limited to warehouse and despatch. It included the customer demand forecasting/planning process, methodology and customer order lead times, as well as the integration and operation of the Warehouse Management System module and stock control system and its interface with other parts of the business.
We reviewed historical and projected data for volume of dispatches per day, week, month, year; either in terms of SKU, items or cases, or pallets. Key to the forward planning was the projected changes in product types and increased product lines, with seasonal demand fluctuations assessed for each product group.
The outcomes of the ‘current state’ review were then used to carry out ‘future state’ analysis based upon Technology Supplies’ projections and criteria and enabled a full assessment to be made with provisional layout designs to suit the business needs.
The initial presentation and proposals that we made exceeded the client’s expectations and provided them with a comprehensive overview of suggested layout designs, material flow routes, storage system options and projected costs. More importantly it provided Technology Supplies Ltd with the ‘peace of mind’ that the proposed new facility enabled them to optimise space utilisation and meets their requirements in terms of anticipated organic growth and planned acquisitions.
The end result is that the new Technology Supplies’ distribution centre (incorporating sales, administration and warehouse functions) became fully operational in the 1st quarter of 2012, after a three year project from initial concept designs, investment planning and business justification stages to the final detailed layouts/designs, build and fit-out, which was supported from start to finish by the warehouse design team from Gideon Hillman Consulting.
The new facility at Battlefield Enterprise Park in Shrewsbury occupies 32,000 sq. ft. and the warehouse comprises of bulk racking for storage and bulk pick, plus a range small item pick areas on the ground floor comprising of shelving, cantilever racking and secure unit storage/pick cabinets. Also accommodated on the ground floor are the project build area and inbound/ outbound marshaling areas.
There is currently a single storey mezzanine installed with shelving to accommodate the business growth through to 2016 without any further need for investment. The design of the building allows for a second storey mezzanine level to be added and also for a 7,000 sq.ft. extension to the building, with space for racking and extensions of the two storey mezzanine floors.
What makes the facility design so efficient is that it has been designed to specifically accommodate the projected business growth over the next 15 years, without initially over-investing in floor space, equipment and fit-out. This has been achieved through a modular design approach, which as well as negating initial over investment also provides flexibility if the Technology Supplies’ business plan changes over the next 10 to 15 years.
Q8 - Lastly, what does 2013 and beyond look like for Gideon Hillman Consulting?
I can safely say more of the same - increased growth, new clients, repeat business from our existing clients and a steady flow of interesting and challenging projects.
Thank you for sharing your knowledge and thoughts with the Global Logistics Media Community, I know Gideon Hillman Consulting will continue to grow and offer outstanding services to the Logistics industry in the UK and across Europe.
CEO - Global Logistics Media
Gideon Hillman Directors : Left Gideon Hillman, Right Paul Trudgian