I
can still vividly remember that when I started
my first, real, post-education job I was allocated
a desk with a phone, an in-tray and an out-tray.
The post trays were cleared four times per day and
anything that needed typing would take at least 24
hours to leave the building as it had to go via an
internal typingpool.
That was the sum total of business information
technology available tome – although if something
was super-urgent you could take it to a telex
operatorwho lived ina special roomand theywould
type your hand-written message into the telex
machine.
When I went into operations management (in
logistics) it was in a world where measurement
of volume and quality of service was based
on sampling of individual loads and individual
contracts. Individually tracked activities were
rare, manual and commanded a significant price
premium.
Now even if this sounds like a description of
Roman times, it’s important to remember that
things still got done, most businessesmademoney
and customers were more often than not happy
with the level of service they received. Whichbrings
me to the question “what has technology actually
done for service industries ingeneral and the rental
industry inparticular”?
One thing it
hasn't
done (at least not yet) is
to change human nature. The reason things, by
and large, worked before information technology
becameubiquitous, is becausemost peopledowant
to perform the job they’re given to do as well as
they’re able to do it under the constraints in which
they operate.
So, technology is
not
necessary to get the
majority of things done to an acceptable standard
most of the time.
Performance
Technology has, however, helped
management to see the effects of
defective performance, and to correct
that defective performance much
sooner.
With
modern
technology,
companies can now see on the
same day if they have a spike
in equipment breakdown in a
particular area and then respond to the root
cause of that problem the day following.
At a more granular level we can see if the truck
despatchedwith the customer’s equipment is stuck
in traffic and therefore likely to be late on site –
giving us the opportunity to automatically alert the
customerwith a text andnot waste their time.
This opportunity to spot and actively manage
customer-affecting defects is certainly a huge step
forward from where we were thirty, or even ten,
years ago.
We can also see, at a glance, if the piece of
equipment a customer wants is due to become
available from the ending of an existing hire, rather
than leafing throughmounds of T-cards – sowe are
less likely tomiss sales opportunities.
We can then use our huge database of previous
transactions to build dynamic pricing systems to
ensureweareoffering logical, but profitablepricing
to customers based on their individual needs and
our fleet’s availability.
Challenge
Our challenge is that across much of the industry,
we are still not doing any of these things. In many
cases we have simply used IT to speed up the
processof counting transactions compared to those
old, manual sampling systems andwe are recording
the same old operational steps, but on screens
rather than T-cards or pieces of paper.
We might have saved ourselves a bit of time, or
at least some paper, compared to the old ways but
wehaven’t really changed the customer experience,
because we’re still prisoners of the “old ways” in
our thinking.
80% plus of things we do will normally go well,
because our people naturally want to do themwell.
The correct use of technology, it seems to me, is
about preventing, or reacting rapidly to, the 20%
that causes irritation, inefficiency, loss of pricing
discipline or outright danger.
The big challenge is how to find technology-aware
managerswho canalso thinkabout howoperational
flaws occur, how to spot them and then how to
prevent them.
The best IT system in the world won’t do that
thinking for us, but if we don’t do it, be sure that
someone else will do it and we’ll risk being the
victim.
IRN
KEVINAPPLETON is former CEOof LavendonGroupplc and former divisional
chairmanof Travis Perkins plc. He is currentlymanagingdirector of Yusen Logistics
UK, non-executive chairmanof HorizonPlatforms, non-executivedirector at Ramirent
Oyj andnon-executivedirector of the Freight Transport Association. To comment on
these articles please email:
Thepaceofchange
KevinAppleton discusses
the impact that technology
has had on service
industries and the rental
sector in particular.
9
THEAPPLETONCOLUMN
IRN JANUARY-FEBRUARY 2015
“Technology has helpedmanagement to see the
effects of defective performance, and to correct
that defective performancemuch sooner.”
