“We are now spending as much on customer needs as on internal operations,” Mike Sturrock says of the journey DX, a distribution specialist, has been on over the last two years. Sturrock and the entire leadership team at DX have been transforming the distribution company since 2011 and listed on the AIM exchange earlier in 2014. Sturrock was 24 hours away from sailing to the Arctic Circle when we sat down in his Buckinghamshire office to discuss transformations delivered and the opportunities they expect to wrap into the organisation.
DX continues to focus on the higher value end of the intensely competitive logistics industry and Sturrock’s strategy remains focused on using technology to both drive up the value DX offers its customers, but also ensure DX remains able to extract a good margin.
DX also works with parcel aggregators such as ParcelMonkey.com to take a slice of the digital disruption travelling through this and every market.
“We call markets like ParcelMonkey.com C2X and the user tends to be an eBay trader and it is a nice bit of business, but it is low value. The aggregator market is going to grow and grow because customers are looking for innovation that helps them personally. What the aggregators offer is an ability to get things to us with a quality of service,” Sturrock says of the relationship between the two organisations.
Since joining DX in 2011, as part of a new a leadership team, Sturrock has been pushing through a box load of modernisations to the information and technology strategies.
“Strategic efficiency has been my major area of focus,” Sturrock says. “We still have a lot of internal stuff to do such as ERP and a new data centre, but this will enable us to deliver to customers a delivery ETA (estimated time of arrival) and a wider network of collection points. We’re rolling out a host of new technology and process to drive customer service and efficiency including new handheld devices to drivers and new scanning technology in all of our service centres,” he says of the role technology is playing in improving customer value.
At previous roles at airline easyJet and broadcaster Sky, Sturrock has pioneered optimisation strategies. Sturrock sees optimisation as the technology enhancement that will enable DX to deliver ETAs to customers and drive up service quality.
“We have a hub and spoke business model, but now we can assess demands instantly and direct good across the spokes. Trunking from the hubs is a major cost, we run over 200 18-wheeler trucks a night, it’s an incredibly competitive sector on cost and capability,” he says of the opportunities optimisation offers to reduce costs and improve services.
“A lot of our competition are using automation for parcel sorting, but we are going for a cage network because it has benefits for high value and fragile items and gives flexibility to our customers. Automated networks can be less flexible as everything has to be homogenous,” he says. Just weeks after our meeting with Sturrock, rivals Royal Mail announced a fall in parcel revenue by one percent.
DX use the Software AG WebMethods platform across the business, ensuring all information sits on a central bus and provides a single view of the business and its information.
“Under the roof every parcel scan is, via Wifi, straight onto the bus in real-time,” Sturrock explains of the collection of information in the sorting process. “We can now harvest all our data and have a single view of the customer.
“A new returns portal triggers a collection, the billing and the handheld devices the drivers use is integrated, so that every event in the company ends up as a message on the bus.”
Sturrock and his team are experimenting with Google Glass to understand the innovation opportunities and disruptions. The CIO describes Glass as lacking the robustness for serious consideration, but he believes the software innovations that will follow are where the exciting opportunities will arise.
“The Heads Up Display concept is brilliant and it is pushing the envelope, but we haven’t found the killer App yet,” he says.
Recently Sturrock has been involved in customer bids and retention. Global logistics rival UPS was challenging DX for its work with Men’s Warehouse, the technology offering of the logistics suppliers was key to the provider Men’s Warehouse chose.
“We went in and pitched a project to them with five drops of technology every month to fix their concerns,” Sturrock says. “We want to be in a position though where we are not being challenged and for us to be on the front foot.” To get on to that position Sturrock is encouraging innovation throughout his team and the organisation.
So how much has changed since DX became a listed company?
“The chief exec’s and our position is that we are still running the business the way we were, we are not focusing on the share price, so there’s been no change in strategy. We all joined as a board to re-invest in this business and as a board we are as one on that.”
Away from world of logistics Sturrock can be found living the life of outdoor adventure, as stated in the introduction, hours after our meeting he was flying to Norway to sail to the arctic circle.
“Personal leadership is about how you lead yourself and give yourself a stern talking to. With extreme adventures there is a lot of planning and preparation and we have a lot of challenges ahead of us,” he says of his trip to Svalbard, an archipelago at 82 degrees North and inside the Arctic Circle.
“I relish this challenge.” Sturrock has presented the scale of the adventure at his sons’ primary school to inspire the kids, again, an issue he cares greatly about. “We have done a lot of training as in the ice you can end up like pepper in a grinder, with you are the pepper. We will be on a watch of three hours with two dog watches. What you learn from this is to trust and be trust worthy.”