The ‘planned emergency’
For Lufthansa Group special speed logistics company time:matters, success in Europe has led to a measured growth plan focusing on growth in its home European market as well as a careful expansion into Asia which recently saw the niche company open a Shanghai office. By Donald Urquhart.
June 1, 2011
With an ambition to become the “best and most trusted provider in special speed logistics for Europe and Asia,” the timecritical logistics company has been building on its successful European base by expanding its tailor-made and industry solutions to focus in the last couple of years on further refining its emergency logistics product. The company occupies a unique niche in the logistics industry because it provides very detailed, individual, highly flexible and customised logistics solutions for especially urgent or complex logistical challenges. This includes same-day or emergency shipments, time-critical international spare parts logistics and international courier services. Speaking to Payload Asia in Munich, time:matters CEO and founder, Franz- Joseph Miller said the company’s latest business segment sprang from the realisation that a lot of its existing customers have same-day and emergency shipment requirements on a more-orless recurring basis, in the sense that certain ’emergency’ patterns emerge. “We’ve approached them with the idea that there is something like a ‘planned emergency,'” says Miller. “A lot of emergencies are actually situations that you can plan ahead for,” he says citing the example of a shortage in the supply chain in which production parts are needed at a critical factory in Asia and the plant it has to go to, say northern Germany for those crucial spare parts. “You can actually make a process design for the emergency so when the case happens you don’t start from scratch, but you really have a plan in your pocket already.” In order to do this time:matters completes an exhaustive identification of every possible part of the process chain where a shortage could occur. These ‘imaginary emergencies’ are precisely simulated, and tested with the customer in order to develop the customised and tailor-made solutions specifically for these cases. Once this is complete an SOP is defined and uploaded into their IT system, so when the emergency actually happens the plans can immediately be activated. “That gives our customers and us, a clear advantage in speed and also cost of course because if you do it this way you can do it more efficiently then if through ad hoc shipments,” Miller says. He also notes that when time:matters embarked on this area it chose to focus on a few specific industry sectors rather than just a random approach, to enable it to really ‘deep dive’ into the sector. These key sectors include automotive, med-tech, semiconductors and most recently oil and gas – precisely because these are the ones that have specific ’emergency’ patterns. He cites the example of the automotive sector, “where you have these patterns and there are certain geographic clusters where the auto industry is present and these are the ones we want to focus on first rather than doing a random approach.” But in the aftermath of not just the global economic crisis of 2008/09, but the Iceland volcano and Europe’s unusual Christmas snowfall last year, “we somehow get used to emergencies”, he notes. But these events have had a lasting impact on supply chains as companies have become far more hesitant to hold stock. This has added vulnerability to supply chains which means risk management has become an essential component, Miller says. Remarkably, while many logistics companies suffered declines as a result of the economic crisis, time:matters managed to generate a small growth through the crisis year. Miller says this was achieved on the back of a shifting balance between its two core business segments. As emergency logistics declined, spare parts logistics – which has a longer term window – continued to grow. “We also managed to keep winning new customers that recognise the benefits of our system and started using us,” he adds. In order to make it all work time:matters has specific agreements with some 24 carries – primarily Lufthansa, Cebu Pacific and Cathay Pacific in Asia. A key part of their solutions relies on getting their processes connected with the air carrier’s. This is a differentiating factor from other logistics companies, Miller says. “We have on our partner airlines specific processes only for our purpose which keeps the freight separate from any other freight which has specific handling and IT requirements, so we have a lot more control over the shipments.” This serves two purposes, he adds, “you keep control of the shipment which increases both safety and speed”. As well, time:matters has over 500 other partners around the world who do everything from pick-up and delivery, Customs and road transport all the way down to bike couriers. This also includes working with big logistics players like DHL, who one might think would also be keen on this specialist part of the business. Miller disagrees, however, noting that it is far too niche and requires far too much detailed attention at the very base level to fall within large logistics companies’ capabilities or interest. Looking east The company made its first foray into Asia nearly three years ago with an office in Singapore which has been followed recently by a new office in China’s bustling commercial centre of Shanghai. “It’s no surprise we believe that a large part of economic growth will happen in Asia and also our customers have approached us, asking if we can do the same thing in Asia as we do for them in Europe.” Miller says quality, confidence and trust is crucial for these multinationals. He notes that with the boom and development in China most logistics companies are focusing on volume and price. “But what we see, is there is more and more demand from the multinationals for high quality, very specific solutions. What we bring to the table in China is a trusted relationship with the MNCs and the logistics companies, because we have proved we have the mindset to do special speed logistics.” For now he says the number one priority will be the greater Shanghai area. “We will take the small-medium size enterprise approach,” he says adding that in talking with companies who were successful in entering the China market their top recommendation was: “Don’t be tempted to do all of China at the same time and to be wanting too much, but take a focus on one thing and develop a good track record before you branch out and do other things.” Alongside a focus to further develop the Asian market out of Singapore and Shanghai, the next step will be to connect Asia and Europe. The company is also eying India – “China and India, it’s hard to tell which is more important, Miller says with a laugh. “One thing we would like to look at is connecting China and India which we feel has huge potential in the future.” In the meantime the company will keep internationalising with a focus on Europe and Asia, as well as expanding their scope and industry coverage and at same time go deeper in the value chain. “We want to continue expanding our scope and really be the experts and freaks on special speed logistics.”