About the company
TNT Express – the business-to-business wing of TNT, Europe’s leading package delivery and logistics group – benchmarks itself against investment banks, telecom giants and major airlines in terms of its vast transaction volumes and the degree to which its business lives or dies on the quality and robustness of its technology.
The division, which employs 50,000 people and generates revenues of over E4 billion, operates in over 100 countries, distributing close to 200 million consignments each year via 19,000 vehicles, 42 aircraft and almost 1,000 depots.
The IT engine behind that operation handles almost 2 billion transactions a year and is provided by 500 IT staff in the UK – mostly based at its Atherstone data centre near Birmingham – and another 500 spread around the world in local support functions. Together with an offshore capability in India, they put in 250 man-days of development work annually and manage over 120 applications, from package ‘track and trace’ and the in-cab, mobile systems through to more standard front- and back-office systems.
In support of that, Dr Shwan Moubarak, director of information and communication services, and a member of the TNT Express management board, has led his organisation through a quality programme that culminated in October 2005 with the winning of the European Quality Award organised by the European Foundation for Quality Management (EFQM).
Moubarak, who joined TNT in 1990, takes a highly pragmatic approach to the introduction of new technology, whether it is SAP, GPS or RFID, ensuring that innovation and the application of technology – as well as system refreshes and standardisation – always deliver direct benefit to the business.
Information Age (IA): TNT has committed to extensive IT investment in pursuit of competitive edge. Where has that investment been most effective?
Shwan Moubarak (SM): The whole emphasis from our point of view is that while we are proud of our strong road and air network in Europe, we also look at our electronic network as a competitive advantage. Everywhere in the world our international business is the same standardised system. So, from a customer point of view sending internationally from Kuala Lumpur or Sydney or London, there is one view of data, one set of interfaces – the GlobalLink system – and the same track and trace system around the world.
We have one standard infrastructure and one standard set of applications throughout the world. Now we are standardising the back-office around SAP and then going forward we are implementing a common, integrated system for domestic and international together.
(IA): Aside from competitive advantage through standardised infrastructure, clearly companies in your sector have garnered considerable advantage by exploiting emerging technologies. Is RFID [radio frequency identification] the next big differentiator?
(SM): We have case studies with our major accounts where RFID is highly successful, but it’s really a mutual thing. Today we produce a [paper] label, a barcode and we scan that throughout all our activities and provide related information to the customer. The question you then have to ask is: ‘So what is the difference between RFID tagging and a label?’. The truth is it is the same. As I say to our major customers – and they are shocked when I tell them this – we will track your package anywhere you want, provided that when you manufacture the product, you put the tag on it. Then I will read it throughout my organisation, and I’ll give the information back to you. So the real challenge is, if you want a complete 100% benefit of RFID, then you, as the manufacturer of goods, need to put it on when you produce the part.
So if the business case justifies it and there is an agreement with the customer, then we can do it. Just think, on a global basis, in every depot, every hub, every gateway we would have to have stations that could read these tags as well as a related – and parallel – operational process [for barcodes].
A few years ago, the cost was high but it has come down dramatically. The real barrier is finding the right business case for it, making sure you are taking advantage of it from beginning to end. Today most customers say they can already do what they need to do with a label.
Name: Dr Shwan Moubarak
Company: TNT Express
Title: Director of information and communication services
Key challenge: To sustain a highly robust, scalable IT architecture that is capable of handling vast transaction volumes and yet is responsive to business demand for innovative technology.
(IA): Do you find that the window for that kind of technological innovation is actually narrowing?
(SM): My personal view is that we can all buy software, all buy hardware, and the suppliers are available to everyone. But the real differentiator is with the people who make it happen. People who have knowledge of the business and knowledge of the technology, who can integrate those sets of knowledge and relate that to the processes. In my judgement it is our people who are our competitive advantage.
We are the first internal IT organisation, perhaps in the world, to win the European Quality Award [from the European Foundation for Quality Management (EFQM)]. Some people wondered, what the hell are a bunch of IT people doing with an award like that? But that was something incredible; we were competing against some major business units around the world, people like BMW.
With EFQM, you’ve got to show you are delivering quality to your customers by surveying them. You have got to show you know what they actually think – the key performance indicators, the service levels and how you are doing against them.
You also have to survey your staff and find out what they think of the organisation and its processes. How are processes designed and integrated, and related to the business opportunity? How are they communicated and how does that information cascade? Is there a formal process for benchmarking and what action do you take as a result? You look at your costs and how those are reviewed, who makes strategic decisions and how that relates to the board, shareholders and stakeholders.
(IA): That pressure to delivery quality processes throughout, does that not put limitations on innovation?
(SM): IT people are cynical by nature. With EFQM they might have been asking, ‘Is Moubarak after an OBE or a knighthood?’. But the answer is that EFQM is all about what we do here. We said if you talk about quality, you should not look at it as a specific task. When people come to work in the morning, everything they do has to be done in the right way because that is what the customer expects, what you should expect. So we created ‘Our Way of Life’, a set of expectations about the way we behave, the way we work, the way we react to each other.
Within that we have created focus groups. So the Innovations Framework is a way of creating innovation when you write software, in the architecture and in the design of systems. By putting processes round it, does it take that individual input out of it? I honestly don’t think it takes anything away from people.
On the contrary, it creates focus, it creates recognition – both at an individual and team level. But you have to adhere to it, it is a full-time job, you can’t just do it and then ignore it. You do it every day, you follow it every day, and then it becomes business as usual.
But that does not stop innovation. And the ability to see where you can innovate. Take GPS [global positioning system] – a very simple technology that everybody knows. The first time we used it was actually for security and it became a big profit maker for us in Italy and other countries with security issues.
Bandits used to come and hijack our trucks full of Gucci bags, Rolex watches and other high value stuff. What did we do? We put a computer in each driver’s cab connected via GPS back to a security centre in Northern Italy. When the bandits stop a driver with a gun, video images are immediately transmitted back to us, we can immobilise and lock the lorry remotely, and immediately alert the police. So you don’t have to employ people to ride shotgun, and the criminals soon get to know there is no point in stopping TNT trucks. As a result, customers with high-value goods trust TNT.
Another example is more of lateral thinking. About a year ago, we were having problems communicating with drivers in parts of Switzerland. We embarked on a sophisticated analysis, looking at the technology, the network configuration, thinking it might be the mountainous terrain. But what we found was that at a certain time of day, when all the kids came out of school, they all turned on their mobile phones and completely swamped the network so our drivers could not communicate back.
What I am proud of the most is the team, I cannot emphasise that enough. The technology is fine, the software is fine, but it is it is the people who put it together, they make it work.
I work extremely closely with the COO and the board and they see the value in IT – the value of the common systems strategy, they see value of the organisation’s infrastructure that provides 99.97% availability, they see the value of the technology provided for the customer.