Dwain McDonald

Tag: COVID-19

  • Getting Brexit-ready: the lessons learned at DPD

    Getting Brexit-ready: the lessons learned at DPD

    For the last 48 years, it was as easy to ship a parcel from Birmingham to Berlin as from Birmingham to Bolton. Not any more. This all changed six weeks ago, following the UK’s withdrawal from the EU Single Market and Customs Union.

    DPD had started to get ready for Brexit in June 2016. Still, nothing could have prepared the team for the reality of the first day trying to send vehicles across The Channel into mainland Europe.

    As both the company and its customers grappled with new rules and new IT platforms to tackle customs clearance, it meant that 20% of parcels had incorrect or incomplete data and had to be held in our network (a figure that dropped to 5%).

    Next, delays and congestion hit at UK ports. Within days, the backlog in the system meant a pause in road services to the EU and Ireland for the first time in living memory. Not a decision taken lightly, given that the company was part of DPD Group’s massive European road network connecting 900 sites across 30 countries.

    Brexit – a bigger mountain to climb than Covid

    In fact, if you’d asked me last June whether anything could be as challenging as adapting to Covid-19, I’d have said “No”.

    I was wrong.

    Getting Brexit-ready was by far the most challenging thing the team had ever done to keep our £300m international business on the road.

    there had been an investment of nearly £14m in the previous two years getting ready. That included recruiting almost 300 additional people – mainly to handle customs clearance – plus a massive spend on warehousing space and IT systems.

    There was also a  knock-on effect across numerous departments, from Sales to Customer Care to Finance and beyond.

    To make sure the company made joined-up decisions, there was a project team of 20 people who met every morning and afternoon to discuss issues, pool ideas and create solutions for DPD’s customers.

    As I have discussed previously, when massive change hits your business, you find out what your people are made of. Team DPD stood at 22,000 strong (9,000 more than this time last year), and during 2020 I lost count of how many times I asked all of them to “dig deep and go again”.

    I felt humbled by the incredible resilience DPD employees showed when faced with the double-whammy of Covid and Brexit. They displayed enormous grit and determination to keep going on a path where there were no shortcuts.

    Do you speak Brexit?

    It’s also been fascinating to see how different customers have reacted to the new trading environment, and there were three distinct groups:

    1. Customers who started making thorough preparations months ago and were ready for the extra bureaucracy now required. And as a result, they have barely missed a beat.
    2. A group of customers who decided to ‘wait and see’ before making significant changes.
    3. A segment which put Brexit in the ‘too hard pile’ and/or decided that the cost of being Brexit-ready outweighed the potential benefits.

     

    Re Option 3, of course, it may have been tempting to hide under a rock in the face of seismic changes and hope that you’ll never need an EORI (Economic Operator Registration and Identification) number, that signing up to the GVMS (Goods Vehicle Movement Service) is not a thing and that the words Movement Reference Number (MRN) will never pass your lips. You might also have been tempted to ignore the NCTS (Newly Computerised Transit System). It’s fair to say that Brexit brought with it a whole blizzard of new acronyms!

    In short, getting Brexit-ready was like learning a whole new language. While everyone will be more fluent a year from now, the odd stutter, miscommunication and faux pas during the early stages were to be expected.

    The DPD approach to Brexit was similar to the approach adopted to tackle Covid: focus on what’s most important and on what can be changed, and accept what’s outside the company’s control.

    And that would be my advice to companies in options 2 and 3 above. If you’re still in the ‘wait and see’ group, now is the time to get back on the horse.

    If you still feel reluctant, remember that, as a wise leader once said, ‘you don’t have to enjoy everything you want to do’. At DPD, the systems were in place, and they have worked well with the NCTS. From 1973 to 2020 trading with our European cousins was a breeze. But, as we discover in times of adversity, only the headwinds make you stronger, so I remained confident that by continuing to work closely with our cherished customers, DPD could achieve this target.

  • The Retail Bounce-Back: Preparing for a Post-Pandemic World

    The Retail Bounce-Back: Preparing for a Post-Pandemic World

    During my time as CEO at DPD UK,  and as UK plc was gradually emerging from lockdown, I asked our retailer customers how they were preparing for life in a post-pandemic world. How much of the old normal will their customers go back to?

    How much trust was there in the consumer journey – both in-store and online? And of the new buying behaviours triggered by the pandemic, which ones would be temporary, and which were here to stay?

    One of the most striking comments came from the Head of Logistics for a major fashion retailer who said to me: “I can’t imagine a million people will be walking through the doors of the Trafford Centre this November.”

    “People visit stores for an experience, not just a transaction, but how are they going to feel if they can’t use the toilet, can’t try on clothes and have to walk one way around the store? And who knows, they might even have to pass a temperature test before being let into the car park.”

    Another commented: “People will still go to supermarkets for food, but who wants to risk infection for the sake of a non-essential shopping trip, when they can buy online from the safety of their own homes and then get a non-contact delivery?” Meanwhile, figures from a DPD customer whose stores have re-opened in Asia show that footfall is only 40% of what it was before, whereas their online traffic remains super buoyant.

     

    New consumer behaviour

    Obviously DPD wanted the UK high street to survive and thrive again, not least because deliveries to store were a major proportion of pre-COVID B2B volumes.

    The company hoped to see a string of innovations that made the in-store experience as engaging, safe and convenient as possible. But the fact is that during the last three months there has been a step change in the move to online shopping and a huge surge in B2C traffic – several commentators have said that e-commerce leapt forwards four years in just three months.

    Perhaps the most dramatic stat, is that according to research consultancy Retail Economics, 45% of consumers bought something online for the first time that they’d only ever bought in-store before.

    DPD data reflected the same story, because since the start of lockdown the company delivered to 500,000 addresses for the first time ever. Downloads of the DPD App – where individuals can manage their delivery preferences – grew 28% quicker than before lockdown, reaching a total of 7.3 million users.

     

    The new online and mobile shoppers

    There was definitely a segment of new ‘silver surfers’ who because of lockdown, became more tech-savvy, overcoming reservations about e-commerce transactions to buy essentials such as food and health supplements.

    But here’s the thing, they’ve then realised that clothes, craft and leisure items were also available to buy with a simple swipe or a click of the mouse and they will arrive safely the next day on their doorstep. In a similar vein, online shoppers who previously bought only fashion and leisure items were now using websites to buy essentials as well.

    Is the massive weekly food shop a thing of the past? It looks that way at the moment, as consumers made shorter and more frequent supermarket visits, supplemented by deliveries from subscription services such as Mindful Chef and Hello Fresh – all of whom ship with DPD, sending 300,000 parcels per week with the company.

    It looks like people who used to buy six or seven days worth of food from the supermarket have replaced around a third of this with food subscription services. And if they’ve relished the new experience, why would they go back to the old way of doing things?

     

    Preparing for a post-pandemic world – planning for the Christmas peak

    Understandably, throughout the current crisis, retailers were very focused on immediate challenges and on getting through the next day or week. But to maximise their chances of bouncing back post-pandemic, we have encouraged them to plan further ahead.

    I wouldn’t normally mention Christmas to customers in the middle of June, but this year it would be irresponsible not to. Why start preparing for the post-pandemic world early? Quite simply because the UK parcels sector will not have limitless next-day capacity in the November-December peak.

    To help maintain retailers’ margins, parcel carriers have learned to run very lean operations in the UK’s ‘just in time’ supply chain. And although recruiting extra drivers and adding new vehicles is easy enough, carriers can’t magic up extra hubs and depots overnight.

    Normally we would have asked customers to nail down their festive volume forecasts by the end of September. But as I write this on Wednesday 10 June, there are just 122 working days until Black Friday (27 November). That has focused minds on planning further ahead than usual. If forecasts are locked and loaded by the end of July, customers can be sure of having enough space in the DPD network.

     

    Trust – an invisible but crucial commodity

    None of us knows how retail will look a year from now, but one thing is certain: whether people return to the high street or stick with online, trust in the consumer journey will be the most crucial factor.

    Trust is the invisible commodity that we all depend on. It’s only because new silver surfers are learning to trust the online experience – from browsing to ordering to delivery (not to mention returns) – that they’ve now become repeat customers.

    Meanwhile, in-store, a whole load of other factors will affect trust levels. For example, because of contamination fears, people will probably feel much less comfortable about trying on and buying shoes in a confined space than about buying plumbing materials from a big DIY store.

    However things pan out post-pandemic, DPD will have to monitor retail trends and buying behaviour both at home and abroad.

  • Towards a new normal – how COVID-19 made us think differently

    Towards a new normal – how COVID-19 made us think differently

    I spoke to several CEOs during May 2020 and it’s safe to say that none were prepared for the challenges of grappling with a global pandemic. Sure, there were business continuity plans and experts who carried out regular risk assessments but dealing with an overnight economic lockdown is not something they teach you at business school. So by the end of this crisis, the new normal will probably look very different to what went before.

    How the Coronavirus pandemic impacted different industries

    The impact in different sectors was stark, with clear winners and losers. Divorce lawyers were apparently inundated with new enquiries, whereas the long-term prospects for karaoke bars looked somewhat less promising. At DPD B2B volumes halved – virtually from one week to the next. Simultaneously B2C doubled overnight – and because we led the UK market in home deliveries, this produced the kind of volumes that are normally only seen in the six-week pre-Christmas peak.

    Customers shopping online rather than on the high street meant we delivered more food, flowers, nail varnish, eyelashes and loungewear than ever before! In fact, Easter volumes were double those of last year. And incidentally, Coronavirus did nothing to put the brakes on the company’s mission to become the UK’s most sustainable carrier. This year we’ve already delivered 2.2 million parcels on all-electric vehicles and the target for Cyber Tuesday (1 December) is to deliver an incredible 70,000 parcels on EVs.

    The new normal and attracting the best talent

    The parcels sector is known for attracting resourceful people who can think on their feet, but in the last two months the business had to become more agile, flexible and innovative than ever before.

    For example, it took some pretty nimble footwork to recruit 500 new drivers in the last month, with another 500 in the pipeline by the end of June, ensuring that they’re trained to deliver the top-quality doorstep experience that DPD customers pay for. And given that we now expect the 2020 peak to be 40% bigger than last year, I found myself asking my Property team to find ten additional sites by the start of November, making a total of 15 new depots by the end of 2020. Oh, and a further 3,000 new drivers by then as well.

    It’s in this kind of crisis that you find out what your people are really made of. Resilience – how well you adapt in the face of adversity – is what will separate the winners from the losers as we navigate these uncharted waters and adapt to the new normal. So, the approach at DPD was to focus on what’s most important and on what we can change, while accepting what’s outside our control.

    The upside of government restrictions is, that while remaining physically remote from each other we had to find new ways of working together. And guess what, some of them are probably here to stay.

    Necessity is the mother of invention

    This old saying has never felt more true than it does today. And there’s something really exciting about questioning the status quo and finding new ways of doing things. For example, I held daily one to two-hour conference calls with the whole Senior Management Team, so that we could discuss the nitty-gritty of running the business. This extra communication brought us closer together and we became more productive and focused than ever.

    But the biggest benefit is that each director invited some of their people to these virtual meetings. That meant much faster cascading of decisions to the rest of the team at the coalface and much quicker execution of the operational changes we needed to make. And of course it also gave some up and coming senior managers direct exposure to the C-suite.

    The plan for the new normal is to extend this format to our annual Strategic Board meeting, which normally sees 17 of us gathering in a hotel to discuss crucial business decisions for three days. That’s the way our previous two CEOs did it and when I took over in 2008, I carried on doing it the same way, thinking ‘if it ain’t broke, why fix it?’

    But the truth is that three such intense eight-hour days in a row became an endurance test and it’s fair to say that if you were the last presenter on Day three, you probably didn’t get everyone’s full and undivided attention!

    With the physical boardroom off-limits, the Coronavirus pandemic gave us the opportunity to look at this meeting with fresh eyes. This year we will still do three days in a row, but in highly focused and disciplined two-hour chunks, for a total of just four hours a day. Each director will have their say, but they’ll only present for 20 minutes at a time and we will draw names out of a hat to decide who goes next, keeping everyone on their toes and fully focused.

    Time to think

    In some ways the parcels sector can be quite traditional. But another myth proven to be untrue is the one that said people are less productive working from home. It’s simply not true, though I have to admit that I was one of the sceptics when the People and Talent Director said: “1,700 of our 13,000 people won’t be coming to the office tomorrow.”

    But what we discovered is that the quality and quantity of work is just as high and, in some cases, higher than before. It’s an outdated attitude to think that everyone must be at their desk all day every day – and be seen to be there.

    It has always been fully ingrained in DPD’s DNA to be a fast-paced culture, often moving at lightning speed to make things happen for our customers. But loads of people are enjoying the fact that they’re running around a bit less now. Less time stuck in rush hour traffic jams, less pollution, less time away from the family on business…, in short we’ve discovered that less is more and that some of our old habits are past their sell-by-date.

    For example, I suddenly had much more thinking time than before the pandemic – and I’ve realised that my diary doesn’t have to be crammed with appointments from 08:30 to 18:30 every day. That was just another outdated habit from old-world conditioning that tells you that this is the way to behave.

    In short, there’s been a lot of talk about ‘returning to normal’ and at the start of this crisis, I must admit that the question of how to do that at DPD was at the top of my mind. But what I have learned is that this pandemic has given business leaders the opportunity to take a step back, take a much-needed breath and then consciously decide which bits of the ‘old normal’ are, at the end of the day, really worth keeping.

  • Responding to the COVID-19 Crisis; Dwain McDonald

    Responding to the COVID-19 Crisis; Dwain McDonald

     COVID-19 crisis and response

    All around the world, countries and businesses are facing enormous challenges due to the COVID-19 crisis. At DPD we have risen to this daily challenge – to ensure services continue, the team is safe and essential deliveries reach residents across the UK.

    COVID-19 was by far the biggest challenge I’ve ever had to face as a business leader, and I know this is the same for many more CEOs. People expect us to make informed decisions, keep all our stakeholders safe and maintain the high standards that they pay for.

    Communication is the biggest tool during this crisis. I have had daily calls with all my teams; planning and evaluating following government guidance.

    We have also kept our customers and people fully up to date with changes with regular email bulletins.

     

    Keeping employees and communities we serve safe

    My job was to focus on what’s most important to our customers, and the wellbeing of my teams. Delivery drivers are now on the front line delivering an important service: keeping goods, essential supplies and medical equipment flowing. That’s their job – and it was my job during my time as CEO to keep them safe.

    We brought in social distancing for all staff including changes to our sortation, loading and unloading processes. We launched a ‘wave delivery programme’, spacing out drivers’ start times to ensure fewer people were on site at any one time. And, despite all the disruption, our services ran normally with a success rate of 99.9% for first time delivery.

    The team spirit was fantastic. Behind the scenes other changes have included moving all office-based teams to home working. IT teams built and supplied around 700 new laptops to support this.

    The entire delivery service became totally contact-free, meaning that people no longer need to sign for parcels on handheld devices or even open their door.

    By adapting current systems, the company was still able to offer customer choice and ensure we complied with social distancing guidelines. People could either use the app to record their preferences, select the Leave Safe option under their in-flight tracking or leave a note on their door with instructions where to leave their parcel.

     

    Staying true to our Values

    Strong leadership means staying steadfast in the face of adversity and that means staying true to what you believe in, rather than panicking and falling into short-term thinking and decision-making. That’s why, despite all the operational changes the company stayed true to its distinctive DNA. The DPD culture is built on six core Values: Respect, Passion, Hard Work, Accountability, Flexibility and Honesty. The company rewards and recognises employees who demonstrate these Values and believe me, in the midst of this unprecedented crisis, the team’s behaviour was truly inspirational, in fact my biggest challenge post-Corona could well be finding a way to truly celebrate what they’ve achieved in these unprecedented times.

     

    Supporting the nation

    As CEO during this difficult time, the buck stopped with me. With my leadership team, I prioritised our people, our customers and the wider community, and implemented swift changes. People expect fast but considered decisions from leaders, and it is by taking these steps that we can reassure staff, customers and members of the public who come into contact with delivery drivers.

    In addition to making sure the core business was running smoothly with minimal disruption, we also thought about other ways we can support the nation during this disruptive time. It’s about innovation and using our resources in a different way.

    The company worked with the NHS and the Government to deliver medical supplies to adult care homes, pharmacies, hospitals, GP surgeries and hospices. So far, this has included 6.7 million protective gloves, 10.3 million safety masks and 5.2 million aprons. We also promised to support free collection and delivery of 3D printed additional PPE equipment around the country.

    Every year, DPD delivers millions of parcels for food retail outlets, and we have extended this to directly partner with Morrisons and support them in “feeding the nation” by getting essential supplies to the public. The retailer produced two different offerings, one box for meat eaters and one for vegetarians. DPD was proud to be the official delivery partner as part of this scheme.

    Moving forward I’ll continue to listen to the team every day and ensure they are as safe as possible. They will remain my number one priority and their efforts will allow us to support customers’ changing needs and the country as best we can.

    Keep safe and look after yourselves.