Labelmaster takes talk to C-suite

NOW’S THE TIME

CONFIDENCE • SUPPLY CHAIN STRESSES HAVE AFFECTED ALL INDUSTRIES BUT THOSE THAT SHIP DANGEROUS GOODS HAVE ADDITIONAL PROBLEMS TO DEAL WITH. CAN THEY COPE?

LABELMASTER’S ANNUAL DANGEROUS Goods Confidence Survey, carried out in collaboration with the International Air Transport Association (IATA) and HCB, regularly highlights the lack of confidence that dangerous goods professionals have that their managers and top-level executives understand exactly what it is they do, the hazards inherent in their companies’ activities and the need for funding and engagement. This year’s survey also showed that many fear that things will get worse, with an ongoing restriction in investment to fill the gaps in technology, training and data management.

At this year’s DG Symposium, Labelmaster gathered a group of executives to gauge their views on the issues and to address the fears expressed in the survey. Opening the session, held this past 15 September, Rob Finn, vice-president of marketing at Labelmaster, stressed that organisational awareness is the biggest hurdle to overcome in changing matters. “What we want is the day when your boss finally remembers what ‘DG’ stands for,” he said.

Given the stresses on supply chains during the pandemic, logistics professionals have been presented with a wide range of new challenges. Is this the best time to try and shift the conversation on dangerous goods compliance? Perhaps counter-intuitively, it may well be, according to the panel.

During the past two years, the supply chain has been in the news a lot and, said David Crist, president of Brother Mobile Solutions, that has made many people a lot more aware of logistics. It’s no longer just a matter of “where’s my stuff?” There have been daily, even hourly interruptions to supply chains, meaning logistics providers have had to be a lot more nimble. The old supply chain models are no good any more, Crist said. They need to be more resilient and less linear. “This won’t be the last shock,” he predicted. “We have had to redefine the supply chain.”

NEW MODEL ARMIES RJ Romano, global supply chain executive at BDO, agreed that there has been quite a change. Before the pandemic, supply chain management was all geared around cost reduction, including strict just-in-time inventory management. Now it’s also about service and resilience to risk or, has he put it: “How can we make the supply chain disruption-proof?”

Customer expectations are rising constantly, Romano added. This brings another stress on the supply chain: can those expectations be met without adding cost? Companies are having to rethink how to spend their supply chain dollars. But in the current environment, cost is not always at the forefront of concerns.

Bruce Samuelson, chief executive of Chemtrec, said we are currently at an inflexion point in supply chain design. Dangerous goods specialists need to look at how to navigate the change and reduce the level of stress in the system. “We need to change the narrative,”

he said. “We need to become part of the solution rather than a cost centre.”

Bill Schroeder, president of ProShip, agreed, pointing out that the changes in the supply chain have brought new partnerships and new models. Manufacturers are now shipping direct to consumers, which brings new players into the supply chain – some of them new to the details of dangerous goods compliance. Shippers are using local and regional less-than-truckload (LTL) or gig economy delivery companies to get stuff to the consumer, overcoming the last-mile problem. Whereas in the past the compliance function may have been left to UPS, FedEx or whoever, shippers are now using networks that don’t have their experience. “We need to pause and consider the ramifications of this change,” Schroeder said.

MANAGE THE RISK Finn asked the panel how important dangerous goods management is for best-in-class companies. Crist said it is very important – but a rather small element. “But if it goes sideways it can mess everything up,” he added. Companies need to view dangerous goods in the same way as high-value goods, where there is a similar risk of “diversion”. Dangerous goods constitute just one of a family of goods that need more careful treatment and shippers need to take a holistic, lifecycle view.

Good shippers are proactive and try to get ahead of the problem, Samuelson noted. They look at what they do all the way through the system. And when you put it all together, Crist agreed, it makes a difference to the ROI. It’s a bigger job but it carries a lot of value.

New technologies can help with compliance and therefore help mitigate risk. Schroeder said he has seen a wide range of different approaches, with some logistics providers doing a lot all the time, while others do only a few things and miss the overall picture. They may be onboarding new customers at an increasing pace and find it hard to keep up with compliance.

Romano added that BDO is reaching out to its shippers’ C-suites to try and identify and prioritise risk; “It’s a critical part of the job,” he said. “In dangerous goods, the margin for error is small, supply chain constraints are tighter. You can’t just call any old carrier. This means the supply chain is at greater risk – sometimes you need to help the C-suite understand that.”

Crist returned to the issue Schroeder had already raised, of what he called ‘turnover risk’. Those making supply chain decisions at shippers’ facilities may not be aware of the risk of moving to another logistics provider and using new staff. Training has to be good – especially as there is a lot of competition for good people.

GOING BEYOND Bringing the discussion back around to the original point about raising awareness among the C-suite, Samuelson said that managers need to be aware of the limits of their service providers. That means it becomes a throughput problem not a dangerous goods problem. More thought needs to be put towards onboarding new, experienced staff, or training new hires to bring them up to speed quickly.

One problem is that dangerous goods compliance is invisible until something goes wrong. “The cost of compliance is like buying insurance,” Schroeder said. “You don’t see a lot of benefit when things are going ok, but it becomes evident when there’s an incident.” But, as Finn said, that can lead managers to bring out the regular comment: “Nothing’s happened, so why am I spending all this money?”

It should not be a conversation about cost, Crist insisted, it’s about keeping your promise to your customer and about corporate reputation. “Compliance is a pass/fail environment,” Samuelson added, “You can’t be just ‘ok’, it will end in incidents – and that can have an impact on the stock price. You want to stay off the front page of the paper!”

Can this conversation be had now, amidst the pandemic stresses? Romano certainly thought so: “Now is the easiest time to have the conversation,” he said. “Risk messages are getting traction with the C-suite across the country.

“There’s a benefit in identifying those risks that are out of your control and those that you can do something about. Define solutions and options for both,” Romano advised. “You need more control and visibility. Look to convert from ‘tactical’ to ‘strategic’. Go beyond cost.”

Readers who missed the Labelmaster DG Symposium can catch up on presentations via www.dgexchange.com.

DANGEROUS GOODS PEOPLE HOPE THAT THE SPOTLIGHT

PLACED ON SUPPLY CHAINS DURING THE PANDEMIC WILL

SHIFT THE CONVERSATION AWAY FROM COST AND PRICE

TOWARDS SERVICE AND CORPORATE REPUTATION