Home Delivery Network Limited - The Interview
Since its formation in May 2005, Home Delivery Network Limited (HDNL), the UK's largest dedicated home delivery service, has led the way for technological advancement across the UK business-to-consumer delivery industry.
 In recent months HDNL has introduced cutting-edge mobile computing across the organisation, including a total 4,850 new handheld terminals in its 62 UK depots, in effect re-wiring a major logistics business in flight. The multi-million pound technology investment programme is further proof of HDNL's commitment to providing exceptional service to its growing customer base, including the latest big win, the John Lewis Partnership. Chris Airey, Home Delivery Network's recently appointed IT Director, spoke to Warehouse & Logistics News.
WLN - Chris, first of all, when did you join HDNL, and what were you doing before? What is your brief as IT Director of HDNL?
I joined HDNL in June this year. Prior to that I was Group Director of IT Systems for RR Donnelley in Europe. Before RRD I was on the board of the consulting division of Vertex, responsible for the front-end of engagement, solution design and the overall IT strategy.
My HDNL brief is to bring the experience of creating and running the consulting front-end of real-world service providers. There are many facets to this, such as synthesising the drivers for investment on client and operational support technology, through to enhancing capability to work on technology-enabled projects with the IT departments within a client's organisation.
WLN - How much are you involved personally in developing and running the IT interface between HDNL and major customers like the John Lewis Partnership? Are you involved in developing the IT side of new business contracts?
I have made it part of my role to meet clients, and over time get to know my IT counterparts. For example, the IT integration agenda has to move on from parcel pre-advice to enable timely data in a client's call centre. I have started to bring new skills into the organisation to enhance the IT part of our new business contracts. Additionally, we have already invested in processing improvements to provide a better service as a reference for new business. Therefore, it is important for me to work with client IT directors or managers, since we are both supporting different parts of a single process in the eyes of a customer.
WLN - To set the scene, how does Home Delivery Network Limited go about the business of working with retailers to deliver goods to consumers' homes?
Home Delivery Network Limited's core function is to bring the high street to every customer's door. We currently deliver on behalf of four out of five of the UK's most used home delivery retailers as recognised by Verdict 2006. We deliver to every postcode every day and have our own network to handle parcels in a consistent process.
 WLN - What kinds of goods does your service deliver? How many drivers do you have and roughly how many deliveries do you make per day?
We handle items of all shapes and sizes, from wine to bulky home furniture. We have a nationwide team of 3,500 delivery drivers who visit every postcode, every working day, delivering over 600,000 parcels a day at peak. Our drivers have developed a unique knowledge of their own local areas and its customer base, which enables suppliers to offer a high quality, flexible and convenient delivery service to their customer. Our two-man delivery service handles heavy, bulky items over 25kg.
WLN - Do your depots cover the whole UK? What about Northern Ireland?
We have a nationwide network of 62 parcel depots and four specialised Two Man locations, and we are proud that in September 2006 we expanded the network into Ireland, delivering over 2 million items a year.
WLN - Let's talk in more detail about HDNL's technology investment programme. What were the mobile computing problems and other challenges the new technology had to solve, and how does it solve them?
Basically the mobile technology had come to the end of its life. HDNL was faced with the choice of finding the most cost effective route to do the basic job of scanning parcel delivery events or considering the range of services clients may want in the future. The tricky part is second guessing innovation in the retail industry. HDNL has gone for a platform based on the latest technology standards, so that through working with clients we can build end-to-end solutions with them. The technology solves the problems by integrating many capabilities such as WiFi, mobile phone technology, Microsoft Windows, scanning technology, and a programming layer for controlling business processes. The device therefore has much of the capability of a laptop, and is as flexible as that level of technology.
WLN - Presumably, along with changing the technology you're using, you've also changed HDNL's business processes. Can you tell us about that?
We have changed the overall business processes at a management level, but crucially have minimised the impact with the driver. It was a key part of our risk management approach on the project to make the training challenge manageable as we got towards the busiest time of the year.
WLN - Who were your technology partners in terms of devices, applications and IT implementation? How did you select them?
The main partners are Syclo, for applications, and Intermec, for the hardware. There are a number of infrastructure providers and sources of implementation resource. The core solution was chosen through an open procurement process to ensure HDNL got the best solution and price.
WLN - Besides giving your delivery drivers the new mobile devices, how are you changing the technology in your depots and your IT backbone, and updating the on-line management information you provide to customers?
We have taken the opportunity to refresh the depot infrastructure with the latest WI FI equipment and integrate the traffic with a communications hub in our data centres. The data feeds our core Track & Trace system, and we have invested in new Management Information reports for the operation and Clients. There are new reports that were designed in conjunction with a group of clients, and an enhanced data warehouse for our more statistical analysis.
WLN - With the new mobile devices you've moved from batch data transmission to continuous messaging. How quickly now will incoming collection and delivery information become visible to customers? Were your customers previously asking you to provide this level of information, or are you proactively leading the way in offering it?
When we decided to invest in continuous messaging, it was mainly for our own needs in terms of improved tracking of operations driving our service standard. However, when we talked to our clients about it, we found a number who felt it addressed the demands of their Internet customers, who prefer more real-time information. The most interesting part of this is the range of value-added services that become available once this kind of information becomes available. Our goal is to have a 15-minute update on doorstep events being available on the tracking systems, which we are currently testing.
WLN - What Track & Trace service will you offer to your clients now?
On-line tracking information is currently provided in three ways. Firstly, we provide the data to a client's CRM or web system, secondly through our OTIS (on-line tracking information service), and thirdly on our web site. The data is also provided in a 'real time' query manner for clients or via batch upload, dependent on how they want to take it.
WLN - What difference will the new technology make to your staff and the end consumer? Will the consumer still have to wait in for their packages?
HDNL has always maintained data transparency with its clients. This has allowed service issues to be worked through. The new technology will help this process, as it is more reliable and also provides data more quickly. Whether the consumer has to wait in for their package depends on the delivery instructions provided by the consumer through the client. We control what the driver can do on the system in line with those instructions. Where a client can capture instructions from a consumer and pass them through to us, the impact on first time delivery is material. For our larger deliveries we obviously contact the consumer in advance. In the future I believe clients and HDNL should work more closely on allowing notification of 'in your area between.' Whilst this is a dynamic piece of information depending on what needs to be delivered each day, the consumer should be given better updates.
WLN - How much of a first is this technology solution for the UK logistics industry?
It is a first in terms of the combination of the new CN3 with the Syclo application. Whilst there are many instances of sophisticated IT in the B2B market, there are less in the B2C market. The differentiation is in two parts. First is the end-to-end data management piece, from pre-advice through to tracking & MI. Second, the application on the mobile device is programmable in an open standard way. Therefore, we have delivered the technology refresh and can now customise the solution as required by clients. Our competitors will have to complete the refresh, or even invest in the end-to-end IT capability.
WLN - How far has the implementation got now, and when will it be completed? How much are you spending on it, and will this cost be passed onto the customer?
We have rolled out over half of the mobile devices, deploying on a safety first basis given it is peak trading. It will be completed by Q1 2008. The overall cost is several million pounds, and this is being treated as an infrastructure refresh. Future projects will be the usual mix of those with common benefit to keep us ahead of the followers, and client specifics tend to have a wider business case. The client sets the customer costs for delivery and any additional services. We will of course advise clients on the ease of delivering any premium services and costs, but the pricing is their choice.
WLN - While the new IT is coming in, you've got to go on giving a service. How do you go about rewiring a logistics business in flight - are you working up to a big bang across the company, or will you roll it out depot by depot? What are the particular challenges of bringing the technology in like this?
I think the main approach here is to 'parallel' everything. For example, we have had the old and new mobile devices and WIFI networks in operation at the same time. We have also deployed a depot at a time in waves, and taken the trainers into each area so they can bring the learning from each implementation forwards. The challenges are really around the level of integration; there are so many parts that have to work. The trick is to build 'work around' solutions for every step of the IT process. This is a level of investment that HDNL are happy to make to protect the service.
WLN - Where do you see HDNL going from here? How much more capacity do you have to take on more major clients like JLP?
We have the capacity to take on more clients, and can create more capacity whenever needed.
WLN - Finally, as HDNL's IT Director, what challenges are you most looking forward to over the next few years?
I have joined to be part of a team that sets out to be the benchmark for the B2C industry, working with clients, customers and partners. The key challenge is how to bring this together and support clients as they look at their end-to-end supply chain from the customer inwards, rather than operations outwards. The delivery process is just one part of the retail experience, and HDNL is positioned to support our clients with this transformation. My personal challenge is to support this by having an IT infrastructure a client IT director is happy to integrate with, since it provides the necessary data, process management and service control they are looking for. Boundaries have to disappear and be replaced with collaboration to service the customer. This is an interesting and challenging environment.
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For further information about this company's activities in the warehouse and logistics industry please contact:
Home Delivery Network Limited
Tel: 08450 706030
www.hdnl.co.uk |
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