If you talk to any transport operator, one of the issues for them is how much the business impacts their time. They can expect the phone to ring any time, day or night, with calls to get a truck fixed or sort out other issues. Further complications occur with miscommunication between customer and transport operator and then between transport operator and the consignee.
Garry Gunn appears to have set up his operation to avoid these hassles, but at the same time be involved with the cut and thrust and day-to-day operation of the business he enjoys and has been involved in for nearly 30 years. By employing an innovative business model and using smart software and networking, he can offer a large multinational company the kind of transparent and sophisticated level of service they expect from large corporate freight organisations, all from the comfort of his office in the garage of his Gold Coast home.
As he sits in his converted garage which also houses his gym equipment, as well as the array of computer equipment required to run the business, Garry is keeping an eye on and fine tuning the operation he has developed over the past two years. From this hub, his company is supplying distribution and delivery services for the global Case New Holland (CNH) agricultural machinery manufacturing group. Gunn Freight is contracted to pick up and deliver all products the company imports into Australia from the wharf and get it to the dealership where it is needed.
When dealing with these large multinational corporations, a great deal of visibility and information systems integration is needed in order for the customer to monitor and audit the distribution process. CNH’s global sales and logistics information network has precise requirements and has set a number of stringent KPIs for subcontractors. Gunn Freight consists of a small number of people working from home offices monitoring and fine tuning a sophisticated distribution operation and has the same kind of interface with the customer as is normally seen being provided by the large corporate distribution companies.
Rising through challenges
Although Gunn started his working career in the banking sector, he was forced to go into business as a one-man truck operation after a business venture he was involved in got into experienced difficulties. He had taken on the lease of the Nullarbor Hotel in the far west of South Australia on the Eyre Highway and realised that the business was nowhere near as profitable as he had been led to believe.
The hotel owned a rigid Isuzu truck to transport the grog and other items out to the remote roadhouse. When the dust settled down after he sold the business, Garry found himself back in Melbourne and the only asset he had left was the old Isuzu truck.
During his time in charge at the Nullarbor Hotel, Garry had come into contact and became friends with a number of people in the trucking industry who had constituted the majority of his regular customers. One of these men had the distribution contract with New Holland. Garry soon became involved in shipping agricultural machinery around Victoria, with the equipment shipped out of the New Holland manufacturing facility in Dandenong.
By a set of unfortunate circumstances, the main contractor passed away, and Garry found himself in a position where he could take over the New Holland distribution contract as it was then constituted.
“I had progressed to my first real truck,” recalls Garry. “It was a UD CK 30 pulling a 40 foot trailer. I was parked up at Kewdale in WA when my wife phoned to tell me what had happened. Everyone was in complete shock. I had developed quite a good relationship with the people at New Holland and I was able to take over the contract.”
The agreement between Garry and New Holland was confirmed with a handshake and the contract remained in place for the next 18 years. Over that time, Sperry who had owned New Holland sold the business to Ford, who then sold it on to Fiat. Gunn Freight built up a strong relationship with the New Holland organisation and developed a great deal of expertise in the area of shifting agricultural machinery from A to B.
The business owned several trucks based out of Brisbane and Melbourne which were also the main ports to which the new agricultural equipment was now being imported with the manufacturing facility in Dandenong having closed down. Due to the very cyclical nature of the business, it relied heavily upon a group of subcontractors who over the years had built up an expertise in shifting anything from a small skid steer up to the largest combine harvesters.
Radical change
During the 1990s the structure of the agricultural machinery business in Australia was changing radically. By 2000 all of the major agricultural machinery manufacturing companies had ceased from building machines in Australia. Agricultural giants like New Holland, International Harvester and Case became a distribution network for a global manufacturer.
A period of rationalisation within these large companies ended with the merger of Case IH with New Holland to form Case New Holland (CNH), representing about 45% of the agricultural machinery market in Australia at the time. These changes meant that this rationalisation would flow down through the organisations that were now involved in a single entity. It became clear that Garry’s distribution contract was not going to be picked up by the new group.
Garry had also developed an operation handling the process of getting agricultural machinery from ship to shore through the customs process and making it ready for distribution to the dealerships. This business sustained him for a couple of years after losing the distribution contract but he sold this to a shipping company and planned to move away from agricultural machinery.
New beginnings
Along with his wife Joy, Garry bought a small tavern in Gippsland and settled down to the life of a pub owner. When the business started to go well, the couple realised they could build it up enough for it to be leased out enabling them to retire to the Gold Coast. And that’s exactly what they did.
By 2008, the top management at CNH had changed over since the initial merger and it was looking to revisit some of its processes within the company. One of the areas it was looking at was its logistics chain all the way from the manufacturing plant in the US and Europe to the CNH dealer here in Australia.
“The way you need to run the inland distribution or something like agricultural machinery is very straightforward,” says Garry. “Firstly, you need to charge per machine and model. There must be a set price for each machine which will be in the system. Secondly, there needs to be a KPI which is relevant to where the machine is going. And you’ve got to allow for the fact that you will never have a full load for Dubbo but you will probably get something which needs to go somewhere nearby like Parkes. When you price agricultural machinery or distribution it has to be priced to a region. The seasons will fall in agriculture in a particular area at a particular time.”
Streamlining productivity
Garry was approached by CNH management to put together a quote to handle the distribution of its product around Australia. He got together with two fellow directors to develop pricing and a system to handle the work. They would work from three home offices and control the distribution system and their sub contractor group without having to invest in the infrastructure of yards and without buying trucks.
“Our current contract has a KPI in which we have to deliver on time over 98% of the time,” says Garry. “We had to commit to meet our obligation from the time when we are notified the machine needs to be moved. After running this contract for nearly 12 months we are achieving 99.3% delivered on time.”
Another requirement of the system was for the invoicing to be presented to CNH in a form where it could be checked easily against their accounting system. This is where the Gunn Freight bid differentiated itself from competitors in getting the work. They sat down with a computer whizz, Christopher Kerr and his company QDOS, and explained exactly what was required in a distribution control system in order to work smoothly, as well as what form of reporting structure CNH would require.
“We ended up spending about $100,000 getting the program worked out and we’re still developing it now,” says Garry. “It’s got everything we need, including a track and trace. The information we gave them allowed both us and them to analyse the distribution and work out the most cost-effective way of moving the machines. For instance the choice of port is very important, we discovered 60% of the machines which were coming into Port Kembla should have been coming into other ports.”
The system allows CNH to get smarter about where it brings its machinery into the country. Other savings have also been found by shifting combine harvesters from Melbourne to Perth via ship if the timing allows.
Gunn Freight’s computer system does not have direct access to the CNH network but does have access to a feed directly from its sales and ordering system. The Fiat system is called GOF and it holds every order in the system. When dispatch advice is issued after the vehicle has cleared customs and has been made ready for shipment, this is sent directly to Garry via e-mail.
The GOF system is then accessed, and using its serial number, they can then check that the dispatch advice matches the information on the central computer. One click then adds this vehicle to the ‘units awaiting transport’ section. This action automatically creates an e-mail to be sent to the dealership informing them the dispatch advice has been issued.
Once the machine is on a truck, the dealership receives another e-mail, this time including an ETA. It is generated when the manifest for the load is created out of the system. Later, the receiver of the machine is given a phone call by the driver of the truck when it is two hours away from delivery. In total, the dealership receives three notifications of the impending arrival of a particular machine.
When the POD is signed at the dealership after the delivery of the machine, they are then required to fax a copy of it to a specified number. This generates an image file which is then included in the information about this particular machine on the computerised logistics system.
Any concerns on the part of the dealership about when the machine will be delivered and its current location can be allayed by simply logging into the Gunn Freight website and punching in the serial number of the machine, its status and its estimated delivery date.
One of the other KPIs insisted on by CNH was that when the invoice was sent through it would have to be 99% correct. By integrating the two systems so information is presented in a manner in which CNH can feed it directly into their system, the invoices for the month can be checked off by one person in 10 minutes.
“Are we perfect in everything we do? No we are not,” says Garry. “But we are quite a long way down that road. When we look at the operation now, we are profitable, we pay our subbies well and they get paid on seven days. Operating from home means we keep our overheads down. If work gets quiet we have very little costs. There is usually enough work to keep my two fellow directors’ trucks working.
“My eventual plan is to go mobile,” says Garry. “When I can work on the road I intend to go around the country visiting the dealerships and talking to them about improving the system. Then we can be on the spot and deal with any problems that dealerships may have.
“Agricultural logistics, if done properly, can sell more machines. If you can provide any of the large manufacturers with a timeline in which you could calculate the week of delivery when the initial order is put in, you can reduce inventory and improve performance. The cost of holding machines is extremely expensive.
“We have taken this system to another stage. It can now be used for any goods. Any small operator could take this system and apply it to their business, offering their customers quick and easy quoting and a reliable dispatch and invoicing system. We want it to be a cheap available system to a single operator.”
Garry has taken those things which have been vital to the Australian trucking industry throughout its history, and combined it with a ‘can-do’ attitude, working together on a handshake basis and finding a solution to every problem. He has then married this with a computerised accounting and dispatch system which is engaged all of the way through the logistical chain. This system also gives CNH greater visibility into what Gunn Freight is doing.
The system also has the advantage of being able to analyse the way the logistics chain is working to make it more productive and efficient for the customer, easier to use for the dealership receiving the machine and profitable for the Gunn business and its subcontractors.