Walking the talk

Roger OakdenGlobal Logistics

Taking chances.

The bulk fuels division of a national transport company in Australia has recently received publicity that it did not want!

One of its road tankers careered out of control and caught fire in suburban Sydney, killing two and injuring five people. The driver survived and said that he had reported defects in the vehicle to his manager.

The accident and driver’s statement triggered government transport inspectors to check all the company’s trucks. Of  the large fleet inspected, a high proportion had faults and many trucks were not allowed to be driven. Problems reported included structural integrity issues with chassis; faults with brakes, wheels and suspension, oil and air leaks.

While defects to trucks can be fixed, the bigger problem is management in the company. Viewing the website of the business tells us that the company is “committed to building a leading company with a performance culture based on the following core values”. The first core value is safety, which the website states is “part of everything we do” and “our health, safety and environment responsibilities are integral to the way we do business”.

The talk on the website ‘ticks all the boxes’ for corporate governance attitudes, but what the company actually does shows its true behaviour. Why the mismatch?

Performance culture

In its Vision statement, the business is “committed to building a leading company with a performance culture…”. In previous blogs and newsletters I have noted that a feature of some 3PL businesses is a ‘can do’ culture, where working long hours and overcoming problems are considered as virtuous attributes of managers. Here there is a ‘performance culture’, which could be read as ‘can do’.

In this environment, planning and organising are not rated highly, so when there is a choice between having trucks on the road earning income or in a garage being maintained, the former always wins. This indicates that in conjunction with a lack of planning, there is no understanding of risk by the managers – that delays to maintenance increase risks to the business; as was evident in the crash and the subsequent truck inspections.

The ‘can do’ attitude in a 3PL businesses must also include approval of the behaviour by customers; here they are major oil companies. When negotiating the contract was price and time the main criteria? In all outsourcing arrangements and contracts with third parties, there exists a ‘chain of responsibility’ – it is not the driver of the vehicle that takes all the blame when an accident happens. If a powerful customer demands unreasonable requirements of their suppliers, then the customer must take some responsibility for the culture and attitudes in their suppliers that result.

In your company, if health, safety or the environment are a principle feature of the corporate vision (and promoted on the website), then what is being done by senior management to ensure that everyone walks the talk?

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About the Author

Roger Oakden

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With my background as a practitioner, consultant and educator, I am uniquely qualified to provide practical learning in supply chains and logistics. I have co-authored a book on these subjects, published by McGraw-Hill. As the program Manager at RMIT University in Melbourne, Australia, I developed and presented the largest supply chain post-graduate program in the Asia Pacific region, with centres in Melbourne, Singapore and Hong Kong. Read More...