MHD sits down with Travis Erridge, co-founder and CEO of TM Insight to learn more about a recent acquisition that will see the company quadruple its supply chain capabilities and double the headcount of its overall business. The strategic acquisition is set to supercharge the business to cope with the challenge of e-commerce volumes across the Asia Pacific region.
The global financial crisis of 2008 sent shockwaves through the industrial property market and while Australia may have gotten off lightly compared to the UK or the US, many businesses made significant cutbacks and were extremely cautious with their spending.
As a result of these cutbacks, Travis Erridge and now business partner Milan Andjelkovic both lost their jobs at global property developer Goodman.
Seeing this as an opportunity to do things differently and fill a gap in the market, Travis and Milan joined forces to establish TM Insight, a specialist consultancy firm that offers services in supply chain, property and project services.
It wasn’t long before Travis and Milan found themselves winning major contracts with retail giants Kmart and Bunnings. Fast-forward to 2017, and the business has since experienced a 600 per cent top line revenue growth with consistently strong year-on-year growth. The organisation is now on track to become a $100 million revenue business and boasts a high-calibre team of experts across the property and supply chain spectrum.
MHD met up with Travis to learn more about an exciting new venture for TM Insight as it prepares to quadruple its supply chain capabilities through a major acquisition in the Asia Pacific region.
The e-commerce explosion
As early as 2015, the team at TM Insight started to see the emergence in the demand of e-commerce and omnichannel operation capabilities as Australians started to warm up to the concept of online shopping. According to Travis, this shift to e-commerce is only going to increase in Australia.
“We’ve been talking about e-commerce for a long time in Australia. But only a few years ago some of our biggest customers and Australia’s biggest retailers’ online consumers were less than five per cent of their total volume. COVID-19 has now driven that up to around 20 per cent in a matter of months and this has presented a massive challenge for retailers across Australia,” Travis says.
This level of uptake rips a supply chain to bits, Travis says. “When you look at the types of vehicles that go in and out of a site, it’s no longer the big semi-trailer trucks but small vans going to people’s houses. So, you have to rethink your entire operation to cater for this level of e-commerce growth,” he says.
Many of TM Insight’s customers have been doing exactly that. Travis and co have already worked on delivering major automation projects in Australia – including the completion of a fully automated high bay distribution centre in Dandenong, Victoria with the total project value reportedly in excess of $500 million. The team are currently delivering a $2 billion pipeline of automated projects across Australia.
This was before COVID-19 supercharged the e-commerce uptake and changed retail forever. “COVID has fast-tracked the next three years of development into a matter of months,” Travis says.
To increase capability in this area, ahead of what Travis sees as a major period of growth, TM Insight is set to launch an e-commerce consulting business as it sees more of its clients requesting capabilities across this area.
The somewhat stubborn relationship that many consumers have with the traditional bricks and mortar stores has been completely transformed during COVID-19, and Travis jokes that to his surprise even the more senior members of his family are now scrolling and shopping.
By working on some of the largest distribution and fulfilment projects in Australia and New Zealand, TM Insight has a unique view into what the future of supply chain and logistics will look like. The team often designs sites that have a four-year timeline from conception to go-live. Many clients are committing to 10- or 15-year leases, making the planning horizon around 14 to 20 years.
“A 15-year-old today will be 25-years-old at the midpoint and you have to ask yourself, will they be shopping at a physical store or will they be using their phone?” Travis asks.
Combining organic growth with acquisitions
While TM Insight has been on a steep growth curve since its inception in 2010, part of its strategy is to grow the scale of its supply chain offering and breadth as well as move further into the Asia Pacific region.
As part of this strategy, the business has acquired its major competitor, XAct Solutions, in a move which will see TM Insight’s supply chain team grow from 15 to more than 65 as well as double the headcount of the entire business.
XAct Solutions offer supply chain and industrial property expertise across the Asia Pacific region and according to Travis between XAct and TM Insight, the two businesses will have been involved in more than 50 per cent of the major automation and industrial projects in the Asia Pacific region over the past ten years.
With investments and expansions in e-commerce and supply chain capabilities high on everybody’s agenda moving into 2021, this acquisition ensures that TM Insight can offer its clients more expertise and talent to deliver those increased throughputs and capabilities that will be required.
“XAct Solutions is our biggest competitor in this space so by bringing the two organisations and expertise together we can ensure we have the expertise needed to take our clients through this massive e-commerce and supply chain journey so many of them are embarking on,” Travis says.
The two businesses complement each other, TM Insight will have access to XAct Solutions’ strong in-house supply chain expertise and its presence in Vietnam, Thailand and Japan, while XAct Solutions will benefit from TM Insight’s strong integrated offering in supply chain, property and project management.
There are lessons to be learned from both regions and shared synergies and opportunities to innovate. In parts of South East Asia there is a much more sophisticated e-commerce offering, which Australian businesses can learn from. With Australia’s high cost of labour, the region is ahead of the game when it comes to automation and can share some of those key learnings with South East Asian organisations looking to increase their throughput with this kind of technology.
“South East Asian organisations are looking at ways that they can adopt the supply chain strategies coming out of Australia. While they don’t have the challenge of the high cost of labour, they do have the challenge of finding people who want to work in a warehouse. So, they are looking to flexible automation to become more efficient and competitive as volume significantly increases,” Travis says.
Travis sees automation as a necessity as volumes continue to rise. He also sees it as a way to make roles in the supply chain more attractive. “Some of the manual operations that warehouse workers are required to do are extremely strenuous. If you can automate that kind of work, then there is a great opportunity for people to upskill and move into roles with more opportunity and longevity,” he says.