Since its demerger, Bluescope Steel has retained its international iconic role in the industry, getting on with the critical job of maintaining its world competitive cost position and achiving best practice in safety performance.
“Zero harm is our goal at BlueScope Steel,” vice president of logistics Ingilby Dickson tells Logistics Magazine.
“Safety is also commercially smart. Our well recognisedsafety record gives us considerable respect across the globe.”
Recently awarded Freight Personality of the Year, Ingilby Dickson joined BlueScope Steel in 2003.
He manages all aspects of road, rail and sea logistics for BlueScope Steel products worldwide, with a portfolio in excess of $1 billion along with Group Procurement which has an expenditure in excess of $6 billion.
Along with achieving a safe, smart, low cost supply chain, Dickson says anything that touches the customer is strategic to his role.
“We pride ourselves on our strong customer service record at the physical end of our supply chain,” he says. “Ensuring products are available and delivering in the designated timeframes is the key to our success.”
“With most of BlueScope Steel’s procurement concentrated in business units across North America, Europe, Asia, New Zealand and Australia, I’m also responsible for consolidating and integrating our activity to ensure we put our best foot forward.”
Settling in Perth in the 1960s, Dickson’s father was a doctor, his mother a nurse and receptionist.
Dickson studied Commerce, finally opting for Distribution and landed a job as Mayne Nickless’ first graduate trainee in Perth.
“Mayne Nickless was a wonderful place to learn the trade,” Dickson says.
“For almost 10 years I was in a constant state of movement either instigated by the company or self motivated. I moved from back to front office, ran warehouses and small contracts.”
“I eventually came under the leadership of Don Telford as part of the team that set up the first logistics business in Mayne. Don became my mentor and continues to be a close friend, peer and colleague.”
“I’ve been lucky to have the opportunity to experience both sides of the supply chain in my career,” Dickson modestly says.
“As a provider of 3PL services for 20 years with Mayne Nickless and Toll in a number of countries such as the UK, the Netherlands and Belgium, I was able to develop an understanding of the competencies required for the physical operations undertaken for customers.”
“Prior to joining BlueScope Steel, I moved from Mayne to Goodman Fielder. Functioning as a customer in the aggressive rigour of the retail world enabled me to develop a great foundation of skills for buying services and making sure execution took place effectively across the operations of large manufacturers.”
Ingilby Dickson says many of the supply chain challenges the company face arise from living in a global community in an industry with more external dynamics than most.
“Apart from the value of the Australia dollar, we need to deal with the impact of global competition and issues such as climate change,” he says.
“We manufacture a product that’s considered a commodity, with production supply and demand fluctuating considerably.”
“As a significant exporter, our volumes might vary by 25-35 per cent per year depending on demand, currency and pricing. Therefore we need to make sure our supply chain is flexible and can handle variations in capacity.”
“Fulfilling the growing expectations of customers is a daily challenge at BlueScope Steel,” Dickson says.
“For example, Queensland and Western Australia, which are the farthest from the company’s manufacturing sites, consume huge volumes of steel as a result of the resources boom.”
“Products are being moved greater distances using more capacity and equipment in a fairly rapid time frame.”
BlueScope Steel’s supply chain is owned by its business units, and acts as their service provider.
“As in FMCG and retail, there’s a pressing need for the capability to know where our products are,” Dickson says.
“We need to understand what DIFOT reporting is, measure it for our customers and ensure we achieve continuous improvement.”
“We’ve recently invested in a sophisticated transport management system, Oracle Transport Management, to make sure we can talk to our carriers electronically on a B2B basis.”
“We now provide data on 2-3 hour feeds to our customer service models.”
“Not so long ago we’d only do that for microchips or colour TVs, but now we monitor coils of steel. That’s a significant move to improve the effectiveness of our supply chain,” Dickson observes.
“It also allows better, more timely information to be fed in to our supply chain planning process to ensure the effective management of capacity.”
“We have small teams involved in regularly reviewing our three month, two month down to one month, weekly and daily capacity.”
“In the past, our approach would have been more ad hoc basis. Planning demand and capacity, and measuring delivery performance are key criteria for our customers.”
“We moved very quickly to make sure we meet customer expectations and exceed the performance of our competitors.”
“As a result, our planning and scheduling is more effective. We’re seeing more tonnes per load, delivering more quickly and overall improvement elsewhere,” he says.
“We now need to focus on analysing the data to enable us to work on exceptions, which is of equal importance.”
In terms of forecasts, Dickson says the company’s sales staff work closely with BlueScope’s customer base to ensure their demand is clearly understood.
“I don’t think our process is quite as sophisticated as it is in the retail environment, but we’re well on the way,” he says.
“Forecasts are collaboratively planned with distributors, local manufacturers and export orders to the US and elsewhere overseas.”
“We’ll collate a forward plan of 12 months which is fine- tuned as the point of manufacture and dispatch approaches.”
With a billion dollar spend on Logistics globally, BlueScope Steel places a significant emphasis on the development of medium to long term relationships with marine and land based contractors.
“Because of the considerable capital involved we concentrate on sophisticated planning processes using strong metrics, performance reward and penalty systems, continuous improvement, and a cost down approach where it makes sense,” Dickson says.
“For example, we created an seven year tri-party contract with Pacific National and One Steel, which could be described as a 4PL.”
“Two major users have joined together to buy rail freight because the synergies offer a great outcome for all three parties.”
“We also spend a lot of time cultivating the next Linfox or Toll by supporting and working with second tier road providers to ensure they’ve got the capability to meet our future needs,” Dickson says.
“It’s horses for courses – we need synergies and capacity to work effectively but we also need to be smart enough to understand how our providers’ cost structures work for us and whether they’re a good fit with the business.”
While Ingilby Dickson has spent a large part of his career in the FMCG industry, he notes that servicing BlueScope Steel’s customers is quite a different proposition.
“In such a large organization, many of our customers are internal,” he says.
“We make product and deliver it from one mill to the next, all of which are considered separate business units.”
“We manage and treat them all as customers through service agreements, strong metrics and performance reporting.”
Another complexity is the large variety of end customers.
“BlueScope Steel has a combination of very large export customers in Korea or California along with very small manufacturers or distributors in Caulfield or Dandenong, Victoria to whom we deliver,” Dickson ex
plains.
“We deal with building sites, builders developers and project managers and we must ensure those timed and small deliveries be it one, two or three tonnes follow the same level of service orientation as perhaps a trainload of coils that’s bound for OneSteel, our major customer in Queensland.”
According to Dickson, important areas of opportunity include further improving collaborative planning and forecast accuracy to the level of sophistication the retail industry has achieved with its supplier base.
“I think there’s a whole area of opportunity in supply chain integration from an information base,” Dickson says.
“Ensuring supply chain planning, order management and IT production control systems are fully integrated is a key challenge.”
“We’re moving down that path by implementing a common ERP platform and gradually updating our production and automation systems.”
“There’s always the challenge of making sure you’ve got good, smart people,” Dickson adds.
“BlueScope Steel focuses energy on recruiting X and Y generations to keep the Logistics team developing, as well as experienced staff to maintain the mentoring process.”
Despite strong contractual relationships, Ingilby Dickson concedes capacity is a long term issue.
“Essential infrastructure in this country is old and tired,” he says.
“We’re very keen to see it improved. BlueScope Steel is supportive of ongoing north south corridor feasibility work, which is not only about capacity but also about speed.”
“There are parts of the track that are very slow, which means our transit times aren’t world class,” he says.
“The east west corridor rail line is near capacity and in Sydney, close to our main manufacturing site at Port Kembla, we have to run trains at night.”
“BlueScope Steel is very supportive of the work of the Australian Logistics Council and others who are lobbying for increased activity in this area, and of the good work the ARTC is doing by implementing AusLink 1 and 2. We’re keen to see that moving forward.”