IT has been four years since a team led by Teong Teck Lean took over domestic express courier company GD Express Sdn Bhd. An aggressive revamp of business processes, integration of information systems, a spanking new corporate culture and major focus on human capital has carved out a sweet recovery story for the company, stemming four years of consecutive losses since 1999.
In 2003, GDex made a pre-tax profit of RM1.1 million. And with that, Teong, chief executive officer of GDex, expects the company to do even better. It is currently in the process of seeking a listing on Mesdaq. The company started operations in 1997 and was just another small player in the domestic carrier industry that had more than 100 licensed players.
GDex was then serving the mass-market segment, which was crowded with numerous small players competing solely on price with little or no differentiation in terms of service variety and quality. By the end of 1999, intensive price competition had driven the company to the edge of extinction. The old management made way for Teong and his team in 2000.
Despite having virtually no experience in the carrier business, the new team were not daunted by their enormous task. Instead the lack of experience may have been a blessing in disguise as they brought a fresh perspective and new ideas garnered from their collective experiences in other businesses to GDex.
According to Teong, amongst the earliest action taken by the new management team was the establishment of standards of measurement for all the company’s business activities.
“You must be able to measure everything you do and only then can you compare your performance to some established benchmark,” Teong said.
Another early measure was identifying internal problems that were hampering the company’s performances.
“Back in 2000 we identified about 700 problems of various nature that were hampering the company’s performance. Today, we are down to about 60 problems. We will continue to eliminate them and seek out new problems and new solutions so that we can continuously improve,” Teong said.
Apart from revamping the business processes and the physical and technological infrastructure, GDex has also set out to change the mindset of its workforce.
According to Teong, all the infrastructure and processes had to be in place first before an effective programme to change the mindset of GDex employees could be launched.
GDex’s quest for world class quality and excellence led the company to implement quality management programmes to achieve accreditation such as the ISO 9001:2000 which the company achieved in November 2003.
According to GDex, it is the first and to date, the only domestic express carrier company to achieve this status for all its operating departments.
Recently the company launched another company wide program for its employees called Towards world class quality excellence.
The year-long programme, which includes training seminars as well as on-the-job training, will implement and enhance good quality practices targeted at achieving a level of quality excellence that is world class and on par with best practices not only in the express carrier industry but in other industries as well.
“Our model for this quality programme is based on the quality management practices of world class manufacturers who currently are able to achieve levels of defects or failures of less than 100 per billion units,” Teong said.
Teong, who is an engineer by training, believes that his experiences as a process/product engineer with an American multinational company in the electronics industry imbued in him an appreciation of the importance of quality in business processes. Those lessons had stayed with him ever since and which he is now trying to inculcate into the psyche of GDex employees.
One of the key factors that led to the introduction of a formal programme to improve service quality at GDex was the realisation by management that although most of the organisation’s departments were functioning at highly efficient levels on an individual basis, the organisation as a whole was not at the level desired. It was a case of the whole being less than the sum of the individual parts.
“We came to realise that while each department within GDex could be functioning at say, 95% to 98% level of efficiency, it was the effect of the 2% to 5% level of inefficiency of each department that got multiplied across the organisation leading to reduced efficiency of the organisation overall,” Teong said.
The company realised that it was the overall efficiency that customers would be measuring GDex’s performance and hence the need for a company wide quality programme.
According to Teong, GDex’s immediate goal is to be the leader in the domestic express carrier market before venturing elsewhere.
“We want to be recognised as the best express carrier at home, not because we are the cheapest which we are not but because we provide the best service in terms of quality and meeting customer requirements before we will even contemplate venturing beyond the domestic market.”
According to Teong, GDex was already competing with world-class express carrier companies in Malaysia in addition to the numerous local players and therefore the attainment of world-class quality standards was a reality the company had to address.
Other areas of priority
In terms of business offerings, the company has also moved into the area of customised logistics solutions for customers who outsource their warehousing, inventory management, bulk breaking and repacking, shipment, transportation and goods handling needs.
As for its international reach, strategic alliances with international carriers such as FedEx, DHL Worldwide Express, TNT Express and United Parcel Service has enabled GDex to cater for deliveries to more than a 100 countries worldwide. GDex is also the strategic partner of FedEx in Malaysia, providing services to FedEx customers in areas not covered by FedEx’s own operations.
Another area of priority for GDex is the development of its human capital. The company introduced various incentive schemes that reward efficiency in terms of individual performance and productivity. The company is also looking at ways to provide opportunities for career advancement as well as succession planning.
In addition, the company is also keen on empowering its employees in order to get them thinking.
“In the beginning, changes and ideas were generated and driven by top management but we want to move away from that to a situation whereby everyone at every level is involved in identifying problems, suggesting and implementing improvements,” Teong said.