EB: Disaster recovery



Spicers’ recent switch to DHL as its third party carrier for furniture has been described as "a disaster" by some independent dealers in theUK. Alan Ball, Managing Director of Spicers UK, tells opi.net what the wholesaler is doing about it.


When Spicers UK announced in March that it was centralising its furniture offering with third party carrier DHL, Managing Director Alan Ball described it as "a real step-change in our service proposition on furniture for dealers".


It has certainly been that, but not at all in the direction that Ball envisaged at the time, as tales of woe emanated from around the country regarding delivery times and damaged products.


Speaking to opi.net, Ball points to two main factors for the drop-off in service levels.


Firstly, he says that Spicers and DHL were thrown off track by an unexpected increase in furniture orders just as the changeover was taking place.


"DHL had set themselves up for a certain amount of product and the spike in demand put pressure on them during the transfer. This meant that they did not have time to get used to us and we started having problems."


The second problem, says Ball, is that DHL is using a third party carrier itself to assist it in some of the deliveries. This, in itself, was not unexpected as Spicers had met with this third party carrier prior to the signing of the contract and had been happy with their credentials.


However, the carrier struggled to deliver the furniture, having issues with delivery times and damaged items.


"We’ve had quite a lot of instances of damage and that’s where a lot of the noise has come from," Ball admits. "Customers are receiving damaged product and therefore they’re having to have it re-delivered. That’s completely unacceptable and is something that we wouldn’t expect from any carrier, and certainly not from somebody of the quality of DHL."


To make matters worse, the third party carrier, also caught out by the volume levels, then subcontracted out some of the business itself for a short period of time, making it difficult to guarantee that trained staff were making the deliveries.


As well as volume and damage issues, there were also IT teething troubles at the time of the changeover, with the DHL system not receiving some orders in the early days. There were also instances when dealers were given incorrect delivery times.


"We did have a couple of weeks where that happened," says Ball, "and that was very quickly solved from an IT point of view and the orders are now getting through."


Ball admits that business has suffered because of the service issues.


"One thing about dealers is that they’re incredibly loyal, but they’re also incredibly honest," he states.


"They’ve been up front with us and they’ve said for this period of time they’re going to have to source they’re furniture from elsewhere. ‘Come back and talk to us you when you’ve got it resolved,’ they told us."


Business is starting to come back as service levels have risen into the 90s, still a bit short of the 96-98 percent target.


"I wouldn’t say that we’re back up to our original level, but we’re certainly well on the way and we’ve seen a significant increase in our 48-hour deliveries," states Ball.


"So I think dealers are starting to come back to us now they’ve seen that we can prove that we’ve got a service model that’s working."


What has Spicers been doing to try and get the service levels back up to the required standards?


"We’ve had a number of meetings with DHL to give us the confidence that they can get a partner that’s not going to deliver the product damaged," explains Ball.


There has also been a succession of meetings internally to look for solutions, with a major change being the decision to put furniture back into Spicers’ Glasgow distribution centre, with the DC to service all furniture deliveries for Scotland and the north-east of England from Monday 19 July.


Some would describe that as a U-turn, others as a pragmatic solution to a real problem.


"The rationale for this move is that we’re obviously going to be in a better position to deliver to some of the more northern areas of Scotland from Glasgow," says Ball.


"From a customer perspective, they’re used to getting a good quality of service from Glasgow and therefore putting it back through there is going to give them confidence that the problem is resolved."


Ball adds that by doing this, the volume strain on DHL’s Lutterworth facility will also be eased, and that when the Glasgow service goes live it will make a "significant improvement" overall, giving Spicers the confidence to go back to dealers who have not yet reverted back to the wholesaler for their furniture needs.


This includes a number of larger dealers, with whom Ball says Spicers will be working especially hard to win back business.


Ball also says that when everything is up and running as it should be, Spicers will be looking to promote its furniture offering.


"We will be looking to make sure that all dealers that have stuck with us through this will benefit, so I will be putting a plan in place to reward them once we’ve got the service up and running as we’d like it."


While the implementation of its new furniture service hasn’t gone according to plan, the silver lining for Spicers could be its handling of the situation.


"We have communicated honestly with dealers and we’ve told them the challenges that we’ve had," states Ball. "Most dealers have found it encouraging that they’re getting that level of communication, which is what I’ve promised from day one."


He concludes: "We’ve got our values very firmly set out and our dealer partners are our number one priority, so I think the only way you can be is honest so people know exactly what you’re about, and then they can make plans accordingly."