“Of our 8,000 employees throughout Asia, only 13 are expats. We don’t believe in using expats to run our Asian operations.”Michael Byrne
CEO, Linfox
Linfox is the largest privately owned supply chain solutions company in the Asia Pacific region. The company delivers sophisticated supply chain services to a wide range of leading business names across ten countries, including eight in Asia.
Linfox first entered Asia in 1984 with its China operations. Malaysia and Thailand followed in 1992. Since 2000, the company has expanded into Singapore, Indonesia, the Philippines, Vietnam and, most recently, India in 2006. Today, Asia accounts for half of the Linfox 15,000 strong workforce.
CEO Michael Byrne was appointed in 2006 after seven years in leading roles with the company, including implementing Linfox’s global management structure in emerging Asian markets. He is responsible for Linfox’s operations across the region.
What was your motivation for developing an Asian presence?
Almost 30 years ago, we decided that the Asian market was important for our company’s growth. We didn’t focus on Europe or America as we knew we wanted to set up a large base in our neighbouring countries.
We still hold that view today. Asia is a key focus of business growth in Linfox’s 2015 Strategy. Our customers are global multinationals, with operations throughout Asia. It’s imperative we have a solid platform there so we can continue to meet our customers’ needs.
How do you choose your target countries?
We look for countries with a large multinational corporate base and the prerequisites for operating effectively. That means: a strong and robust legal system; reasonably transparent regulations and compliance programs; and predictable and reliable banking systems.
How has the process of entering a market varied from country to country?
With the exception of India, we’ve entered each Asian market to date on the invitation of our customers, who needed supply chain logistics in that geography. Much of our success in Asia is driven by our continuous focus on the customer, which has yielded many of these cross border relationships.
In terms of entry strategies, Linfox prides itself on our organic growth. We do not participate in joint ventures or partnerships. We always back our operations 100%, allowing us to empower our people and control our operations.
We also adapt our approach to local conditions. Asia is extremely different from country to country — and even from province to province. Business conditions in Thailand can be very different from one side of the country to the other. Understanding the unique cultural, political and business issues in each country is the key to Linfox’s success across the region.
Many foreign corporates focus on the seaboard and on the big cities, however Linfox knows there are opportunities inland and sometimes in remote areas.
What have been the main challenges?
The differing state of the infrastructure throughout Asia can make smooth supply chain management logistically difficult. We use a powerful technology platform with our own systems to drive consistency across the region.
Some countries have loose operating laws and are subject to political instability and corruption. We combat these situations by remaining steadfast with our values and culture around safety, people and principles.
What are the future opportunities for Linfox in Asia?
Linfox’s 2015 Strategy focuses on ensuring continuous improvement in our service delivery. The growth of our business is intricately linked to the improvements we bring to our customers’ supply chain operations. We believe there are great opportunities in challenging old models and embracing new ideas as we look for continuous improvement in everything we do.
How important are relationships as you enter an Asian market for the first time?
Relationships are unbelievably important to our business, no matter where we do business. We have 100 customers globally and treat each company equally. We tailor our solutions to our customers and are 100% focused on delivering customer satisfaction using consistent platforms and proven disciplines throughout the world.
What structure does your organisation have?
We have a decentralised structure, with individual, national operations. In terms of regional overview, we recently restructured our senior leadership — creating two new Vice President Asia positions. Their brief is to help our Country Managers drive growth by developing operational improvements and pursuing new business opportunities.
Why decentralisation?
We need a decentralised structure so our country leaders can build close customer partnerships. Linfox can only achieve the continuous improvement our customers expect by gaining a deep understanding of their strategic intent.
Strengthening customer relationships was vital for improving operations while we faced the business challenges of the global financial crisis; maintaining deep ongoing relations is a key of our 2015 strategy.
Are skills shortages a major factor for you in your business in Asia?
No. We believe there are smart people all over the world. Many of the people we employ have worked or studied in Australia, however that’s not important. What is imperative is that they understand and can take on our culture and values.
How do you develop your Asian talent?
We take the same approach across our entire workforce. Employee development requires a serious, honest dedication to safety, training, compensation, benefits and performance.
We believe employees have the right to expect fair compensation and benefits, equal opportunities, necessary training and support, candid performance assessments and the opportunity to work in a safe environment.
This requires us to invest heavily in our people. Last month, more than 380 Linfox employees graduated from courses run by Linfox College, a key part of our organisational development and training programs. Linfox College offers a wide range of learning opportunities, including tertiary qualifications.
We also operate a graduate program to develop logistics careers for young people. Next year’s graduate intake will include people from across our Asian operations for the first time.
How do you maintain a consistent organisational culture while being sensitive to cultural differences?
We are culturally aware and adopt strategies to be culturally sensitive — such as the food in the canteen or the uniform our employees wear. However, we have no tolerance for operating a business on a platform that differs from our organisational culture in terms of safety, loyalty, customer centricity and a focus on people.
How big is your expat population?
Of our 8,000 employees throughout Asia, only 13 are expats. We don’t believe in using expats to run our Asian operations. We hire, train and retain local personnel to run, manage and oversee our operations.
What approach do you have to nurturing leadership talent for your Asian operations?
We nurture our future leadership from within.
Each year our Graduate Program takes on talented university graduates from a variety of disciplines to learn our business and develop their operational and leadership skills. This year’s Graduate of the Year, Daniel Skubisz, shows tremendous promise and has been appointed as Site Manager for one of our operations.
Linfox’s ongoing investment in its people and technology are fundamental to our 2015 Strategy and successful growth as an Asia Pacific supply chain leader.
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