Yanke Group

Source: Exec Digital Canada

Date :31/10/2007 09:35:05

Yanke Group goes global

President and COO Scott Johnston tells Exec US about Yanke Group’s global expansion and the benefits of its triangular management structure

Written by Alison Withers and Produced Kevin Patey

Yanke Group, Canada, was started 30 years ago with just two trucks. It now has a fleet of more than 400. A global transportation company, it specializes in moving and handling products from diverse industries including pulp and paper, agri-chemicals, hazardous materials and temperature-sensitive commodities as well as building materials, retail goods and food stuffs.

The company’s head office is in Saskatoon and it has eight terminals across Canada, each equipped with amenities for its PTOs (Professional Transport Operatives) who are often away from home for stretches of up to 14 days. The company also offers a sublease program allowing drivers to lease one of its trucks and start their own business and as part of its marketing strategy has a merchandising section offering a range of robust clothing and equipment for drivers and golf enthusiasts.

The group’s president and COO (Chief Operating Officer), Scott Johnston, 50, began his career in the LTL (Less than Truckload) sector of the freight industry. After six years out of the transportation industry with the Canadian Mounted Police, he returned, working for Highland and Kieysen Transport. He also pursued an executive MBA at Queen’s University, Kingston, before joining Yanke in 1990, where he worked in all management areas and levels in Manitobe then at head office.

He became Executive Vice President in 1994, President in 1998 and COO in 2003. He says: “I think transportation plays a significant role in driving economies both nationally and globally and it’s very dramatic and constantly changing. Although being with the mounted police was interesting and challenging I was drawn back to transportation because of the interaction with people and their products and the challenges of moving their products.”

Triangular management

Although most organizations have a pyramid structure with senior positions at the top ,Yanke has what it calls a ‘triangular management structure’, which Scott Johnston describes as an inverted pyramid whereby the most senior positions are at the very bottom of the pyramid with front line staff running the operation day to day supported by management.

He says: “My role is more Dean of Education, making certain that people are asked the questions, expediting and looking at things holistically and making the right decisions to satisfy the customer. It’s about empowerment, accountability and people taking decisions rather than looking to the people above them. It attracts a certain personality willing to function in an environment where they make decisions.”

The fleet of trucks is renewed every four years and since 1992 all tractor units contain state-of-the-art equipment for drivers including GPS and a communication satellite/keyboard. There is a tight service/maintenance schedule, much of it using sophisticated automated systems (like automatic tractor greasing to ensure service reliability) and central tire inflation systems to maintain consistent pressure on trailers.

Ensuring maximum fuel economy and efficiency has environmental as well as cost benefits. Sophisticated security systems ensure the safety of goods in transit. The company also operates a domestic double-stack rail service using both the Canadian Pacific and Canadian National railways. It also provides ocean freight forwarding, moving goods from the Pan-Asia Gateway and linking with various ports with Yanke’s rail and road transportation operations.

In addition to fleet assistance maintenance management through Cetaris software, the company has TMW TL2000 software to assemble orders and quotes for customers, internet track and trace to update status of shipments (available to customers via Yanke’s website) and an IBM AS 400 computer to improve efficiency and customer service.

The company makes a point of using skilled and professional employees. It has an incentive scheme for PTOs., called a utilization bonus, based on productivity, safety and fuel efficiency and awards more than C$2 million a year. Drivers who complete one million and two million miles have an additional incentive scheme.

Yanke has recently begun recruiting drivers from the UK, Dubai and Ukraine, the first two because the company needs drivers who qualify for the USA’s B1 visa waiver program and the Ukrainians because their country’s climate is similar to Canada, where winter lasts six months, and their drivers are used to the weather.

Another operation – the Yanke sublease program – allows drivers to run their own businesses, leasing tractor units from the company and receive in-house maintenance support and business management training, plus a health benefits program and the costs of licensing fees, heavy use tax, tolls and bridge fees.

Salaried employees receive a profit share and executives have a management reward system. Says Scott Johnston: “We also recognize tenure and service and we have long service awards for both operating and salaried staff.”

Global expansion

“Because we are a facilitator of commerce we are changing as an organization away from a trucking company towards a full transportation company,” says Scott Johnston, back in his office for a week between a trip to Barbados and another to China at the end of the week.

He explained that in the last twelve months the Canadian dollar has strengthened while the US dollar has declined, and because the USA is Canada’s largest trading partner the currency change has had a negative impact on manufacturing in Canada. Yanke has now incorporated China and the EU into its sphere of operation.

Another factor has been the buying power of the region’s “baby boomer” (50-plus) population, all at the peak of their earning potential, very materialistic in their wants and needs but cost conscious and so retailers increasingly reduce costs by “going offshore” - outsourcing manufacturing to places like Mexico, South and South East Asia. Johnston’s coming China sales trip is part of a policy to identify manufacturers elsewhere in the world and provide them with a door-to-door service through ocean line, warehousing and transport then using its rail and trucking services.

He emphasizes that the company would expect its ethical management philosophy to be observed by customers and: “if they don’t have it quite frankly we move on”.

Employees and customers are directly involved in the company’s annual business planning process. They complete surveys measuring Yanke’s engagement score. The surveys identify the most critical elements used to evaluate suppliers and how Yanke can perform compared with competitors. An executive retreat evaluates the top down elements of their services and then they do a SWOT analysis assessing strengths, weaknesses, opportunities and threats. Add accounting due diligence analysis, revenue quality, service, reliability, cost and risk management into the information gathering process, and out comes a business plan for the next year.

This annual process is completed in three days. Weekly executive and management meetings keep everything on track, rotating through the month - one week focused on business planning updates, the next financial performance and the remaining two on any issues presented. It means Yanke can be swiftly responsive, flexible and on top of changes. Says Scott Johnston: “What’s absolutely critical in transportation is the need to look at things being half full rather than half empty, as opportunities not barriers, recognizing goods will be manufactured outside North America and that we have to be able to do better than anyone else.”