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Europe & Middle East Outlook

Logistic
FM

FM LOGISTIC

Demandingness, Drive, Entrepreneurship

 

FM Logistic continues to expand its supply chain footprint and offering in line with its core internal values, ensuring customer satisfaction, staff development and flexible operations


Writer: Matthew Staff

Project Manager: James Mitchell

 

FM Logistic has diversified, expanded and enhanced its range of supply chain operations over the past five decades to become one of the most internationally reputable businesses in the industry, all the while staying true to the same entrepreneurial family values that helped build its initial success.

Beginning life as a family run business in 1967 as a transport company in eastern France, it was two significant periods of evolution which laid the platform for FM’s rise to prominence ever since; a strategic move into warehousing in 1982, and the company’s first foray into international territory 10 years’ later.

Since then, the business has taken its extensive range of storage & handling, transport & distribution, co-packaging & co-manufacturing, and warehousing services to 12 different countries, across three different continents.

Servicing the fast moving consumer goods (FMCG), manufacturing, cosmetics (beauty and perfumes) and health industries through this range, FM Logistic is now regarded as one of the most reliable, innovative and truly turnkey providers within the supply chain world.

“It is one of our key considerations: how to be an international company based in 12 countries with 18,000 people, but to keep our philosophies and values and to be a company with the right governance and respect to all people,” says FM Logistic’s Chief Executive Officer (CEO), Jean-Christophe Machet.

“It’s about putting the respect of the company in the middle too and it’s one of my personal goals to be able to manage and grow, country after country, with respect always to our FM values.”

 

International expansion

This ethos was first brought to the fore in 1982 through the company’s move away from solely transporting operations, and into the warehousing arena. Perhaps more significantly though, was this set of values in broadening the company’s geographical footprint in 1993.

J-C. Machet explains: “We decided not to start our expansion into Spain or the UK or Germany, but into a new country without these types of solutions. So we decided to follow our customers, with our entrepreneurial spirit, into Eastern Europe; Russia, Poland and then into the Czech Republic, Romania, Ukraine and Hungary.

“This was to give our customers the opportunities to adapt their supply chains and move from being national organisations to international organisations.”

This strategy was built upon a bedrock of flexibility, agility and capacity that FM has always strived to provide its customers, and this trend of expansion continued in the subsequent years to develop a presence that covered the entire width of the company’s home continent.

“Growth has always been in accordance with market and customer requests, alongside our strategy to move into countries where there is not a lot of competition or solutions already there,” the CEO continues. “We are now in a very strong position in three continents but we’d rather be focused and in the top three in 12 countries rather than not so strong in 40 countries.”

 

Think global, act local

After years of careful planning and market research, this careful but proactive approach led to FM Logistic’s introduction to China, the company’s first expansion outside of Europe.

The move proved to be an invaluable one, not only in terms of the success the business is now experiencing in the country, but through the learning curves that befell the business following the initial move.

“We were without enough experience when we first entered China, behaving like a European or French company and expecting to do business with Chinese partners,” J-C. Machet recalls. “We quickly realised that to be in China, we had to be a Chinese company.

“Today, that is exactly what we are. Before you work in a new country, you have to be able to speak with them, and to understand them and to become a proper partner. Our growth in China has now been very good for the past two years.”

Learning that it was imperative to apply the right cultural behaviours and skills to each new country was a realisation that laid the foundations for FM Logistic’s later move to Brazil; a move into South America that looks set to be the benchmark for future expansion strategies.

J-C. Machet adds: “With Brazil we knew it was another very specific market with specific behaviours, and we learnt from the China experience to enter Brazil as a Brazilian company.”

With just three expatriates comprising its 1,200-strong workforce in the vast country, the move was made once again at the request of FM’s loyal and longstanding customers who were largely settled in Brazil themselves, but without the same strength of supply chain services they had been used to in Europe.

“Our  development in China, and then in Brazil three years’ ago, has been a good school for us, entering as a European company but becoming a Chinese and Brazilian company with a strong respect for the local culture, spirit and people,” J-C. Machet notes. “Our impact has to be to think global, but act local.”

 

Customer focus

Growing alongside its key customers has been the primary focus of all FM Logistic’s expansion plans over the years, leading to the business being a supply chain partner of choice in as many as 11 countries in some cases.

Having mutually beneficial relationships with multinational Groups including the likes of Mondelēz, Nestlé, L’Oreal, Auchan and Carrefour – as well as longstanding value-adding partnerships with businesses like the logistics optimisation expert, ORTEC - has not only facilitated FM’s own international growth, but has fostered unrivalled trust and notoriety among the industry as a whole.

“It’s our way to grow,” states J-C. Machet. “First, we develop a strong partnership with our customer country by country, and from there, we create a trust between the two companies and move together into new countries.

“One of our proudest achievements is to be a partner for Nestlé, for example, in 11 countries, because it is a complete example of our long term strategy and commitment to customers.”

More than two-thirds of the company’s growth emanates from the development of pre-existing partnerships, and the positive relationships that have been formed are based largely on the considered and innovative offerings that FM can provide.

“We came from the food industry to begin with, and now operate in the HPC (home personal care) sector as our other main industry,” notes J-C. Machet. “Then, in 1995 we also began partnering with retailers, understanding what it would take to be a third party provider between manufacturer and store shelf.

“Today retail is more than 28 percent of our turnover, so our drive is to continue adding value, industry by industry, through our tailor-made concepts for these different industries.

“To develop our model, and to develop our warehouses and to develop our IT, all to be better and faster than our competitors, gives us a big strategic advantage.”

 

Demandingness, drive, entrepreneurship

Successful relationships, innovations and operations are the end products of FM Logistic’s experience and hard work, but these sit upon a core set of philosophies and internal structures which J-C. Machet attributes every bit as much to the ongoing prominence of the business.

“We work to create value for the customer and to meet their demands, and to do that, we use our family dynamic, our entrepreneurship, and our sense of the long-term,” J-C. Machet emphasises. “It’s our spirit around how to create the value that drives our decisions.”

The way to manage this internal agility has been to involve staff at all levels within the business, with J-C. Machet ensuring that all 18,000 employees have the right entrepreneurial mindset to add value to the company’s operations.

J-C. Machet continues: “Our collaborators know better than anyone how to improve the business, because they are the ones doing the same things hundreds or thousands of times a day.

“They are the ones who therefore know how to improve performance and our managers develop these workers to be able to become entrepreneurs and to put forward ideas.” 

FM Logistic subsequently invests 4.5 percent of its salary costs into the ongoing training and development of its collaborators, ensuring the continuous improvement and sustainability that has made the company such a personable organisation over the years.

“We want to share the value with different stakeholders, and between the company, customers and staff too through participative management,” J-C. Machet adds.

“I have a dream where I see a queue of hundreds of people in front of every site of FM with the determination to work for us. I want to see FM as the place to be, offering the capacity to develop people, based on our three pillars of demandingness, drive and entrepreneurship.”

 

Sustainability

The company’s commitment to wider social issues, particularly when it comes to environmental considerations, is just as important as aiding customers and employees.

Once again capitalising on existing expertise and knowledge across core supply chain processes, FM has introduced two key initiatives to make sure it is doing its bit for the good of the industry, and the good of the planet.

“Firstly, concerning our trucks we have to have the best Euro 5 or Euro 6 vehicles. But this alone is not enough, so in September we decided to present our Citylogin concept in Rome, as a concrete action to take care of the environment,” J-C. Machet explains.

This concept involves the delivery of goods into the centre of cities each morning by FM Logistic’s fleet of hybrid trucks, subsequently “serving the last kilometre” and reducing the high levels of pollution, noise and congestion that would occur through numerous standardised vehicles making the same trip each day.

FM’s dedicated software package manages the entire supply chain through this process, including loading, routing and tracking, all while using the same amount of energy as 15 ordinary rounds carried out by commercial vans.

If successful, the Citylogin project will be mirrored in more European cities later in 2015, epitomising the influence that FM continues to have in the region and on the wider industry.

This initiative is supported by the company’s second initiative and its work in energy efficiency; making the most of natural or sustainable energies within its own facilities and through innovations on its own land to become self-sustainable where possible.

 

Plan 2022

Environmental and corporate social responsibility strategies will continue to comprise large facets of FM Logistic’s continuous improvement focus moving forward, and will be complimented by three further pillars which make up the company’s ‘Plan 2022’ ambition.

J-C. Machet wants FM Logistic to become not only the first choice for staff and customers, but the right choice too; becoming a sole reference for each industry through its turnkey, customisable offering, and with even further inroads being made into future innovation.

“We want to run faster than our competitors and to do that we have to work on innovation leading into our 2022 ambition,” the CEO notes. “Pillar one is to therefore reinforce our bases in all our industries and to remain in the top three in every country we operate in.

“Pillar two is to develop the drivers behind these bases so we can continue to develop our business, especially in Brazil and in the cosmetics, health and fresh sectors.

“The third pillar is to reinforce our long-term plan in terms of excellence in operations and to provide this true supply chain answer.”

This means not just transportation and not just warehousing and logistics, but an all-encompassing presence in each country to provide its multinational customers the full range of services that they need to expand, themselves.

The aim for FM Logistic moving forward is to not only achieve these goals, but to achieve them without sacrificing the values and philosophies that have served the company so well for the first 48 years of development.

J-C. Machet concludes: “Our destination concerning the three pillars goes alongside the spirit and mindset and culture too. We have to remain a family company so we can fulfil this long-term project and also so that our customers are aware that we are here for them in the long-term as well.

“I want to see FM as a responsible international company respecting each and every stakeholder, member of staff, society, environment and country. Working in a company that has a long-term view with fantastic alignment across the shareholders, management and staff makes my job easier than it is for other CEOs.

“For the past two years, our turnover has grown more than 15 percent from €870 million to more than €1 billion, while our operating margins also increased. This is not a question of chance or miracle but a question of people involvement, throughout all of FM Logistic.”