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In trying to overcome high logistics costs, DAP's Gina Toh struck gold
GINA Toh and her husband had only begun thinking about starting their own business when the cost of logistics almost deterred them. But the pair saw opportunity in solving the problem, and eventually turned their idea into what is now logistics firm DAP Asia Pacific.
Ms Toh, who was then working in the insurance industry, and her husband sank in just S$100,000 to start DAP in 2004. Today, the company makes millions of dollars in turnover, employs more than 50 full-time staff and operates over 150,000 square feet of warehouse space.
At that time, "we were overwhelmed by the high costs of setting up a warehouse, and procuring material handling equipment and vehicles", recounts Ms Toh, now the general manager at DAP.
Also, producing small volumes as a new company meant that they would not be able to make full use of resources or justify costs, she added.
However, they later realised that other new companies were likely to face the same problem. It struck them that savings could be had in investing in warehouse space and related equipment through economies of scale, sparking the idea for DAP.
But it was not easy getting the business off the ground. Ms Toh talks about her biggest challenges starting out in an industry she had no background in, and how she overcame them.
How was it like when you started DAP Asia Pacific?
It was very tough. Firstly, there were a lot of regulations and industry terminology that we weren't aware of or didn't understand. Even if you employed someone capable, they may not be willing to teach you. We learned things the hard way, through much trial and error.
Also, when we started this business in 2004, most business owners were not used to the idea of entrusting their inventory to someone else. To give assurance to our customers, we had to invest heavily in warehouse management systems to improve the visibility and transparency of inventory movement and logistics operations.
As the business scaled up, we also faced issues with accuracy in picking and packing orders, as well as delivery mistakes due to human and data entry errors.
At that time, we had an average of 500 orders daily, and a one per cent error will result in five unhappy customers every day. That's when we got worried; what will happen if we have 5,000 or even 50,000 orders daily? With a one per cent failure rate, we would be overwhelmed by service recovery and firefighting every day.
To counter that, we had to tweak our warehouse management and transport management systems to reduce data entry errors and manual processing. We also introduced handheld scanners to staff to improve picking accuracy.
What are some of the skills that you have had to develop and that you think are most crucial to your role?
People management skills - it's really not something you can pick up from textbooks; I learnt through the hard way. The industry is better now, but in 2004, workers were sometimes difficult to manage. I have encountered insubordination, constant absenteeism and sloppy work.
Some workers were simply not interested in job progression. Others perhaps saw me as a young lady and were not keen to take instructions. When you asked them to do something, they could just walk away. It took me a while, and the help of my husband, to gain their respect.
It is also really important to communicate with employees, be they young or mature workers.
For example, one thing I've learnt is that besides having a fair stick-and-carrot approach, we have to understand that the current workforce, especially the younger workers, looks for meaning in their jobs and not just a pay cheque.
So, at DAP, we rotate new or younger employees across different parts of the business to show them how the entire model works. This way, we also identify their strengths and develop them in areas they are good at.
It is easy for a business owner to set a vision and move towards it. The difficult part is getting your whole team to move towards the shared vision. And in logistics, what we sell is our service, which depends greatly on our team.
How would you describe your management style?
I think I belong to the transformational style. With the lightning speed of today's technological evolution, I believe that change and growth is the way to stay ahead.
What do you think was your worst bet for the company?
When we made the move to revamp our systems, we were too ambitious in wanting to have everything done right immediately and wasted a lot of time and money, only to realise that transformation is not overnight.
And your best?
Investing in the right people.
When you are not working hard in the office, where are you to be found?
I visit the shopping malls regularly to keep myself abreast of the retail scene and check the handling and labelling of products that passed through our warehouses. Of course, it's also a chance for me to enjoy what's probably every lady's favourite activity: shopping!
- This story first appeared on SGSME.sg, the bilingual SME news portal powered by The Straits Times, The Business Times and Lianhe Zaobao. Visit the site and sign up for SGSME's newsletter for more stories.