John Menzies plc Celebrating one hundred and seventy five years
John Menzies plc
108 Princes Street, Edinburgh EH2 3AA
www.johnmenziesplc.com
C
e
l
e
b
r
a
t
i
n
g
one hundred
and sevent y
five years
o
f
J
o
h
n
M
e
n
z
i
e
s
from one man in
one city, to over
18,000 people
in 28 countries,
John Menzies
has come a long
way in 175 years.
Contents
First things first
2
Chapter 1:
MILESTONES 1833-1998
The early years
Branching out
Dynasty
A return to the roots
New horizons
Going for growth
Endings and beginnings
4
6
7
8
10
11
13
14
Chapter 2:
Onwards and upwards 1998-2008
Changing times
16
18
Chapter 3: Menzies Aviation
Delivering every single minute of the day
Menzies Aviation fact file
A never ending story
Flight path
Taking off
Mission stations
Growing places
Building a culture of service worldwide
22
24
25
26
28
30
34
35
Chapter 4: Menzies distribution
Serving customers here, there and everywhere
Menzies Distribution fact file
A night in the life of Menzies Distribution
The morning after...
Staying ahead
Innovation
Added value services
Continuous improvement
38
40
42
44
46
47
48
49
Chapter 5:
Tomorrow and Tomorrow and Tomorrow
Menzies Distribution
Menzies Aviation
Chairman’s Statement
52
54
55
56
1
First things first
February 1833. Heavily coated against the biting cold of one of
the harshest winters on record, a young man perches on top of a
mail coach for the 60 hour journey from London to Edinburgh,
summoned home on the death of his father.
Bequeathed little but a stepmother and two sisters to support,
25 year old John Menzies turned to the only trade he knew and
set up shop at 61 Princes Street, Edinburgh as bookseller,
stationer and printseller. It was a logical choice of profession for
one whose only work experience had been as apprentice and
assistant to booksellers in both capital cities, but he was a newcomer
in an already overcrowded marketplace and consequently found
himself last in line for whatever thin profit could be squeezed from
Edinburgh’s fiercely competitive retail book trade.
So it was time to think again... and this is where our story really begins.
It was not so much a eureka moment of inspiration but the result
of pragmatic market analysis that took Menzies on a mission back
to London, taking maximum advantage of the many publishing
contacts he had made during his time there to secure appointment
as sole agent for their works north of the border. He had found his
niche as a wholesale distributor of previously unavailable material
from the likes of Dickens, Wordsworth and Thackeray, the business
growing year on year as the word spread and orders flooded in from
booksellers and other outlets of all sizes across Scotland.
2
The rest, as the saying goes, is history. But a pattern for progress
had been set. Still in his twenties, our founder had demonstrated
the vision to identify a market opportunity allied to the energy,
determination and single-minded decisiveness to seize it and make
it work – the hallmark Menzies approach that has sustained our
business and seen it grow from strength to strength over the
past 175 years.
This can be seen in the establishment of an empire of platform
bookstalls to meet the needs of the travelling public on the back of
Victorian railway mania; in the pioneering of nationwide newspaper
distribution; in the accelerated expansion of our retail chain through
a vigorous programme of strategic acquisition; in the reputation we
have gained for setting the pace on technological innovation... and,
most recently, in the forward thinking that initiated a complete
restructuring of the company for the future benefit of customers,
staff and shareholders alike.
Today, John Menzies plc is a leading provider of time critical logistical
support services to the UK newspaper and magazine supply chain
and to the global aviation market, operating through two divisions –
Menzies Distribution and Menzies Aviation. We employ over 18,000
people in 28 countries, with Group operations generating turnover of
around £1.5bn a year. Proud of our Scottish roots, our headquarters
remain in Edinburgh in Princes Street... just a few yards along from
the site of the small bookshop where it all began 175 years ago.
1. Our founder, John Menzies (1808-1879).
2. An early bookstall at Glasgow Central Station.
3. A typical retail outlet from the late 1980s.
2.
1.
3.
This commemorative brochure not only charts the evolutionary
path of John Menzies plc from then until now, but aims to provide
an insight into the core cultural values of probity and integrity,
sound financial management and total commitment to the highest
standards of quality customer service that have distinguished
our past, drive our present and provide the focus for all we aim
to achieve in the future.
It was not so much a eureka
moment of inspiration but
the result of pragmatic
market analysis that took
Menzies on a mission back
to London.
3
Chapter 1:
MILESTONES
1833-1998
A typical railway bookstall, Stirling during the First World War.
4
5
MILESTONES 1833-1998
1. Alloa bookstall on Derby Day, 1894.
2. Carlisle bookstall, early 1890s.
The early years
1.
2.
1833
The first bookshop to bear the Menzies name opens for business at
61 Princes Street. Despite an innovative approach that included
being the first in Edinburgh to sell The Scotsman over the counter,
our founder John Menzies had to report in his notebook a few months
later: ‘Cash received in business very small’.
1834-44
Fortunes change as Menzies identifies a gap in the market and
secures contracts with major London publishers to act as their
agent in previously untapped regional territories throughout Scotland,
resulting in increasing emphasis on the wholesaling side of the business.
1845
These contracts included sole Scottish distribution of the new satirical
magazine Punch and, most significantly, exclusive rights in the east
of Scotland to Charles Dickens’ first novel Pickwick Papers. This marked
the beginning of a lifelong friendship between Dickens and Menzies
– not to mention the ever escalating profits that were to come from
a constant stream of Dickens best sellers over the next 30 years,
providing much of the funding for the ongoing development of
the wholesale and distribution operation.
6
With the publication of the first issue of A List of New Books
and New Editions, Menzies reinforces his position in the trade
as a major wholesaler.
1850
Turnover has been more or less doubling year after year and now
reaches £8,148 – approximately £600,000 in today’s money.
MILESTONES 1833-1998
Branching out
1855
1859
Following relaxation of the duties levied on newspapers, cheap mass
circulation dailies begin to appear. Menzies wastes no time in securing
distribution rights in the east of Scotland for the newly launched Daily
Mail and Daily Express (nothing whatsoever to do with their present
namesakes). Both these titles quickly fold, but Menzies had glimpsed
the potential of a national newspaper distribution network – a vision
of what would become the mainstay of the business in future years.
Marking the end of an era, the shop at 61 Princes Street closes
as the wholesale operation moves into new warehouse facilities
half a mile away in Hanover Street – the first of many moves to
successively larger premises to accommodate the relentless growth
of the business over the coming years.
1857
The rapid expansion of the rail network throughout Scotland opens
another door of opportunity for John Menzies. Railway mania is
reaching its height as more and more passengers take to the tracks –
all potential customers for reading material to while away the hours
from departure to destination (and, being British, to deter fellow
travellers from any attempt at conversation!).
The first Menzies station bookstalls open at Perth, Stirling and Bridge
of Allan. By the end of the following year, they are a standard station
feature on all east of Scotland lines between Edinburgh and Aberdeen.
The company would eventually have bookstalls at every mainline
station in Scotland and, at their peak in the 1960s, Menzies bookstalls
could be seen at no less than 357 locations throughout the UK.
Pragmatic as ever, John Menzies is reported as being ‘not displeased’
to see the closure of the original shop. The company will not have
a retail shop again until 1928.
1867
Four long-serving employees are taken into partnership by the
founder to form John Menzies & Company, beginning a Menzies
tradition of elevation through ability, from shop floor to boardroom,
which continues to this day.
1868
The opening of a warehouse in Glasgow gives the company its first
foothold in the west. It also signals the start of a prolonged period
of steady expansion that over the next half-century sees wholesale
branches opening in strategic locations all over Scotland.
7
MILESTONES 1833-1998
Dynasty
2.
1.
1879
1896
John Menzies dies. The running of the business passes to his two sons
– John Ross and Charles Thompson Menzies – the start of an almost
uninterrupted dynastic succession lasting the best part of 120 years.
The first mass circulation daily newspapers begin to appear including
the Daily Mail, Daily Mirror, Daily Sketch and Daily Express. Menzies
secures exclusive distribution rights for most territories in the south,
east and north of Scotland, promising publishers that editions printed
the night before would be on the doormats of their Scottish readers
by breakfast time.
Despite their tender years ( John R was 27 and Charles T just 22),
the two brothers soon show themselves to be their father’s sons in
every way, driving the business forward with a relentless energy that
never loses sight of the founder’s principles of thrift, integrity and
sense of duty.
1890
A growing presence in the west of Scotland sees the relocation of the
Glasgow warehouse to larger premises in West Nile Street, known as
Glasgow House. A second warehouse is opened on the south side of Glasgow two years later.
8
Not only does this unique commitment set Menzies apart from its
rivals, it triggers a necessarily rapid expansion of the distribution
network and propels Menzies into a new age of ‘time critical logistics’
– not a phrase that anyone would have recognised then, but the
bedrock discipline that governs all Menzies operational activities today.
1898
Fuelled by an unprecedented increase in adult literacy, demand for
cheap daily newspapers continues to soar with some of the most
popular titles achieving circulation figures of a million a day.
The opening of the latest distribution branch in Aberdeen prompts
a Northern Chronicle reporter to record: ‘The business done is
enormous. Prompt despatch is the secret of Menzies success’.
1. Edinburgh skyline from East Princes Street Gardens, 1890s.
2. A 1910 Argyll, a typical early Menzies truck.
3. Carstairs station bookstall at the turn of the century.
3.
1914-18
Reinforcing the firm’s standing as Scotland’s leading distributor of
newspapers and periodicals, the first issue of Weekly Notes for the
trade is published in 1914 to supplement the monthly Book List.
1900
By the turn of the century, the firm has grown to be the largest
organisation of its kind in Scotland. It now enjoys a virtual monopoly
on national newspaper distribution north of the border. It stands
alone as the wholesaler of choice for the vast majority of booksellers
and stationers in every Scottish town and city. The ubiquitous
Menzies station bookstall is now firmly established as an iconic
national institution.
1906
The firm is incorporated as a limited company. John R and Charles T
serve as Joint Managing Directors, with John R also acting as Chairman
– a position he continues to hold until retirement in 1932.
1910
Forever in the driving seat of technological innovation, Menzies buys
its first petrol driven vehicle for three hundred and eighty three pounds,
seventeen shillings and sixpence. The distribution fleet becomes fully
motor-driven 10 years later with the sale of the last remaining horse
and van.
Like all other major organisations, Menzies loses key personnel to
the carnage of the First World War. One sixth of employees who
volunteer for active service never return. Charles T Menzies goes
to Flanders in 1916 and is known thereafter as ‘Colonel’ Charles.
1921-27
Insatiable demand for newspapers during the war years had seen
profits soar, but it is not long before the country falls into a deep
post-war slump.
Menzies is not immune but manages to survive and maintain staff
levels through sound financial management and diversification into
complementary disciplines such as publishing, concentrating on
material that experience as a wholesaler had shown would have
widespread popular appeal... illustrated guide books, collections
of comic tales and so on.
Colonel Charles’ two sons join the firm – John F Menzies in 1921 and
Charles C Menzies in 1927. Both would become Vice Chairmen... and
both are destined to die tragically young, John F at 40 and Charles at 46.
John R Menzies steps down as Managing Director, but remains
as Chairman until retirement in 1932.
9
MILESTONES 1833-1998
A return to the roots
1928
1939
The company returns to retailing with the acquisition of Elliot’s
at 16-17 Princes Street.
A second shop is opened in Princes Street. Menzies bookstalls
are now becoming a familiar sight at bus terminuses as well as
railway stations.
A pioneering non-contributory staff pension scheme is introduced
– the brainchild of John F Menzies and one of the first of its kind in
the UK.
Annual profits now hover around £100,000 (around £4m today) and
remain more or less at that level throughout the following decade.
1930-33 Taking over as Chairman when John R retires in 1932, Charles T
Menzies and his son John F work closely together to steer the
company through the depression years. Far from retreating and
seeking to cut losses, they grasp the opportunities presented by
falling prices to instigate a major expansion programme. Two new
retail stores are opened in Inverness and Aberdeen. Four new
wholesale branches bring the nationwide total to 15. More and
more station bookstalls are added to the Menzies network, most
notably in territories previously controlled by competitors in the
west of Scotland.
1935
Three years after retirement, John R Menzies dies. Married only to
the business, he leaves no heirs.
1940 John F Menzies, then Vice Chairman, dies suddenly.
1941
The Greenock warehouse and the Partick bookstall are destroyed
in air raids – the only damage to Menzies property throughout the
entire war.
1943
Still serving as Chairman at the age of 85, Colonel Charles T Menzies
dies. His widow, Helen Frances Menzies, is elected as his successor
by the Board and holds the post for a further 8 years.
1948
The first of many Menzies airport bookstalls opens at Edinburgh
Turnhouse.
John M Menzies – son of John F and great grandson of the founder –
joins the firm where he will spend the next three years going from
department to department, gaining experience and learning his trade.
1949
Turnover reaches £10m (£240m today).
10
MILESTONES 1833-1998
1. An early record department in the 1960s.
New horizons
1.
1958
The company is now 125 years old. As a sign of things to come,
19 shops have been added since John M Menzies became Chairman
in 1951.
1959-61
Menzies takes over Wymans. This results in the acquisition of a
major wholesaling operation in London, 78 more shops, around
200 bookstalls and the prestigious firm of stationers Smythson
of Bond Street.
1951
Having duly served his apprenticeship, John M Menzies takes over
from his grandmother as Chairman at the age of 25. He is to occupy
the chair for a further 46 years, presiding over a prolonged period of
vigorous expansion that would transform the company into a major
player on the national and international stage.
1953
Nationalisation of the railways involves renegotiation of bookstall
franchises nationwide. The end result for Menzies is much the same,
retaining 73 bookstalls and 3 kiosks in Scotland as well as 2 stalls and
2 kiosks south of the border.
WH Smith remains the dominant force in England, challenged only
by Wymans’ control over key routes in the Midlands, the West
Country and parts of North Wales – the way it had been for nearly
50 years. But all that is about to change...
This bold move takes the English business establishment completely
by surprise, few having heard of this obscure invader from the north.
An explanatory article in the Investor’s Chronicle includes the prophetic
line: ‘We have not heard the end of the House of Menzies’.
It does not take long for this prophecy to be fulfilled. Two major
provincial wholesaling businesses – Pickles of Leeds and Porter of
Belfast – are bought in the space of a week in February 1961.
A year later, London publisher and wholesaler Horace Marshall & Son
is acquired and merged with Wymans.
1962 The company goes public. Capital raised from the stockmarket
flotation is used to fund a long term strategy of tactical acquisition
and disposal in line with its new corporate responsibility to deliver
ever increasing shareholder value.
11
MILESTONES 1833-1998
New horizons (continued)
1.
1965
The company portfolio now includes 90 wholesale branches, 161
shops and 350 bookstalls. The age of the bookstall, however, is coming
to an end. The decision is made to gradually withdraw from all but a
handful of key sites as the emphasis shifts to building a greater retail
presence in Britain’s High Streets.
1970
Turnover tops £50m. Retail news and stationery firm Jones Yarrell
joins the group.
1973
The largest ever Menzies store opens at 107 Princes Street as the
chain continues to expand across Scotland.
1980 1982
The acquisition of wholesale record and tape distributor Terry Blood
Records Ltd comes in a year when group sales hit the £200m mark.
1981
Leading library suppliers Lonsdale Universal plc and Cambridge
Jackson are acquired and merged under the banner of John Menzies
Library Services to create an international business with arms
in Australia, Canada and the USA.
Children’s Books (Rugeley) Ltd, wholesale suppliers of books, toys and
games, becomes part of the group.
1983
The company celebrates its 150th anniversary.
12
MILESTONES 1833-1998
Going for growth
1984-89
The pace quickens.
Menzies begins 1984 by acquiring the 13 branches of Universal Office
Supplies, adding 2 more branches within a year.
The Early Learning Centre chain of over 100 UK retail outlets is
acquired in May 1985, beginning a decade of unremitting growth and
international expansion. At its height in 1996, a new ELC store opens
somewhere in the world every 10 days. By then, there are 200 stores
in the UK, over 70 in the USA, 11 in Eire and the Netherlands with
franchise operations in Saudi Arabia, Bahrain, Dubai, Qatar, Portugal,
Cyprus, Gibraltar and Malta.
1. Long before Menzies Aviation, Menzies Distribution staff could be found loading planes!
2. One of over 280 ELC shops worldwide.
In 1987, Terry Blood Distribution is voted Best Wholesaler in the
UK record distribution industry. Two years later, it acquires one of its
main competitors, Wynd-Up Records, to become the acknowledged
UK market leader.
The final year of the decade also witnesses the most significant
event of all in terms of the future development of the company.
Barely worth a paragraph in that year’s Annual Report, Menzies
moves into the transport services sector with the purchase of the
Scan International Group of air couriers – a move which, together
with the acquisition of air cargo handlers Cargosave a year later,
marks the first step on a path that will ultimately lead the company
to a new destiny as one of the leading providers of aviation support
services in the world.
Developed by Menzies Wholesale, the introduction of the unique
Microlink computerised control system for rationalising the
distribution of newspapers and magazines on the basis of market
purchasing patterns establishes Menzies as an industry leader for
technological innovation.
1987 sees the Hammick’s group of wholesale and retail booksellers
absorbed into the group, followed a year later by an overnight
doubling of selling space in England with the purchase of 66 shops
from the Martin Retail Group.
2.
13
MILESTONES 1833-1998
Endings and beginnings
1991
John Menzies Wholesale wins the prestigious ANA award for
technological innovation.
1992
Scan and Cargosave operate from established bases at Heathrow
and Manchester airports. A joint venture with United Airlines forms
United Quality Express, enabling Scan to offer next day door-to-door
delivery anywhere in the USA.
1993
Annual group turnover now exceeds £1bn. Profits and shareholder
dividends reflect a pattern of accelerated growth year on year.
Air Menzies International (AMI) is formed through the merger of Scan,
Cargosave and the recently acquired Air Marketing International.
This makes AMI the UK’s leading independent wholesale express air
courier and air freight consolidator, serving more worldwide destinations
than any other competitor.
1994
Wholesale opens its first Central Returns Unit in Thurrock, Essex.
Plans are made to rationalise the branch network into a ‘hub and
spoke’ system designed to deliver more efficient coverage in
key geographical areas and reduce multiple carriage costs for its
retail customers. The existing network of 65 branches will gradually
reduce to 32 by the end of 1998.
Terry Blood Distribution changes its name to THE (Total Home
Entertainment Service), eventually to be rationalised into four
divisions – THE Games, THE Books, THE Entertainment and the
export arm THE International. Meanwhile, AMI establishes a
new base at Gatwick.
1995
The wholesale operation moves to a new award-winning
Headquarters in Edinburgh Park.
THE Games becomes a major European player with the Group’s
acquisition of a 37% share in the German multimedia software
distributor Funsoft. A joint venture between Universal Office Supplies
and Dutch counterparts Samas immediately creates the third largest
contract stationery business in Europe.
The group’s growing presence within the air transport services
industry is boosted by the acquisition of Concorde Express –
the leading provider of cargo handling and contract labour services
at Heathrow airport.
1996
With the acquisition of book wholesaler Heathcote from
WH Smith, THE Books becomes the largest book wholesaler in
the UK. Meanwhile, THE Games secures exclusive UK and Republic
of Ireland rights to the Nintendo 64 and Game Boy Pocket systems,
selling out of initial stock within two days of launch in March the
following year.
14
1. THE Games managed the launch of the Nintendo ‘64 in 1996, including providing
helplines for eager gamers.
1.
The announcement is made in this year’s Annual Report that
John M Menzies is to retire as Chairman in September 1997.
He continues in the role of Honorary Life President until his death
in 2007, effectively marking the end of the Menzies dynasty.
1997
Ongoing investment in industry leading technology continues
to deliver dividends for Menzies Wholesale. This includes taking
a pioneering lead in bar code scanning of newspaper and
magazine returns, with successful implementation in a growing
number of Central Returns Units throughout the country.
Menzies Transport Services is formed to consolidate cargo
handling operations, immediately resulting in the expansion of
Heathrow warehouse facilities for Concorde Express following
major contract gains including SAS and Canadian Airlines. A joint
venture with Lufthansa results in the opening of the London
Cargo Centre the following year, making MTS the third largest air
cargo handler at Heathrow.
On the other side of the coin, retail profits slump dramatically in the
wake of the growing dominance of multiple supermarket chains as
‘one stop shops’ for the majority of staple items traditionally sold
through Menzies outlets. And in December, somewhat portentously,
John Menzies plc obtains Stock Market permission to be reclassified
under ‘Distributors’ rather than ‘Retailers’ in the FTSE Index.
1998
A landmark year of change.
As High Street profits continue to fall, the Board decides that the
time has come to think the unthinkable and dispose of the retail
arm as part of the largest restructure in the company’s history.
The nationwide network of Menzies shops is duly sold to main
competitors WH Smith for £68m.
A part of our past has gone. An exciting new present is about
to begin.
15
Chapter 2:
Onwards
and upwards
1998-2008
16
17
Onwards and upwards 1998-2008
Changing times
1.
2.
The benefit of hindsight is a wonderful thing, especially when it
justifies your actions and proves that you made the right decisions
at the right time.
Any corporate restructure of the size and scale undertaken by Menzies in
the late 1990s will inevitably involve tough, sometimes painful, choices.
The decision to dispose of the retail chain that had been the public
face of John Menzies for 70 years was not an easy one for the Board,
but it had to be done – a necessary amputation to ensure the future
health of the body as a whole.
18
Nor was it any kind of knee-jerk reaction to a sudden market downturn.
As had been the case with our network of station bookstalls, our High
Street shops gave us a high profile national presence but their
contribution to overall profitability was comparatively small. By the
mid-1990s, the rapid growth of grocery multiples and their
diversification into non-food items such as our traditional stock-in-trade
of newspapers, magazines and books had put the writing on the wall
for all to see.
1. 2. & 3. From our retail outlets to our office stationery suppliers,
the business underwent radical transformation.
And retail was not alone in suffering the impact of changing times.
The emergence of a plethora of copycat outlets triggered a dramatic
decline in Early Learning Centre earnings. Similarly, heavy discounting
by competitors old and new created difficult trading conditions for
Universal Office Supplies operations at home and abroad. The increasing
popularity of the Internet as an entertainment medium hit our
THE Games business and tie-in with Nintendo. Demand for CDs
was falling away as record shops saw their predominantly young
target market turn to the web for the money-saving attraction
of unrestricted music downloads.
3.
Evolution rather than
revolution, it was a common
sense move that gave the
company the structure it
needed to channel all our
energies into what we do
best and being the very
best at what we do.
And so it was in 1997 that the Board embarked on a fundamental
repositioning of the company, not as a quick fix but to put it on a
path for progress designed to secure its future for decades to come.
The decision was made to gradually divest ourselves of all non-core
businesses and focus entirely on our unrivalled strength in time
critical logistics, concentrating exclusively on the two logistic based
branches of the business – distribution and the still small but highly
promising area of aviation services.
However radical this shift of emphasis may have appeared to the
outside world at the time, it was very much business as usual
for Menzies. We had been here many times before, seizing the
moment to turn adversity into opportunity. Evolution rather than
revolution, it was a common sense move that gave the company
the structure it needed to channel all our energies into what we
do best and being the very best at what we do.
19
Onwards and upwards 1998-2008
Changing times (continued)
This could not happen overnight, of course. The strategic withdrawal
from non-core businesses would take years to complete, our primary
consideration being to get the timing right to safeguard the interests
of Menzies employees caught up in the tide of change.
Proceeds from the sale of the businesses and the subsequent savings
on overheads gave us the extra investment resources necessary to
strengthen our two core trading divisions, now named Menzies
Distribution and Menzies Aviation.
For Distribution, this brought the opportunity to rationalise its
branch network and continue its major investment in efficiency
enhancing technology, backed up by an ever expanding range of
added-value customer support services for the benefit of publishers
and retailers alike.
For Aviation, it signalled the start of a programme of rapid international
expansion through tactical acquisition and organic growth that, in
just a few short years, has made it one of the top five independent
providers of passenger, ramp and cargo handling services in the world.
The restructuring complete, a new three-pronged strategy was
launched in 2003 to guide and underpin all Group activities into
the future:
20
Get the basics right – As a service company specialising in time
critical logistics, our primary consideration at all times must be
to deliver great service at the right price to our customers.
Build strong businesses – Through the innovative development of key
processes within each division, our aim is to build scaleable platforms
for providing our customers with a truly unique service offering.
Grow from strength – We constantly search for new opportunities to
extend our offering in areas where we have particular expertise to grow
the company in ways that will deliver sustainable shareholder value.
The results are clear to see. Today, we are a truly international
company with operations in 28 countries. Restructuring has made us
leaner and fitter with the financial strength and flexibility to adapt to
changing market conditions and take full advantage of new
opportunities as and when they arise.
As we celebrate our 175th year, we believe we have the right
structure, the right strategies and, most important of all, the right
people – 18,000 Menzies people – to build on our present successes
and take us from strength to strength as our story continues to
unfold through the coming years.
21
Chapter 3:
Menzies Aviation
Delivering
every single
minute of
the day
22
23
Delivering every single minute of the day
Menzies Aviation
fact file
In 1989, John Menzies plc took a first tentative step into the aviation
business with the acquisition of the Scan International Group of
air couriers. Less than 20 years later, Menzies Aviation is a leading
independent provider of ground and cargo handling services
in the world.
Today, we operate from over 120 airports in 28 countries and employ
more than 14,000 people. In providing a full range of passenger, ramp
and cargo services to over 500 airline and airport authority customers,
we handle more than 575,000 flight turns, 87 million passengers and
1.8 million tonnes of cargo every year.
Our ground handling services include ticketing, reservations, check-in,
load control, baggage transfer and reconciliation, ramp handling,
passenger transfer, aircraft pushback and tow, aircraft loading and
unloading, toilet and water services, cabin cleaning, de-icing and
other ancillary services.
Cargo services include ramp transfer, load management, import and
export handling, warehouse and storage management, manpower
provision, inter-airport trucking, track and trace services, airfreight
wholesaling, courier and mail wholesaling and forwarder handling.
24
Delivering every single minute of the day
A never ending story
As you read this, a Menzies Aviation operation is
underway somewhere in the world. At any given time
of the day or night, at over 120 airports in 28 countries
spanning every continent and time zone, from Australia
to the Americas, Asia to Africa, India to Europe,
at check-in desks, in cargo sheds, in trucks and transfer
vehicles, on the runway and at the ramp, thousands of
Menzies Aviation employees will be playing their part
in a global operation that continues without beginning
or end, every single minute of the day.
120
14,000
Stations Worldwide
Employees
25
Delivering every single minute of the day
Flight path
To understand who we are, what we do and where our business
is today, it is important to look back at where we came from and
how we got here.
The 1980s could be called the age of the conglomerates. It was a
bullish time for business and, as the decade wore on, it had become
commonplace – almost expected – for larger companies to diversify
their holdings by buying into non-core businesses.
John Menzies plc was no exception. So it was hardly surprising that
the company’s entry into the aviation marketplace with the purchase
of wholesale air couriers Scan International in 1989 attracted little
attention and slipped by largely unnoticed under the radar.
However, heads began to turn a year later when we made the
complementary acquisition of air cargo consolidators Cargosave.
And by the time we completed the picture by bringing our main
freight forwarding competitor Air Marketing Services into the fold
in 1993 to create Air Menzies International (AMI), it was clear that
a serious strategy for growth in this exciting new sector was
beginning to take shape.
26
It was also obvious that the company’s move into aviation had not
been made on a whim and a prayer. We had identified an opportunity
to apply Menzies’ highly developed distribution skills to a new industry
offering remarkable parallels to the core activity that had been
our bedrock business for more than 150 years. As with Menzies
Distribution, it involved moving time-sensitive products from one
point to another. In turn, this required the effective utilisation
of different forms of transport, running a strategic network of
operational bases and managing the demands of a fast moving 24/7
environment driven by customer deadlines. So switching from road
to runway was an entirely logical progression for Menzies’ logistics
expertise, bringing the edge of experience to bear on an ever
expanding market with outstanding potential for future growth.
a decade of international
expansion has seen
Menzies Aviation become
one of the leading
providers of ground
and cargo handling
services in the world.
And grow we did. By 1995, with AMI now securely established as
one of the UK’s leading independent express air couriers and air
freight consolidators, we were in a position to add a full range of cargo
ground handling services to our portfolio by buying Concorde Express
– the only non-airline cargo handler at London Heathrow.
It proved to be the right move at the right time. Menzies Transport
Services (MTS) was formed to provide a trading umbrella for AMI and
Concorde Express operations as more and more airlines followed the
trend towards outsourcing of the key services we were perfectly
placed to provide. We now had successful operations at major airports
the length and breadth of the UK. Major cargo handling wins, together
with a 50% stake in the new London Cargo Centre in a joint venture
with Lufthansa Airport and Ground Services, made MTS the third
largest air cargo handler at Heathrow.
And so, by 1998, it could be said that we had well and truly earned
our wings. Turnover was steadily increasing year on year, we were
continually expanding the scale and scope of our operations, but we
were still landlocked in the UK as a relatively small fish in a very large
global pond. But this was to prove a year of dramatic change for John
Menzies plc and the starting point for a decade of international
expansion that has seen Menzies Aviation become one of the leading
providers of ground and cargo handling services in the world.
27
Delivering every single minute of the day
Taking off
The Board’s decision to restructure the John Menzies Group into just
two core operating divisions was pivotal to the further development
of Menzies Aviation. Cash released from the sale of the retail chain
and other non-core businesses could now be used to fuel expansion
– but in which direction and how?
The pace of acquisitions quickened – including our first venture
overseas when we purchased BOC’s cargo handling business and
inherited its Melbourne operation – but important as all these were,
none could be described as the giant leap forward we were looking for.
And so the search began for a major acquisition that would really put
Menzies Aviation on the map.
This came in November 2000 with the purchase of Ogden Ground
Services. It was an adventurous move to say the least, a minnow
taking on a whale. We had only a handful of stations at the time,
whereas Ogden had been a leading player in the aviation services
market for more than 40 years, serving over 300 airlines at 64 stations
in 20 countries with a workforce of more than 6,000 permanent and
sub-contracted staff.
With little experience of managing such a complex global operation,
we were well and truly flying by the seat of our pants in the race
to put all the necessary management structures in place to get the
integration process off the ground and, at the same time, keep the
operation running smoothly and profitably.
28
And then on 11 September 2001, terrorists flew hijacked planes
into the World Trade Centre. As the Twin Towers collapsed, so did
the airline industry. In the USA, where we had inherited a substantial
network of operations from Ogden, airline schedules dropped by up
to 35% overnight. Other key Ogden customers either downsized their
operations or went out of business altogether.
Our learning curve had suddenly got even steeper. Even before the
tragic events of 9/11, it had become obvious that major structural
changes were to be made to the Ogden network to ensure its
long-term profitability and make it work the Menzies way. As well
as bringing in new people, we initiated a programme of network
rationalisation known as Fix-Close-Sell – either fix a failing station,
close it or sell it. The underperforming operation in Germany was the
first to go, closely followed by Rome; we entered Korea to benefit
from the 2002 World Cup and were out again within a year; we
persevered with Amsterdam and brought it back into profit within
two years... and so the list goes on.
The hard lessons learned from the Ogden experience and the
aftermath of 9/11 served us well as we continued to grow the
business, both organically and through tactical acquisition. In this,
whether building network density in geographic regions where we
were already firmly established, or expanding into promising new
territories, we are continually looking for new opportunities to add
real value to the business and create a world wide operation with
a common culture and commitment to the very highest standards
of customer service, airport by airport.
1. Check-in at Heathrow airport.
2. Servicing the best of British in the USA.
1.
2.
And it works. In 2006, we became the most profitable of all
independent operators in our sector and, with the acquisition of cargo
handler Aeroground adding 9 more airports to our USA operation, we
passed the magic landmark of having more than 100 Menzies Aviation
airports worldwide. In our 175th year, we now operate at over 120
airports around the globe.
The story continues. We’ve come a long way, but we still have a
long way to go. We are now ideally placed to build from strength
with the right strategies and the right people. We are indeed in for
the long haul.
We are now ideally
placed to build from
strength with the right
strategies and the right
people. We are indeed in
for the long haul.
29
Delivering every single minute of the day
Mission stations
The story of John Menzies chronicled in this brochure also tells the tale
of how the core values established by the firm’s founding father have
given the company its unique identity and provided a route map on
the way to conduct business for successive generations of Menzies’
employees, as valid today as at any time during its 175 year history.
Inheritance of those values comes with the territory of being part
of the Menzies Group, inspiring the development of our own guiding
principles to reflect the distinctive nature of the global aviation
marketplace and the role Menzies Aviation has to play within it.
More than the well-intentioned but all too often meaningless ideals
of a corporate ‘mission statement’, these principles provide an agenda
for action, defining the values that shape our business and drive
everything we do, wherever we operate, anywhere in the world.
These values are well understood by all our staff worldwide and
embody what we stand for and what sets Menzies Aviation apart,
expressed in the appropriate acronym SPIRIT:
Safety and Security
Passion
Integrity
Reliability
Innovation Teamwork
30
Safety and Security
Safety comes first in everything we do. Nothing could be more
important than safeguarding the health and safety of our staff,
ensuring the wellbeing and security of the millions of passengers
that pass through our hands each year and protecting the property
our customers entrust daily to our care.
There are no short cuts to safety, no compromises and no half
measures. That’s why, as part of our relentless drive to create an
endemic culture of safety across the company, we have made a
major investment in the development of a continuous improvement
programme spearheaded by our unique M.O.R.S.E safety system –
Menzies Operating Responsibly Safely Effectively.
This provides a clearly defined set of risk reduction procedures and
guidelines for action covering every aspect of our operation from
basic employee safety to airside working and the use of ground
handling equipment. To make sure these become embedded as
second nature for every employee, M.O.R.S.E is supported by our
Behavioural Risk Improvement initiative which turns the focus
sharply on the personal responsibility of each individual employee to
make safety their number one priority in every decision or action they
might take during the course of a normal working day. We are not
complacent but we are proud to have a market-leading record of
safety which is relentlessly pursued at every station, every day.
Passion
It is the passion and pride of our people in the job that continues
to drive our success. We can put in the management structures,
the technology, the plant and equipment, but it takes the best people to
bring it altogether and make it work at the sharp end in the day-to-day
delivery of the best customer support service in the business.
Passion can never be taught from a training manual, but it is in the
intensive training we give every new employee that the passion begins.
To join that family does indeed take very special qualities. From cabin
cleaner to regional controller, from cargo shed to check-in desk,
the chemistry has to be right. So choosing the right people is about
character as well as qualifications, attitude as much as aptitude.
Most of all, we look for highly motivated people driven by a passionate
desire to achieve the right result for our customers, for the company,
for their colleagues... and for themselves. We are fortunate to have
an outstanding workforce of people who really care about making
a difference and delivering the best possible service.
Integrity
Without the enduring trust and confidence of our customers,
we have no business. Whether working for an airline or an airport
operator, whatever the nature of the operation we have been
contracted to perform, we are constantly under the spotlight as
their front-line representatives and guardians of their reputation in
the eyes of their customers and the industry as a whole. So honesty
and integrity are not small-print optional extras but bedrock cultural
values that provide the starting point for everything we do.
In a business given the responsibility for handling over 1.8 million
tonnes of cargo, 100 million items of personal baggage and 575,000
aircraft turns every year, it is essential for us to know we can rely
on a dedicated and totally trustworthy workforce. And we do.
31
Delivering every single minute of the day
Mission stations (continued)
Reliability
Time is money in the aviation industry. Any delay in turning around
or loading an aircraft could result in lost revenue for our customer
and, for us, that’s no result at all.
Our customers rely on us to do whatever it takes to get timetables
back on track if schedules slip due to circumstances beyond our
control. Late arrivals or weather delays come with the job, and add
to the ever changing list of challenges we face every day, constantly
working against the clock in a huge logistical operation to get all
the right people and equipment in the right place at the right time.
We aim for perfection, always striving to exceed the highest efficiency
standards our customers might expect of their own staff. To achieve
this, we constantly monitor our operational effectiveness and levels
of customer service against clearly defined Key Performance
Indicators covering such areas as aircraft turnaround times, labour
hours per cargo tonne and ground handling on-time performance.
It is this level of performance that recently made Menzies Aviation
a four time winner of the Britannia Airways global ‘Don’t Delay Get
Away’ award for on-time performance by our ground handling staff
at Cancun in Mexico. We also received the prestigious British Airways
BA WAY award for the ground handler who most closely reflected the
airline’s own ideals and values in the consistent delivery of world class
service levels.
32
Innovation
We have a vested interest in the continuing success of every one
of our customers – our continued success is based upon their
continued success. So it’s only natural that we should take a highly
proactive role in developing imaginative and innovative solutions to
the real world problems our customers experience in their day-to-day
operations, focussing on our main areas of expertise – passenger,
ramp and cargo handling. And when we find an ideal solution that
works for one customer, we adapt it to be rolled out across our
network for the benefit of all.
At Heathrow, for example, we inherited a number of outdated cargo
handling systems characterised by sky high running costs and rock
bottom functionality. Our answer was to develop HERMES – a unique,
multi-functional event management software system that tracks
airside and landside cargo movements with the built-in flexibility
to accommodate the different service levels required by each airline.
Following its success at Heathrow, we have now rolled HERMES out
to our major cargo sites throughout our network.
Inventing, innovating, always looking for new opportunities to harness
Menzies Aviation know-how to the development of practical working
solutions that will help our customers perform more effectively, more
productively and more profitably. After all, that’s what we’re here for.
1. London Heathrow bussing operations – regular service for staff to all terminals.
2. ‘RBOB’ (Right Bags On Board) our innovative baggage reconciliation system.
3. Always a smile at check-in.
1.
3.
2.
Teamwork
Teamwork works. It is the essence of our business and the key to our
success, the glue that holds our worldwide operation together, the
embodiment of our values evidenced daily by the work of 14,000 like
minded people pulling together in a combined effort to deliver the
highest standards of quality service, wherever they are, whatever they
do. From the front line to the back office, storeroom to boardroom,
teamwork works by providing a stimulating and supportive working
environment where every employee can feel truly valued, inspired to
perform to their full potential by the camaraderie of colleagues and
the personal satisfaction of a job well done, in an atmosphere of
mutual reliance and respect. It works by breeding the edge of healthy
competitiveness, within teams and between teams, each station
striving to outperform the other, every individual fired by a
determination to be the best they can be for the good of all.
And that’s why our way of team-working works for our customers.
Whatever the nature of the operation, it is on the ground that our
customers can see the tangible results of teamwork in action and
the Menzies Aviation spirit coming to life in everything we do – in
the emphasis we place on safe and secure working, the passion of
our people, their honesty and individual integrity, our tireless
dedication to reliability and, as committed business partners, in our
extra-contractual contribution to our customers’ continued success
through the development of innovative solutions designed to keep
them ahead and make a real difference.
Which, for the Menzies Aviation team worldwide, is the bottom line
we work for too.
33
Delivering every single minute of the day
Growing places
3.
1.
2.
Standing still is simply not an option if we are to remain a major
player in such a fast moving industry.
Our marketplace is constantly evolving – witness the relatively recent
phenomenon of low cost airlines, for example, or the rise and rise of
the new economies of India and China – and we must make sure that
we are in the right place with the right service offering at the right
time to take full advantage of every fresh opportunity to build further
value into our network.
Key to this is the Menzies Aviation system of ‘management by
postcode’, devolving operational management responsibility as far
as possible away from the centre to strategic geographical regions –
Europe, Africa, Asia Pacific and the Americas.
1. Cargo operations in Amsterdam.
2. Jet2 – a low-cost European Airline.
3. You bag it, we tag it and deliver!
4 & 5. Our check-in staff – the first point of contact.
34
Not only does this help us achieve the economies of scale we need to
keep costs lean and boost our potential for sustainable profitability but,
most important of all, it makes sure we have the right people on the
ground with the local knowledge to identify new opportunities for
further expansion or provide early warning alerts of possible problems
that might lie ahead.
So whether pursuing a path of organic growth through cross-selling
our services at existing stations or extending our coverage through
new contract wins, whether adding new stations through acquisitions
or releasing extra resources by closing down underperforming operations,
whatever we do, every move is carefully planned to keep our strategy for
that region on track, keeping it profitable, keeping performance at peak
levels, keeping focussed on the bigger picture to be ready for whatever
tomorrow might bring.
Delivering every single minute of the day
Building a culture of service worldwide
5.
4.
There is no secret to our success. Quite simply, it is the practical
application of the Menzies ethos of quality customer service
developed over 175 years and now a day-to-day way of life for
over 14,000 Menzies Aviation employees at more than 120 airports
around the world.
In a fiercely competitive industry driven by performance, we have to
get it right first time, every time. We are where we are today because
we deliver on our promises, always prepared to go that extra mile to
repay the trust placed in us by our customers with industry leading
service that adds real and recognisable value for every penny spent.
Our future depends on reputation and repeat business, and that only
ever comes from satisfied customers.
It is also critically important that these service levels are consistent
throughout our network, from airport to airport, region to region.
We often serve the same customer across different continents, so it
is vital that if a customer works with us in one country, they should
have a positive picture of how we work everywhere else.
This doesn’t happen by chance... especially as we are constantly faced
with the challenge of integrating newly acquired businesses into the
Menzies way of working. As we continue to grow we are also pursuing
a structured programme for standardising service delivery across our
network while still maintaining each station’s unique local identity.
By communicating the company’s vision and values and showing how
these should be applied on the ground to ensure best practice in each
area of the operation, we seek to create a common culture across the
company and offer our customers the comfort that whoever they
deal with, wherever they are in the world, they should expect the
complete Menzies Aviation service from every member of staff,
every time, everywhere.
35
Proving that honesty is
always the best policy
going about her
Cabin cleaner Felicia Fernandez was
of a recently arrived
n
cabi
r
normal duties in the passenge
rnational Airport
Inte
ricas
Ame
Delta Airlines flight at Las
overed a CD case
disc
she
n
whe
in the Dominican Republic
ed in a year!
earn
she
than
e
containing US$4000 – mor
rt her discover y
repo
tely
edia
Her only thought was to imm
be located before
in the hope that the owner could
to be, the CD case
ed
prov
it
leaving the airport. And so
passenger passing
hted
delig
a
and money reunited with
a lucky find for
ed
prov
It
rol.
through immigration cont
esty with a
hon
her
for
d
Felicia as she was rewarde
us too as this
for
one
s
itou
sizeable bonus... and a fortu
tion being
Avia
zies
Men
nd
was one of the factors behi
of ramp
ision
prov
the
for
awarded a 10 year contract
.
ator
services by the airport’s oper
36
ssed in
Keeping focu
e storm
the eye of th
life
elcome fact of
er yday if unw
ev
an
the
e
ed
ar
ov
es
pr
Hurrican
ane Wilma
ico, but Hurric
ex
. We
M
ph
of
0m
lf
14
Gu
in the
in excess of
ds
in
w
ith
w
all
d it quickly
mother of them
se for days an
Wilma’s cour
ng
ki
ac
was directly
tr
en
un
had be
ation at Canc
er
op
r
ou
at
s th
,
became obviou
staff at Cancun
only a skeleton
g
in
ted to
av
ca
Le
lo
.
re
th
re
in its pa
control cent
l
na
io
at
er
op
tion’s
co-ordinated
Menzies Avia
ere, our team
th
om
Fr
e.
nc
adva
our
Mexico City in
rpor ts to keep
her Mexican ai
ot
l
al
r
ilma
fo
W
es
as
activiti
possible
as smoothly as
g
in
ven
nn
ha
ru
t
n
is
io
ur
operat
ly idyllic to
ge the normal
va
e
ra
th
to
In
d
.
ue
ys
contin
of two da
r the best part
fo
h
un
es
fr
nc
d
Ca
an
around
ions down
l communicat
al
aff in
st
ith
r
w
ou
h,
r
at
fo
afterm
e first priority
th
d,
ye
ro
st
s de
get through
water supplie
f flights could
lie
re
re
su
en
as to
here the
Mexico City w
t at Merida w
erating airpor
op
t
es
ar
orking
w
ne
–
e
to th
took over
Aviation team
es
zi
en
d get our
M
an
nt
rt
reside
e relief effo
th
t
or
pp
su
to
ock
r customers
around the cl
ll service for ou
fu
to
ck
ba
n
atio
t team...
Mexican oper
fort by a grea
ible. A great ef
ss
po
as
y
kl
ic
as qu
y one!
, each and ever
unsung heroes
Getting a handle on lost luggage
Missing bags mean frustrated pass
engers... and the
problem is just as painful for airlin
es who ultimately have
to pay the price through repatriat
ion costs, compensation
and the loss of disgruntled passenge
rs to other carriers.
This is why Cathay Pacific turned
to Menzies Aviation for a
solution to its mishandling rates,
particularly on transfer
luggage, that it was experiencing
on the thousands of bags
passing daily through its busy hub
at LA International.
Our solution Right Bags On Board
(RBOB) matches the
right bag to the right passenger thro
ugh the use of
scanners by baggage handlers, prov
iding them with
essential information such as the
passenger name, their
outgoing and connecting flight num
bers, their destination
and which container the bag shou
ld go in. This means
luggage should always go into the
right container... so
problem solved. And if a passenge
r doesn’t get on the
plane and the bag has to be removed
, then baggage
handlers always know precisely whe
re to look. The
introduction of RBOB delivered an
immediate 70%
reduction in mishandled and misc
onnected baggage,
resulting in one very satisfied cust
omer and a lot more
happy passengers in the baggage
hall!
Going sleepless in
Seattle
After winning th
e contract from Al
aska Airlines to ta
over ramp operat
ke
ions at their key
Se
attle hub, we ha
54 days notice to
d
only
set up one of the
largest outsource
star t-up operation
d
s in commercial av
iation industry
history. So there
was no time to wa
st
e in recruiting ne
400 new staff an
arly
d training them to
ha
ndle more than
150 flights a day
the Menzies way!
New recruits we
chosen for their
re
commitment and
en
thusiasm, but fe
had previous aviat
w
ion experience –
a vital missing
commodity that
was quickly prov
ided by around 50
Menzies Aviation
staff who were br
ought in to take
charge of the Seat
tle star t-up oper
at
ion from Aucklan
Sydney, Melbour
d,
ne, Macau, Hong
Ko
ng
, St Maar ten,
London and othe
r Menzies Aviation
US stations.
Running on adre
naline in a race ag
ain
st the clock, this
newly assembled
team from around
th
e globe worked
tirelessly to get ev
er ything in place
fo
r
wh
at proved to
be a highly succes
sful first day with
ve
ry
fe
w minor
teething problem
s, exceeding all th
e
ex
pe
ct
ations of a
highly delighted
customer. That’s
te
am
wo
rk
.
That’s
Menzies Aviation
.
37
Chapter 4:
Menzies distribution
Serving
customers
here, there and
everywhere
38
39
Serving customers here, there and everywhere
Menzies Distribution
Fact file
Blue: Menzies Distribution
Green: EM News, a joint venture with Easons
23,000
4.8m
Retail customers nationwide
Newspapers delivered daily
With around a 30% market share, Menzies Distribution is the second
largest distributor of newspapers, magazines and periodicals in the UK
– and the country’s only truly national distributor with operations in
Scotland, England, Wales, Northern Ireland and now, thanks to a joint
venture with our partners Easons, in the Republic of Ireland as well.
With 4,000 employees working at 19 hub and 18 spoke branches in
the UK, we deliver 4.8 million newspapers (6.4 million on Sundays) and
2.6 million magazines (covering 3000 titles) daily to more than 23,000
retail customers nationwide including all the major supermarket
chains – Tesco, Sainsbury, Asda, Marks and Spencer, Waitrose and
Morrisons, to name but a few.
40
As a natural extension to our distribution service, we also provide a
wide range of added-value support and marketing services to retailers
and publishers. Services to retailers include space and range planning,
sales promotion, category management, sales based replenishment and
IT support. For publishers, we provide help with the launch of new
titles and sales promotion development as well as providing a range of
bespoke services such as returns processing and data services.
It is astounding what we do.
We do it through the night, 364 nights of the year, throughout the UK
so that countless millions from the Northern Isles to the Isle of Wight
will have a daily newspaper to read over the breakfast table or to pass
the time on the bus or train on their way to work, so that crosswords
can be completed and competitions entered, so that magazine pages can
be flicked through over lunch or the evening’s TV viewing planned and
plotted on the journey home, so that such normal everyday routines can
be taken for granted with never so much as a second thought about
where it all comes from or just what it takes to get it there.
We do it throughout the day, collecting unsold copies of yesterday’s
news or last week’s magazines from thousands of retail outlets all
over the country, from newsagents and supermarkets, from garage
forecourts and airport bookstalls, from stances at railway stations and
bus depots, pulling together the jigsaw of essential information our
publishers need to crunch out the numbers on what they’ve sold and
what they haven’t, so they can report to their advertisers and adjust
future supply figures, information that has to be gathered and
collated from millions of individual operations and relayed through
with absolute accuracy within a matter of hours.
1.
We do it because our customers expect us to always be there for
them, always on time with their correct order so that display shelves
can be stacked and paper rounds begun, doing whatever it takes to
meet their morning delivery deadline regardless of fog, flood or snow,
alerting them by text or email of a potential late delivery, thinking on
our feet to make up for any time lost through late print runs or
production line breakdowns, through flight cancellations or train
delays or unforeseen hold-ups on the road, working as one across our
branch network in a co-ordinated effort to get more than 23,000
separate customer orders out of our door and delivered to theirs.
It is, indeed, truly amazing what we do. Although the scale may have
changed, the fundamentals of this massive exercise in time critical
logistics have changed very little since the first John Menzies set up in
business as a wholesaler and distributor 175 years ago. Despite all the
advances in enabling technology and transport infrastructure, what
we do now is essentially the same as we did then – getting the right
products to the right customers at exactly the right time.
And experience counts. We do it better because we’ve been doing it
for longer. It’s what we call the Menzies DNA. Much, much more
than a formalised code of procedures and practices, it is the thread
that connects everything we do and everyone in the organisation to
the unique identifying values that have always set Menzies apart.
It’s what binds us together and makes us tick. It is ingrained, instinctive.
The shared adrenalin of duty and service that makes caring more and
going that extra mile the most natural thing in the world.
It is in our blood – quite literally – with so many in our current
workforce carrying on the family tradition as second, third or even
fourth generation Menzies employees. And people stay with Menzies,
the huge number of employees with 10 years service or more giving
us a collective pool of millions of man-hours of experience and
expertise to call on every time we need to move a package of
newspapers from point A to point B.
Because that’s our business. Cutting through the complexity of a
tortuously tangled logistical web to make the extraordinary look
commonplace on a daily basis. Moving whatever mountains it might
take to deliver on the trust placed in us, as the vital link in the supply
chain from publisher to retailer to reader. Trying harder. Going further.
Always being there.
1. The driver of one of our 7.5 tonne vehicles prepares to unload.
41
Serving customers here, there and everywhere
Midnight. The presses have long since stopped rolling, and now it’s
down to us.
A night in the life of
Menzies Distribution
At our 19 hub and 18 spoke branches across the country, thousands
of Menzies employees wait for the first nightly shipments to arrive.
First one then another, batch after batch of bales and bundles, their
contents adding up to a total of anywhere from four to seven million
separate newspapers despatched to Menzies for the guarantee of
morning delivery by numerous local, regional and national publishers,
arriving in a steady stream through the night by road, rail and air.
And so the ‘nightly miracle’ begins – a meticulously choreographed
logistical ballet, over a century and a half in rehearsal, played out by
a cast of thousands in a blur of seemingly chaotic non-stop activity
that disguises the precision planning behind every move, every man
and woman intuitively understanding the key role they have to play as
another 6-hour performance unfolds, act by act, throughout the night.
1.
2.
42
The minutes tick relentlessly by. Shipments are now arriving in
quick succession, sometimes together, all to be unloaded, checked
and broken down for feeding through to the picking lines for
separation and packing into over 23,000 individual orders, no two
orders ever the same from one night to the next.
The first deadline of 3am arrives. Already, thousands of orders have
been processed and parcelled up, each unique package identified by
a fully detailed despatch note ready for loading onto over 400 Menzies
trucks and vans for transfer from hub branches to spoke depots or
delivery direct to the retailer. On and on it continues until every order
has been filled and despatched, the last van leaving the last depot to
complete the final leg of one of the largest paper rounds in the
country shortly before 6am.
And that’s the easy part. Few nights go by without delays to incoming
deliveries... presses break down, planes are grounded by extreme
weather conditions, bulk deliveries reaching us by road are jammed
up in overnight road works or diverted along country roads. So we’ve
come to expect the unexpected, constantly monitoring the progress
of every shipment and reacting immediately at the first sign of any
potential delay. Print-outs of shipments already received and those
still to come are scrupulously analysed so that immediately available
stock can be reallocated to priority routes, pickers redeployed,
paperwork updated and contingency plans laid as necessary with
other affected branches across the network.
Because there are no excuses in our business. Incomplete orders and
late arrivals can only mean lost sales for our customers. So whatever
the circumstances, we have to deliver.
Because there are no
excuses in our business.
Incomplete orders and
late arrivals can only
mean lost sales for our
customers. So whatever
the circumstances, we
have to deliver.
3.
1. The HS Magazine packing line in action at our York depot.
2. A scene from the ‘Nightly Miracle’ – today’s news is packed at our Newbridge
branch in Edinburgh.
3. While the country sleeps, we deliver – in darkness, the headlines reach this
M&S Superstore.
43
Serving customers here, there and everywhere
The morning after...
Night turns to morning and Menzies Distribution operations shift into
another gear.
Our drivers are returning to their depots after their morning rounds,
now loaded with bundles of returns amounting to over 1.6 million
separate items every single day. Channelled through our nationwide
network of returns units, these now have to be individually scanned
so that publishers can be sent their daily sales updates and retailers
properly credited for their unsold copies, so that this mountainous
jumble of randomly packed material can be separated and sorted into
the right categories for either pulping, recycling, retaining or returning.
At the depots, magazines, periodicals and partworks are packed in a
continuous stream throughout the day, compiled in runs and readied
for loading by our dedicated staff – to join on the vans, later that night,
the thousands of tons of newsprint which whirl through our
warehouses each day in the early hours. Simultaneously, despatch
notes are being finalised and processed for the next cycle of delivery
rounds, while the night shift arrives to pull on overalls and take up their
places – so that everything is ready, as midnight draws near and the
rest of the country sleeps, for another Menzies nightly miracle to begin.
Meanwhile, our Sales and Distribution Representatives are on the
road, helping retailers large and small maximise their sales
opportunities with a comprehensive range of added-value support
services from racking and display advice to in-store staff training,
from range management and stock control to making sure they are
fully equipped to make the most of forthcoming sales promotions
and product launches... whatever they need, whenever they need it.
Getting busier by the minute as the day progresses, Contact Centres
covering every region are buzzing as customer orders continue to
flood in by phone and online. Every addition and amendment has
to be entered on the retailer’s records, every change incorporated in
the compiling of 23,000 orders with no margin for error and never
a minute to spare.
1.
44
1. A member of our field marketing team meets with the manager of this Tesco store,
in the North East of England.
2. Our Field Marketers use hand-held technology to check magazine ranges and monitor
returns in major stores across the country.
Great Service... Delivered Daily!
2.
Customer service underpins everything we do at
Menzies Distribution. But what does it actually mean
for our customers?
Great delivery service means meeting our delivery
times, ensuring deliveries are properly and securely
packaged and come in the right quantities with all the
required documentation.
Great collection and invoicing service ensures the
efficient collection of unsold returns and the benefit
of prompt and accurate weekly invoicing.
Great communication with customers is always our
goal whether by phone, in person through our field
teams or by regular news updates both in print and
online with i-Menzies web services.
Great support services offer our customers a wealth
of opportunities to drive sales through our leadingedge promotion and sales development facilities. This
also includes a totally transparent Key Performance
Indicators (KPI’s) monitoring service in which we track
and publish weekly key performance indicators to keep
our customers up to date with how we are performing
against our targets.
45
Serving customers here, there and everywhere
Staying ahead
We’re strong. And in the true Menzies tradition, we are always looking
for ways to grow even stronger.
We continue to grow our customer base through a carefully
managed programme of acquisition and joint venture partnerships.
Recently this has resulted in the acquisition of Chester Independent
Wholesale Newsagents (CIWN) extending our territorial coverage
across the north-west of England and North Wales, and a joint
venture with Easons which has both extended our coverage in
Northern Ireland and given us access to key areas further south
in the Republic.
46
In this, we are driven by what makes most sense for our business and
what will deliver the best long term value for our shareholders. So we
always look for synergies, for like-minded organisations we can work
with from day one to the mutual advantage of both. Because for any
acquisition or partnership arrangement to succeed in our industry,
the starting point has to be genuinely shared good will. Without the
enthusiastic approval of publishers for us to inherit existing contracts,
without the total support of incumbent management and staff, the
simple fact of the matter is that it just won’t work at all.
Serving customers here, there and everywhere
Innovation
We continue to set the pace in harnessing technology to make sure
our people are equipped with the latest tools-of-the-trade, helping
them work ever more efficiently and effectively. Although clearly
not alone in recognising the benefits that advances in technology
can bring to every level of the business, the difference with the
Menzies approach is that we don’t wait around for others to do it
for us... we make it happen ourselves.
If it doesn’t exist, we invent it. Since the introduction of our
pioneering Microlink system way back in 1987, we have enjoyed a
reputation for the imaginative use of new technologies in developing
innovative solutions to endemic problems, many of which have since
been adopted by our peers as the basis for parallel systems of their
own or adapted for use in other industries.
We invest in technology to try to deliver our aim of 100% packing
accuracy 100% of the time, so that retailers can benefit from access
to real-time details of their account online from daily delivery records
to payment schedules and to provide publishers with totally reliable
data of the previous day’s sales figures faster than ever before...
a myriad of fit-for-purpose, future-proof hardware and software
systems to make sure we remain the best equipped to do the best
we can for our customers and do it better than anyone else.
That’s why in 2008 we have embarked on the largest capital
investment project in our history with the implementation of a
new Enterprise Resource Planning (ERP) software system that will
ensure ever greater efficiency at every level throughout our business
– further proof of our continuing commitment to investment and
innovation as the way forward to achieving our aim of leading our
industry into the future.
We continue to set the pace
in harnessing technology
to make sure our people are
equipped with the latest
tools-of-the-trade, helping
them work ever more
efficiently and effectively.
47
Serving customers here, there and everywhere
Added value services
1. Our Sales Development Advisor assesses opportunities
in this Edinburgh M&S Superstore.
2. Our performance monitoring system, Project Dial, allows
us to identify issues at a glance – and take action to
resolve them.
1.
Adding value. Making
a difference. Not because
we have to, but because
we want to.
We continue to expand our comprehensive range of added-value
customer services to ensure retailers and publishers have all the
support they need to reap maximum benefit from the resources
available to them through Menzies Distribution.
Our multi-award winning Superleague Elite scheme offers our top
independent retailers a range of exclusive services to help them
compete with the multiples on a level playing field, including the
opportunity to maximise their profit potential on new magazine
launches through our Launch Factory initiative.
48
We provide access to affordable bespoke finance packages so that
even the smallest retailer can reap the rewards of installing their own
EPOS till system, including the opportunity to benefit from our Sales
Based Replenishment system. Through daily sales monitoring and
forecasting, SBR automatically controls the supply of the most popular
magazine titles to help retailers reduce waste and keep stock
availability at optimum levels on the shelves at all times.
And so the list goes on – of the many ways in which, day in and
day out, our experience and resources are being placed at the disposal
of our customers to help them do better business. Adding value.
Making a difference. Not because we have to, but because we want to.
Serving customers here, there and everywhere
Continuous improvement
2.
94.99
95.82
96.66
97.50
94.16
98.33
93.32
99.17
92.48
91.65
100
99.80%
01 Jan –
31 Dec
2006
We continue to strive for superlative performance in everything
we do – and we don’t just talk about it, we live and breathe it
around the clock.
We aim to not only meet but exceed customer expectations.
However, we realise that we can never hope to achieve this goal on
good intentions alone. That’s why we have introduced a formalised
system of performance measurement across our branch network –
Project Dial – so we can clearly identify where we are getting it right
and, most importantly, where we are getting it wrong.
Project Dial sets customer satisfaction targets in four areas of the
business of vital importance to retailers and publishers, establishing
Key Performance Indicators for newspaper packing, magazine packing,
We continue to strive for
superlative performance in
everything we do – and we
don’t just talk about it, we
live and breathe it around
the clock.
delivery and returns. Daily data collected from the branches is
analysed through a purpose designed IT system, drilling down
behind the headline figures to provide a totally accurate picture
of how these KPIs are being met by taking all influencing factors
into account – late deliveries from publishers, for example.
Where nothing less than a 99.5% rating against KPI targets will do,
the centralised posting of results for each branch clearly shows where
successes are being achieved and where changes have to be made.
And when action is needed, we take it and take it quickly. It’s all part
of staying ahead by being the best – and understanding that to be the
best requires a constant search for ways to be even better. Because in
our business, if one customer loses a single sale as a result of a late
delivery or incomplete order, that will always be one too many.
49
We keep the papers flooding
through!
Caught in the middle of heavy Janu
ary floods, staff at our
Carlisle depot found themselves
all but cut off with no
power and no phones except the
few personal mobiles
that were still working. These wer
e used to contact
nearby Scottish branches who quic
kly rallied to the cause.
With their help and the outstand
ing efforts of Carlisle
staff – including offloading 31 load
ed pallets by hand at
a nearby motorway junction in torre
ntial rain – most of
the day’s newspaper deliveries got
through to the
astonishment of grateful local reta
ilers.
Another high-water mark for Men
zies Distribution... and
apologies to our Carlisle custome
rs if we were a little late!
50
elfast fire
No alarm at B
on Saturday
arby premises
ne
at
ak
le
s
for
ga
d
e, it was time
When a fire an
branch to clos
st
lfa
Be
ith
r
w
ou
ly
– especial
morning forced
quick thinking
ry
ve
e
d
m
an
so
es
do
zies vehicl
cool heads to
apping 30 Men
tr
ne
zo
n
io
us
a 24-hour excl
ents inside!
nday supplem
Su
s
y’
da
xt
ne
the
fellow
am contacted
anagement Te
M
st
share their
lfa
to
Be
r
ed
So ou
ns and arrang
so
Ea
r
le
sa
le
ho
Replacement
newspaper w
ght’s packing.
ni
at
th
r
fo
ted
es
ciliti
s were contac
warehouse fa
, and publisher
lly
ca
lo
d
ce
ur
so
ead.
vehicles were
to Easons inst
tly shipments
gh
ni
r
ei
th
nd
to se
on time with
aper delivered
sp
w
ne
ay
nd
l Su
xt day.
The result – al
wing on the ne
lements follo
pp
su
ng
si
is
the m
Job done!
51
Chapter 5:
Tomorrow
and Tomorrow
and Tomorrow
52
53
Tomorrow and Tomorrow and Tomorrow
Menzies Distribution
The only thing certain about the future is its total unpredictability.
Successive generations of doom-mongers have confidently forecast the
inevitable and imminent demise of the newspaper and associated print
media in the wake of advancing technology... but they have always
been proved wrong. It didn’t happen with the advent of radio, the
arrival of television or the bolt-on invention of ceefax, nor does it look
any more likely as a result of ever increasing reliance on the internet.
Despite our multi-channel digital world of instant news, the fact
remains that 1 out of every 2 adults in the UK still reads a paper every
day. The phenomenal rise in the popularity of celebrity gossip and
lifestyle magazines over recent years is just one small example of how
the industry has adapted and responded to changing consumer tastes,
constantly fed by the new media that was meant to destroy it.
That said, there can be no room for complacency in facing the
challenges that lie ahead. In a rapidly changing operational
environment, the particular challenge for us is to maintain and exceed
the exceptionally high standards we set ourselves and others have
come to expect of us. That means making sure we remain in the
vanguard of innovation, continually exploring new ways to improve
54
In a rapidly changing
operational environment,
the particular challenge
for us is to maintain and
exceed the exceptionally
high standards we set
ourselves and others have
come to expect of us.
efficiency and enhance service levels for the benefit of publishers and
our customers, investing for the future to secure the rewards of
sustainable success for our employees and our shareholders.
And in this, we have history on our side. However we need to reshape
and restructure our operation in the years ahead, the guiding force
will always be the core values that have made us what we are and
who we are, values expressed every day in the skill and commitment
of our people, essential values of ethical conduct and customer service
that will remain as relevant tomorrow as they ever were in the past.
That’s why we can look forward to the future with such confidence.
Because as long as there is public demand for the printed word, there
will always be an equal need for someone to deliver it. And as the
record shows, nobody does that better than Menzies Distribution.
Ellis Watson
Managing Director
Menzies Distribution
Tomorrow and Tomorrow and Tomorrow
Menzies Aviation
Reports that the end is nigh for the aviation industry have been greatly
exaggerated. In fact, nothing could be further from the truth.
The industry is in robust good health with every reason to be bullishly
optimistic about the future. Stockmarket confidence in the sector
and direct investment in airlines and airport expansion continues.
Environmental concerns about further growth in air travel are being
met by an industry-wide commitment to operational change through
route rationalisation and the development of new plane designs and
alternative fuel technologies.
The simple fact of the matter is that people will always want to fly,
and shipping goods by air remains the only viable solution to the need
for speed and reliability in an ever expanding global marketplace.
Demand driven growth is therefore inevitable and unstoppable.
And as the cake gets bigger with new airlines coming on stream and
more airport destinations opening up across the world, nobody could
be better placed to take a larger slice of the support services market
than Menzies Aviation.
Our international
strength provides a solid
platform for building
profitability in every area
of our operation year
after year.
We will continue to pursue our proven model for growing the business,
building a balanced portfolio of worldwide operations that will protect
our overall profitability against the risk of unexpected downturns in
any one territorial region. And as we continue to expand our operations
in traditional markets, we will also be vigorously exploring new
opportunities to employ our global experience in emerging markets
– a natural home for the Menzies Aviation brand of customer
commitment and competitive pricing in a ground and cargo handling
services offering, which we believe no other independent operator
can match.
We have the management structure in place to take advantage of
new opportunities for expansion whenever and wherever they may
arise. Our international strength provides a solid platform for building
profitability in every area of our operation year after year. And with
the edge of unrivalled expertise from our continuous investment in
developing the best trained and most committed workforce in the
business, the future for Menzies Aviation couldn’t look brighter.
Craig Smyth
President and Managing Director
Menzies Aviation
55
Tomorrow and Tomorrow and Tomorrow
Chairman’s Statement
the legacy of 175 years of
tradition and achievement
now forged into a
confident and successful
modern business whose
route ahead is clearly
defined by what we like
to call the ‘Menzies way’.
Our long journey from tiny bookshop to multinational has led us along
many different paths. We have experienced periods of tremendous
progress, interspersed inevitably by the occasional step back. The
momentum over time, however, has remained relentlessly forward,
steadily building the structural strength and hallmark stability that so
distinguishes John Menzies plc in the constantly changing corporate
climate of today.
The stability we can now carry forward into the future bears testimony
to the sound business principles that have guided our past, the legacy
of 175 years of tradition and achievement now forged into a confident
and successful modern business whose route ahead is clearly defined
by what we like to call the ‘Menzies way’.
This commemorative brochure has charted our history, profiled
our present and now it falls to me as Group Chairman to offer a
personal vision of the challenges and opportunities awaiting us in
years to come. A decade after the decision was made to rationalise
the Group into just two divisions, we can take stock and be justifiably
optimistic that the leading positions achieved by each division in their
respective fields – Menzies Distribution locally in the UK and Menzies
Aviation globally – provide the strongest of platforms for ever greater
success into the future.
56
Distribution
This has always been a fascinating marketplace in which to operate
where profit potential is determined by volumes of newspapers and
magazines sold and, as such, permanently at the mercy of shifting
consumer taste over which we have no control. What we can control,
however, is making sure we continue to deliver a market leading
service to our customers underpinned by an ever expanding range
of innovative support initiatives designed to boost sales and minimise
waste. We will also continue to focus on controlling our cost base, the
key to remaining keenly competitive as we look for fresh opportunities
to further enhance our relationships with retailers and publishers in
fully exploiting the advantages offered by the new era of digital and
associated media.
Aviation
These are exciting times for Menzies Aviation. From small beginnings,
it is now one of the leading independent providers of passenger and
cargo handling services in the world. The historical growth rate of 20%
per annum achieved consistently over recent years testifies to the
potential of a constantly expanding marketplace, but we are realistic
enough to recognise that such accelerated growth cannot be
sustained indefinitely. Quite simply, the bigger you get then the
tougher it becomes.
Our priority for the future is therefore to concentrate on maintaining
steady growth, both through strategic expansion and selective
acquisitions that can offer real value for money and bring ever greater
stability to drive the business forward. This will mean increasing our
presence in airports where we already have a strong base, as well as
pursuing greenfield start-up opportunities in areas holding particular
promise for further development – as witnessed by our recent
successes in India and South Africa, for example.
Corporate Social Responsibility
Every new age throws up new imperatives. Whatever else might
lie in store as the twenty-first century unfolds, it is already clear
that the corporate and social responsibility credentials of major
corporations like ours will increasingly be put under the microscope
in such areas as health and safety at work, environmental care and
ethical business conduct.
This is nothing new to us at John Menzies. Indeed, caring for our
employees, our customers and the communities in which we operate
has always been at the very heart of our culture. As such, it is so
ingrained and inherent that we have always taken it as a given in
every plan we make and every action we take.
Today, of course, such considerations lie at the core of operational and
strategic planning for any business – indeed, performance in these key
areas is as much a part of the public face a company presents to the
outside world as figures on a profit and loss account. We have long
had formalised structures in place to ensure the implementation of
best practice procedures across our entire organisation, both here at
home and internationally, and are committed to making this the arena
for John Menzies plc to set the standard for excellence and
achievement in the future.
Our future
For the first time in our history, we face the future without a Menzies
family member being directly involved in the running of the business
following the passing of John M Menzies in 2007.
And so, 175 years after the first John Menzies opened his bookshop
in Edinburgh, it falls to us and the generations who will succeed us to
be custodians of the values that have always defined our strength and
have ultimately brought us to where we are today. This is not only our
duty but a privilege, protecting and perpetuating the Menzies family
traditions of integrity, fairness and ethical business conduct that we
believe to be as relevant a formula for sustainable success going
forward as at any time in our past.
These closing lines therefore present the opportunity to offer
reassurance to our customers, our shareholders and our employees
that the Menzies Way is safe in our hands as the only way to take
the company forward to even greater heights for the good of all in
the future.
William Thomson
Chairman
John Menzies plc
57
58
This 175th Anniversary Brochure
is dedicated to the memory of
John M Menzies
Chairman for 46 years from 1951 to 1997
and Honorary Life President
until his death in 2007
59
from one man in
one city, to over
18,000 people
in 28 countries,
John Menzies
has come a long
way in 175 years.
John Menzies plc Celebrating one hundred and seventy five years
John Menzies plc
108 Princes Street, Edinburgh EH2 3AA
www.johnmenziesplc.com
C
e
l
e
b
r
a
t
i
n
g
one hundred
and sevent y
five years
o
f
J
o
h
n
M
e
n
z
i
e
s