DHL on supply and demand in a disrupted world

Insights from Thierry Driesens, Digital Transformation Officer at DHL Supply Chain
Deutsche Post DHL Group is the world’s largest logistics company with a broad service portfolio that includes letter and parcel dispatch, express delivery, freight transport, e-commerce and supply chain management solutions. By the year 2050, the company aims to achieve zero emissions logistics.

We spoke to Thierry Driesens, Digital Transformation Officer at DHL Supply Chain on the progress the firm has made to date on a diversity of digitalization and innovation initiatives.

How has the pandemic impacted you and your business generally?

We have a bit of a mixed picture – we see industries where volumes have increased e.g. LSHC, pharma, retail and e-commerce in general. We have also seen other industries where the customers had to shut down their operations due to lockdown, for example automotive, aviation and other heavy industries. At the start of last year, I was talking to my colleagues in China – DHL has a partnership with SF Holding in the country. Europe and U.S. had early warnings from APAC about what was coming. In my head, I could almost see it – this wave starting in China, going through the rest of Asia, coming to the West. We quickly realized that this will not only have a local impact, but will affect supply chains around the globe. Due to our strategic investment in digitalization and data analytics, we were able to fast analyze and respond based on fact-based decisions.

What was the knock-on effect for DHL’s customers?

We have seen a mixed picture. We look after the entire logistics operations of some of our large automotive customers. The automotive industry just stopped production at one point in time. This is a knock-on effect of just-in-time production. If the production stops, we have to adjust our supply chain operations immediately, too. On the other hand, if you look at pharma companies or consumer goods, these were really booming. We have customers who make hand gels – you can imagine how that business boomed.

What do you think prepared you for being able to manage the COVID-19 situation effectively?

Digital transformation and digital tools were essential. A big focus of my role is to accelerate the digitalization of our operations and improve our customers’ digital journey. A key part of this is to create efficiencies and to make sure that we increase the satisfaction of our employees and of our customers. We know that if our customers and our employees are happy, that leads to higher revenues and margins, as well. We always combine these three things, which studies show go hand-in-hand.

We’ve been bringing more and more digitalization solutions into our business, which meant we are now generating a lot of data. Our focus is now in the direction of what we will do with all that data and how can we leverage it to the best interests of our customers and bringing predictive analytics into the discussion.

What new technologies came to the forefront of your operations last year during the crisis?

Initially, people focused on keeping the lights on. But after a few weeks, it was clear that our people were asking for better digital solutions to make our business more robust.

We’ve been looking into increasing our use of robotics, for example. We deployed a new robotic picking solution in one of our warehouses in just one month in the middle of the pandemic. We had to do it remotely and be creative, because the guys in my team were not allowed to travel. We used WebEx, put a laptop in the warehouse and held video calls. We learned that maybe we don’t always have to travel to sites, technology can help. With those robotic solutions, we can achieve picking efficiency increases of between 30% and 40%. This means warehouses could handle a lot more volume.

Is the availability of real-time data important to your business?

When it comes to health and safety, when it comes to looking at your costs or engaging with your customer, you need accurate, local real-time data to be able to take the right decisions for your business. And that's where digitalization can really help.

Real-time data has also helped us prepare for a second or even third wave of the pandemic. We anticipate a lot. We can see from the data, what worked last time. We know also how to engage with our customers. So we're much better prepared for what's going to come.

And what you can do with the data that you now gather?

We’re one of the biggest employers in the world with around 550,000 employees. And if we can detect patterns, if we can combine the data my customer gives us with better forecasting, we can achieve better resource planning.

Do you think sustainability will be a trend as we go forward?

Yes, I think so. We have a project called GoGreen, which uses IoT sensors to regulate warehouse temperatures, make them more energy efficient and reduce our CO2 emissions. I think that digital solutions help – you can combine your digital journey and your sustainability journey, and in many cases, that leads to cost reductions, as well. And you can use that money to invest in more sustainable solutions. By 2025, we want all our warehouses to be CO2 neutral.

Are you seeing specialist supply ecosystems evolve with tighter integration?

Yes, for a few years I’ve been a big fan of working in ecosystems. For example, we may want to leverage a microservice that has been developed by a start-up in China or San Francisco. I can ask that company to adhere to all my compliance and IT security requirements. I’m a strong believer in open discussions with our customers, partners and suppliers, where we share relevant data that lets us offer a better service at a better cost. Companies need to work together, they need to engage.

Find out how you can optimize your global supply chain by using real-time data to create a more agile and responsive ecosystem.

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Helen McInnes
Helen McInnes

As Director of Thought Leadership, Helen works at the intersection of business, society, economics and technology to help firms anticipate and address the rapidly changing needs of consumers. A systems thinker, she’s enjoys connecting the dots to help digital businesses solve problems and create better futures. In her spare time she loves gardening, nature and reading.