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DHL - Logistics & eBusiness Standards
- 1. International Conference onAdvancing Public-Private Partnerships for e-Business Standards Characteristics, Trends & Future Shape of the Logistics Environment Interaction with Standards Work Harry Strover Geneva, September 18-19th 2008
- 2. Outline 1. DHL CompanyOverview 3. Logistics Environment • Characteristics • Trends • Future Shape 4. e-Business Standards at DHL • Our expectations • Relationships with Standards Organizations • e-Business with our Customers • Internal e-Business • Conclusion DHL | September 2008 Page 2
- 3. DHL Overview DHL’s parent company Deutsche Post World Net is the world’s leading logistics group. With revenues of more than €63 billion and 500,000 employees in more than 220 countries and territories it is one of the biggest employers worldwide. Largest Courier and Express provider in Europe, 8 million customers Asia Pacific and Middle East /Africa 36 Hubs and 4,700 bases Top 3 worldwide 350 aircraft, 72,000 vehicles World’s No.1 in Warehousing, Distribution & 59 countries and territories Contract Logistics 2,500 logistics centers, warehouses, terminals 23million m2 storage capacity World’s No.1 in Air and Ocean Freight 150 countries and territories 813 terminals & warehouses 4.4million t Air; 2.8miliion TEU Ocean Europe’s No. 2 in Road Freight 30 countries and territories 160 terminals 2million full truck load movements Cross-border solutions for business Largest worldwide network for Mail Distribution mail, publication distribution, direct marketing and merchandise DHL | September 2008 Page 3
- 4. Outline 1. DHL CompanyOverview 3. Logistics Environment • Characteristics • Trends • Future Shape 4. e-Business Standards at DHL • Our expectations • Relationships with Standards Organizations • e-Business with our Customers • Internal e-Business • Conclusion DHL | September 2008 Page 4
- 5. Characteristics So what isLogistics? ●The Art or Science of getting:- ●and its not:- • The right thing and the right person • The next best thing • In the right quantity • To the nearest economic delivery quantity • In the right place • To the storage point, not the usage point • At the right time • A week earlier, to be sure • At the right quality • Requiring inbound inspection • Every time • 95% of the time • At the optimal cost • At a cost we can get away with • Doing least harm to the world • Paying lip service to the environment DHL | September 2008 Page 5
- 6. Characteristics Evolving Business Models in Logistics Outsourcing Core Logistics Competence Traditional Typical Leading Visionary Business Strategy Core Customer Customer Strategy Supply Customer Competence Chain Supply Chain Orchestrator Manager Planning Customer LLP 4PL Warehousing Distribution Coordi- nation Functional Processes Courier Value Business Couri Freight Ware- Value Added Processes Logistics Cour Freight Ware- er Trans- hou Added Execution Exp Freight Ware- Value Services ier Trans- hou port sing Svcs. Freight ress Trans- hou Added port sing Sourcing Transport port sing Svcs. 3PL 3PL 3PL Integrated Production Engineering Logistics Provider • Single function transactional relationship • Strategic multi-functional partnerships • Local / regional reach • Global, door-to-door coverage • Physical asset heavy, process execution • Bring integrated IT solutions ready to use • Cost plus management fee • Continuous innovation (cost & service) • Fixed upfront cost to change • Risk/Gain share • Reduced need for capital DHL | September 2008 Page 6
- 7. Trends Fast &Fundamental Global Change is upon us • Indian population grows as fast in 1 week as the EU population does in 1 year ●Globalization moves • The Chinese middle class is consuming more and more of what it makes to a Multi-Polar world • Major new hubs are being built around the world (e.g Dubai) • Much of the world is now on-line, mobile commerce is developing quickly ●Technology led • Humble delivery equipment (containers, totes, hangers) become intelligent complexity accelerates • Increasing dependence on automation • Rising oil prices slowing the growth in global trade ●After a decade, • Globally food prices and inflation rates rising (China12%, Vietnam 25%) inflation is back • Marked shift from Air to Ocean in Technology and Healthcare companies ●Terrorism has • Container scanning will slow ports down, compliance will tie up management created a new cost • Security issues can cost hundreds of dollars per container pressure • Carbon: Sustained investment hampered by short term who pays argument ●The Smarter are • Energy costs steeply rising; Efficiency/carbon abatement actions needed getting Greener • Water supply is becoming the next sustainability issue for some • Imbalance of “white-collar” talent is limiting growth in the developing world ●Who will win the • Wal-mart report “Blue-collar” labour shortage in the US as a growing issue War for Talent ? • “Employers of choice” make training a priority ..these are opportunities if we grasp them, real threats if we do not DHL | September 2008 Page 7
- 8. Trends ..with significant impact on supply chain International Supply After Market Chain Management Management “The Wider Supply Chain” (21st Century focus) Global Customers/ Local Customers/ Supply / Producers Consumers Suppliers Retailers Sourcing After Market “The Immediate Supply Chain” (1980/90s focus) Reverse Flow Logistics Ever increasing Security & Risk Being serious about Disruptive Transport Costs Management the Environment Technology Waves DHL | September 2008 Page 8
- 9. Future Shape ofthe Logistics Environment Embracing the possibilities of information and technology Sophisticated customer solutions • Deeper integration with other enterprises means more and more information exchange • Increasingly diverse and complex processes mean e-Business capabilities are becoming more sophisticated and expanding to meet needs across multiple industries and disciplines Capitalizing upon innovation Solar Powered Smart Sensors Warehouses Parcel Robots E-Paper Remote vehicle intelligence Electric Vehicles DHL | September 2008 Page 9
- 10. Outline 1. DHL CompanyOverview 3. Logistics Environment • Characteristics • Trends • Future Shape 4. e-Business Standards at DHL • Our expectations • Relationships with Standards Organizations • e-Business with our Customers • Internal e-Business • Conclusion DHL | September 2008 Page 10
- 11. e-Business Standards atDHL Our expectations Operate a profitable global business • Use e-Business to help standardize business processes and encourage re-use • Reduce operational overheads through process simplification and standardization • Enable advanced business models that provide global coverage and consistency ●Ability to deliver consistent, effective and innovative solutions • Use e-Business to create a competitive edge • Establish global standards-based services leading to robust, replicable customer solutions • Reduce implementation & running costs; increase margins and benefits to the customer. ●Understand & Manage our Business Better • More in depth visibility of the information supply chain, better control of the process, improved business performance, and reduced organizational cost • Making change a part of the process – agility is key to a successful business • Allow operational teams more control of the supply chain, allowing in-flight changes and decisions to be made easily, reducing the risk of failure DHL | September 2008 Page 11
- 12. e-Business Standards atDHL Relationships with Standards Organizations • DHL is proactively engaged in the use and definition of e-Business standards (e.g. UN EDIFACT, RosettaNet, OAG, GS1, IATA, ANSI) • Standards organizations provide a supporting community • Effective collaboration between standards organizations is critical EANcom GUSI Woodx Petro-chem SIG PIDX CONSUMER CHEMICAL Tradacoms GSI CIDX PAPER/FOREST DR HI -TECH PAPIN ET C TN Petro-chem ROSETTANET FA JCPI /CEDI / CE UN RETAIL/PHARMA GS1 CargoImp G ENERIC G ENERIC UN/CEFACT AIRCARGO X12 IATA CargoFACT ES RI ebXML ST HEALTHCARE DU HL7 Galia IN VDA XM L ST GENERIC D VICS AUTOMOTIVE S Odette OASIS G ENERIC JAIF OAGi AIAG JAMA/ HRXML JAPIA STAR AAIA DHL | September 2008 Page 12
- 13. e-Business Standards atDHL On-Demand Customer Requirements Our customers and other Customers / business partners require: Partners • Operational agility • Continuous business process change • Scale from small to large Complex operations • Scale from low to high volumes DHL • DHL to use (their) standards. DHL | September 2008 Page 13
- 14. e-Business Standards atDHL DHL’s customers use many different standards • In connecting with thousands of e-Business customers, we use Customers / many different standards. Partners • Standards provide: RosettaNet EDIFACT IDOCs OAGi GS1 Custom – Familiar “target” for involved parties – common dictionary, DHL’s Customer Integration Platform(s) syntax and process – Greater re-use and hence reduced risk for our customers Still DHL – Faster deployment of unnecessarily solutions complex Over one billion e-Business transactions annually Approximately 8,000 customers, suppliers, customs authorities, etc. DHL | September 2008 Page 14
- 15. e-Business Standards atDHL Standardizing e-Business transactions between internal systems • A common data model will make standards really work for DHL Customers / • Standards provide: Partners – Good direction for internal e- Business transactions – Supporting knowledge for RosettaNet EDIFACT IDOCs OAGi GS1 Custom business transactions and DHL’s Customer Integration Platform(s) data models inside the Common Data Model enterprise – Leverage and ease of Common Data Model implementation with our major IT providers DHL DHL Enterprise Internal Integration Platform(s) This is DHL’s biggest current e-Business initiative DHL | September 2008 Page 15
- 16. e-Business Standards atDHL Case Studies - Implementing Standards for internal e-Business ●Large Healthcare Customer ●Large Consumer Customer • Selected RosettaNet as internal • Selected GS1 as internal e-Business standard e-Business standard • Not all internal requirements were met by • Not all internal requirements were met by the selected standard the selected standard • Made structural and semantic changes to • Made structural and semantic changes to Standard (Bespoked) Standard (Bespoked) • Forked from standard version • Proposed Changes to GS1 governing body • Project was delayed considerably • Created complexity for External Parties • Risk of forking from standard version ●Implementing external standards for internal e-Business is challenging DHL | September 2008 Page 16
- 17. Conclusion DHL uses e-Businessstandards with our customers • Standards provide the best way of providing an open, re-usable way of inter- operating with our customers • SDOs are a valuable supporting community for our e-Business development • Using e-Business standards when working with our customers benefits DHL’s internal operations DHL | September 2008 Page 17
- 18. Conclusion Implementing standards withinour organization is challenging • We have to be selective when implementing standards internally • e-Business standards do not represent all internal business interactions • Our strategic software vendors need to participate with us in implementing standards • Standards compliance and version alignment is difficult – especially where the fit is not ideal – If not managed well, standards limit the agility of the internal solutions • Many other organizations regard internal e-Business as a key differentiator / asset – Not all are willing to share and help develop standards for this purpose DHL | September 2008 Page 18
- 19. Conclusion e-Business is muchmore than data exchange • Information quality and its associated benefits all require standards to be in place • e-Business for DHL is about business process interactions across multiple enterprises – Standardizing business processes is our real challenge DHL | September 2008 Page 19
- 20. Thank You! DHL |September 2008 Page 20