DHL Helps Clients Transform Their Business by Putting Data to Work in New Ways
In the app economy, speed and data-driven decision-making can make all the difference.
Data is everywhere in the software-driven enterprise. The challenge is to harness its power without being overwhelmed by the complexity and scale of the job. For DHL Supply Chain, helping customers harness data is a core business imperative. That might mean analyzing client data for useful feedback on process improvements, or distributing data down to levels of the organization that have not had access to it before.
In many cases, creating value depends on making meaning from data via analytics. In one instance, DHL reconfigured the supply chain of a consumer electronics company by segmenting the firm’s sales information into smaller and smaller sections based on categories of devices. “By cutting and slicing the data, we were able to work out a much more efficient way of configuring their supply chain. Once we got the data very granular, we could pick up the pattern that some items have a certain profile of behavior. So, we were able to use that data more intelligently,” says Damian Pike, DHL’s vice president of innovation.
The sweet spot is if we can change our client’s business and in so doing change our own business. Then, everybody comes out in a new space.
— Damian Pike, vice president of innovation, DHL Supply Chain
A division of the Bonn, Germany-based Deutsche Post DHL Group, which had $64 billion in annual revenue last year, DHL Supply Chain gleans wisdom from many sources. Take, for example, data that comes through clients’ social media feeds. DHL scrutinizes comments to understand how customers are experiencing the supply chain. It then turns that data into a source of continuous improvement for the client, which can refine processes through a series of test campaigns. “That is the sort of activity you would not have imagined happening five years ago in supply chain, but is very much the situation right now,” Mr. Pike says.
The app economy is focused on speed, so DHL needs to help clients move quickly. The company has developed a hand-held device that allows commercial-vehicle drivers to view a range of important information from their own companies, such as regulatory requirements, workload information, routine scheduling, and health and safety rules. “Data plus mobility,” says Mr. Pike, “adds up to efficiency.”
Sometimes understanding the data in a new way can solve a problem that once seemed intractable. When a major airline could not figure out which refreshments on its planes were being consumed and which were staying in the flight locker trip after trip, DHL crunched the numbers and provided a dynamic, real-time data set. That allowed the airline to determine the drinks that should—and should not—be loaded on every plane. The result: planes carrying less weight, burning less fuel, and providing an improved customer experience. “It’s always great when you can make everybody happy—fast,” Mr. Pike says.
But the road to such changes is not always smooth. DHL finds that while it typically has significant buy-in from senior management to innovate and transform around data analytics, there is still an enormous cultural challenge. The issues involved are changing behavior and dealing with cultural inertia, neither of which is an easy task, he says.
Looking to the future, DHL has its eye on using video data analytics to improve operations and drive quality. While still in the early stages of development, the company is confident video data will one day have a big impact on supply chain management. Says Mr. Pike: “The sweet spot is if we can change our client’s business and in so doing change our own business. Then, everybody comes out in a new space. That is where we want to get to.”
About the Research
This case study is based on an April 2015 interview with Damian Pike, vice president for innovation at DHL Supply Chain. For more information about this research, read the full report, “The Battle for Competitive Advantage in the App Economy.”
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