By Matthias HeutgerSenior Vice President, DHL Customer Solutions & Innovation

Logistics is a competitive business. On the surface, it seems straightforward — moving something from here to there — but the truth is that, in many cases, the relative success of a company’s supply chain is a ‘make or break’ proposition. Lean manufacturing has more or less become the standard approach among the world’s largest companies across nearly every sector, which is why many businesses are now turning to logistics providers for ways to help maintain a competitive edge.

This is our specialty within the Customer Solutions & Innovation (CSI) organization at DHL where we provide a single point of contact for DHL’s largest customers at a global and regional level as well as driving innovation and sector leadership on behalf of the group. There are many benefits to this arrangement, one of which has been the opportunity to work closely with our customers to develop innovative industry-tailored solutions.

‘Innovation’ is another term that seems simple at first glance, but as we refined our innovation efforts over several years, we realized that the word carries vastly different meanings. For many, it was essential for innovation to be incremental and evolutionary, but there were others who welcomed disruptive innovation. It became clear that we’d need to closely analyze each customer’s needs to satisfy the full range of innovation demands.

Once we came to this realization, we increased our investment in proactive customer engagement and embarked on a more ‘customer-centric’ innovation approach, a direction that has proven quite rewarding for us and, more importantly, for our customers. These efforts were even recognized on a global stage when we received the SAMA Excellence Award™, which honors best-in-class practices in the area of strategic account management, for our customer-centric account management and innovation approach.

Putting Innovation into Practice

Implementing our new approach wasn’t only a matter of changing mindsets. We also had to ensure we had the right foundation in place — literally, to allow us to put innovation into practice. We already had an Innovation Center established near our global headquarters in Bonn, Germany, but, after seven years, it needed an overhaul and it also no longer reflected our innovation philosophy. Therefore, we fully committed ourselves to further developing a stronger link to our customers by completely rebuilding the Center, which we reopened in 2015 with a completely new look and a new customer-centric approach.

Additionally, we decided to open a second Innovation Center in Singapore to better accommodate our Asia-Pacific-based customers, which opened later that year in December 2015. Building upon that success, we are now preparing the third addition to our network and will open our Americas Innovation Center close to Chicago, Illinois, in the USA in 2018. Our global state-of-the-art Innovation Centers serve as the nucleus to engage with our customers, in an environment where they can discover and experience the latest trends and innovative logistics solutions and, furthermore, connect with subject-matter experts from our industry and beyond. These creative and inspirational surroundings enable us to dive even more deeply into the challenges of our customers in DHL-led workshops. Each customer visit helps both sides to generate ideas to help resolve immediate concerns, while also strategically preparing the customer for the future.

Adding Customer Value with Thought Leadership

To further embed innovation into our DNA, the DHL CSI team launched a new and structured Trend Research approach that focuses on insight generation, new concept development, prototyping, and proof of concepts.

The team leverages the industry expertise of our customers and global partner network, including institutes such as Fraunhofer and MIT, in order to jointly produce their annually updated flagship publication — the Logistics Trend Radar. This dynamic tool identifies and assesses the impact of social, business, and technology trends in the logistics industry and acts as the basis for all trend research projects.

The DHL trend research team also publishes multiple deep-dive Trend Reports. Recent reports include The Sharing Economy, Omni-Channel Logistics, Robotics, and 3D Printing. These publications examine trend developments and emerging best practices, identify potential sector-specific applications, and consider logistics implications.

To further inspire customers and position the organization as a Thought Leader on innovation, the Trend Research team actively involves customers and industry partners in developing ‘logistics use cases’ through prototyping and proof-of-concept analysis. This process provides an ideal starting point for new solution development, led by Deutsche Post DHL or DPDHL Group business divisions. A typical outcome is an enrichment of the solution and service portfolio.

One good example is our latest project in the area of robotics and automation, in which the team worked closely together with our customer Wärtsilä to jointly test the potential of using self-driving robots from ‘Fetch Robotics’ in order to streamline warehousing operations. We planned the proof-of-concept closely with our customer and deployed the prototype directly in their warehouse. The first pilot showed good results, and we will continue to explore the applicability of this and other robotics technologies in various types of operations.

Another example of a trend turned into an innovative new solution is our risk management solution ‘Resilience360’ which brought ‘Big Data’ to life at DHL. Resilience360 helps our customers to better deal with real-time and future challenges in increasingly complex global supply chains. The tool combines internal and external data sources to monitor different events along key trade lanes and operations in order to identify potential risks. Analytics are applied to match events to a customer’s supply chain which will then trigger mitigation strategies that minimize the impact on their supply chains.

Reaping the Rewards of Collaborative Innovation with Customers and Partners

As one customer-driven innovation is achieved, it raises the possibility of the next one, and each innovation is likely to have impact today and tomorrow. Our team has seen first-hand how the learnings from one initiative can be applied to help refine and improve the process for next time.

When the benefits of engaging in this way become apparent, customers typically commit to a long-term innovation journey. And, with a customer-centric approach to innovation, the DHL CSI team is equally committed to this long-term journey with each strategic account.

Our innovation partnership with Huawei is one example of this. In February 2017, DHL Supply Chain and Huawei signed a Memorandum Of Understanding (MOU), to develop a range of supply chain solutions for customers using industrial-grade Internet of Things (IoT) hardware and infrastructure. Huawei and DHL will collaborate on innovation projects focusing on cellular-based Internet of Things technology, which can connect large volumes of devices across long distances with minimal power consumption. The greater connectivity will deliver a more integrated logistics value chain by providing critical data and visibility into warehousing operations, freight transportation, and last-mile delivery.

This customer-driven approach to innovation has already created many great opportunities for DHL to strategically engage with customers, and involve subject-matter experts from relevant DPDHL business divisions, industry partners, and research institutions. Looking ahead, the DHL CSI team is committed to further refine, deepen, and sharpen innovation initiatives to amplify impact.

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