dhl - logistics & ebusiness standards

International Conference on Advancing Public-Private Partnerships for e-Business Standards

Harry StroverGeneva, September 18-19th 2008

Characteristics, Trends & Future Shape of the Logistics Environment Interaction with Standards Work

2 DHL | September 2008 Page

Outline

1. DHL Company Overview

2. Logistics Environment

• Characteristics

• Trends

• Future Shape

3. e-Business Standards at DHL

• Our expectations

• Relationships with Standards Organizations

• e-Business with our Customers

• Internal e-Business

• Conclusion


DHL Overview

Largest Courier and Express provider in Europe, Asia Pacific and Middle East /Africa

Top 3 worldwide

8 million customers 36 Hubs and 4,700 bases 350 aircraft, 72,000 vehicles

World’s No.1 in Warehousing, Distribution & Contract Logistics

59 countries and territories 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

Largest worldwide network for Mail Distribution Cross-border solutions for business

mail, publication distribution, direct marketing and merchandise

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.


Outline



• Characteristics

• Trends

• Future Shape






• Conclusion


CharacteristicsSo what is Logistics?

The Art or Science of getting:-

• The right thing and the right person

• In the right quantity

• In the right place

• At the right time

• At the right quality

• Every time

• At the optimal cost

• Doing least harm to the world

and its not:-

• The next best thing

• To the nearest economic delivery quantity

• To the storage point, not the usage point

• A week earlier, to be sure

• Requiring inbound inspection

• 95% of the time

• At a cost we can get away with

• Paying lip service to the environment


• Strategic multi-functional partnerships• Global, door-to-door coverage• Bring integrated IT solutions ready to use• Continuous innovation (cost & service)• Risk/Gain share• Reduced need for capital

CharacteristicsEvolving Business Models in Logistics Outsourcing

Strategy

Traditional Typical Leading Visionary

BusinessStrategy

Core Logistics Competence

Customer

CustomerCo

re

SupplyChain

Orchestrator Supply Chain

Manager

Customer

• Single function transactional relationship• Local / regional reach• Physical asset heavy, process execution• Cost plus management fee• Fixed upfront cost to change

BusinessProcesses

Warehousing

FreightTransport

ValueAddedServices

Sourcing

Production

Coordi-nation

Execution

LLP 4PL

Integrated LogisticsProvider

Freight Trans-

port

Ware-hou sing

Value Added Svcs.

Ware-hou sing

Value Added Svcs.

Freight Trans-

port

Ware-hou sing

Freight Trans-port

3PL 3PL 3PL

Lo

gis

tic

s

Exp ress

CourierCour

ier

Engineering

Distribution

Planning Customer

Co

mp

ete

nce

Functional ProcessesCourier


TrendsFast & Fundamental Global Change is upon us

Globalization moves to a Multi-Polar world

Technology led complexity accelerates

After a decade, inflation is back

The Smarter are getting Greener

Terrorism has created a new cost pressure

Who will win the War for Talent ?

• Indian population grows as fast in 1 week as the EU population does in 1 year • The Chinese middle class is consuming more and more of what it makes • 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• Humble delivery equipment (containers, totes, hangers) become intelligent• Increasing dependence on automation

• Rising oil prices slowing the growth in global trade• Globally food prices and inflation rates rising (China12%, Vietnam 25%)• Marked shift from Air to Ocean in Technology and Healthcare companies

• Container scanning will slow ports down, compliance will tie up management• Security issues can cost hundreds of dollars per container

• Carbon: Sustained investment hampered by short term who pays argument• Energy costs steeply rising; Efficiency/carbon abatement actions needed • Water supply is becoming the next sustainability issue for some

• Imbalance of “white-collar” talent is limiting growth in the developing world• Wal-mart report “Blue-collar” labour shortage in the US as a growing issue • “Employers of choice” make training a priority

..these are opportunities if we grasp them, real threats if we do not


“The Wider Supply Chain”

(21st Century focus)

Trends..with significant impact on supply chain

“The Immediate Supply Chain”

(1980/90s focus)

Local Suppliers

Customers/ RetailersProducers

Reverse Flow

Logistics

GlobalSupply /Sourcing

Customers/ ConsumersAfter Market

Being serious about the Environment

Disruptive Technology Waves

Security & Risk Management

Ever increasing Transport Costs

International Supply Chain Management

After Market Management


Future Shape of the 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 industriesand disciplines

Capitalizing upon innovation

Smart Sensors

Remote vehicle intelligence

Solar Powered Warehouses

Parcel Robots

E-Paper

Electric Vehicles


Outline



• Characteristics

• Trends

• Future Shape






• Conclusion


e-Business Standards at DHL 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


e-Business Standards at DHL 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

GENERIC

X12

VICSGENERIC

OAGi

ebXML

CHEMICAL

CIDX

Petro-chemPIDX

Petro-chemJCPI/CEDI

AUTOMOTIVE

JAIF

JAMA/JAPIA

Odette

HI-TECH

ROSETTANET

CONSUMER

GSI

PAPER/FOREST

PAPINET

VDA Galia

AIAG

GENERIC OASIS

RETAIL/PHARMA

GS1

STAR

EANcom

Tradacoms

AAIA

SIG

GUSIWoodx

HEALTHCARE

HL7

AIRCARGO

IATA

CargoImp

CargoFACT

GENERIC

UN/CEFACT

HRXML


DH

Le-Business Standards at DHL On-Demand Customer Requirements

Cus

tom

ers

/ P

art

ners

Our customers and other business partners require:

• Operational agility

• Continuous business process change

• Scale from small to large operations

• Scale from low to high volumes

• DHL to use (their) standards.

Complex


DHL’s Customer Integration Platform(s)RosettaNet EDIFACT IDOCs OAGi GS1 Custom

Still unnecessarily

complex

DH

Le-Business Standards at DHL DHL’s customers use many different standards

Cus

tom

ers

/ P

art

ners

• In connecting with thousands of e-Business customers, we use many different standards.

• Standards provide:

– Familiar “target” for involved parties – common dictionary, syntax and process

– Greater re-use and hence reduced risk for our customers

– Faster deployment of solutions

Over one billion e-Business transactions annually

Approximately 8,000 customers, suppliers, customs authorities, etc.


• A common data model will make standards really work for DHL

• Standards provide:

– Good direction for internal e-Business transactions

– Supporting knowledge for business transactions and data models inside the enterprise

– Leverage and ease of implementation with our major IT providers

e-Business Standards at DHL Standardizing e-Business transactions between internal systems

Cus

tom

ers

/ P

art

ners

DH

L

DHL’s Customer Integration Platform(s)RosettaNet EDIFACT IDOCs OAGi GS1 Custom

Common Data Model

DHL Enterprise Internal Integration Platform(s)

Common Data Model

This is DHL’s biggest current e-Business initiative


e-Business Standards at DHL Case Studies - Implementing Standards for internal e-Business

Large Healthcare Customer

• Selected RosettaNet as internal e-Business standard

• Not all internal requirements were met by the selected standard

• Made structural and semantic changes to Standard (Bespoked)

• Forked from standard version

Large Consumer Customer

• Selected GS1 as internal e-Business standard

• Not all internal requirements were met by the selected standard

• Made structural and semantic changes to Standard (Bespoked)

• 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


Conclusion DHL uses e-Business standards 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


ConclusionImplementing standards within our 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


Conclusione-Business is much more 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


Thank You!

dhl - logistics & ebusiness standards

Documents

world e

territoriescontract

logistics centers

right time

ocean freight

right quantity

upfront cost

right thing