1. International Conference on Advancing 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 Company Overview
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 Company Overview
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 is Logistics?
●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 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 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 Company Overview
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 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
DHL | September 2008 Page 11
12. 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
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 at DHL
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 at DHL
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 at DHL
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 at DHL
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-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
DHL | September 2008 Page 17
18. Conclusion
Implementing 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
DHL | September 2008 Page 18
19. Conclusion
e-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
DHL | September 2008 Page 19