DHL Supply Chain: A Data-Driven Approach in Transformation
DHL Supply Chain is the world’s leading contract logistics provider. It combines value-added and management services with traditional fulfilment and distribution, with its customised and integrated logistics solutions driving efficiency, enhancing quality and helping to establish a competitive advantage.
Oscar De Bok is the CEO of DHL Supply Chain. Originally from the Netherlands, De Bok has spent the majority of his career across numerous roles around the globe before moving into his current role in October 2019. De Bok believes what sets his organisation apart is customer centricity and the standardisation across the business at the same time. “It’s about our consistency in the way we operate around the world,” he says. “We also standardise the way we train and develop our people; it’s important you get the same level of service.”
While automation isn’t a new innovation in the logistics industry, De Bok believes that flexibility has improved considerably and allowed the cost of robotics to streamline operations to be greatly reduced. “This means that you’re far more flexible in the type of solutions you can develop and you can adjust solutions far more quickly than in the past,” explains De Bok. “The level of investment has substantially increased in the industry and this has meant there is a lot more innovation within the logistics sector. That has created the possibility together with the increase of data analytics to enable us to make better decisions around how we can introduce collaborative robotics into operations, as well as still having the flexibility to upscale, downscale and adjust going forward.”
De Bok is well aware of the plethora of information at his organisation’s fingertips, however, he recognises how important it is to leverage this data effectively. “In the logistics industry, we sit on so much data and information and this means we have lots of visibility over what’s happening in the market,” he says. “By leveraging machine learning in a better way, we can start telling our customers what will happen tomorrow instead of it being the other way around. Data has allowed us to accelerate decision-making, making conclusions to implement changes within the supply chain together with our customers much quicker. Machine learning and data analytics are two of the biggest topics in logistics at the moment.”
DHL Supply Chain provides specialist, proven expertise within a range of different industries. These include consumer, life sciences & healthcare, retail, automotive, technology and engineering & manufacturing sectors. With COVID-19 having disrupted company operations and industries worldwide, De Bok believes his organisation has coped with the pandemic well. “Some of our sites we had to practically close down in terms of fashion and automotive,” explains De Bok. “But on the other hand, we experienced a considerable rise in consumer and grocery retail and we had to cope with both. In some countries such as the UK, we’ve been able to move people between operations which was always a benefit of having all members of staff trained in the same way.”
De Bok believes that one of the biggest lessons he’s learnt from the pandemic is again realising that there are great people at all levels within the organisation. “I’ve been highly impressed by how people have stood up and made important decisions,” he affirms. “I feel that we’ve empowered organisations to take decisions and this was made possible by how we trained our people, the talent of the people themselves and also by having more standardised processes in place. We now have more visibility of data and this allows us to make decisions quicker than ever before.”
Over the past few years, De Bok has witnessed first-hand the rise in the demand of e-commerce. “There is a considerable change towards B2B e-commerce just as much as the BTC commerce,” he says. “Over the past six months, we’ve seen companies having to develop very quickly. There is an increasing need for more flexibility and a trend towards multi-sourcing points. In the light of COVID we have developed a new service which we call the European Fulfillment Network. This network grants our customers flexibility and proximity to the markets. By connecting more than 30 European fulfillment warehouses to a giant European network of warehouses, we help our e-commerce customers to be faster – though we enable them to ship the next day, or even same day – and have more resilience in their supply chains. Given one geography falls under a lockdown or supply restriction, we can serve the markets from one of our multiple other stocking points. That kind of service sets a whole new industry standard and will be a blueprint for other markets and geographies as well.”
With the future in mind, De Bok recognises how vital it is to be lean and willing to adapt. Citing the changing world around us, coupled with increased investments in the industry, De Bok sees an acceleration of the evolution of supply chain. “No one has a crystal ball and can predict the future. The only thing that we all know is that you need to be agile and able to respond to any changes in the market immediately,” affirms De Bok. “The need for flexibility starts right at planning around sourcing, and being able to adapt from this point on is vital. This is why data analytics, collaborative robotics and the ongoing digitalisation of planning is so important. Just seeing how quickly we’ve been able to move this year makes me optimistic that whatever happens we can transform our industry for the better.”
Will Public Procurement Budgets Increase in 2021?
Procurement is more than just a private enterprise. COVID-19 reminded us that sourcing materials is an essential part of the government’s role. Throughout 2022, tiny departments sourced massive amounts of personal protective equipment (PPE), medical supplies, and emergency vaccines and testing kits. Even non-procurement professionals were pulled into the fray, as frantic timelines demanded nothing less.
According to Celeste Frye, co-founder and CEO of Public Works Partners, the crisis brought procurement to the attention of skilled employees who had never considered it. As non-procurement personnel stepped up to help their coworkers, many found that they’d stumbled upon a critical and rewarding job. “Existing public employees have seen the essential nature of the work”, Frye said. “[They’ve] gained some critical skills and possibly [grown] interested in pursuing procurement as a longer-term career”.
Small, Local Suppliers Take Charge
Frye, whose firm helps organisations engage stakeholders and develop long-term procurement strategies, thinks it well worth the effort to open one’s mind to new opportunities. Cooperative contracts, for instance, can help public departments and municipalities save money, time, and effort. By joining together with other towns or cities in the region, public procurement teams aggregate their purchasing power and can drive better deals.
These cooperative contracts have the added benefit of advancing equity. Smaller suppliers that struggle to compete with established firms for government contracts can act as subcontractors, helping big suppliers fulfil bits of the project. Once they get their foot in the door, small, local, and disadvantaged suppliers can then leverage that government relationship to take on additional projects.
Especially as governments start to pay attention to procurement resilience, public procurement departments must expand their requests for proposals (RFPs) to take into account innovative solutions and diverse suppliers. According to Frye, Public Works Partners—a certified female-owned firm—has benefitted from local and state requirements that specify diversity.
Post-Pandemic Funding Swells Procurement Budgets
And the pandemic won’t be the end of it. City governments need to build sustainable energy infrastructure such as solar panels, charging stations, and recycling plants, ensure that masks and medicines are never in short supply, and source new technologies to keep up with cloud and cybersecurity concerns.
Public procurement budgets will likely increase to match demand. As Peter Ware, Partner and Head of Government at Browne Jacobson, explained, “in a non-pandemic world, the [U.K.] government spends on average around £290 billion on outsourced services, goods, and works...anywhere between 10% and 14% of Gross Domestic Product (GDP). Post-pandemic, city procurement will only increase as national governments provide local divisions with emergency funding.
And in truth, government employees might jump at the opportunity. Frye noted that public procurement could give immediate feedback on new programmes: “[Procurement] is where new laws and policies ‘hit the road’ and are implemented”, she said. “Professionals in these fields get the satisfaction of creating real change and seeing quantifiable outcomes of their work”.