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DHL CIO discusses how digitalisation and automation will transform the future of logistics

DHL CIO discusses how digitalisation and automation will transform the future of logistics

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Intelligent CIO Europe caught up with Markus Voss, Global CIO and COO at DHL Supply Chain, to discover how the company is so successful when it comes to offering customers seamless end-to-end supply chain solutions, and he tells us how he predicts automation and digitalisation processes will transform the logistics industry.

Markus, you are not only the global Chief Information Officer at DHL Supply Chain, but you are also overseeing the global operations, as Chief Operating Officer.

That’s correct. I have a double-hatted role at DHL Supply Chain, but one that comes with some natural synergies. When you consider the increasing complexity of our business – mainly driven by macro trends such as changing buyer behaviour, the rapid growth in e-commerce, ever more complex supply chains and customer demand to know where their goods are in real time – then it becomes obvious that the technology is truly the backbone of our operations.

Without intelligent data processing and powerful IT solutions, we would simply not be able to offer our customers such seamless end-to-end supply chain solutions. At DHL Supply Chain, the roles of the CIO and COO – at least in my experience – go hand in hand.

What technologies do you believe are the driving force behind Europe’s technology development?

We use different smart technologies and a wide range of innovations – from robotics to automation processes. In Europe, the demand is for technologies that can be highly scalable and deployed now, so we are investing in wearable technologies such as smart watches combined with ring scanners, smart glasses and other smart devices. These are relatively inexpensive compared to larger robots or automated guided vehicles; they are relatively easy to implement in the existing warehouse structure, and – for me the most important part – they have been quickly adopted by our workforce. So, wearables add immediate value to our operations and support our employees in the best way possible.

We have also seen strong demand for Artificial Intelligence and especially robotics process automation. This offers excellent, easy-to-implement solutions to expedite repetitive, time-consuming and standardised workflows. That doesn’t mean the appetite for robotics and automated guided vehicles isn’t there, because it definitely is, it’s just that our focus for the moment is on technologies that can be scaled faster, are less costly and complex to implement and which deliver quick wins for the business.

How do you and your team transform business requirements into world-class IT solutions?

Be it enabling effective, efficient operations on the shop floor or driving innovation, we rely on a network of experts across our regions and functions to assess the technical feasibility and business viability of our IT solutions.

We are strategic partners for our customers and business partners alike and focus on driving value-added change through standardisation and innovation. Becoming more customer-centric and adopting a high-quality culture from the ground up are also paramount to meeting our business requirements.

What solutions do you implement?

DHL Supply Chain is the contract logistics arm of Deutsche Post DHL Group, so I am speaking primarily about our warehouse and transport operations where we use different smart technologies and a wide range of innovations. As global market leader for contract logistics solutions, we currently have more than 1,300 digital initiatives running across more than 2,200 sites and warehouses globally.

We’re leading in the implementation and deployment of ‘physical’ collaborative robots that help our warehouse colleagues perform repetitive and strenuous tasks. But we’re also applying software solutions that help automate repetitive business processes – eliminating manual data entry, structuring data, formats and processes or support with repetitive tasks in accounting or invoicing. These are just some of the areas we’re exploring.

What are the defining factors critical to customer success with regards to IT solutions?

At every customer engagement meeting we attend; innovation is always top of the agenda. Customers can tap into our IT expertise for innovation which can give them the edge in their industry.

We have made great strides in various technological trends in recent years such as automation and Big Data, and have developed warehouse management solutions in the cloud too – sometimes enabling warehouse management systems to be set-up in just hours instead of weeks.

We are also engaging with customers to drive down our environmental impact and help us differentiate DHL from our competitors. 2018 saw the inclusion of green solutions in around 11% of DHL Supply Chain customer wins (representing €471 million worth of annualised revenue), an exciting first step towards our 2025 goal where we aim to have more than half of our sales incorporate contractual green solutions. I’m confident that 2019 will see another leap forward for us.

Let’s not forget about Information Security either, as we need to provide secure IT solutions that support our customers; and Data Protection to both DHL Supply Chain and customer information. We constantly assess and mitigate a wide range of threats to reduce risk and maximise the effectiveness and efficiency of our business.

How can your solutions contribute to increase performance along the supply chain?

You’ll understand that operational performance data and individual warehouse metrics are not something we share publicly, but obviously, we closely monitor the improvements that new technologies bring to a specific warehouse or operational location. Any improvements we make need to pay off in terms of improved working conditions for our employees as well as reducing operational effort and cost for the customer. Yet again, automation processes – both physically and IT driven – mean that improved working conditions and reduced operating costs go hand in hand.

How should enterprises adapt their supply chains to remain competitive?

Digital Transformation is coming in many forms. We have already standardised our underlying systems (e.g. warehouse management, transport management) and started developing them in the cloud to shorten time to market. At the same time, we have been moving towards digital enabling tools and processes (e.g. robotics and automation) and managing its interfaces (APIs) with our systems in real time – ultimately improving the way we collect, use and share data.

Data control is undeniably the future of supply chains. Our industry is on the brink of disruption and the right integration environment (Enterprise Architecture) is the foundation for future service offerings based on the combination of hardware and software.

A standardised process library will enable us to design customer-centric solutions with reduced effort and risk, providing the basis for advanced data analytics and algorithmic optimisation of logistics.

How does technology allow you to operate with a unique selling point, giving you an advantage over other logistics companies?

Technology is empowering us to fully realise the potential of supply chains. Our customers are always looking for new ways to streamline their supply chains while meeting the demands of a globalised world. And DHL is just the right partner – we have an innovative portfolio that offers fit-for-purpose solutions, real time and transparent data as well as standard way of executing our operations.

These developments and our constant foray into technologies such as wearables, AI and robotics are all ideas that excite us, our customers and our customers’ customers – ideas we know will have customers thinking of DHL when they think of logistics.

Why is DHL Supply Chain so successful in implementing new technologies?

What makes our approach unique is that we have a dedicated global digitalisation agenda which helps standardise the process of unearthing new technologies, testing them under real-life conditions and – if they add value to our operations – implementing them quickly and deploying them on a large scale.

What is the outlook for 2020? How will automation and digitalisation change the logistics industry?

Speaking for DHL, we will continue the large-scale deployment of the automation devices – physical and software based – that have brought a great improvement to our operations. With robot process automation, IoT solutions and devices like smart glasses, watches and ring scanners we have identified some of the best technologies available at the moment.

I also see a very strong trend – and speaking for DHL Supply Chain, a very strong use case – in using AGVs for the indoor transport, as well as collaborative work between man and machine. These technologies I see as the strongest drivers for the near future. And broadly speaking, by end of 2020, I expect nearly 80% of all DHL Supply Chain warehouses worldwide will feature some form of digital innovation, or automation process implementation. That doesn’t mean the warehouses will be fully automated, but that the deployment of devices will significantly speed up in the coming years.

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