Deutsche Post sets out five year plan

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Deutsche Post World Net has unveiled a new structure – and a new name “Deutsche Post DHL” as part of its strategic plan.

Strategy 2015 provides for a two-tier structure with Mail and DHL as well as tighter links between the three DHL divisions, the latter being facilitated by the creation of an additional overarching executive committee.

It is aimed at defending the group’s position in the German mail market and raising profitability at DHL. In the mid term, the group wants all corporate divisions to generate annual organic growth of one to two percentage points above the market average. In addition, all divisions should rank in the top quarter of their peer groups regarding profitability, cash conversion and return on capital.

Organic growth and strict cost control is also on the agenda. A key component of this effort will be the IndEx programme announced in November which is aimed at generating savings of at least one billion euros in non-operating costs by the end of 2010.

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Chief executive Frank Appel (pictured above) said: “We have to improve if we want to maintain long-term relationships with our employees, customers and shareholders. And we can improve tremendously if we systematically address our weaknesses.”

“Our goal is to remain Die Post für Deutschland as well as The logistics company for the world.”

For DHL, the priority will be to accelerate the collaboration between the three divisions Global Forwarding / Freight, Express and Supply Chain through the creation of  an Executive Committee DHL.

Specific target sectors such as life sciences, technology or automotive will be promoted under a dedicated sector management.

A new central unit called “DHL Solutions & Innovation”  will be used to drive innovation across the group bundling all previous innovation activities to offer customer-specific solutions with the help of new technologies.

Chief financial officer John Allan said:  In Global Forwarding / Freight we need to focus on expanding our market share in the current economic downturn. We will also decrease operating expenses by reducing complexity, harmonizing processes and improving our systems. In Express we need to increase flexibility in our time-definite network and capture the growth potential in all regions. In Supply Chain we aim to raise the return on capital employed primarily by analyzing the profitability of our existing partnerships, contracts and businesses, by selling assets or by generating profitable business down the road.

For the Mail business, the aim is to get it in shape to respond to decreasing traffic volumes and increasing digitalisation by refocusing its core business. It will also introduce an online letter to provide secure electronic communications as well as integrated sender and recipient services at Parcel Germany.

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