The agenda is changing for third party logistics providers as customers increasingly look for more collaborative and sustainable operations. Graham Inglis explains how DHL is moving to meet these requirements to Malory Davies.
There are plenty of DHL’s competitors that look at it with a mixture of envy and fear. After all, the scale of the business is huge and its ability to compete globally is unmatched.
But of course, there is another side to the coin – huge sums of money have been invested in the business and consequently there is pressure to provide the returns necessary to justify that investment.
Last year, parent group Deutsche Post started implementing its “Roadmap to value”, Following that, earlier this year it announced a structural change to the business splitting the logistics division into two: Supply Chain, and Global Forwarding and Freight.
Graham Inglis, chief executive officer for the UK, Middle East & Africa for DHL Exel Supply Chain, points out that the move means that the three DHL businesses (Express is the third) are all now represented on the Deutsche Post World Net board. “We have gone through the integration and we are now in the era of collaboration. We have put in place lots of mechanisms to leverage the different elements of the DHL brand.”
In particular, he points to the development of the “global customer solution team” concept to serve customers on a multi-regional and multi-business unit basis. In addition, DHL has also developed ten “cluster groups” to drive the collaborative agenda in terms of sharing best practice and improving utilisation of resources. Inglis highlights the introduction of an internal electronic freight exchange covering all businesses and sites.
An example of this collaboration is the “service logistics” product which provides an expedited service for service parts for engineers. The supply chain business manages a network of forward stock locations enabling it to respond to demand within a couple of hours using the express business for delivery.
In another example of collaboration, DHL has created a multi-functional group from across the supply chain business to serve the publishing sector. In April it took a stand at the London Book Fair to highlight the fact that, through collaboration between the Exel Supply Chain, Express, Global Mail and Global Forwarding units, it could offer a complete end-to-end supply chain solution to the publishing industry.
Inglis points out that changing market conditions, such as rising fuel prices, are encouraging customers, particularly in retail and consumer, to embrace collaboration and consider sharing capacity.
This is happening on a tactical level at the moment, but more people will look to network solutions in the future, he says. DHL operates a consumer network operation in the UK. Service levels have been an issue in shared user services in the past, but Inglis points out that the important thing is to have the right KPIs in place.
“It’s all KPI driven. We are servicing big, demanding customers and we have our own 12 operating metrics for every operation. In addition, we have people with continuous improvement skills to solve problems at specific sites.”
The global reach of the business has enabled DHL to win some massive international supply chain contracts but domestically Inglis can also point to some big wins. The £1.6 billion contract with the NHS to operate NHS Supply Chain, signed towards the end of 2006, was one dramatic example.
Inglis also says that earlier this year DHL won its biggest UK motor industry deal – a three-year contract worth more than £100 million a year to manage in-plant logistics and the collection of UK and European sourced component parts for Jaguar and Land Rover vehicles.
DHL’s activity is being extended from its existing operation at Castle Bromwich, to include Jaguar and Land Rover’s sites at Halewood and Solihull. DHL is managing Jaguar and Land Rover suppliers to ensure they are shipping the right materials at the right time, as well as providing a dedicated team focused on improving the UK and EU collections operations.
The issue of sustainability and improving environmental performance is now on every boardroom agenda. Inglis says DHL is focusing on understanding the carbon footprints in its different businesses, work that is at different stages across the business.
It is also looking at a number of sustainability initiatives. For example, it has been trialling electric vehicles for urban deliveries and it was involved in trialling the Don-Bur “teardrop” trailer developed for Marks & Spencer. And, earlier this year it announced trials of two Mitsubishi Fuso Canter Eco Hybrid vehicles in the UK, which are expected to have better fuel consumption.
Graham Inglis is chief executive officer, UK, Middle East & Africa for DHL Exel Supply Chain.
- 1974: management trainee at National Health Service in the UK, becoming deputy national director of logistics.
- 1995: Joined Exel Logistics as a key account director and became managing director, Europe for the newly formed Health & Utilities business unit in Exel.
- 1998: commercial director, responsible for a range of central functions for Exel (Europe).
- 2000: president, Healthcare Worldwide following the Ocean/Exel merger.
- 2005: chief executive officer, sector development responsible for all EMEA development activity.
- 2007: chief executive officer, UK Middle East and Africa for DHL Exel Supply Chain.