Logistics is a competitive business. On the surface it seems straightforward –moving something from here to there – but the truth is that in many cases the relative success of a company’s supply chain is a ‘make or break’ proposition.  Lean manufacturing has more or less become the standard approach among the world’s largest companies across nearly every sector, which is why many businesses are now turning to logistics providers for ways to help maintain a competitive edge.

This is our specialty within the Customer Solutions & Innovation (CSI) organization at DHL. Since establishing the industry’s first global account management program in 2004, we’ve provided a single point of contact for DHL’s largest customers at a global and regional level as well as driving innovation and sector leadership on behalf of the group. There are many benefits to this arrangement, one of which has been the opportunity to work closely with our customers to develop innovative industry-tailored solutions.

‘Innovation’ is another term that seems simple at first glance, but as we refined our innovation efforts over several years, we realized that the word carries vastly different meanings. For many, it was essential for innovation to be incremental and evolutionary, but there were others who welcomed disruptive innovation. It became clear that we’d need to closely analyze each customer’s needs to satisfy the full range of innovation demands.

Once we came to this realization, we increased our investment in proactive customer engagement and embarked on a more ‘customer-centric’ innovation approach, a direction that has proven quite rewarding for us and, more importantly, our customers. These efforts were even recently recognized on a global stage when we received the 2015 SAMA Excellence Award ™, which honors best-in-class practices in the area of strategic account management, for our ‘customer-centric approach and innovation.’

Putting innovation into practice

Implementing our new approach wasn’t only a matter of changing mindsets. We also had to ensure we had the right foundation in place – literally, to allow us to put innovation into practice. We already had an Innovation Center established near our global headquarters in Bonn, Germany but after seven years it needed an overhaul and it also no longer reflected our innovation philosophy. Therefore we fully committed ourselves to further developing a stronger link to our customers by completely rebuilding the Center, which will reopen in May 2015 with a completely new look.

Additionally we decided to open a second Innovation Center in Singapore to better accommodate our Asia-Pacific based customers, which is scheduled to open its doors in December 2015. Our global state-of –the-art Innovation Centers will serve as our main platform to engage with our customers, in an environment where they can discover and experience the latest trends and innovative logistics solutions, and furthermore connect with subject-matter experts from our industry. We expect that these creative and inspirational surroundings will enable us to dive even more deeply into the challenges of our customers in DHL-led workshops. Each customer visit helps both sides to generate ideas to help resolve immediate concerns, while also strategically preparing the customer for the future.

 

Adding customer value with thought leadership

To further embed innovation into our DNA, the DHL CSI team launched a new and structured Trend Research team that focuses on insight generation, new concept development and prototyping.

The team leverages the industry expertise of our customers and global partner network, including institutes such as Fraunhofer and MIT, in order to jointly produce their annually updated flagship publication – the Logistics Trend Radar. This dynamic tool identifies and assesses the impact of social, business and technology trends in the logistics industry and acts as the basis for all trend research projects.

The DHL CSI trend research team also publishes multiple deep-dive logistics Trend Reports. Recent reports include augmented reality, big data, low-cost sensor technology and autonomous logistics. These publications examine trend developments and emerging best practices, identify potential sector-specific applications, and consider logistics implications.

To further inspire customers and position the organization as a thought leader on innovation, the Trend Research team actively involves customers and industry partners in developing ‘logistics use cases’ through prototyping and proof-of-concept analysis. This process provides an ideal starting point for new solution development, led by DPDHL Group business divisions. A typical outcome is an enrichment of the solution and service portfolio.

One good example is our latest project on augmented reality in logistics, during which the team worked closely together with our customer, Ricoh, and DHL Supply Chain to jointly test the feasibility of using smart glasses in warehousing operations. We developed a prototype for ‘vision picking’ and were one of the first to successfully test and share the results of such pilots within our industry. This prototype will be further developed and also showcased at our Innovation Centers for our customers to experience.

Another example of a trend turned into an innovative new solution is our risk management tool ‘Resilience360’ which brought ‘Big Data’ to life at DHL. Resilience360 helps our customers to better deal with real-time and future challenges in increasingly complex global supply chains. The tool combines internal and external data sources to monitor different events along key trade lanes and operations in order to identify potential risks. Analytics are applied to match events to a customer’s supply chain which will then trigger mitigation strategies that minimize the impact on their supply chains.

Reaping the rewards of collaborative innovation with customer partners

As one customer-driven innovation is achieved, it raises the possibility of the next one, and each innovation is likely to have impact today and tomorrow.  Our team has seen first-hand how the learnings from one initiative can be applied to help refine and improve the process for next time.

When the benefits of engaging in this way become apparent, customers typically commit to a long-term innovation journey. And, with a customer-centric approach to innovation, the DHL CSI team is equally committed to this long-term journey with each strategic account. Our innovation partnership model with Cisco is one example of this. What initially began as a workshop on trends turned into a joint deep dive into the trend of the Internet of Things (IoT). DHL and Cisco are working together to identify and evaluate the implications and use cases of IoT in logistics and the results will be published in a report in April 2015. These use cases will then pave the way for further discussions on joint-innovation activities.

This customer-driven approach to innovation has already created many great opportunities for DHL CSI to strategically engage with customers, and involve subject-matter experts from relevant DPDHL business divisions, industry partners, and research institutions. Looking ahead, the DHL CSI team is committed to further refine, deepen and sharpen innovation initiatives to amplify impact.

Published: April 2015