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A Shared Journey: Customer-Centric Innovation

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9/7/2017

Huawei and DHL will collaborate on innovation projects focusing on cellular-based Internet of Things technology, which can connect large volumes of devices across long distances with minimal power consumption. The greater connectivity will deliver a more integrated logistics value chain by providing critical data and visibility into warehousing operations, freight transportation, and last-mile delivery.

Matthias Heutger Senior Vice President, DHL Customer Solutions & Innovation
Background

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 the specialty within the Customer Solutions & Innovation (CSI) organization at DHL where they provide 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 DHL customers to develop innovative industry-tailored solutions.

Challenges

‘Innovation’ is another term that seems simple at first glance, but as DHL refined their innovation efforts over several years, they 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 DHL needed to closely analyze each customer’s needs to satisfy the full range of innovation demands.

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

Putting Innovation into Practice

Implementing DHL’s new approach wasn’t only a matter of changing mindsets. DHL also had to ensure they had the right foundation in place — literally, to allow them to put innovation into practice. DHL already has an Innovation Center established near their global headquarters in Bonn, Germany, but, after seven years, it needed an overhaul and it also no longer reflected their innovation philosophy. Therefore, DHL was fully committed to further developing a stronger link to their customers by completely rebuilding the Center, which had reopened in 2015 with a completely new look and a new customer-centric approach.

Additionally, DHL decided to open a second Innovation Center in Singapore to better accommodate the Asia-Pacific-based customers, which opened later that year in December 2015. Building upon that success, DHL is now preparing the third addition to the network and will open an Americas Innovation Center close to Chicago, Illinois, in the USA in 2018. The global state-of-the-art Innovation Centers serve as the nucleus to engage with 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 the industry and beyond. These creative and inspirational surroundings enable DHL to dive even more deeply into the challenges of their 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.

Solution

Adding Customer Value with Thought Leadership

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

The team leverages the industry expertise of customers and a 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 trend research team also publishes multiple deep-dive Trend Reports. Recent reports include The Sharing Economy, Omni-Channel Logistics, Robotics, and 3D Printing. 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 Deutsche Post DHL or DPDHL Group business divisions. A typical outcome is an enrichment of the solution and service portfolio.

One good example is DHL’s latest project in the area of robotics and automation, in which the team worked closely together with a customer Wärtsilä to jointly test the potential of using self-driving robots from ‘Fetch Robotics’ in order to streamline warehousing operations. DHL planned the proof-of-concept closely with the customer and deployed the prototype directly in their warehouse. The first pilot showed good results, and DHL will continue to explore the applicability of this and other robotics technologies in various types of operations.

Another example of a trend turned into an innovative new solution is DHL’s risk management solution ‘Resilience360’ which brought ‘Big Data’ to life at DHL. Resilience360 helps 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.

Benefits

Gaining the Rewards of Collaborative Innovation with Customers and Partners

Once 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. DHL’s 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.

DHL’s innovation partnership with Huawei is one example of this. In February 2017, DHL Supply Chain and Huawei signed a Memorandum Of Understanding (MOU), to develop a range of supply chain solutions for customers using industrial-grade Internet of Things (IoT) hardware and infrastructure. Huawei and DHL will collaborate on innovation projects focusing on cellular-based Internet of Things technology, which can connect large volumes of devices across long distances with minimal power consumption. The greater connectivity will deliver a more integrated logistics value chain by providing critical data and visibility into warehousing operations, freight transportation, and last-mile delivery.

This customer-driven approach to innovation has already created many great opportunities for DHL 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.

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