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eBusiness Standards in Logistics
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International Conference on Advancing Public-Private Partnerships for e-Business Standards
Harry StroverGeneva, September 18-19th 2008
Characteristics, Trends & Future Shape of the Logistics Environment Interaction with Standards Work
2 DHL | September 2008 Page
Outline
1. DHL Company Overview
2. Logistics Environment
• Characteristics
• Trends
• Future Shape
3. e-Business Standards at DHL
• Our expectations
• Relationships with Standards Organizations
• e-Business with our Customers
• Internal e-Business
• Conclusion
3 DHL | September 2008 Page
DHL Overview
Largest Courier and Express provider in Europe, Asia Pacific and Middle East /Africa
Top 3 worldwide
8 million customers 36 Hubs and 4,700 bases 350 aircraft, 72,000 vehicles
World’s No.1 in Warehousing, Distribution & Contract Logistics
59 countries and territories 2,500 logistics centers, warehouses,
terminals 23million m2 storage capacity
World’s No.1 in Air and Ocean Freight 150 countries and territories 813 terminals & warehouses 4.4million t Air; 2.8miliion TEU Ocean
Europe’s No. 2 in Road Freight 30 countries and territories 160 terminals 2million full truck load movements
Largest worldwide network for Mail Distribution Cross-border solutions for business
mail, publication distribution, direct marketing and merchandise
DHL’s parent company Deutsche Post World Net is the world’s leading logistics group. With revenues of more than €63 billion and 500,000 employees in more than 220 countries and territories it is one of the biggest employers worldwide.
4 DHL | September 2008 Page
Outline
1. DHL Company Overview
2. Logistics Environment
• Characteristics
• Trends
• Future Shape
3. e-Business Standards at DHL
• Our expectations
• Relationships with Standards Organizations
• e-Business with our Customers
• Internal e-Business
• Conclusion
5 DHL | September 2008 Page
CharacteristicsSo what is Logistics?
The Art or Science of getting:-
• The right thing and the right person
• In the right quantity
• In the right place
• At the right time
• At the right quality
• Every time
• At the optimal cost
• Doing least harm to the world
and its not:-
• The next best thing
• To the nearest economic delivery quantity
• To the storage point, not the usage point
• A week earlier, to be sure
• Requiring inbound inspection
• 95% of the time
• At a cost we can get away with
• Paying lip service to the environment
6 DHL | September 2008 Page
• Strategic multi-functional partnerships• Global, door-to-door coverage• Bring integrated IT solutions ready to use• Continuous innovation (cost & service)• Risk/Gain share• Reduced need for capital
CharacteristicsEvolving Business Models in Logistics Outsourcing
Strategy
Traditional Typical Leading Visionary
BusinessStrategy
Core Logistics Competence
Customer
CustomerCo
re
SupplyChain
Orchestrator Supply Chain
Manager
Customer
• Single function transactional relationship• Local / regional reach• Physical asset heavy, process execution• Cost plus management fee• Fixed upfront cost to change
BusinessProcesses
Warehousing
FreightTransport
ValueAddedServices
Sourcing
Production
Coordi-nation
Execution
LLP 4PL
Integrated LogisticsProvider
Freight Trans-
port
Ware-hou sing
Value Added Svcs.
Ware-hou sing
Value Added Svcs.
Freight Trans-
port
Ware-hou sing
Freight Trans-port
3PL 3PL 3PL
Lo
gis
tic
s
Exp ress
CourierCour
ier
Engineering
Distribution
Planning Customer
Co
mp
ete
nce
Functional ProcessesCourier
7 DHL | September 2008 Page
TrendsFast & Fundamental Global Change is upon us
Globalization moves to a Multi-Polar world
Technology led complexity accelerates
After a decade, inflation is back
The Smarter are getting Greener
Terrorism has created a new cost pressure
Who will win the War for Talent ?
• Indian population grows as fast in 1 week as the EU population does in 1 year • The Chinese middle class is consuming more and more of what it makes • Major new hubs are being built around the world (e.g Dubai)
• Much of the world is now on-line, mobile commerce is developing quickly• Humble delivery equipment (containers, totes, hangers) become intelligent• Increasing dependence on automation
• Rising oil prices slowing the growth in global trade• Globally food prices and inflation rates rising (China12%, Vietnam 25%)• Marked shift from Air to Ocean in Technology and Healthcare companies
• Container scanning will slow ports down, compliance will tie up management• Security issues can cost hundreds of dollars per container
• Carbon: Sustained investment hampered by short term who pays argument• Energy costs steeply rising; Efficiency/carbon abatement actions needed • Water supply is becoming the next sustainability issue for some
• Imbalance of “white-collar” talent is limiting growth in the developing world• Wal-mart report “Blue-collar” labour shortage in the US as a growing issue • “Employers of choice” make training a priority
..these are opportunities if we grasp them, real threats if we do not
8 DHL | September 2008 Page
“The Wider Supply Chain”
(21st Century focus)
Trends..with significant impact on supply chain
“The Immediate Supply Chain”
(1980/90s focus)
Local Suppliers
Customers/ RetailersProducers
Reverse Flow
Logistics
GlobalSupply /Sourcing
Customers/ ConsumersAfter Market
Being serious about the Environment
Disruptive Technology Waves
Security & Risk Management
Ever increasing Transport Costs
International Supply Chain Management
After Market Management
9 DHL | September 2008 Page
Future Shape of the Logistics Environment Embracing the possibilities of information and technology
Sophisticated customer solutions
• Deeper integration with other enterprises means more and more information exchange
• Increasingly diverse and complex processes mean e-Business capabilities are becoming more sophisticated and expanding to meet needs across multiple industriesand disciplines
Capitalizing upon innovation
Smart Sensors
Remote vehicle intelligence
Solar Powered Warehouses
Parcel Robots
E-Paper
Electric Vehicles
10 DHL | September 2008 Page
Outline
1. DHL Company Overview
2. Logistics Environment
• Characteristics
• Trends
• Future Shape
3. e-Business Standards at DHL
• Our expectations
• Relationships with Standards Organizations
• e-Business with our Customers
• Internal e-Business
• Conclusion
11 DHL | September 2008 Page
e-Business Standards at DHL Our expectations
Operate a profitable global business• Use e-Business to help standardize business processes and encourage re-use• Reduce operational overheads through process simplification and standardization• Enable advanced business models that provide global coverage and consistency
Ability to deliver consistent, effective and innovative solutions• Use e-Business to create a competitive edge• Establish global standards-based services leading to robust, replicable customer
solutions• Reduce implementation & running costs; increase margins and benefits to the
customer.
Understand & Manage our Business Better• More in depth visibility of the information supply chain, better control of the
process, improved business performance, and reduced organizational cost• Making change a part of the process – agility is key to a successful business• Allow operational teams more control of the supply chain, allowing in-flight
changes and decisions to be made easily, reducing the risk of failure
12 DHL | September 2008 Page
e-Business Standards at DHL Relationships with Standards Organizations
• DHL is proactively engaged in the use and definition of e-Business standards (e.g. UN EDIFACT, RosettaNet, OAG, GS1, IATA, ANSI)
• Standards organizations provide a supporting community• Effective collaboration between standards organizations is critical
GENERIC
X12
VICSGENERIC
OAGi
ebXML
CHEMICAL
CIDX
Petro-chemPIDX
Petro-chemJCPI/CEDI
AUTOMOTIVE
JAIF
JAMA/JAPIA
Odette
HI-TECH
ROSETTANET
CONSUMER
GSI
PAPER/FOREST
PAPINET
VDA Galia
AIAG
GENERIC OASIS
RETAIL/PHARMA
GS1
STAR
EANcom
Tradacoms
AAIA
SIG
GUSIWoodx
HEALTHCARE
HL7
AIRCARGO
IATA
CargoImp
CargoFACT
GENERIC
UN/CEFACT
HRXML
13 DHL | September 2008 Page
DH
Le-Business Standards at DHL On-Demand Customer Requirements
Cus
tom
ers
/ P
art
ners
Our customers and other business partners require:
• Operational agility
• Continuous business process change
• Scale from small to large operations
• Scale from low to high volumes
• DHL to use (their) standards.
Complex
14 DHL | September 2008 Page
DHL’s Customer Integration Platform(s)RosettaNet EDIFACT IDOCs OAGi GS1 Custom
Still unnecessarily
complex
DH
Le-Business Standards at DHL DHL’s customers use many different standards
Cus
tom
ers
/ P
art
ners
• In connecting with thousands of e-Business customers, we use many different standards.
• Standards provide:
– Familiar “target” for involved parties – common dictionary, syntax and process
– Greater re-use and hence reduced risk for our customers
– Faster deployment of solutions
Over one billion e-Business transactions annually
Approximately 8,000 customers, suppliers, customs authorities, etc.
15 DHL | September 2008 Page
• A common data model will make standards really work for DHL
• Standards provide:
– Good direction for internal e-Business transactions
– Supporting knowledge for business transactions and data models inside the enterprise
– Leverage and ease of implementation with our major IT providers
e-Business Standards at DHL Standardizing e-Business transactions between internal systems
Cus
tom
ers
/ P
art
ners
DH
L
DHL’s Customer Integration Platform(s)RosettaNet EDIFACT IDOCs OAGi GS1 Custom
Common Data Model
DHL Enterprise Internal Integration Platform(s)
Common Data Model
This is DHL’s biggest current e-Business initiative
16 DHL | September 2008 Page
e-Business Standards at DHL Case Studies - Implementing Standards for internal e-Business
Large Healthcare Customer
• Selected RosettaNet as internal e-Business standard
• Not all internal requirements were met by the selected standard
• Made structural and semantic changes to Standard (Bespoked)
• Forked from standard version
Large Consumer Customer
• Selected GS1 as internal e-Business standard
• Not all internal requirements were met by the selected standard
• Made structural and semantic changes to Standard (Bespoked)
• Proposed Changes to GS1 governing body
• Project was delayed considerably
• Created complexity for External Parties
• Risk of forking from standard version
Implementing external standards for internal e-Business is challenging
17 DHL | September 2008 Page
Conclusion DHL uses e-Business standards with our customers
• Standards provide the best way of providing an open, re-usable way of inter-
operating with our customers
• SDOs are a valuable supporting community for our e-Business development
• Using e-Business standards when working with our customers benefits DHL’s
internal operations
18 DHL | September 2008 Page
ConclusionImplementing standards within our organization is challenging
• We have to be selective when implementing standards internally
• e-Business standards do not represent all internal business interactions
• Our strategic software vendors need to participate with us in implementing
standards
• Standards compliance and version alignment is difficult – especially where
the fit is not ideal
– If not managed well, standards limit the agility of the internal solutions
• Many other organizations regard internal e-Business as a key differentiator /
asset
– Not all are willing to share and help develop standards for this purpose
19 DHL | September 2008 Page
Conclusione-Business is much more than data exchange
• Information quality and its associated benefits all require standards to be in
place
• e-Business for DHL is about business process interactions across multiple
enterprises
– Standardizing business processes is our real challenge
20 DHL | September 2008 Page
Thank You!