Hard won lessons replicated

WHY RE-INVENT the wheel? One of the benefits of 3PLs has always been gaining the quick benefit of prior expertise. Logistics service providers such as DHL can help with this, with the broad range of clients they have worked with, across a myriad of sectors, they can accrue a good feel for what works best.

Except it isn’t about feeling anymore.

What’s new is the role of IT in taking this traditional strength of the 3PL to a new level. In years gone by, the lessons learned by 3PLs would be heavily dependent on the teams that had managed innovative implementations. Of course these are still crucial, but with IT tools that can help map out best practice, it’s easier to create templates that can be accessed and implemented by anyone.

Andrew explains: “The use of data and IT in logistics is about moving away from gut feel to informed, fact-based decisions. They help us to define and understand the true value of the solutions we are delivering. Standardisation and best practice replication are really key in this.”

DHL seeks to progress as far as possible towards pre-determined outcomes, and use its systems and data in a very standardised manner, leveraging the size and scale of the organisation.

Andrew continues: “Companies within industry sectors and sub-sectors operate very much in the same way. For example, the medical device supply chain has characteristics that are unique to the sector. You need to understand the serial numbers of what you are dealing with, track them, especially as these products are often life-saving.

“We’ve proven that through the pandemic, understanding the transit of vaccines, at minus 80 degrees, travelling across long distances, across deserts. The data around the integrity of the product is crucial.

“We achieved this through an IoT platform, based on Microsoft Azure. Now we’ve done it, we can leverage that expertise in many other use cases.”

While standardisation is a strategic difference maker for DHL, it’s important not to take it too far.

“We try to be innovative in how we standardise,” says Andrew.

“We find the best solution for a particular warehouse in a particular sector with particular characteristics, and once we’ve proven that, it’s logical to replicate that for a similar business. It starts as a fully validated solution, including business processes, training materials, cost models, this saves time and money. But we bring a continuous improvement mindset to it.

“It provides a baseline, not an endpoint. Maybe you get an 85% fit up-front, and then you ask ‘what is unique here?’ Then you build that on top, and what you’re doing is you’re creating another iteration of the standard.”

DHL uses the Merlin tool for business process mapping to create a sector best-practice template, which DHL can tweak, as it works with a customer to ascertain the extent to which it meets their needs. In the future, DHL aims to develop this to extend into automated WMS configuration when onboarding clients.

“Depending on the size of the operation and its complexity, it will take some time to adjust,” Andrew explains.

“Of course, if you start building a solution for a large retailer from scratch, with major automation solutions involved, it takes a lot of time and effort. If you want to do orchestration it adds complexity, and timelines have to adjust to complexity.

“That said, we can take clients in some sectors into an environment, in a week or two, at very low cost, in a very standard manner.”

One example is DHL’s IDEA plug and play software solution, which is used to optimise e-fulfillment. The software uses algorithmic analysis and data science to optimise picking routes and warehouse staff allocation.

“This is replicable across any WMS, and we can take this into any pick cart type activities we operate with a great deal of confidence about what we can achieve.”

Robotics

For AMRs, DHL created a Robotics Hub, primarily so it could manage bots from multiple vendors, again in a way that was controlled and easily replicable from customer to customer.

Andrew says: “This has been built with Blueyonder, sitting on a Microsoft Azure platform, and allows us to manage a multi-user facility with different robotic solutions as a complete resource pool.”

Robots come with their own software and management tools but this platform allows DHL to approach them all in the same way, learn how best to use them, and replicate the learnings.

Andrew says: “AMRs are relatively new to the warehouse, but we don’t find integrating them any more difficult to manage than the integration of ASRS or other automated solutions.”

Fact-based decisions based on analysing large, robust datasets underpin this approach.

“Big data is crucial for this. For example, in Sydney we could predict when eComm volumes would spike. We could see when the flu medication was increasing, and knew people would be at home sick, and ordering online.”

In the wake of the pandemic, big data also helped DHL map out supply chains and understand critical points, providing alternative sources, in order to maximise resilience.

The mix of IoT and software analysis is equally useful for monitoring the progress of DHL and its clients towards better environmental performance.

Andrew explains: “We are following science-based targets, and understanding the details of, for example, transport orders, what type of vehicle was used, fuel type, help us map out carbon imprint. This info is now built into the TMS.

The customer sets the priorities.

Andrew continues: “Many carbon-cutting solutions are not cheaper, so it comes down to engagement with the customer. We can offer deliveries that are either most carbon-efficient or least cost.”

Talent

One challenge is finding the right people to drive a modern, tech-focused logistics company.

“Post-Brexit, it is notable how we have talent across Europe with the skills we need for UK projects but it has become difficult to get the guys in. There is a shortage and we see that in demand and salaries.

“We are leaning on contractors while focusing on building up apprenticeships and graduate programmes.”

It’s not just raw numbers that are the issue.

“Many of the IT people in the market are quite generic. If you look at the IT at DHL it’s very configured to what we do. When we get someone in, it will take 6-12 months to get them aligned to DHL’s way of thinking. It’s far more preferable to train people up.”

Historically, logistics has not been seen as an interesting industry to join, but that is changing and DHL has been driving the change in perception, and getting more diverse graduates coming through.

Andrew concludes: “We hope people see the global nature of DHL. I’ve worked all over the world, and we offer a great opportunity for graduates to be a real global citizen and work in a rich variety of places and applications.”

For more information, visit www.dhl.com

“The use of data and IT in logistics is about moving away from gut feel to informed, fact-based decisions. Standardisation and best practice replication are really key in this.”

“We hope people see the global nature of DHL. I’ve worked all over the world, and we offer a great opportunity for graduates to be a real global citizen and work in a rich variety of places and applications.”