Digitalisation to facilitate logistics, the backbone of trade

According to managing director of DHL Express in Malaysia & Brunei, Julian Neo, their recent announcement to focus on their core business and digitalisation is absolutely right, given the current situation caused by the coronavirus.

The following are his other responses during an email interview with Enterprise IT News.

EITN: What might be the new normal of logistics that DHL is anticipating?

Julian: While several countries have since reopened their economies, trade lane closures, reduced cargo availability, and increased border processing times continue to be prevalent issues across the logistics industry. Businesses will definitely start to think more carefully about their supply chain, and how they can make it more resilient.

For example, by spreading production across several regions instead of having just one factory in one country, or they may take more lead times for inventory. In general, a multi-pronged manufacturing site strategy is a practical and rational supply chain approach as it spreads risks and sidesteps the potential pitfalls of supply chain failures and uncertainties if all your eggs are in one basket so to speak. Trade will play an important role in the recovery once this is all over, and the logistics sector as the backbone of that would be crucial in ensuring that the world keeps moving.

Automation will claim a larger part of traditionally people-heavy roles. Non-customer facing tasks, for example sorting and warehousing, are increasingly reallocated to controlled and programmable robotic systems as well as artificial intelligence. That being said, technologies deployed at DHL are never meant as a replacement but rather a complement to our employees.

The aim is to ease the workload of our workforce in order to free them up for less monotonous and manual tasks.Knowledge, experience, and instinct cannot be replaced at the helm of major decisions. The prolonged period of restricted living conditions has further skewed consumer behaviour towards e-commerce compared to brick-and-mortar businesses. The greater demand for orders and speed may soon eclipse the capability of online retailers, presenting an opportunity for logistics providers to include fulfilment in their portfolio. We could also see higher concentration of logistics activity catering to pharmaceuticals, FMCGs, non-perishable foodstuffs, and other sectors that have remained relatively profitable throughout the crisis.

EITN: How is DHL adjusting to this with digitalisation? What is your roadmap for the next 3 to 5 years?

Julian: Digitalisation has always been one of the top priorities of our business. In fact, our parent company, Deutsche Post DHL Group, last year committed roughly 2 billion euros until 2025to step up transformational initiatives designed to enhance customer and employee experience as well as improve operational performance across all divisions. Efforts are already underway to comprehensively modernise our IT systems, integrate new capabilities, and offer staff targeted training. Global Centres of Excellence are being established to centrally develop key technologies like data analytics, Internet of Things, and autonomous vehicles for logistics use.

Here in Malaysia, the COVID-19 outbreak and subsequent Movement Control Order have accelerated our own digitalisation journey. Where previously a signature would be needed, we have implemented contactless pickup and delivery to mitigate infection risk. We also successfully rolled out our WhatsApp service, DHLontheGo, which allows shipment booking, tracking, and enquiry all through the messaging app. These have seen a warm welcome among our clientele, and we see them continue to be in demand well beyond the crisis.

We have also deployed a new system called the Advanced Quality Control Center (AQCC), which utilises the latest technologies in artificial intelligence, big data referencing and routing, as well as automated systems. AQCC provides us with the capability to monitor in real-time 100-percent of our shipments and movements in a highly efficient manner. Robotic Process Automation (RPA) has also helped us to streamline vital processes, automate time-consuming repetitive tasks, and helped our teams become more productive.

EITN: What are your opinions/thought leadership ideas and best practices for the rest of the industry?

Julian: The current situation shows that the recently announced Group and Express Strategy 2025 by focusing on our core business and digitalisation is absolutely right. It is equally important to invest in our greatest asset – our people – because with good talent and a happy workforce, we create a virtuous cycle of satisfied customers and a profitable network. Our frontline employees throughout the world have really made a herculean effort to come into work, keep our operations running and ensure that our customers’ shipments are moving in a very challenging environment. This is so important in maintaining the flow of supplies and goods in communities, and also in supporting the continuity of trade activities for businesses. It is impressive that our employees are showing more commitment than ever in the current climate.

COVID-19 has also underscored the business continuity mandate. As a company with a global presence, pandemic scenarios are an integral part of our continuous risk assessment. The Group as a whole adheres to a holistic management process that enables each division to ensure the best possible operational performance. The safety of both employees and customers occupies top priority, with a task force on hand that monitors the situation daily, coordinates with the relevant authorities, and disseminates information across all levels. In overseeing our capacity and maintaining our trademark speed of service, the volatility of trade is part and parcel of our day-to-day analysis and contingency planning. This safeguards our preparedness for peaks and slumps in the different seasons of the changing market, including during this public health crisis. Now is the time to renew operational systems for the better in terms of effectiveness, efficiency, resilience, and responsibility.

EITN: Can you comment about delivery services which smaller players are starting to offer i.e. Grab, Lalamove, etc.?

Julian: DHL Express specialises in inbound and outbound international express shipping, for instance next-day delivery to major cities in Asia and Europe. That said, the entrance of the aforementioned players does not necessarily crowd the logistics space as the sector serves distinct market segments that may be mutually exclusive of others. The constantly changing landscape of commerce demonstrates the untapped potential still available, as new verticals emerge and old ones evolve.

EITN: During the lockdown, when a majority of the population had to stay home, there was a lot of reliance on delivery services for not just food, but also packages and shopping to friends and family. In Malaysia at least, there was no sign of DHL playing a part in offering these services. Do you have any comments/observations about this? How do you foresee this trend panning out?

Julian: As mentioned above, DHL Express specialises in B2B and B2C international express shipments and are not involved in the delivery of food and packages in the C2C space. On-demand delivery has long been a staple of our services in Malaysia, allowing customers the choice of date and time for both pick-up and delivery. We have also brought the power of shipping to the smartphones of Malaysians with the nationwide launch of DHLontheGo. Hosted entirely on WhatsApp, it enables mobile capabilities for our most popular enquiries, communicated in real time via instant chat. At just the send of a message, customers can receive shipping estimates, schedule pickups, complete secured payments, and track deliveries to anywhere across the country as well as DHL Express’ network of more than 220 territories globally.