Deutsche Post DHL has called on its most important asset – its employees – to consolidate its position as the first choice for logistics customers around the globe. Greg Bush reports
Company acquisitions, as well as the objective of cementing its position as market leader, led Deutsche Post DHL to implement a fresh approach to dealing with customers within its various global divisions.
Prior to Deutsche Post acquiring a majority interest in DHL in 2002, the German logistics group had purchased Swiss logistics provider Danzas and AEI (Air Express International) in 1999. The acquisition of British logistics company Exel in 2005 added another culture into the group.
In 2007 Deutsche Post DHL launched a new program – First Choice – to promote customer loyalty by making the logistics group the ‘first choice’ of current and potential customers. A fresh approach meant adopting a new philosophy through the employee ranks of Deutsche Post DHL.
The organisation is of firm belief that keeping employees busy equates to a stable workforce – inactivity breeds boredom and workers will look for greener pastures. In addition, an integral component of the First Choice program is the empowerment of employees.
“Every employee has a voice as much as every customer has a voice,” says DHL Global Forwarding’s Chief Executive Officer, South Asia Pacific, Amadou Diallo.
“We listen to the voice of our customers but we listen as well to our employees and try to get our staff as motivated as possible in order for them to resolve all potential issues that we can have while processing goods.
“That keeps our staff motivated because they have less damages, they have less complaints, and the service level they deliver is higher and then we can grow our business.”
Heading up the First Choice program in the Asia Pacific region is New Zealand-born Jonathon O’Leary, who has the lengthy title of Senior Director, First Choice and Performance Improvement Management. O’Leary has been with DHL for more than 12 years, moving from New Zealand to Dubai and Australia before basing himself in Singapore in 2002.
“We went through a large period of acquisition, from ’97 right through to 2007. So with all these acquisitions you’ve got a lot of processes that are cross-fertilised from different companies and different systems,” O’Leary explains.
“We knew work needed to be done to improve our processes.”
Despite only beginning the first staggered rollouts of First Choice in early 2007, O’Leary believes the group has made exceptional progress from a “push” to a “pull” culture.
“The culture change and the real change management is still ongoing,” he says. “Some people are now really pulling. They’re saying, ‘I’ve got this problem, come on, let’s do it, let’s get together and work on it’.
“Some we still need to push a little bit and say, ‘hey, you’ve got these issues here, we’re coming in and we’re going to use this method and we’re going to help’. So we’re kind of in the halfway along the change.”
An important factor of First Choice is utilising the experience of the employees in their individual roles. O’Leary’s team of regional senior advisors travel to all parts of the Asia Pacific region, interacting with and training workers to the new program. For O’Leary. the scenario is refreshing, especially as he has witnessed life from both sides of the fence.
“I used to work in a warehouse and we were the guys at the bottom of the line getting yelled at – ‘get that freight out the door’,” he recalls.
“Now, no longer is a forklift driver just a forklift driver; he’s somebody helping to do our process better. They know their job and they know what they’re doing. That’s the exciting bit.
“It’s probably the thing I’ve taken most out of these three years is seeing the engagement in these initiatives.”
THE SIX SIGMA MANDATE
The First Choice approach comes via the Six Sigma DMAIC (Define, Measure, Analyse, Improve, Control) methodology and the Lean process. While DMAIC arrived at DHL from technology companies such as GE and Motorola, Lean has its origins in manufacturing.
“We started off with support from external consultants and a lot of these external consultants came from GE and Motorola, so it’s kind of the link we have with them,” O’Leary says. “There are also some key people within our organisation that we have from GE and Motorola as well.”
Motorola is also one of the customers who have responded to DHL’s customer satisfaction survey.
“We’re very open about the initiatives we’re working on,” O’Leary says. “If they say ‘we’ve got a documentation accuracy issue’, say from Shanghai to Brazil, we’ll work on initiatives and we’ll share them with all our documentation because they’re on the same mindset. They’re thinking along the same process lines.”
Thanks to customer feedback, knowing there is an invoicing problem is the easy part. Identifying what area of invoicing has the problem is, O’Leary says, probably one of the biggest learnings they have had during the past three years.
“Initially we tried to save the world in our first wave of initiatives, and now as our internal senior advisors, or [Six Sigma] black belts, have got up to speed we’re a lot better and scoping down and focussing on a size that we can really fix with the resources that we’ve allocated to do that.
“Then we have the key initiatives themselves, and I think the key point here is that frontline staff have been involved again. We want to empower people on the ground to help fix their own problems, we don’t want them to come to work and we have to pop down and tell them what to do.
“These guys know their processes, they know what they’re doing back to back, and we’re really empowering them by helping them, by saying, ‘we want your advice on how to fix this, you’re the guys doing it, let’s all work together to fix it’. So they’re involved, and they’re important on the initiative side.”
O’Leary says Australia, in particular has been quick to embrace First Choice methodology, especially in complaint handling and streamlining invoicing processes.
“We’re doing a lot of customer focus initiatives in Australia and implementations are improving our service quality through the implementation of initiatives that we’ve done,” he says.
“For some specific customers, our clearance documentation has been reduced by three or four days in Sydney; we’ve done initiatives on invoicing timelines in Sydney and Melbourne, and in Brisbane we did an initiative for ocean freight.”
O’Leary says the layout of DHL’s new Melbourne facility (see box item) is an ideal example of improving efficiencies, right down to employee seating arrangements.
“The whole layout of that facility is using one of the First Choice tools. Spaghetti diagrams show where a document comes in, where it goes to, where people need to sit, and how close they are to printers,” he says.
AUSTRALIAN INITIATIVE
According to Amadou Diallo, roughly 85 percent of DHL employees in the Asia Pacific region have undergone First Choice training. He reiterates that Australia in particular has been at the forefront of culture change, pointing to Phil Dean – Sub Regional Advisor at DHL Global Forwarding in Melbourne – as the organisation’s first Six Sigma ‘black belt’.
“We have had a lot of black belts in the meantime across the globe, but he was the first in our organisation,” Diallo says.
“In most of the innovative ideas within the organisation, Australia usually runs faster. And they have been helping the DHL organisation in broadening the tools and services and putting it as a DNA of all the employees world wide.”
Another Australian, Brad Harris, is the General Manager of the DHL Singapore hub, the largest air express hub in Changi Airport. Not far away is DHL’s Healthcare and Life Sciences Hub, which delivers end-to-end supply chain management solutions to companies in the pharmaceutical, hospital and medical equipment sectors.
Diallo, originally from Senegal but now based in Singapore, is also DHL Global Forwarding’s Chief Executive Officer for Angola, as well as being globally responsible for DHL’s Fashion and Apparel Centres. He says it’s not uncommon for DHL executives to have multiple functions.
“We believe people should utilise their resources where they add value to the company and not just be locked into geography,” he says.
He points to Sam Ang, Chief Executive Officer for South East Asia, who is also regionally responsible for DHL’s energy sector across Asia from China down to Papua New Guinea. The new DHL Asia Pacific Oil and Energy Centre of Excellence, located in Changi South, is the largest such centre in the group.
Hermann Ude, CEO of DHL Global Forwarding Freight, says the growing global demand for energy, and the exploration of alternative energy sources, presents key opportunities for logistics companies.
“DHL is well-positioned to develop new approaches and set new benchmarks in the industry,” Ude says.
With Asia as the centre point, DHL is basing its growth across the board on fundamental trends towards the three “triangles of trade”. One triangle links the Middle East and Africa to Asia, another from Latin America to Asia, and lastly within the Asia region itself which also includes Australia. Notably North America and Europe, already boasting a sizeable DHL presence, are not in loop for major expansion.
“To service the Latin American market we have set up a hub in Australia where we concentrate all the goods coming from Asia on an air freight service to get into the Latin American market,” Diallo says.
“This gives us an alternative to flying over Los Angeles or flying across destinations in Europe, because it is a much faster route.
“Australia did not go through a recession and we have been capable of doing our business in a double digit manner.”
Despite DHL’s US origins and Deutsche Post DHL being headquartered in Germany, the organisation’s various global centres have very much a local identity.
“I do not feel like I am working in a German company,” Diallo says. “In Asia I feel like I’m working in an Asian company and the same for the people in Africa, they feel like they’re working in an African company.
“So if you go in Australia, our people in Australia working in DHL don’t feel like they’re working in an American organisation or a German organisation. It’s pretty much an Australian organisation.”
This article was published in the February 2010 edition of SupplyChain Review magazine. Visit our subscibe page, see the Contact Us page or call 136 116 to subscribe.