Tomorrow’s Future

According to DHL’s head of Business Incubation, Jon Bumstead, the biggest challenge the logistics industry currently faces is dealing with a multi-polar world.

“There’s recession in the developed countries and high growth in developing countries,” he explains.

“Coming to grips with the juxtaposition of this and the implications for the supply chain is one of the most demanding issues at the moment.”

“As the supply chain becomes ever more complex, I believe the real priority for us will be tackling the wider issues such as carbon emissions, security and water resources,” Bumstead predicts.

“Cost and efficiency will not be the only influencers in our business, we’ll need to start taking in a much larger holistic view than we do currently.”

“More factors mean increasing complexity and if we don’t start thinking about these issues now, we won’t be prepared to deal with them in the future when the symptoms become manifest.”

Jon Bumstead says his role within DHL is to look after business incubation— including the management of innovation within the company and providing new and improved services for customers.

“I head up a small team who engage with the different areas of our business, such as DHL Exel Supply Chain, DHL Global Forwarding and DHL Freight,” Bumstead says.

“We’re looking out for tomorrow’s future by focusing on several strategic themes. Firstly, we aim to attract, retain and develop talent globally — to deliver the best, we need to employ the best.”

“It’s also essential for DHL to intensify its customer focus. We need to make sure we understand and then exceed our customers’ expectations.”

“Thirdly, we’re looking to provide consistent service globally — being a name you can trust in a place you may not.”

“We always strive to extend our capabilities and to relentlessly improve efficiency — constantly looking at ways we can do more, better,” he says.

“Finally, DHL promotes proactive social responsibility. We consistently work at being a responsible company and ensuring that we look after our employees, our environment and our customers.”

Jon Bumstead says one of his division’s important innovations is 4C procurement — a joint partnership between DHL and 4C procurement experts.

“DHL was the first logistics company to realise the importance of procurement and its link to the supply chain which led to our successful partnership with procurement specialists, 4C,” he maintains.

“Established in 2005, the partnership was borne out of our desire to add an extra dimension to what we can offer customers.”

“We needed to find new value-creating ideas around outsourcing, things that weren’t so far away from what we did already.”

The recent launch of DHL Neutral Services, a carbon abatement consultancy with the remit to work across all DHL divisions, is another first in the industry.

“While we’re not the first company to think about carbon emissions, DHL was the first to take a broader and integrated view of how carbon reduction could be applied to the supply chain and, most importantly, be measured,” Bumstead says.

In addition, he points to the Sensor tag, a third innovation, also recently launched, which monitors and controls the temperature of pharmaceutical products.

“The temperature control sensor tag, RFID for the pharmaceutical sector, is not a brand new piece of technology either,” he says, “but the application of it within our business, is.”

“It’s not just using the technology to identify a product; it’s using RFID to intelligently measure the temperature of the product to guarantee its integrity throughout its entire supply chain journey.”

Bumstead believes all of these areas will help improve the efficiency of the supply chain, impacting positively on cost and energy usage as well as providing additional services to customers which can add intrinsic value to their supply chains.

“For example, DHL Neutral Services can work with companies to assess how they can best manage, minimise and reduce their carbon emissions” he says.

“Through this process they examine energy consumption and try to reduce it, or make the use of energy more efficient.”

“If a company uses less energy, it costs less money, providing benefit to the bottom line as well as to the environment.”

Procurement is a way of providing new value streams and can play an important role in how products are moved through the supply chain.

“Where you source items can have an impact on how, when and where you transport them, so our partnership with 4C can provide a global view — and solution,” Bumstead enthuses.

Without doubt, one of DHL’s great strengths is the formation of beneficial long term relationships.

TradeTeam a joint venture between Coors and DHL Exel Supply Chain is an example.

A DHL company, Tradeteam specialises in the distribution of drinks to pubs across the UK.

“The catalyst was a change of legislation in 1989 which removed much of the brewing and pub industry’s vertical integration and led to a rapid restructure of the UK industry,” Bumstead recalls.

“The twelve-year relationship speaks for itself. Over this time, TradeTeam has increased its efficiency, driven down its costs and provided valuable revenue for both Coors and DHL.”

As well as turning a cost centre into a profit-making company, TradeTeam offers additional value to customers, such as more flexible supply and distribution arrangements which lead to a competitive advantage, consolidation of deliveries from different suppliers into one, and an independent route to market.

“All of these innovations and partnerships stand out because they are not just theory,” Bumstead says.

“We are putting them into practice and delivering the outcome, not just the input. That’s where the true value lies.”