Kathy Gibson at Huawei Connect in Shanghai – Industrial companies, with an investment in legacy infrastructure, face massive challenges in the era of digitalisation. DHL is bucking the trend and leading in innovation.
“The logistics industry is 1 000 years old, and has seen many changes,” says Dr Markus Vos, CIO of DHL. “But this industry is ripe for a bigger change now — and the venture capitalists agree.”
Digitalisation is top of mind, and Industry 4.0 is a key buzzword, he adds. “And digitalisation will fundamentally change the way global supply chains work.”
Standardisation, industrialisation and technology advancements like the cloud are driving these changes, Vos adds.
“It used to take weeks, sometimes months to set something up — now it takes a couple of mouse clicks. If we are not quick enough, we will be left behind.”
In fact, half of the Fortune 500 companies in 2000 have already disappeared, he says. “It is Digital Darwinism, and it’s a case of do or die.”
Logistics is an essential part of everyday life, profoundly affecting the food we eat, the clothes we wear, the good we use.
The face of the market is changing too, Vos explains. “Millennials grew up in the digital age. They are connected more than ever; digitalisation is part of their DNA.”
In just a few years of Internet and smartphone availability, so much has changed about the way we live and work. “We really have a lot of information our fingertips; there is a hyperconnected population and plenty of choices.”
Organisations have to change to meets changing human needs, says Vos, and DHL is working on changing the way it works and delivers goods around the world.
The company is involved in the whole supply chain, touching all kinds of goods, using all transport modes.
“But did you know we are a car manufacturer as well?” Vos asks. DHL has developed a Smart Scooter, a carbon-free delivery vehicle that it uses in its own operations and sell to partners.
Knowing what to invest in is the challenge, though, so DHL follows business and social trends to stay on top of what is happening.
Vos outlines the trends DHL believes will change logistics dramatically.
Robotics takes a lot of the physical work out of strenuous tasks out of warehouse work. This lets workers focus on accuracy and speed rather than carrying around boxes. The Thouzer, an automated hand cart that follows the user around, is smart so it is easy to work with and has had a huge impact on productivity.
Augmented reality is another technology that could bear fruit, Vos says. “We are using AR glasses for visual picking. It does away with paper-based picking and is both quick and accurate. We can make users mush more effective just hours instead of weeks. And the error rates are reduced as well.”
Drones are having a major impact on the logistics world. DHL is using drones to fly parcels in the mountainous areas of Switzerland, and expects to scale the application of the technology soon. The company is also starting to use drones for counting inventory in the warehouse.
Blockchain, typically associated with finance, also have applications in the logistics world. “It can be used especially around the serialisation of life science products,” Vos says. “Users want to know they always have the right product, that it has been dealt with properly through the whole supply chain. It can be used for many things, including the combatting of food fraud.”
DHL has recently partnered with Huawei to solve an age-old problem in the logistics industry: the delivery of motor cars once they have rolled off the manufacturing line.
Working with IoT, DHL has uses IoT sensors at dock doors, to alert drivers via an app as soon as cars are available at a particular door.
This has resulted in a 50% improvement in productivity, and radically improved the whole manufacturing process.
“By 2020, the estimates say we will have more than 50-billion connected devices,” Vos says. “Everything that we do today, every day, means a significant change for the marketplace. We have the technology, the brains and the need for innovation. Importantly, we have the right ecosystems.
“Logistics, an old industry, is a rally exciting place that touches everyone, and we have great opportunities to innovate.”
Access to knowledge and resources makes it easier to innovate today than ever before, says Yan Lida, president of the Huawei Enterprise Business Group.
He likens the voyages of discovery to what is happening in the world today : then we discovered new lands; today, the merging of the physical and virtual worlds is changing the way we live and work.
“Even a couple of years ago we were asking if we should transform digitally,” he says. “Today, it is about how we are going to do it.”
Lida cites the example of Langgang District in Shenzhen — an area that was a small town just a few years ago and is now a major city.
The city now offers all government services online, as part of a smart city initiative that integrates all government departments.
This system uses three platforms, for applications, big data and ICT enablement running over an urban cloud that links urban communication with an IoT network.
“This is just one of many projects we have conducted over the last few years,” Lida says. “Through partnerships in many industries we have built some successful systems.”
Lida stresses that digitalisation has to be a three-side effort involving customers, ICT vendors and app developers.
Importantly, digitalisation is about transforming the business and the processes, he adds. And the solution has to be industry-specific.
“Digitalisation has to be based on a platform that is able to connect the physical world with the digital one. It is about all things sensing, ,all things connected, all things intelligent.”
The right platform should create infinite possibilities for partners, giving them opportunities to develop value-add solutions.
“Huawei wants to become the most trusted partner of our customers,” Lida says. “We do not want to monetise data, but become the best digital partner.
“Innovation at Huawei focuses on business success, aiming at creating value for our customers.”
As part of its efforts to enable solutions, Huawei has committed to continue its investment in OpenLabs, with $20-million earmarked for these innovation projects.
Offering a full-stack ICT infrastructure, Lida believes that Huawei is able to offer a platform on which partners can build value-added solutions.
“We emphasise sharing and want to foster ecosystem growth,” Lida says. “We have a development plan to do this.”
The plan is for more than 1 200 partners to be signed up within the next few years, with more than 100 of them with revenue in excess of $100-million.