Case Study: How DHL Intends to Deliver

by Knowledge@SMU, 08 July 2011

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topics:
Management

tags:
cost cutting cost effectiveness DHL employee engagement three pillars for growth

Compared with other industries like finance, banking and information technology, the logistics industry is decidedly less glamorous – but for all the businesses in the know, no less critical.

Numerous companies work behind the scenes, moving materials, goods and finished products, accurately, quickly, from Point A to Point B. A couple of names come to mind, either due to clever marketing or sheer unmistakable size. One prominent brand and industry player is, without a doubt, DHL.

DHL, together with the mail business of Germany, forms Deutsche Post DHL, a global logistics giant with revenues of more than €51 billion in 2010. With some 470,000 people on the payroll in more than 220 territories, the company ships to 120,000 destinations worldwide.

Its clientele comprises key players across different industries, including Fortune 500 companies like Caterpillar, Merck, Shell, Baxter, BMW and many more.

To ensure its continued success as the logistics company for the world, company CEO Frank Appel unveiled, in 2009, a ‘Strategy 2015’ plan. What does this strategy entail and how will it be executed? Sam Ang, CEO Southeast Asia, DHL Global Forwarding/Freight, threw a few hints at a CEO talk organised by Singapore Management University’s Wee Kim Wee Centre.

Ang, who has some three decades of experience in this industry, framed his talk around DHL’s three pillars for growth: being an investment of choice, provider of choice and employer of choice. To the company, each pillar is equally important and relies on the other two for success.

DHL’s bottom line pillars of corporate strength

Investment of choice

As with other businesses, DHL grapples with the perennial issues like return on investment, yield for customers and other value-added services. Questions like “How do we do more with less?” and “How do we do even more with even less?” are explored constantly. As the product life cycle is now shorter than ever before, “it is essential to increase productivity so that the same resources can generate more business,” said Ang.

To be sure, it is easy to boost profits by cutting costs. But such obvious “growth” tactics are, according to Ang, akin to “plucking the low-hanging fruit when things are down.”

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