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Orchestrating innovation right across the organization

Kenny MacIver — February 2017
Businesses need to keep a watchful eye on the fast-emerging digital technologies and new business models that could disrupt their markets, says Markus Voss, CIO and COO of Deutsche Post DHL’s Supply Chain division, while aligning themselves with key partners who can address those opportunities.

As digital transformation has moved to the top of the business agenda, IT leaders in all industries have been tasked with driving technology-led innovation within their organizations — both to exploit new opportunities and to thwart the ambitions of new, nimbler challengers. For more traditional companies, that has encouraged the exploration of some very different innovation models, from acquiring or partnering directly with startups to forming innovation hubs or co-creating with technology partners and customers.

At DHL Supply Chain, CIO and COO Markus Voss constantly scans the market for digital technologies and innovation models that could prove transformational for the business, and allow it to leverage its formidable existing strengths.

“Whenever we investigate innovations and trends, we look at what would be our unfair advantage and try to exploit that to its full extent. So if we have more assets, more people with a certain expertise or more data than anyone else, then we lever that unfair advantage,” says Voss. “Scale is a big factor, as is the speed at which our people can adopt those new technologies.” 
Scanning the radar

DHL assesses the potential of these emerging technologies using a robust process, centered on its Logistics Trend Radar. Updated bi-annually and published on its public website, the radar plots the degree to which any given technology or business trend might significantly impact the logistics sector. Currently sitting within the radar’s five-year horizon line are technologies such as augmented reality, big data, cloud logistics and robotics, with some of the likely impactful business and social trends identified as ‘shareconomy,’ omnichannel and smart energy logistics.

DHL’s Trend Research team deep-dives these trends and together with other DHL divisions, builds proofs of concept which can be scaled up fast for deployment across DHL if a technology proves to be viable and beneficial. But the company rarely does this alone. It typically relies on key technology partners to co-create the solutions and drive them into early adoption, says Voss.

One recent such initiative focused on solving the problem of driver drowsiness. DHL has worked with global ICT company Fujitsu to pilot a wearable device that monitors drivers’ vital signs and reaction levels, and detects when they are showing early signs of fatigue. The earpiece device then alerts both the driver and the relevant DHL control center that the driver needs to rest. “The aim of this technology is to make significant improvements in road safety,” says Voss.

He characterizes such co-creation in distinctly romantic terms. “In the past, early explorers used the constellations to navigate; we have the map and the information to know what is possible and what is not, and work with the right partners [to get there].”
Disruptive models

Those digital initiatives are a response to a new set of market dynamics. As Voss points out, investment in startup businesses who are hoping to ‘Uber-ize’ the logistics sector has soared in recent years.  

“We’ve seen a big inflow of venture capital (VC) into logistics,” he observes. From 2001 to 2013, total worldwide VC funding was running at just over $1 billion dollars per year, he says; by 2015 that number had hit $11.9 billion.

“Before digital, logistics was regarded as a pretty boring industry. Now we’re seeing a quadrupling of the money going into startups each year with a focus on creating new business models for logistics,” he says. “That puts us under pressure to really innovate, to use our brainpower, our data and our assets to further drive the application of many of these new technologies.”

“We’re working heavily with our customers to innovate on the shop floor. At the same time we are looking at where we can co-innovate with startups, add our industry knowledge and create the next wave of products.  And we also invest into joint ventures [with strategic technology partners] where we innovate together.”

The initial spark for such innovation can come from any part of the business — and beyond. “While in many cases the IT community identifies how we can apply a certain technology, in other cases our business colleagues, our customers and our partners are also seeing new things. What happens then is the ideas come back to my organization, we filter them, shape them together with the business and see what is really ready for prime time and what might have to wait a few years. But the speed at which these kind of things are happening is just mind-blowing.

• Markus Voss was a keynote speaker at Fujitsu Forum 2016 in Munich

• Photography: Stefan Hobmaier
First published
February 2017
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About: Markus Voss
For the past decade, Markus Voss has played a leading role in the planning and execution of DHL Supply Chain’s ambitious vision for digital technology. He became global CIO in 2015 and took on the additional role of COO role in January 2017.

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