How DHL Express is digitising logistics through a period of change

As Southeast Asia, and the wider world, adjusts to the economic implications of COVID-19, the wheels of the supply chain are slowing starting to turn in tandem. Following an endless stream of government-mandated lockdowns, transport restrictions and border closures—worsened by labour shortages, regulatory uncertainty and inventory delays—the logistics market has suffered a challenging six months of operation.

Despite ongoing roadblocks, a new direction of travel is emerging as businesses gradually reopen and prevention measures ease.

At the centre of such change is DHL Express, a global logistics giant attempting to redefine the industry through digitalisation.

For Singapore-based Supriya Rao Patwardhan, the newly appointed executive vice president of IT Services at DHL, transforming traditional practices through emerging technologies is critical to future supply chain success.

“We are focused on digitalisation as a conscious application of technology and the enablement of people to improve customer experience, employee experience and operational efficiency,” said Patwardhan, who previously held the role of CIO of Global Programs and Standards at DHL. “To be truly successful, IT and business have to be aligned on the same priorities.”

Such alignment centres around the wider CEO priorities of ‘delivering excellence in a digital world’, motivated by a belief that future growth will derive from a consistent focus on the company’s profitable core logistics business.

“Digitalisation will become the greatest lever,” Patwardhan added. “To be successful, technology implementations must contribute to the bottom line in terms of increased productivity, improved service quality, cost reduction and customer acquisition and retention.”

The technology team at DHL continues to be instrumental in driving a number of innovative projects across the wider business. This includes customer-centric innovation designed to help users stay connected and track shipments, schedule deliveries, and receive rates and services information through interactive voice response, chat or mobile, whether online or offline.

“Front-line employees are empowered by a digital solution that proactively monitors shipments and leverages data mining and real-time analytics to ensure every shipment is delivered on-time,” Patwardhan said. “A secure foundation for digital initiatives is also enabled by a cyber security platform that provides visibility for OT [operational technology] and IT in all countries.”

Transformation to a SOA approach

In drawing on more than 30 years of logistics and supply chain experience, Patwardhan is well-versed in the art of delivering transformation, with the IT department cited as a key contributor in DHL’s rise to profitability.

The business recently completed an IT transformation project on an “unprecedented scale”, converging thousands of local systems into a portfolio of 150 global solutions, while modernising architecture from siloed systems to service-oriented architecture (SOA).

The project was labelled ‘Evolution Not Revolution’ in recognition that success could only be achieved in incremental stages as the business steadily progressed. “To facilitate this transformation, we implemented enterprise-wide IT governance to carefully select initiatives based on business-case, ensuring that every IT investment had an ROI,” Patwardhan said. “This significantly reduced the total IT cost as a percentage of revenue and created a solid foundation for DHL’s digitalisation journey, with new frameworks introduced to help drive digital initiatives.”

Key metrics include digital campaigns to improve awareness and promote self-service to increase user adoption of new solutions, which spiked by 150 per cent, while design thinking techniques and engagement of front-line users resulted in a 70 per cent reduction in deployment time and training costs.

“We systematically shut down old systems and sunset legacy technologies in the process,” Patwardhan said. “We have embarked on the next phase of our digitalisation journey by focusing on the four areas critical to our business; customers, shipments, mission-critical operations and employees. Our enterprise wide governance allows us to select the right initiatives that are best aligned to business priorities, while the service-oriented architecture of our IT platform allows us to seamlessly integrate new technologies.”

Leading in a crisis and through technology disruption

Before assuming new responsibilities in early July 2020, Patwardhan most recently headed up the global IT team at DHL, spanning 13 nationalities and eight locations, with female executives accounting for 27 percent of the division.

Holding accountability for the end-to-end management of global solutions that power the wider business, the team supports all functions, including e-commerce, sales, marketing, pricing and customer service, as well as operations, finance, HR and business intelligence.

“The impact of the pandemic is felt in every corner of the economy, and on individuals too,” Patwardhan said. “With the entire enterprise working from home, IT leaders have to ensure they can continue to motivate their workforce and at the same time help the business respond to impacts on commerce overall. “Work from home is no longer an exception but the rule based on the constraints in each country. This is likely to drive further investment in collaboration tools to let organisations operate and collaborate despite social distancing.”

As a result, Patwardhan expects companies to increase investment in innovative projects leveraging technologies such as the internet of things (IoT) and blockchain, designed to “change interactions and redefine relationships” between business parties.

“While not mainstream yet, blockchain is likely to be a big disruptor,” she said. “This is particularly true of the supply chain industry with transactions requiring secure handoffs between different parties. … Data analytics is also helping to drive the insights that can fuel business growth, while IoT and automation help improve productivity in a high-volume business such as DHL.”

Delving deeper, artificial intelligence and machine learning are enhancing response quality to customers, alongside DHL embracing omni-channel capabilities to better support end-users.

“With an increasingly tech-savvy workforce, technology leaders have to steer the enterprise to adopt technologies that make sense and will have most impact,” Patwardhan said. “As CIO, I had to drive the organisation towards a mindset focused on agility and innovation.”

This included bringing in new talent to work alongside existing teams, creating an ecosystem of more than 45 technology partners and challenging teams to “reimagine rather than replace”. Such initiatives acted as catalysts to drive a digital mindset, resulting in employee opinion survey scores of 90 per cent with attrition rates remaining low.

“Technology leaders must step out of their comfort zone to define how technology can be better exploited in this new reality,” Patwardhan said. “We also always have to be proactive in anticipating changes, whether in business demands or technology trends.

“This proactivity was in full flow when the COVID-19 crisis hit,” Patwardhan said. “Overnight all the business functions had to operate remotely—so the IT teams had to mobilise quickly to ensure systems were accessible, sufficient bandwidth was available and everyone had the necessary equipment to work from home. This has emphasised the position of the IT function as a critical partner for the business and not just a back-office function. IT leaders have an opportunity to build on this respect by helping chart the ‘new normal’ as business seek to redefine their operations in a post-pandemic world.”