After the World Health Organization (WHO) affirmed COVID-19 as a pandemic in early 2020, many countries across the world closed their international borders, restricting travel and movement of goods to mitigate the outbreak of the novel coronavirus. This acted as a direct blow to many logistics firms that were involved in the storage, movement and flow of goods, as it placed an unprecedented strain on their resources, infrastructure, and processes.
The supply chain disruptions caused in this sector due to the pandemic impacted the economic growth and competitiveness of many businesses. This spurred companies to start making their strategies more resilient. Many logistics providers such as DHL Express found ways to navigate the pressures of the pandemic. They delivered and aided in the world's recovery through leadership and investments that focused on data, experience and people.
Here are the three key lessons that helped DHL navigate through the pause and rebound of global logistics.
When it comes to navigating large scale business impacts, the concept of binary thinking or responding in all-or-nothing terms will not lead to success. The key lies in digging into your pool of experience, analysing historic data trends and keeping in close contact with your customers.
When global trade undergoes a crisis, customers still expect their needs to be met. It may not matter that there is a volcanic ash cloud over Europe disrupting the flow of goods or that a Tsunami in Japan has brought air cargo operations to a standstill. If a package has been shipped out, there is a consumer waiting for it in some part of the world, expecting it to be delivered on time. This expectation of consistency can only be met with consistency in decision making.
DHL were able to dig into their archives of data, institutional memory, business forecasts and real time consumer research. Instead of dramatically reducing air capacity or laying off people, they were able to make informed decisions and adjust their processes, infrastructure, and resources to closely match the volatility in demand. So the bottom-line - amid these rapid shifts, binary or linear thinking must be avoided. Rely on data and experience.
The world witnessed tectonic shifts in trade flows as the pandemic unfolded. At one point there was a sudden surge of PPE kits into China and then later that flow reversed with China shipping out to the rest of the world. Cross border ecommerce volumes sky rocketed. It was because DHL had, over the years invested in the right skill sets for their network planners, air operations teams, fleet managers and the various teams working behind the scenes, they were able to manage these shifts.
Cultivation of employee skills and investments in an agile culture, helped DHL tackle the challenges that quickly unfolded. A people-centric culture is thus key to resilience.
In a world that is embracing the shared economy like never before, this point can seem counter intuitive. But the pandemic has shown us that when there is pressure on the resources – sharing isn’t an option. Companies need to have direct control of their assets rather than relying on a shared asset.
DHL’s control of a fleet of 250+ aircraft, meant that they were able to operate services to 220+ countries and territories, maintaining critical lifelines for countries all around the world. So in a world that is focusing on asset-light strategies, direct control of assets still has a role to play in building resilience. The key is finding the balance between critical supply chain elements that can and cannot be shared.
Read the full article here: https://hbr.org/2021/05/how-dhl-express-navigated-the-pause-and-rebound-of-global-trade