DHL’s Supply Chain CEO, Graham Inglis FCILT, has urged industry professionals to tackle recessionary challenges with bold change.
Graham delivered the prestigious CILT Logistics Lecture 2009 in London’s Cavendish Conference Centre. In his speech, he stressed that supply chain and logistics professionals must ‘improve core processes, manage risk and embrace transformation to take advantage of the recovery, wherever and whenever it occurs.’
Graham warned that while improving efficiency is a must, recession-prompted cost saving initiatives should be approached with caution and carefully balanced with risk management strategies to mitigate future failure.
One transformational approach cited by Graham is a return to ‘co-petition’, in which leading manufacturers and retailers co-operate and share supply chain operations. He revealed that several competitive high street fashion brands are co-operating in their logistics operations despite being High Street rivals.
‘We must be prepared to break old rules’ said Graham. He argued that much could be borrowed of best practice between different areas of the supply chain. ‘Why don’t all companies adopt automotive best practice such as lean operations?’ he asked.
In the session he also noted that the supply chain is often the enabler to a successful change in a business, he revealed DHL is to manage BA’s entire short haul and domestic Heathrow in-flight supply chain service – which means DHL is now in the catering business. ‘80% of the value of the food service is logistics’. DHL is also managing in-flight retail and in-flight comfort provision. It’s a ten year multi-million-Euro deal stretching the concept of logistics provision into new areas. This is just one area in which transformational ideas can pay dividends.
A fascinating Q&A session – lead by Institute Vice President Jim Spittle FCILT – followed the lecture. In the session Graham stated that the contract logistics industry needs to stand up for reasonable margins, and regretted that some clients were too reluctant to co-operate because they are very protective of their data.
Graham noted that whilst world trade is down, there are variations across countries, channels and industries, and many businesses could harness the supply chain to move into new markets territories. What’s more there are opportunities coming out of the recession. As part of the Government’s recently revealed plans to cut public spending to reduce its deficit, the public sector may move to outsourcing.
Following this rare opportunity for an insight into the thinking of the world’s largest logistics company, CILT Chief Executive Steve Agg concluded the event, saying: ‘As a leader in our profession we can really learn from you.’