DHL Supply Chain’s Chief Executive Officer – Asia Pacific Paul Graham predicts the strongest Logistics service providers will survive and thrive by continuing to invest in their employees and their business, despite the economic situation.

Based out of Singapore, Paul Graham oversees 20,000 employees across 18 countries in Asia Pacific, including over two million square meters of warehouse space and a large ground-based domestic transport business.

Originally from Belfast, Northern Ireland, Paul began his career in the logistics industry in 1980. He has over 25 years’ experience in all facets of the industry and has conducted business on all continents including working extensively in the United Kingdom, Australia, North America and Asia Pacific.

Graham, who has spent a significant part of his career living and working in Asia Pacific and has held senior roles in both freight forwarding and contract logistics, says this is the time to be bold and increase market share.

“Asia Pacific should fare better than other regions as it still has a growing domestic GDP,” he argues.  “The key to continued growth will be to balance the reliance on exports with greater stimulus in domestic consumption, particularly within the developing nations.

"It will be essential for logistics service providers to maintain a strong commitment to delivering performance and increasing their focus on customer facing resources. Our customers want help, they want to see us respond and work with them jointly on the issues of the day.”  

Graham believes all DHL’s business units in Asia Pacific – DHL Supply Chain, DHL Global Forwarding, DHL Express and DHL Global Mail - are very well placed for growth.

“We have large developing economies such as India and China, but other markets like Indonesia and Thailand are also growing, despite the current economic climate.

"The strength of our brand, coupled with our ability to continue to invest in infrastructure and people will continue to differentiate us from the competition.

"As a well established logistics player in the region, we have built a solid platform for growth and expect to exceed GDP growth in all the markets we operate.”

While Graham agrees Europe remains the most mature logistics services market and sees the UK as the best potential bellwether of future models in Asia, he says countries such as India and China will develop quite unique supply chain services to cope with the varying degrees of infrastructure issues, sheer geographic spread and also the rampant demand of consumerism.

“If we look at the mature examples overseas, we can certainly expect to see outsourcing grow rapidly,” he predicts.

“We will see different models with a common thread- the growing recognition of the value of outsourcing, not just in people or assets, but in driving supply chain efficiency and also, the growing and substantial investment in infrastructure, with the clear recognition that good infrastructure creates more efficient supply chains.”

Paul Graham also observes more businesses becoming open to exploring deeper relationships with 3PLs and willing to outsource more complex parts of their supply chains.

“Outsourcing helps businesses rationalise their costs faster than they can do it on their own,” he maintains, “and enables them to make decisions more quickly to achieve greater efficiency in their supply chains.”

“Many companies today want to design a product and put it on the market and if they can outsource all the steps in between, they will. We term this ‘logistics process outsourcing’ whereby a customer looks to outsource all business processes in the supply chain from manufacturing to last mile delivery.

"This requires DHL to continually invest in new skill sets within its workforce, and, particularly, in new technology, which allows us to not only store and move the product, but also generate the invoice on behalf of our customer, handle the call centre activity etc, so that the customer can focus on its core business.”

“There is still a long way to go in this area,” Graham adds. “I don’t think we are limited in our approach, only by the scope of what our customers deem possible to be outsourced!”  

Given cutting costs is always a driver, Paul Graham says DHL Supply Chain’s approach is to develop platforms that allow particular industry groups to create competitive advantage through new supply chain models that leverage off underutilised assets or manpower.

“Certain industries make this a challenge,” he admits, “so we work in both forums; industry platforms and individual companies looking for a competitive edge.

"We are always open to collaborations that could prove profitable for our customers and, therefore, for DHL.”

Environmental sustainability is a keystone of DHL’s overall Group strategy.  “DHL was the first company in the express and logistics sector to establish a strategy that helps the company formally track its carbon efficiency goals,” Graham says.

“The project, known as  ‘GoGreen’, will enable DHL monitor its progress in reducing its carbon emissions by 10 per cent by 2012 and by 30 per cent by 2020 when compared with 2007 levels.”

“From large scale projects like upgrading our air fleet with more fuel-efficient aircraft, to replacing all our warehouse lighting with more energy efficient lighting, we want to make Go Green a ground up initiative.

"Therefore we are focusing on practical day-to-day things such as driver training for fuel efficiency, encouraging our customers to use more efficient packaging and planting more green space in our facilities.”

Asked about the technology he thinks will have the greatest impact on supply chain management in the future, Paul Graham cites the continued development of end to end visibility tools and those that link execution with the financial systems so that DHL can pick, despatch, deliver and invoice the end customer in one seamless process.

“We have many elements in place today,” Graham says, “but being able to provide a seamless system like this across all DHL business units globally will take time and having common industry standards is a work in progress.”

“In Australia, we have implemented a ‘Order to Cash ‘distribution business by leveraging our existing Pharmaceutical pre-wholesale network capability and our national storage and material handling systems in 8 cities across the country to deliver time critical product direct to their customers.”  

“As part of the initiative, DHL has invested in the Oracle Order Management System and Oracle Financials to deliver an order to cash functionality and a web based ordering system.

“It has also established a shared Customer Service team managing the pharmacy and hospital customers through a call centre,” Graham explains.

“The dedicated Direct to Pharmacy Supply Team will manage order capture, CRM, warehousing and distribution, information management, billing, credit control and cash collections all on behalf of pharmaceutical manufacturers.   

“This model is very scalable and can be used for any industry group looking for a more innovative and cost effective way to deliver their products to their end customer right across the region and we are expanding its reach across the whole of the Asia Pacific business.”

Despite being a modern economy, Graham says infrastructure in Australia remains a big issue. “Australia could be a perfect country for a well integrated, fast, reliable cargo rail service, yet we still see thousands of trucks heading down the Hume Highway every night. Why is that?

"“While Australia still hasn’t had the vision to build a truly integrated, seamless national freight rail network, other nations including developing ones like China continue to place a great emphasis on rail,” he argues.

“If Australia is to become more efficient, and look to reduce its carbon footprint, then it really must get on with developing a truly world class freight rail system.”

Graham says another challenge particular to Australia is population disbursement. “Heavy levels of population density on the East Coast combined with the manufacturing base of Melbourne and the heavily import-dominated profile of Sydney point to freight imbalances between the states,” he observes.

“There is no easy solution to this, but it will continue to drive higher supply chain costs as trucks run one way with load balances remaining out of kilter.”

 Paul Graham is proud of DHL’s supply chain management strengths, saying the company’s greatest achievement lies in its continued development of employees, coupled with the fact that its supply chain business is operating in 18 highly diverse countries and territories.

“We have established very long term relationships with customers in markets with a variety of needs and maturity levels,” he says.

“Every single day we have an event of some significance where our people respond to a last minute request. It is these actions when drawn together over a period of time that continue to echo our biggest achievement, namely our commitment to serve.”

“My vision is for us to continue to be the service provider and employer of choice in Asia Pacific,” Graham says. “We can only do this if we continue to deliver the right solutions and continue to invest in our people and encourage diversity at work, not just of gender and nationality, but also of encouraging people from other industry groups to come and work in supply chain to help drive continued innovation.”

“As the Asia Pacific region grows and becomes the economic powerhouse for the world, I hope that many of the ideas and solutions we’ve developed in this region will be seen as applicable to other more developed parts of the world and that we as a region and within DHL continue to drive global best practice.”