But what is the "New Normal”? This was discussed last Thursday at a webinar organized by the German Logistics Association (BVL), attended by 150 participants. At the end of the virtual meeting, the panelists agreed that Covid-19 has given the industry an enormous boost in innovation but will drive numerous forwarding agents out of business.
It began with the corona shock, followed by hectic measures to safeguard the existence of logistics companies, combined with creative steps to maintain supply chains running as best as possible under extremely demanding conditions. Meanwhile, the worst is probably over, with the industry facing a so-called “New Normal.“ In a nutshell, this summarizes the situation of most logistics companies from the beginning of the pandemic in March until now. All 6 panelists of the BVL webinar emphasized that Covid-19 has evidenced the vulnerability of global supply chains which were disrupted as the virus went out of control in many regions and states. To keep supplies moving despite lockdowns, hit by the near collapse of air traffic or the closing of borders, to name but a few of the hurdles that had to be overcome, logistics companies needed to be increasingly agile to adapt to changing circumstances, the webinar speakers concurred.
For example, DHL very quickly set up a task force on Covid-19 where all data provided by Deutsche Post-DHL’s global network was combined and evaluated by experts, resulting in quick reactions to changing circumstances. "We provided our customers with a constant update on the status of their shipments, which was imperative due to capacity bottlenecks in air freight, trucking restrictions, scarce ocean capacity, or sudden changes in customs regulations in some countries,“ Tim Scharwath, CEO, DHL Global Forwarding, described the challenges his enterprise had and still has to master. He went on to say that since the outbreak of Covid-19, this intensity of communication has taken on an enormous significance and will continue. Therefore, transparency, agility, innovation, and resilience, combined with intensified customer contact, is the new currency for the forwarding world, which forms the interface between producers and carriers. "Thanks to our extremely dense global data network, we feel well positioned in this respect," he emphasized.
To data or outdata
The crucial role of big data in Covid-19 / “New Normal“ times was also emphasized by Amsterdam-based Sylvia Opiela, Head of Global Purchasing Logistics, Henkel Global Supply Chain B.V. After all, statistically 8 Henkel produced shipments, be they beauty care, adhesives, or laundry care items, are handed over to customers every single minute somewhere in the world. Although some segments such as products for barber shops or hairdressers, nearly collapsed following the outbreak of the pandemic, sales of others went through the roof, like detergents and hygiene articles, for example. “This sudden shift in demand and the resulting adaptation of transport capacities would not have been possible without our modular designed IT platform, that even collects track and trace data,“ said Ms. Opiela. Henkel’s enhanced Enterprise Resource Planning System that includes many subtools, was first implemented in the U.S. market, where it proved to be extremely supportive to manage changed demands and supplies, and was meanwhile also launched in Europe, she added.
Digital Dashboard provides important decision-making support
Rene Kaschta, too, Valencia, Spain-based Head of Ford Lead Logistics Partner: DHL Supply Chain, and his team had to completely redesign the flow of supplies for the automotive industry practically overnight after Covid-19 led to a 26-day long manufacturing stop of cars across Europe. All brands were affected by the lockdown, leading to 2 million vehicles fewer produced in the EU (-26%), he stated. “Consequently, we had to organize emergency storage solutions for car parts within hours, not days, to find out where goods were stuck in transit at ports or airports and solve similar issues in no time,“ the manager explained. Without accurate and permanently updated data provided by DHL's Digital Dashboard, based on Oracle's Transport Management System (ORM) in combination with various subsystems, these challenges could not have been mastered, Mr. Kaschta claimed, describing DHL’s arrival in the logistics world of “New Normal.“ That said, he also indicated the sad side of the story: Particularly firms that fail to adapt quickly enough to the new business practices will fall by the wayside. This mostly affects medium-sized or smaller classic freight forwarders that lack agility and do not offer value-added services to the market, the manager forecasted.
Still a people’s business
Holger Klug, Head of Oracle Germany, supported Kaschta’s estimate, but added that logistics will continue being a people’s business, as direct contact between human beings is the lifeblood of this industry. Collaboration is indispensable for logistics, but collaboration requires integration, he stressed. This needs to combine established solutions with newly developed data systems to improve the ability to accurately predict business developments while ensuring strict security requirements, Mr Klug stated.
Touching the integration aspect, Professor Thomas Wimmer, Chairman of the Board of the BVL Management, rounded up the webinar by stating that production and logistics are moving ever closer together and, thanks to data exchange, form a triangle in which software, hardware, and human production go hand in hand. What role robotics and automation play in this constellation was not addressed. This would be an exciting topic for a follow-up webinar.
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