Driving efficiency: DSV’s data-powered workforce

What is most distinctive about DSV’s way of working and entrepreneurialism?

“DSV is a logistics service provider (LSP). Our Air & Sea division, as the name suggests, takes care of everything that goes by air and sea and is responsible for almost three quarters of our turnover,” Peter van der Maas begins. “If it’s got wheels, it’s part of Road’s remit. They manage about 22,000 trucks every day, most of which are in Europe. Solutions, or contract logistics, covers everything with four walls. DSV is a hands-on company with a pronounced can-do mentality: responsibilities, authority, and especially entrepreneurship are rooted deeply in our organization. The main thing that sets us apart from other LSPs is how quickly we make decisions.

Has the tight labor market affected DSV?

“Staff shortages are primarily an issue in North America and Northern Europe. There’s scarcity across the board, from warehouse workers to knowledge-intensive roles and from the logistics sector to the rest of the economy. The Netherlands can no longer do without international workers; we’re short on people wherever you look. Asia is in a different phase altogether. Take Hong Kong and Singapore, for instance, where lack of space is a much bigger issue, and more and more companies are going vertical.”

How does DSV keep its central scheduling system flexible enough to respond to the changing needs of the organization and its employees without jeopardizing efficiency or control?

“We use the central scheduling system to balance our campuses. The same system shows us how many people we need for a particular job and how many are yet to be trained. In the Netherlands, we’ve centralized scheduling for permanent and flexible employees in two regions. This way, we’re getting our people their guaranteed hours while ensuring that we get the right workers with the right competencies, even if it means training them first. We’re much more in control now, even in the face of last-minute upscaling driven by seasonal developments. Afterwards, we review the data and eliminate inefficiencies where possible.

We ended up with ORTEC after their tender bid turned out to offer the most value for cost. One of its main selling points was that they’d already developed a smaller, but similar system for one of our competitors, which meant they knew how the market works and had a vision. We continued the build of this product together: ORTEC has developed a tremendous tool, but they couldn’t have done it without our input. Our system was primarily built for the Benelux area and was rolled out in the Netherlands first. After evaluating how it performs here, we’ll see whether there are other opportunities elsewhere. The ultimate goal is for employees to be able to plan or change their own schedules as they see fit, and we designed the tool to get there.”

How do you anticipate changing market conditions?

“As a rule, we work closely with our customers. If they get their data right, we can use the data for forecasting and scenario planning, but other customers are entirely in the dark because their internal systems are not up par, leaving them to the whims of the market. In that case, we generally use information about the past to produce forecasts. We typically have a wealth of historical data because customers tend to stay with us for so long. We look closely at what product characteristics mean for our storage methods, which is why we need people who understand how a supply chain works. In contract logistics, the devil really is in the details, to the point that the flow of information can be even more important than the flow goods. Every single step has to be transparent and understandable for us and for our customers. We try to conceptualize the supply chain cross-divisionally from 'verticals' such as Consumer, Industry, Healthcare and Automotive and try to optimize it by putting ourselves in the customer’s shoes. We always look for the best long-term solution for the customer rather than short-term revenue for DSV. Ultimately, it's about what the supply chain costs the customer, and what the cost is relative to their product or per product they put into the market. Any contribution towards reducing those costs is a direct contribution to the customer’s business.”

Has decisiveness become an increasingly important feature for LSPs in today’s day and age?

“Our world is changing every day, and legislation follows closely behind. Customers appreciate LSPs who can shift gears on short notice amidst changing market situation, such as by quickly putting down a new building somewhere. We’re opportunistic builders, because all the turbulence in the supply chain has put a premium on partners who have the capacity to provide a little breathing room in the event of supply chain disruptions. The attacks on ships in Yemen, for example, led to increasing stocks because of low consumer brand loyalty. They know that if they fail to get their goods to market in time, consumers will simply look elsewhere. At the same time, rising interest rates mean that keeping somewhat lower stock levels is more financially attractive. It’s a challenging area of tension, and we’re right in the middle.”

How do you integrate new technological innovations into your business strategy in the pursuit of your long-term goals?

“We’re investing heavily in automation and mechanization. AutoStores are a valuable prospect for generic customers - both in the context of storage and picking - and we’re in the process of proactively setting them up at various sites in Europe. On top of that, some of our employees are dedicated solely to automation. They are exploring which tools, applications and developments fit our product portfolio and looking for ways to integrate them. As a result, we now do stock counts by having a squadron of automated drones fly through our warehouses every night. Setting up warehouses in this way and using automation to maintain bulk inventories was a strategic move pure & simple. It happens to be a highly sustainable strategy, as our warehouses produce more energy than we consume. Implementing sustainability in our processes is an important goal for us, which is why we’re the first LSP to commit to the Paris Scientific-Based Targets Initiative. We’ve set ourselves a carbon reduction target of 50% for scopes 1, 2 and 3 by 2030.”

What does DSV expect from its suppliers?

“We can be quite demanding, I admit. What our customers can expect from us, we expect from our suppliers. We’re convinced that the best way to learn is developing a process or product together, and that’s what happened with ORTEC, too. This unavoidably produces friction at times, as you have to get behind plans together, but if you strike a balance that works for both parties, it’s a very potent accelerator. You need mutual trust to get a project right the very first time. What’s more, you need time to grow into a partnership. We’re loyal, but critical too. You need to be on your toes to make the most of a partnership. We’ve now reached the stage with ORTEC where the wrinkles have been ironed out and everything is going swimmingly. The scheduling system has been rolled out throughout Belgium without a hitch, just the way it should be.”