Case – Contract Logistics: HOW TO BECOME A GLOBAL LEADER IN WAREHOUSE OPERATIONS
Developing and implementing the Operations Maturity Model (OMM)
Summary: What has been solved?
The development of the Operations Maturity Model (OMM) started in 2011 when DHL Supply Chain – a division of Deutsche Post DHL Group – established the goal of ensuring greater operational consistency and excellence by leveraging its own best practices on a global scale.
Over time, OMM evolved into the biggest operational standardization program within DHL Supply Chain. DHL Consulting supported this journey from day one.
Client
DHL Supply Chain
Task
To establish global best practices and develop an easy-to- implement model to propel the operational excellence of any international facility to the next level
Results
The model has become so attractive that facilities now directly request it
Team
Approximately 20 consultants and 200 experts contributed over the course of the project
Challenge: Local supply chain facilities benefit from global best practices
In 2011, DHL Consulting initiated a project in cooperation with DHL Supply Chain (DSC). External customers had been requesting more standardized operations, and DHL Supply Chain desired to meet this demand, while also increasing the effectiveness of over 130,000 employees at more than 2,000 warehouse facilities worldwide. The project and its final product became known as the Operations Maturity Model (OMM).
Historically, DSC has operated in a customized, localized manner, but the demands of global customers have shifted towards greater standardization of practices. DSC already relied on best practices appropriate to the various markets, but these were not shared on a global scale. The objective was to develop an overarching model that would reduce costs, improve profits, and increase efficiency and innovation at the facility level.
The biggest challenge, therefore, was to establish global “good warehouse” standards and to create the tools needed to meet those requirements. It was crucial to strike the right balance between attaining minimum global standards and not overburdening less mature facilities. Regional differences still needed to be taken into consideration within the new global initiative. Even ensuring that a single term would have the same meaning for different cultures was a recurring challenge.
Team: Embracing diversity – involving employees from all business areas around the world
Leading the project was a joint team from DSC and DHL Consulting, representing a broad variety of backgrounds and nationalities. The majority of work was carried out in Bonn (Germany), but workshops and pilot programs were conducted all over the world. In total, more than 200 employees – representing every region and function, including operations, HR and sales – were involved, in order to make sure the ultimate solution could and would be accepted and practiced throughout the business. This collaborative approach across all of Deutsche Post DHL Group’s business units was awarded the European Employer of Choice Award by the Global Business Services division.
Business transformation is not linear
During a typical project day, the DHL Consulting team would work on several topics in parallel. While one team member was developing an OMM training concept, another one coordinated the off and online implementation of support tools. Meanwhile, a sub-team assisted a pilot facility and collected feedback first-hand. At the same time, another colleague gathered best practices from around the world to feed into the model.
In addition to its work in operational development, the team prepared executive briefings for the Deutsche Post DHL Group management, to provide them with regular and transparent oversight of the program.
Approach: Test drive – global pilot projects help ensure success
DHL Consulting supported the project’s conceptual development, and engaged diverse stakeholders from various levels and international locations. Furthermore, DHL Consulting managed the global rollout, including the development of supporting materials and online tools.
To assist the model in becoming an integrated part of the business, DHL Consulting supported pilot programs at 22 facilities in 13 countries. By focusing on cost leadership, OMM provides facilities with guided tools to identify and reach their full potential.
Results: In demand – facilities ask for omm by name
The Operations Maturity Model is an innovative, industry-unique solution that sets the standard for exceptional supply chain operations. What makes it successful is that it was constructed by the business and for the business, leveraging the pre-existing excellence from within.
Based on this logic, the Operations Maturity Model is currently being rolled out following the “pull” principle: Facilities that wish to take their operations to the next level can ask for OMM to be implemented at their location. And because the model has proven to be so successful, facilities are actively asking for it. Given its rapid pace of implementation, the OMM program aims to encompass 1,000 facilities around the world – and 21 languages – by the end of 2015.
Lessons learned: The value of collaboration, preparation and communications
The development of the OMM required commitment and cooperation at all levels, as well as real teamwork between DHL Supply Chain and DHL Consulting – for nearly three years. This collaborative internal approach ensured full ownership of the final model by the Deutsche Post DHL Group.
Another key finding was that even the best program can fail if not actively and appropriately promoted. Great care and a significant budget went into the development of a unique brand identity for the OMM, thus rendering it both recognizable and appealing. This consistent procedure, along with a centrally driven approach to communication, ensured that the OMM was on top of everyone’s agenda right from the start.
“In the past, we at DHL Supply Chain faced significant challenges to share and scale best practices across our operations. Together with DHL Consulting, we overcame this challenge by developing the Operations Maturity Model (OMM). The operations experts from DHL Consulting were valuable partners throughout the process. From initial conceptualization to piloting and the start of the rollout, and with smart, highly motivated people who can quickly dive deep into various topics, DHL Consulting’s support was instrumental in delivering this strategic initiative successfully.
Ben Lechner, Former VP Global Operations Excellence DHL Supply Chain