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Recently, DHL Consulting worked with DHL Supply Chain to develop a data-driven analytics solution that improves decision-making and reduces risk. It was so effective, it helped DHL Consulting win a finalist award at the prestigious WirtschaftsWoche Best of Consulting Awards.

Author: Tony Greenway

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Data Analytics

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Recently, DHL Consulting worked with DHL Supply Chain to develop a data-driven analytics solution that will help improve decision-making and reduce risk. It was so effective, it helped DHL Consulting win an excellence award at the prestigious WirtschaftsWoche Best of Consulting Awards.

Digital technology is currently revolutionizing the way the world does business. Some examples of this are fairly obvious, says Florian Köpke, Vice President Controlling Excellence & Data Analytics at DHL Supply Chain. Just look at what DHL is doing to accelerate digitalization and automization in its warehouses with, say, augmented reality and robotics.

But, he notes, there are less obvious examples of digitalization that are ticking quietly and effectively away behind the scenes — such as the technology that helps businesses optimise their data analysis. And Florian should know because he lives and breathes the subject. He’s also passionate about what it can do. “Data analytics gives organizations the opportunity to solve problems that they’ve known about for a long time,” he says. “It also helps them identify and solve problems that they didn’t even know they had. The bottom line is that if a business carefully analyses its data, it can rethink its operations and be much more successful as a result.”

BCA Match is a good example of how this tech works. This is an analytics solution — jointly created by DHL Consulting and DHL Supply Chain — which has the potential to transform the way that DHL Supply Chain Finance evaluates business cases (BCAs). And that’s incredibly important.

“Every year, DHL Supply Chain evaluates several thousand business cases,” explains Florian. “It’s essential for us to assess the probable risk and expected reward of every new deal before we commit to it and sign a contract with the customer.” The fact is that while striking deals with new customers often pays off, surprises can crop up that hurt profitability.

Game-changing Tech to Improve Decision-making

Assessing this risk falls to BCA controllers, who recommend whether the deal is viable or not. Ideally, they should be able to study data from similar historical business cases to make an informed decision about what is likely to happen. Unfortunately, identifying relevant data isn’t easily possible, which means that assessments mainly have to be made based on the controllers’ own experiences of past deals.

BCA Match promises to be a data analytics game-changer, however, because its algorithm trawls through historical data and identifies previous similar business cases, based on operational, commercial and customer characteristics. It then provides controllers with a ranking of these previous similar deals, and information about their start-up performances, where available. “This is invaluable information that can hugely improve the controllers’ decision-making processes and therefore reduce the company’s exposure to risk,” says Florian. “Plus, because BCA Match runs on a Power BI dashboard, it’s easily scalable and available across a variety of platforms.”

An Award-winning and Pioneering Data Analysis Solution

Currently, this pioneering new data analytics technology is being refined to make it even more effective; but its proof-of-concept phase was so successful that, in October, DHL Consulting was recognized for excellence by the German business news magazine, WirtschaftsWoche, for the fifth year in a row. Florian’s ambition is to productize BCA Match and roll it out to controllers within the next couple of years.

That makes it sound easy — but a lot of hard work has been done to get to this point, note two experts from DHL Consulting who were brought in to work on the project: Geoffrey Boutin (Senior Data Scientist) and Lukas Klamt (Data Scientist). At the start, Geoffrey and Lukas discovered that the historical data that needed to be built into the model was stored in a wide variety of structured and unstructured databases and unstructured text documents. This was solved by establishing automated mapping routines to link information from multiple sources, while text-based data was extracted and organized using advanced text mining techniques.

Intensive Collaboration To Get the Best Results

Then input was needed from the controllers themselves. After all, they would be the ones using the solution, so it had to work for them. “These are people with years of BCA experience which was vital to incorporate into the project, so we interviewed them and gave them surveys to complete,” says Lukas. “It was so important for us to understand what they do and how they do it. But it was also important to gain their acceptance and get them onboard as early as possible, because the tool would be useless if they didn’t want to use it.”

In all, the BCA Match data analytics project took around four months. When it was finished, controllers found they were able to compare BCA data more quickly and in a more structured way. “Before the project started, I think there was a concern that the quality of the historical BCA data was too low and too fragmented,” admits Geoffrey. “While significant work remains to further improve the data foundation, the solution shows that the data can be used effectively and that this can be a valuable product for the company.”

A Test Case That Can Be Used Across Other Business Units

It’s certainly been well-received by DHL Supply Chain colleagues. “Many have said: ‘This is great! When can we have it?!’ reveals Florian. “That was gratifying because we wanted to build a solution that would wet their appetites. But we also wanted it to be the first step towards establishing an analytics platform that can be utilised quite flexibly to improve decision-making in different areas across the company, going forward — not just business cases.”

Mark Rogers, CFO Commercial & Investment Controlling at DSC, adds: “This use case has illustrated how analytics can help us improve our commercial decision making. I’m looking forward to seeing this develop further in the future and making a positive impact on our profitability!”

For everyone involved in the design, winning the WirtschaftsWoche Best of Consulting excellence award has been a bonus. “For me it’s important because an external organization has recognised the pioneering work going on inside DHL,” says Geoffrey. “Our objective at DHL Consulting is to always try to be the thought leader for the Group and support it with the highest quality service. This award is proof that we can — and do — achieve that.”

For Florian, it underlines what can be accomplished with teamwork. “Everybody brought their unique expertise to the table,” he says. “By combining our skills we developed a data-driven analytics solution that will support, inform and improve decision-making.”

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