Mission Logistics 4.0

The incomparable sense of “us’ keeps the fully family-owned Dachser grow rapidly and scale up operations across the world, including India, an important market in the Dachser network. Reji John...

In one of the recent eLetters Bernhard Simon, the chief executive officer of Dachser, addressed to his Dachser family members and partners world over he writes about “Logistics 4.0”. “The first thing that comes to mind is probably the linking of digital information to the physical movement of goods. In many sectors, it’s already the standard approach—take tracking & tracing for instance, or supply chain event management. Fully automated, self-guided systems are already established features of intra logistics and warehousing,” wrote Simon, grandson of Thomas Dachser, who founded Dachser in 1930, which has now become one of the global leaders in system logistics. “Yet I would like to add another dimension to Logistics 4.0. I am thinking of our network of entrepreneurially-managed branch offices, which coordinate at the regional level, and develop our business on a decentralized basis. Digital processes play a crucial role here. But one must add to this another rather traditional core competency of logistics: interpersonal relations,” wrote Simon, who became the CEO and chairman of the executive board in January 2005, representing the third generation of the completely family-owned global conglomerate that generated EUR 5.3 billion in revenue for the fiscal year 2014. The above thought of Simon stems from the very foundation of Dachser’s incomparable sense of “us”. The spirit of “us” is an essential part of Dachser’s guidelines and its mission statement is to have an internal and external communications tool working on Dachser’s culture as a permanent process. The company employs 25,000 people at its 437 locations worldwide and Dachser is represented with own country organisations in 42 countries. Dachser, which began its operations in India in 1996 with its collaboration with AFL, over the years build up a successful and strategic partnership. The two companies—both of which are family-owned—jointly developed the regional markets in India from 2007 to date by founding a joint venture in India. And in 2014 Dachser completed the complete takeover process of the India operations and today it operates as Dachser India. What is remarkably unique about this global organisation is about the importance the top management at board level places on each of the market it operates in. Thomas Reuter, the chief operating officer for air & sea logistics at Dachser, who was in India recently reflected on Dachser’s growth in India and how important India is in the overall global operations. “The company board had a very clear idea. If you would like to build up a worldwide network you cannot ignore a market like India with such a large population,” said Reuter. “If we build up other markets without India; that does not make sense for us,” was the reasoning of the Dachser top management. According to him doing business in India is always challenging but never regretted. “We cannot ignore India. It is a very important market. Dealing with India was always challenging, regulations are complicated; profits margins are quite law. But there is tremendous amount of volume, growing populations, very educated people, are big advantages,” said Reuter, who began his career in Dachser’s foreign operations in 1982. In fact, Reuter was in India along with the company CEO Bernhard Simon and Edoardo Podesta, Dachser’s managing director for Far East. The top management visit coincided with the annual conference of Dachser India held in Mumbai. “To us, it was very clear that together with China, India was important. It has tremendous potential,” said Podesta. On the question of changes taking place at Dachser since the process of takeover was completed last year, Reuter said there is basically no change because we have been doing it well for such a long time as joint venture partners. Responding to a question of evolving strategies to operate in different markets Reuter said there are differences in some markets. “In India, each individual shipment is an event in itself,” Reuter said with a smile. “Because customers are used to bargain for each shipments and this makes it a little bit more complex and complicated.” However, Podesta said that every market matures and evolves over a period of time. “Every market at the beginning is both fragmented and price sensitive. With time fragmentation become less and less. With fragmentation becoming less and less, the service quality became more important. So what is up in India is not completely unique. Every market goes though a very similar type of evolution,” said Podesta. Commenting on the potential available in the intra-Asia trade with India’s trade policy initiatives like the ‘Make in India’ campaign to boost India’s manufacturing capabilities and the ‘Look East’ policy to cultivate extensive economic and strategic relations with the nations of Southeast Asia, Huned Gandhi, Dacsher’s managing director for India says that the company is already prepared to take advantage of these initiatives. “I think the preparation has already been done. We already have strong presence in all these markets. We are building up on the intra Asia business and there are several internal strategies already in place because of our unified network,” Gandhi said. According to him Dacsher India has an advantageous position to ride on these policies. “When these policies actually hit the ground, and we want it to happen quick, we will ride the wave. We are well prepared for this scenario. We are hoping that this hits the ground fast so that we can take advantage of it,” he added. Though there are several operational business units, Dachser is creating a more decentralized management structure for quick, flexible decision-making. The goal is to combine the great size of a global network with on-site proximity to the customer.