Interview with Holger Winklbauer, Executive Vice President Corporate First Choice, Deutsche Post

Holger Winklbauer «The world of tomorrow will always be a better place»
The pressure on logistics corporations like Deutsche Post DHL will rise in the future and require cooperations with former competitors as well as new services like to the point delivery.

You conducted a global Delphi study on the future needs of consumers in logistics. What is the most surprising insight you gained through this analysis?
The 81 theses of this study show a very wide picture, not only of logistics but of the society and economy in general. It can’t be boiled down to a few words. The Delphi study also shows, that many future expectations find their roots already today, like a growing importance of the internet and the mobile internet. What struck me most, was the idea, that we will be roused by a personal internet-agent, who serves up the most important news, coordinates my agenda, checks my blood-pressure and warns me, if I piled too much food onto my plate. The experts, who were asked in this analysis, agreed that almost everybody in the world will have such an agent. This will be relevant for our marketing, as this agent will go through all the ads and sorts them out. We therefore have to make sure, that the future marketing efforts for the brands of Deutsche Post and DHL or as service provider of marketing efforts for other companies, will be favoured by the agent and that the advertisement will be passed on to the owner.

And which thesis made you the happiest?
What I really liked was the optimism. Even though there are plenty of negative trends and developments the business experts seem to think, that we will find solutions for the global problems and get them under control. Neither the economic crisis nor a pandemic will seriously damage the system. We should rely on a market-based society to follow one primary target: To provide most people a decent life in prosperity and access to education. Wealth and education are the pillars of a peaceful future. Mankind will find ways to deal with the climate change and to profit from free trade. We as a logistics company will provide a fair part. Logistics has a future.

Where do you see the most important transformation of customer needs in the next 10 to 20 years?
Lots of things will have changed by 2020. But the client won’ t change as much: he will be as demanding and lazy as today. The customer of the future will expect, that what he – mostly in the internet – buys, will be delivered immediately. Delivery to the company or home address will only be one option. More often the client will ask for point delivery to where he or she is currently staying. At the same time the customer will become more environmentally aware.

How will that go hand in hand?
Climate change is regarded as the biggest threat. People in the future will choose environmentally friendly products and services. They will accept to pay more for such services. Some countries will require a declaration on products showing its CO2-footprint, enabling the customer to see how much the production and transport affects the environment. Most of the time the customer himself will ask for such information and avoid non-labeled products. This customer behaviour will influence the environmental standards of the economy more than governmental regulations. It will be one of the core taks of logistics to find ways to fulfil these sometimes contradicting targets: On the one hand the customer wants the fastest service, on the other an environmentally friendly delivery. The pressure to innovate mounts in the logistics sector.

The technology supporting today’s logistics is getting more and more sophisticated. Schedules are optimized, seconds sheared off etc. The side-effect: There is no margin for error. One mistake may cause a ripple through out the whole process. How can this be avoided?
This is truly a very delicate matter. Our experts agree that life will speed up even more. Therefore the logistics will have to go all out as well. We will have far less time to plan and build up new delivery chains. Hubs wont be built for all eternity, but only used for a short time-span. At the same time the required stability in the delivery chains will have to mount. Today’s central control systems will sooner or later collapse under this complexity. We will need something different: decentralized control systems, i.e. through the internet of things on the basis of RFID (radio frequency identification). Our participants expect, that this will become standard. Through communication and the connection of things among themselves goods will be controlled in a decentralized way through the delivery channels. Each unit looking on its own for its individually best way.

Customer expectations are rising in the day and age of “I want it here, right now”. How can these challenges be met? Solely by logistics?
No. The future, and the participants of our questionnaire pretty much agree, will be an age of cooperation. There will be new cooperations between service providers. Our clients predict an oil price by the year 2020 of 300 Dollar per barrel. There will be alternative engines as well as renewable energy sources, but they wont have prevailed as main energy sources. The mega-metropolises will strongly restrict the delivery traffic. Therefore today’s competing companies will have to cooperate in networks and resources. Or the internet of things. Nobody has the market power to pull this gigantic endeavour through on his own. The logisticians will have to develop the infrastructure together with IT-companies and foremost our clients.

Do customers help to improve your product?
Today’s customers are already very quality conscious shoppers and ask their business partners for the best quality and services. This will grow stronger in the future. We already experience today a great readiness of our clients to look together with us for improvements. Deutsche Post DHL is the first logistics corporation that invested in a continuing and global quality and service offensive. We call it First Choice. First Choice is based on components of Six Sigma and Lean, which we adapted to the service sector. Since 2006 we have started with these tools and our customers several thousand improvement-initiatives. First Choice doesn’t only bring together tens of thousands of employees, but also all 500’000 employees of the corporation.

E-Mail brought a great shift in the field of mail services. Do you see another major change in the future?
In the future three billion people will conduct business transactions solely through the internet, assisted by their personal internet-agent. All of these three billion people will not only be shoppers in the internet, but also sellers, marketers, shopping-advisors, counsels, accountants – in short: all-round entrepreneurs. The buyer will be more experienced and critical, because he will know from his own experience how sales and marketing work. What the letter loses through electronic media, the internet supported trade will gain.

What can we look forward to hearing in Lucerne?
Interesting stories about an interesting future, but it will not be all roses. New dangers will emerge. The participants of our study think that also among the western industrial states there will be victims of globalization, who will turn to more politically radical groups. The fear, that the growing population can’t be stopped, is also widely spread. More people translates into more demand for goods and services, but also more effects on the environment and use of resources. Most experts predict that there will be conflicts about the allocation of resources. This may sound abstract, but it boils down to hunger and war. But in general I want to present a positive outlook and spread confidence. There used to be a very naïve believe in eternal progress. Naïve because it was based on a perfect world full of perfect people. This we will never achieve. But then again striving for progress is very human. The development of society has always shown that the world of tomorrow will always be a better place.

As Executive Vice President Holger Winklbauer is responsible for the successful development and implementation of Deutsche Post DHL´s global service improvement program First Choice.
Before he accounted the Inhouse Consultancy of Deutsche Post DHL as Managing Director. Prior to his functions at Deutsche Post DHL Holger Winklbauer was working in logistics management at Metro MGL Logistik GmbH, Düsseldorf, in consulting at Research Institute for Operations Management (FIR), Aachen and in procurement at Mannesmann Anlagenbau AG, Düsseldorf.
He studied electrical engineering and applied economics in RWTH Aachen University and University of Portland, Oregon.

Delivering Tomorrow. Customer Needs in 2020 and Beyond. A Global Delphi Study
Holger Winklbauer, Executive Vice President Corporate First Choice, Deutsche Post

Friday, October 16, 2009; 14.30h
Culture and Convention Centre KKL Luzern