DHL Uses Artificial Intelligence to Transform Logistics Operations

AACSB Standards: Decision Making

DHL was founded in 1969 by Adrian Dalsey, Larry Hillblom, and Robert Lynn. In the competitive world of logistics, DHL is one of the world leaders, with a presence in over 220 countries and over 380,000 employees—which doesn’t even include the robots that work for the company. DHL is also a leader in using AI, machine learning, and robotics to enhance its business and satisfy customers.

DHL has been proactive in its approach to technology. Matthias Heutger, senior vice president and global head of innovation explains, “As the technological progress in the field of AI is proceeding at a great pace, we see it as our duty to explore, together with our customers and employees, how AI will shape the logistics industry’s future.”

DHL’s Resilience360 Supply Watch software uses both machine learning and natural language processing to look for anomalies in the supply chain process. According to the company, the software scans for “140 different risk categories including financial, environmental, and social factors among risk resulting from crime, labor breeches, quality defects, and supply chain perils such as shortages, capacity constraints, and delays.” This software allows DHL to be proactive rather than reactive to issues—informing customers of issues before the customer becomes aware through other means. This level of customer service helps foster loyalty with DHL’s customers.

Air freight is a large part of DHL’s service. With locations in over 220 countries, DHL ships merchandise all over the world. As anyone who has ever been to an airport knows, flights are not always on time. There are many factors that affect schedules—weather, maintenance, crew delays, and factors outside normal operations. Because of this, DHL has developed a machine learning tool to predict air freight transit time based on 58 different parameters. The model allows the company to determine, up to a week in advance, if a shipment will, or even should, fly. Most of these shipments are international shipments.

DHL delivers over 1.5 billion packages every year. The use of robotics is allowing customers to track their packages using voice-activated devices, such as Amazon Alexa. These devices allow the customer to ask for an update on the status and be connected to customer service if there is a delay. Robots are also being used to automate the more repetitive tasks and those tasks that can cause injuries. Using machine learning training, the robots can then stage the shipments for the optimal loading/unloading sequence.

When making the move to AI and automation, DHL, working with IBM, recommends companies use the following four techniques to ensure a successful implementation: (1) design thinking to reveal any unmet needs, (2) traditional IT management techniques to scope the resources needed, (3) AI-specific methodologies for knowledge and training, and (4) agile methodologies for continuous development and improvement.

Critical Thinking Questions

DHL is being proactive in notifying customers of problems. Why would this create customer loyalty? Would it not be better to fix the problem and not notify the customer? What would you tell the customer in the event of a problem?

Autonomous vehicles and trucks are being tested for use in commercial applications. If DHL uses an autonomous vehicle for local deliveries, what else will they need to be successful? How can they ensure that the packages are received, and how will the packages get from the vehicle to the person?

DHL works with home voice-activation devices for package tracking. What other features could work with these devices that would make logistics and shipping easier for the customer and enhance loyalty to DHL?

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