Business Process Oriented IT In Logistics: Vision And Implementation" Martin Kolbe CIO Kuehne + Nagel International AG Mai 2011

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1 Business Process Oriented IT In Logistics: Vision And Implementation" Martin Kolbe CIO Kuehne + Nagel International AG Mai 2011

2 The Global Logistics Network Worldwide network locations in more than 100 countries Integrated service portfolio approximately 57,500 employees 7 million m 2 warehousing space Business Process Orientated IT p. 2

3 Mission Statement The global logistics network is our strongest asset. Dedication, integration and innovation are at the heart of our business philosophy. Focused on our customers needs we provide integrated logistics solutions of outstanding quality and operational excellence we are the extension of your business. Business Process Orientated IT p. 3

4 The Kuehne + Nagel Strategy Market trends Competition Requirements from customers Shareholder value approach The Global Logistics Network distinguished 3PL services Global Contract logistics Sea + Air: Integrated network Overland transport: European network Key Account Management Global and national key account management customer oriented sales structure / customer service Focus on industries Automotive High Tech Pharma, Chemical Industrial, Retail Textiles Consumer Electronics Lead Logistic solutions Continuous enhancement and implementation of LLP management services Aviation Logistics Business Process Orientated IT p. 4

5 Market Position Global No. 1 in Seafreight Value-creating service portfolio Leading the industry with IT-based solutions Strong partnerships with preferred carriers Global Top 3 in Airfreight Well positioned in the top league Cargo 2000 Phase II certified (first mover!) Strong partnerships with preferred airlines Global Top 3 in Contract Logistics Global infrastructure for global contract logistics coverage Dedicated and shared warehousing & distribution management Transportation management solutions Top 6 in European Road & Rail Logistics Focus on network services, LTL & FTL business Pan-European coverage of 38 countries Innovative intermodal solutions Business Process Orientated IT p. 5

6 IT Mission Statement We want Kuehne + Nagel to have the best globally acting and service-oriented IT Organization within the logistics industry, by providing the most: - cost efficient - business enabling - robust - and innovative solutions to our internal and external customers. Business Process Orientated IT p. 6

7 Worldwide Information Technology Organisation Facts and figures 1000 IT Specialists worldwide ca. 250 MCHF IT Budget 65 strategic applications > 1000 integrated business partners 20 Mio. EDI messages per month 260 Mio. documents in the document warehouse 3 Terabytes of information in the data warehouse Business Process Orientated IT p. 7

8 Trends

9 Market trends Globalisation long term economic growth focus on core competences Steadily growing expectations from customers IT and communication technologies ecommerce External effects / taxes Eastern extension of EU Consequences for logistics Supply chain management Growing demand for integrated solutions Growth of contract logistics Customers reduce amount of logistics providers Growing demand for value added services Consolidation within the logistics industry through M&A Extension of ecommerce Business Process Orientated IT p. 9

10 Supply Chain Management From a traditional forwarder to an integrated Supply Chain Service Provider Source: The state of Logistics Outsourcing 2009 third-party logistics results and findings of the 14th annual study Business Process Orientated IT p. 10

11 Growing Demand For Integrated Solutions And Further Automation 1. Added value in logistics is more and more bonded to the use of IT Increased electronic integration of customers and vendors Paperless documentation flow is a requisite for automated transactions of logistics processes A common presentation of the whole supply chain (Sea/Air, Warehousing, Road, last-mile ) become a key element, especially in niche markets (Oil + gas, aviation and aerospace technology) 2. Cost reduction can mainly be achieved by further automation of administrative, operative and financial transactions. 3. Deployment of automated monitoring and reporting becomes increasingly obligatory for the monitoring of productions and performances but also for steering profit in a business with small margins. Business Process Orientated IT p. 11

12 1. Conclusion IT becomes an even more important strategic factor for the business a unique selling point Therefore, IT can be considered even less separately Transfer into technology is still an important IT service but will disappear step by step IT will be more involved in process being a mediator who supports the business in order to model automated processes Process and IT responsibility have to interlock even more This change requests massive change management of existing IT in terms of this new role and in terms of developing the necessary capabilities. An orientation towards business processes needs to be developed. Business Process Orientated IT p. 12

13 IT Value With our IT strategy we reached in various steps a bases for BPO IT Rock Solid IT Service-Oriented IT Business Process-Oriented IT Enhance Business Alignment IT & Business Manage IT Infrastructure Optimize IT Infrastructure IT Scope Business Process Orientated IT p. 13

14 and developed a common vision together with the business Business Process Excellence will be the next leap forward in terms of productivity With the aid of a Business Process Automation Platform, services are used as process steps in any number of processes and products. This leads to a high level of standardization and costefficiency while maintaining a high level of customer focus at the same time (mass-customization). Business and IT are more closely aligned and talk about processes instead of applications or screens. Business Process Orientated IT p. 14

15 and while implement first workflows, we further improve our platform for the next level Our software providers help/have helped us with this exercise: Implementing a robust scalable messaging backbone since 2006 Implementing of web services since 2007 Our IT Solutions reaches a maximum level of added value and acceptance if it fits perfectly into the unique process chain of Kuehne + Nagel- We use products and experience of our vendors in order to equip us with the necessary flexibility like Introduction of a Kuehne + Nagel specific task assignment and task lifecycle Phase model Regional adjustments: Definition of a standard process for all regional extensions Support in building up rich clients for improved end user s productivity Usage of existing software products allows a faster implementation Business Process Orientated IT p. 15

16 Process Optimisation + Tailor Made Software = Productivity Business Analysis Standardisation of applications Process Optimisation Global Solutions Advantage of In-house IT solutions: High independence from IT market (no licence fees, determined release cycles ) Individual customer requirements can be realized within short time periods (customer retention) High flexibility to enter and grow in new business segments Through high internal standardisation of used IT components we maintain our cost leadership within the logistics industry Business Process Orientated IT p. 16

17 7 Rules For Business Process Excellence Think big start small Find the right balance between formalism and usefulness Design your processes with the simple questions: who does what when? Clearly distinct between business process model and technical process model Focus on one scenario at a time, do not lose yourself in exceptions too early Be enduring in implementing your process vision and focus on processes that really make a difference Sell the right business values Business Process Orientated IT p. 17

18 Thank You

19 Standard Components Component Project Management Business Process Modelling Database Technology Clarity Agilian Oracle Process Implementation Software AG Business Process platform Programming Language Java 5+, J2EE Business Process Orientated IT p. 19

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