Chapelman, I can start the session now. Go ahead, please.
And with my first voucher, Vadimat? A guess food?
The current net starting. That's meeting itself.
Great. Okay. Johnny, good. And welcome everybody out there. My name is Martin Seidenberg, Head of IR at Deutsche Fultz, DHL Group, and welcome to the next edition of our investor relations series called Experience Excellence simply delivered.
We started off with that series, a few weeks ago, featuring how digitization is helping our forwarding business. So today, we are gonna look at how in our supply chain division accelerated digitization is going to support overall success. And for that, as you know, we have today with us, Oscar Dubok, CEO of the Supply Chain Division and a CIO and COO, Marcus Faust, who's gonna take us basically through the key findings. Oscar will help you to, understand how the whole theme of digitalization plays out under strategy 25, particularly for supply chain. And, Marcus is gonna introduce you to the methodology being applied allowing that the best technology is available for each customer's request, which sounds very tailor made, but still is perfect organized for mass deployment and therefore also a wide rollout in how we steer and track the benefits And, that's gonna, help us through the next 60 minutes, including Q And A.
Talking about Q And A, you find below in the window you're looking at. A field where you can punch in your questions. I see those popping up here. Some of you have been, starting to that bring in the questions already, which is good. So I think we should have at least half an hour later on for Q And A.
And without, to do, I would like to hand over to you, Oscar, please.
Thank you. So I would actually start to introduce to, how it is linked to our, our, our strategy 2025. How that actually links to, what we're doing within the supply chain. And that obviously, then is, is the introduction towards the digitalization deep dives that we're that we're doing today, if I'm on my my markers. So what you see in the screen today here is and I think our purpose of connecting people improving lives, has been very clear over the past, over the past periods, during the crisis that we all went through.
But I think the important part of today is, to see how our mission and our, our, our, our focus, is gonna be achieved through the digitalization agenda. So if we go to the next slide, you'll see the, the actual, how the strategy 2025 is translated into, DHL supply chain. So we call it together unstoppable. Reason for that is because, supply chain is not necessarily a network but the strength actually sits in it when you do connect all the, all the facilities that we have around the globe and when you do connect the people through standardized ways of operating, the way we engage and train our people, and the way we make sure that our customers have consistent operations anywhere around the globe. So that's where the whole name together unstoppable comes from, which is, very well received and used by our people around around the globe.
And you see this split up in connected people. That's about making sure that we have a connected and consistent way on how we train and develop our people and and how we create a diverse organization while being safe. Execution Edge is a very important one around we make sure that we use our standardized ways of operating, around the globe in order to be able to improve every single day. Delighted customers is actually how we then actually make use of those tools in such a way that we can fast respond, and provide the flexibility that our customers require specifically in these days, to actually delight them and and, fulfill their needs in the future. And then what we're really gonna deep dive on mostly today is oh, tomorrow.
So this is how we create the digital supply chain, how we make that a reality going going forward. So going to the next slide, So these are the trends that you see in the market of today. So, yes, we are the supply chain solutions company for the world, but a world that is really fast changing. So, but if you divide it in some books, if you look at the digitalization agenda, it is faster developing than ever before. But also with some benefits that automation and robotics and digitalization is, actually there's a lot available.
It very flexible, and it actually is a lower cost as well. So there's a lot that you can do in our industry now with robotics and digitization. On the labor side, there is an obviously a high request of flexibility to be able to, move fast upskill, down skill fast. I mean, we've learned that over the last period even even more. And and and that together with, training people in different minutes because we become more digitals.
We have different skills that we need, on the floor in our operations around the globe. And then on the customer side, you see a fast development, and also here, even faster than ever before the rise e commerce requirements because and more alternative channels to be able to operate, and and we've, I'll come back to that point in a second. And you see the overall flexibility that is needed to, design and adjust supply chain. We have examples over the past period that we had to basically reset supply chains, global supply chains of customers within weeks to be able to respond to the various developments that we've seen around the globe, moving from production areas, storage areas, change those, create the different supply chains throughout the various business units within DHL. So we feel that, our strategy is actually well sent to, address the challenges that that are in today's market, and that actually will give us the possibility to do own tomorrow.
So going to the next. This is a bit where you can see how over the past, 8, 9 weeks we could actually clearly see how our all being a pretty new strategy really worked really well in, in these in these settings. You saw that our global standardization through our OMS First Choice program enables that enabled us to really fast adjust our processes and our ways of working to just to the requirement of safety, but also the requirements when we had closures, to make sure, that supplies were reset And we've been able to do that while maintaining the safety and the health of our people. And that's things that our safety agenda always have been higher in our agenda we could actually use that really well during that period. And therefore, we actually had record performance in our, LTIFR during these periods.
Our quality performance has been really high. Again, by having well trained and people, we could actually make sure that we keep the quality level high. And also by having through our data analytics good visibility, we've been able to manage that well. And we, on the basis of that, we have decided while in the middle of the crisis, to continue to invest in training over phone client supervisors. It's about 20,000 people, and that's an 18 month program.
They'll be rolling out as we speak. Because we've seen the benefit from it, and we'll see that there is more and more that we can get out of that in the coming period. And we've also seen our customers are appreciating this. As we speak, we are in our Q2 customer satisfaction survey, and it's really, we've never seen such increases as we've seen at the moment. And and then, we've been able, during this phase to communicate and interact with all our 150,000 people because we're rolling out what we call our connect app, and that's an application where people not only get their communication from, what they communicate with each other, in their size, in their communities, but also from there it becomes their digital enabler to interact with the company.
So that just gives you a few shots of, and impressions on how we've used our strategy to the benefit during the COVID crisis Going to the next slide gives you an indication. I was speaking before about how our customers had approached us still. So during the crisis to find alternatives ways to extend their the channels that they have. So we've seen lots of increase already before the COVID crisis, but even, within the crisis, as well on having alternative e commerce channels. And, we were had just ready a complete set, and then don't worry.
I'm not gonna talk you through the details of this slide, but it gives you an impression that we have a complete set of standard package of IT solutions end to end that, for, e fulfillment in in the market. And we've seen, a fast growth in our, new e commerce business can see here, 38% of our new retail business, is in, in e commerce. And you can sort of spread them between the pure e commerce for brand manufacturers, the pure e commerce for retailers and e traders. But when you see most development of, in recent period, is actually in the omnichannel B2B and B2C, and original fulfillment network. So what this actually is is that you take traditional supply chains and you add the, the e fulfillment angle to those existing stop points and use the infrastructure that we as DHL have in all tier 1, tier 2, tier 3 cities, to have forward stocking locations, to have fulfillment points close to the end customer.
We could use this to help. And we've got some great examples around the globe where we within weeks set up or even within a week, set up new operations to give our customers new channels to face the challenges of today's world. So we could only do this, obviously, and can only do this going forward if we have our investments in our accelerated digitalization agenda. And as I mentioned before, our our digital supply chain, So I think this is a good moment to actually, hand over to, Marcus Fools to talk us through what that really is.
Thank you, Oscar. Yes. And I'm very excited if we can move to page 10 to talk about the the vast variety. That we have available to us and how we varied surgically, bring those innovations, bring those technologies into our sites and actually roll this out in a mass deployment. And why is that so complicated?
Obviously, the it is not a one size fits all. We are the world's number one logistics company. We're supporting customers all around the globe. And we're helping them to drive their digitalization opportunity. We have we're operating the countries, and we have more than 2000, 2000 sites globally.
And we would have loved to show you, in in real life in this session, of how this actually, feels and look like. But but none of these operation 100% the same in terms of the products that we're doing. And you see the splitter in terms of, the sectors we're operating in, it is a a big variety across all of those sectors, being retail and consumer is the biggest tier, but, auto and tech. Coming, straight thereafter. So what we need to do is to drive the right technology into the right site so that we can gain, advantage in terms of our operations for our customers make them more agile and drive their supply chain in a more digital fashion.
And, within the last next half hour or so, I will explain to you of how we do this and how we bring those technologies into each of those sectors. We have delivered, and we are in the, in the phase of delivering a very, comprehensive digitalization agenda. It's a standardized approach to identify the key technologies at scale. It really is, for moving to the next slide, operator, please, if we are moving to, digitization, here we go. So we can see that we have the key technologies, available at, at every site.
Our goal is to have every site, every customer, and every employee experiencing the new digital supply chain. What I'll also explain is how we very closely track the deployment of each of those digitalization initiatives and how we are measuring the benefits. So with this, we are leveraging our scale to focus on a few focused technologies which we think are mature. And, and we are connecting agnosticly to our system so that we have the ability to change. I will explain that in a moment a little bit more.
The technology from one side to another in a very seamless manner. And on top of that, what is very important that was going to be even more benefit are going to be driven by this is the application of advanced analytics. And with this, we are going to maximize the supply chain efficiency the resilience and the delight of our customers. And that all is in line with our strategy 2025 objectives. We wanna grow the market.
Outgrow the market. And we, we, we want to, maintain our industry leading margins to around 5%. The benefits will be we stay on top of being the provider of choice, investing of choice, and employer of choice. So let's look at our digitalization agenda in a bit more detail. At the core of this agenda is our operation.
So we see on this slide, the core components, when it starts with receding, storage, picking, packing, dispatch delivery. Is then going into the transport part of our operations. So every operation in supply chain is touching that. And we have looked at the key digitalization enablers of what will drive benefits in a very holistic manner. And it starts from process automation we do have, supporting robots like cleaning robots in in every of operations.
I'll go through this in some detail. I will be able to show you some videos of how this actually feels in a site which is digitalized. On top of that, We are driving the customer supply analytics and delight our customers with new insights so that they can optimize the inventory, having the right inventory at the right place, closest to the next point of consumption. And to, compliment this, we are also driving utilization in each of our support function. Well, that's IT in terms of predictive IT maintenance.
Or finance, where we have predictive cash flow optimization, or in the HR, where we're very closely looking at how we can further increase staff engagement and retention. I'm going to go now into the details of how we are matching the bright technology to the sites. About 2 years ago, we've already had numerous ideas and initiatives ongoing in terms of driving digitalization into our own supply chains. Great idea. But we needed to maximize the pace through a very focused and orchestrated effort to drive things more into the goal I face.
And what we see here now is where we stand. So we have still numerous and and, and, unlimited ideas. We're focused on 12 key technologies which I'll explain in a moment. We have more than 80 partners that we have engaged who know us and who we help to further develop. 1800 opportunities that we have identified already, in June 2020.
We have more than 5 400 customers already touched, meaning we've introduced digitalization initiative into their operations and more than 6 20 goal lives. So that's a quite massive scale that we have brought in a very short period of time. So going into these 12 key focus technologies, and I will give you a few examples of some videos of how how you can see how this works. So we start, in a moment, but, let me just kind of go through this in some detail. This is assisted picking robots will help in e commerce operation.
We'll see a video of that. Goods to person is going to is is reducing the amount of travel that, our associate have to have to go and the goods are being transported to them, wrapping robots. It's simple, but very powerful technology every operation. We have technology where we can grab robots. This is the, is the, the foil indoor robotics transport, which is a way of introducing fully automated vehicles to transport pallets, and we'll get much closer to that idea of the full autonomous logistics.
We're driving robotic arms into our operations, to help, when it comes to value added services or co packing exercises, the work, which is very manual, can be replaced very quickly, with robotic arms. And then on the lower part here, we see those which are massive scale in terms of how we can deploy them. They do require less capital investment, but they're very powerful, and I'll we'll see in a moment, a few ideas on that one. Smart operation, where all the devices are a big topic. And then intelligent process automates and algorithms and and other supporting robots, are are things to mention here.
And maybe we just move very briefly to the first video which will explain one of the key components of, of our operations, which is in the robotic transport and the transportation of pallet something that happens everywhere. And if you can roll the video, operator, that we can see, the forklift moving around, our operation. There is no, human being around here. It's fully, autonomous, the palate is being picked up. And and we can see that over a relatively long way of travel, is all be done completely automatic.
It can be, it can be introduced in a very short period of time. It's connected to our warehouse management system. I'll talk to that in a moment a little bit more And, it's then brought to another place where all of this otherwise would have to be handled by a forklift operator. So that's a a massive scale that we will be able to deploy because this type of operations is happening every year. So how do we bring them this type of technology into the right site?
Moving on to page number 19. And this is a illustration of how we map those key technologies, those focused technologies to our sites. We have characterized all of our sites with their profile. So we know exactly how many picking, how many pieces are being, inbound, outbound, what is the size of the operation, how many operators we have, how many shifts are we operating. And depending on the characteristics of that site, we can very clearly define what is the right technology for that site.
So that is easy for, for a site, for an operator to, to work with central teams to identify initially the right product and then move to the next phase of implementation. With this, we have a 100% fit of of the right technology for the right sites. And that is where the explain is the next video. If you can roll that, and that's an example of our e commerce operation. And you can see here, one of our partners, Locust, where we can see, that it's a very user friendly, interface that the operators are working with.
Peace picking here. There's just one item that needs to be put into the trolley of of this spot. And then it's transported to the park station where it's then sent, to its final destination. We have this deployed And we have just announced that we're going to deploy, another hundreds of those bots into our operations, both in North America as well. As in, the u European Union as well as the UK and I.
So use, applicability for peace picking and e commerce operation The right technology, again, to the right site, is where it drives the power. So let's move on then how we are tracking our progress, around those introductions or those key technologies, robots, and tour operations. And, and we are tracking this. I have daily visibility. Oscar has daily availability of where we are in terms of the rollout of our sites.
We have, the key view on all technologies, We know where they are in the funnel, of whether we have already we're in the deployment phase, whether we have gone live and and we can further drive, essentially, the, adoption of those technologies for the, for the right sites. So that is, very powerful in driving, this last deployment. And the result of that, you see on page number 22, as I said, we started a long time ago on our digitization program, but we really pressed the acceleration button in 2019 and now still in 2020, are growing exponentially in terms of our, application of key digital enablers, like you've just seen into our operations. Right now, we are at around 1800 initiatives, which are underway. Some of the, some of them are still in the, an opportunity assessment stage, when we then go into some more site assessment so that we know exactly of how this is going to, play out.
Then we go into the planning approval, the deployment and then the go live state. And as you can see, more than 620 initiatives of those digital, enable us digital, solutions, focused technologies that we have already done live. And the, just to repeat this again, we want to have every site, every customer employee that, is experiencing this new way of working in supply chain. Very exciting times for for our industry. So now, this is about quantity, but we also to see how this plays down in terms of benefits, for our investors and for our customers.
So just an example here in terms of driving the the technology and also understanding of how we manage monitor and steer the return on investment. For all well, railroad devices which I'll also show you a video in a second. We have a very clear assessment, as I explained earlier, on them. We create a business case They're rolling out of those variable devices. Obviously, we get the invoices from our partners.
But then when it comes to the benefit tracking and our validation should we know that we have, that we know what we are implementing and what to expect in terms of, operational efficiencies and then also monetary efficiencies. We have a dashboard where we can see very clearly how many scans, for example, with those variable devices are being conducted on a hourly basis. So we can see that it is actually used to technology is being used we measure the impact on our direct labor and the depreciation. And then, finally, a global view divisional performance management where we see down to every site, the positive P and L impact, so that our level confidence in all of these rollouts is further increasing that we know that it actually works, and it does drive the benefits that we associated with each of those technologies. And since I've spoken about those variable devices, maybe we can roll, the next video, the smart ops video, which is an example actually in one of our operation in Vietnam, where we'll introduce variable devices and you see a before and after here.
The colleague is picking some pieces and has to go back on the right hand side to the control station to get the next task, while with the wearable device, the already, the new task is being, directed to the device So so that we have huge efficiency, sea, sea gains. There there is not all these unnecessary trouble back to a station where the next task is going to be delivered. Next example, would be then the end to end digital process where we where the operator and besides supervisor can also look at, of how, the performance is actually looking like. And we see another example here right now. I think it's been rolled already, which is, our safety measures.
So again, the picture of a safety moment can directly be captured in the moment when it happens. It's been transported to a central we can see what's going on. And and and then a kappa and and a preventive action can be taken. All of this is happening directly on the floor. Where has happened rather than something which it, which has to be done via our control tower.
And the other point, which I wanted to mention is that we can see, in real time, the productivity, of of the associates. And instead of going back, to a place, in a meeting room where then the performance of the day is going to be discussed. We already see this, as, on on the screen and the dialogue between the supervisor and the associate can happen directly, on the floor. So very, very exciting technology. And the soft where the software makes the the biggest difference in terms of, our, and, of the of the value that we can bring to this new technology.
So we're moving on to page number 27, where we're further driving than the extent of how we roll out these great technologies into our sites. Early on, we, we used project by project, and we created BCA by BCA, and then obviously the IT integration and some customization, which is good. We have seen some great, returns on that, but it does not utilize the scale of DHL. Well, we have moved to onto now is moving to leveraging our scale using global or global capability and then only do a very small customization locally. And that brings more success to the size much more, much less risk in terms of introducing it.
And we can further turn, things, into into new ways of accelerating the rollout. So we we are realizing our economies of scale, and obviously also the cost advantage and and and with this, we can then also move technologies, whether that's wearables or a a box or an indoor robotic transporter, an automated forklift from one side to the other, without, creating a huge overhead in terms of movements and, and readjustments of the same technology to the next site. We know where it fits and we can move it and we have already seen this. Can exchange robots from one side to another. We have different peak times for certain operations.
And then, and we we deploy those robots at a new site in record time, which gives me an example to show one video of our customer, which is, a video a company called Optus, and I will probably pause in a moment because it will be worthwhile for you to listen for a moment, to our customer what they're thinking about our ability to scale into fast track deployment with this new way of working. So do you can roll the video, please? We went down.
DHL was able to provide us with commitment for people's off training project teams. IT, and they were confident enough to say that they would be able to get us up and running again within a week. And I'm really pleased to say that they delivered on that promise.
So you're saying that we were able to stand up a complete warehouse and start shipping to customers from nothing to doing 7000 shipments a day in a week.
Absolutely.
That sounds pretty extraordinary to me.
In all my use, it is the only time I have ever seen that happen, yet it was done.
So I think, pretty powerful message from ops, which is the 2nd pick, biggest telecoms operator, in Australia, I guess for for those of you not so well in tune with the, with the Australian, dialects. That's, but but it's it's been powerful in in 1 week. And that is getting much, much closer to the vision that we have, that we want to deploy, supply chains within days, maybe at some point in minutes. So that we can enable our customers to grow much faster, to adapt, to be able to, respond to, to new demands very quickly. And this is a great example and testament that this strategy is working.
So how I'm moving on then to the, to the next Next page here, the benefits of, of also using technology, in creating the linkage between our warehouse management systems and and those robotic solutions, we have introduced a robotic hub. And that is a plug and play solutions that minimizes the deployment effort. That's the one thing that traditionally did still cost a lot of time, and also money, in terms of bringing a new solution well, that's, the local solution you've seen earlier or many, many others that we are deploying, like 6 rivers or or many of our, our partners that we work with. To a new site. So what we're doing now is to create this robotics hub.
It's a collaboration, between Lou Yonder, Microsoft, or selves to build a piece of software, that will be the linkage between the Wells Management system that we have deployed at our sites, to, those vendors, to those robotics solutions. And we have already shown that that reduces the cost and the effort and time, to introduce a robotics solution to a site by 60 to 70%. It's it's it's it's great to see that this agnostic way of connecting is already showing up, as, as youth's benefit for us in the future. So the whole complexity goes away, the costs are getting lower. And our customers get the value, and, and they get the right robotic solutions for their site.
With the, with a good cost, less good quality and time. So this will help us to move, those robots also very efficiently. And I'll get to my last point of this, of this small talk here. It also enables us to standardize the access to our data. I was mentioning that we can, that we can capture all of the events that are generated by a forklift, by a robot, or by a wearable device so that we know exactly what's going on, where do we see and where do we detect, new things in terms of the supply chain that we need to respond to.
There's higher demand or there's lower demand so that we can work on. So is this solution, this is robotics hub solution, we get also very standardized access to those sites. And and I will give you a one example on the left hand side of this, chart on, page number 30, which again brings us back to the full vision of our digital supply chain strategy, which we are driving in our, in our, in our 2020 5 strategy. And that is the customer supply analytics by knowing what's going on, by understanding in a central manner of where we detect any type of new demand, we can also help to optimize the inventory management. And we'll have a second example of a customer of ours which I'll very briefly introduce on page number 35, and then we'll roll the video, which is, an airline company, that has given us the task to help them with, was, providing the right meals and and and and all of the consumable world products onto the flights And, we have looked at the the the sensors and that, the key things that we are detecting in their supply chain.
And so the customer is facing some inefficient sourcing and and some of the right, wrong products on the right, on the right products on the wrong flights. And so we help them to build a diagnostic model and to understand, optimize, the inventory levels, so that we have the right consumption product on the right flights. Obviously, that decreases the cost because nothing has traveled and being, which doesn't need to be traveled. And we have a full digital twin of the supply chain and can model it, and the customers are delighted by by getting the right supply. And on that.
Just one example, and maybe we can very briefly roll that video, from the CEO of, as a TS.
Features is the ability to constantly monitor demand consumption. So the airline will get a better sense of which meals are more popular. And therefore using the logistics component, they'll be able to move the right menus to the right roots. So it matches up against taste of the demographic on those particular routes. That's a level of sophistication that the industry hasn't really gotten to yet.
And so combining what sets does with what DHL does on the logistics side, and then using data analytics to know those consumption patterns, we should have a much better chance of delighting the customers on board.
So another great customer sentiment and and I can only subscribe there. This is this this is a new way of looking at supply chain and really digitizing it and using then data analytics to drive much more efficiency and agility. So how are we marketing this also internally? We have, put together and very soon we'll also exclusive, externally, we've put together a page, a a web page where we can see all of the details of the technologies, where we can drill down. I hope this this is also animated here, but we can see that for each of the technology, that we have identified as focused technologies that our colleagues can look at their specific technology.
They can, they can see the videos. They can see the the testaments, of the customer, but also the benefits, and the time to, to engage who to work with, everything that they need to know. About this digital transformation. We have the collaterals, including all of the, the library in the back end, what needs to be done, And then obviously, as I explained earlier on, an innovation tracker, what we see very clearly, also new things coming into the pipeline. Something, that we haven't yet put into the focus, but has the ability to very soon come as a thirteens new focus technology.
We'll have the program governance and and and all the regional engagement, laid out. And and with this, on the on the summarizing page, It just want to, to illustrate that we have, the digitalization and vendor started, and we see great progress. We have this standardized approach where we identify right technology for the right sites. So that we don't have any full startups or or disappointments. And we have seen great progress with these 1800 opportunities and more than 600 goal line So we're talking about real goal lives.
So this is something that our customers and employees can touch and feel. We have started this plug and play robotics app, which will enable us to move robots from one place to another with very low effort. And that will give this program a further push. I'm expecting an even higher, experimental acceleration of our numbers in terms of go live. And and then we we are augmenting this with data analytics.
To understand all of the data in the supply chain, to be able to use the right assets at the right time and enable a better decision making. And with this, we are going to make this digital supply chain a reality. Thank you.
Thanks Marcus and ask us so far at this stage for introducing us to, the theme of digitization and how we actually do deploy this, and it's good to have effect based discussion on that for a change. So, you're getting in a couple of questions, so I'm gonna start off with a few, trying to check a couple of actual aspects, before we gets to what I think is, the most relevant to our, listeners out there. Oscar, you mentioned e fulfillment. This is an important theme. Do you have some sort of quantification of what percentage of the supply same division's business is in e fulfillment or how much of the growth is coming from e fulfillment?
Yeah. So, so 3 8% of our, of our new business, in the retail sector is, is coming from you fulfillment. And they, retail itself is about 30, over 30% of our overall, close to 30% of our overall revenue. So it's a quite substantial, substantial part. And I think what is interesting that, that is the traditional part, but you also now see more in, some of the business to business sectors, technology, industrial, also more fulfillment related businesses coming in.
So it is an it is a, a development of growth that is really rated in many of the sectors we operate in. Okay.
Perfect.
Now more to the theme of digitalization, Marcus, do do we have something like a percentage goal as to how many of our sites we want to to cover at the end of the process or is going to be an ever revolving process? It it is. It is for me. There's a whole whole whole
type of approach. We want all of our sites, all of our customers, all of our employees to be touched by by this new way of building digital supply chains. I think there is, I have not I've yet to find a site, which is not applicable to any of our, our technologies. So there is definitely room If
we think about the software part and the wearables, it's something that is scaling very well and also insights where we have maybe lower labor cost situations. And, obviously, the question is, we're using off the shelf technology from the technology providers. So, if I get you right, the trick is not just to, have, if if I put myself in an competitor situation and say, okay, let let me get this technology as well.
No, I think the, our strengths is is in the integration to use our rights, our, our best practice, on this first choice methodology. We have standardized way of dealing with our supply chains and then augmenting this and putting the light technology into into the into the sites and helping the sites to further Excel and achieving their full potential. So that's the I I don't think, is a you just throw in a few, a few new devices. And then wait for the benefits to come. It needs a full, full, full process of how this is going to be deployed, how to measure the benefits.
And how to also help the culture part of it, to engage with the employees, to engage with the customers, and, and, and get the buy in, on each of the components.
And I think in addition to that is that we can fast scale it up. So, whatever we have learned in the first two operations, we can then actually roll out in the in the following 40 because what Marcus was explaining before, have we done the analysis on where a certain solution would fit? And so a customer doesn't need to come to us. We will come to them, to actually apply, what what what the actual solutions, and that's always an integration of various solutions. So the way Marcus' team have worked on IT part where we've combined various IT, softwares, etcetera, integrated depth, applied it in such a way that it actually becomes more effective the same way it works actually with, with robotic solutions.
Okay. Manila from Bank of America, I think that takes care of some of your questions. There's one detailed question on on page 29, actually. You you you're talking or you make the differentiation between strategic DHL and non strategic sites for customer owned sites. Can you quickly help us with the the logic behind that?
Okay. There is, there is a difference, in terms of the, the IT systems we're operating at sites. The majority of our sites, we're running our warehouse management systems, our IT solutions. But there is the, the, also, there are some custom merge, which prefer to, operate on their own systems. It's the nature of the contract logistics.
You usually take over an operation and sometimes it's greenfield and we'll be a strategic DHL system. Sometimes it's a it's an existing operation, and we take over and gradually turn this over into what we consider best, best, best practice. So what, but there are other systems that we need to integrate And the robotics hub solution helps us then to be faster and also in those sites, where, which are customer operated in terms of their IT solutions.
Okay. So you I hope that that makes that most clear. And, last from the from the Nevus list, CapEx. I mean, supply chain overall, not exactly a CapEx heavy division in in the group context. How how do you see investments into this type of technology sort of moving the needle bits more towards asset heavy, or is that not a significant confector?
I don't think it will be, of course, there is a bit of a movement because there is there is there is still indeed investments. But as I said at the beginning of the presentation, investments in, specifically in talk about robotics. They're not, the type of investment that they used to be 10 years ago where you, had to invest in a last deal and, and fully automated science that were then stuck for the coming 15 years in in one financial model to be amortized for that specific solution. The great thing is this is that the investments are a lot lower. They're a lot more flexible because you can move robots between sites depending on capacities.
So the CapEx is, yes, it will increase a bit, but not substantial. And it be, and it remains flexible.
Okay. Well, that brings us basically to, to the core of the question that we've got a couple of, as asking people, like Mark McVicar from from from Barclays or Christian Oaks, and also Unilever. How how do we get our answer around the financial benefit or the impact? How do you measure it I think is, it's, is it finding about the right balance between efficiency gains actually being monetized and a competitive advantage to, to, to win the contract? How, how do you weigh that?
Yeah. I, I, I think there's, there's 3 elements. So, so one is it's provides flexibility because let's not forget that we, in today's market, you have to be able to cope with far more fluctuations, point fluctuations than ever before, not only because of the COVID crisis, but also before. That was already the case because of the growth of, ecommerce that, that, that puts the pressure in the supply chain all the way to the end. So flexibility is, is one that is, that's required.
The second one, indeed, is competitiveness. We think this will translate in growth because we can be more competitive because we provide both better flexibility more efficient operations. And and then, obviously, of course, there's also productivity aspects on it. And I think it's the combination of the 3 that will give the benefit. Now there is some share that we do with customers as well, right, in some cases, and, a customer gets some part of the benefit as well.
And therefore, that will then translate in growth
that's when you have an existing site and start to introduce technology. Exactly. Okay. And for for brand new customers
or brand new? It translates into growth. Because we have already seen that we can, and you've already seen that more than I, where we have, been able to win business because of the type solution that we offer. And and then because we have a proven track record that it works because we have already done it somewhere else, And I think that's the big benefit that that everybody can come with an idea from the shelf, but really coming and saying, we know it works. We've done it, and these are the benefits is gives customers confidence to actually come with us.
Okay. Just as a quick reminder to everyone out there, if you wanna have your questions answered here, you just need to punch them in quickly. We got a still a list to to work down here. Mark McQuicker, you also asked about where where do we stand in, richonne on invested capital. We are not showing this on a on a regular basis, but, I think it's no secret that supply chain is, higher than the group's average, group average, as, as you know, is just above 11%.
That's including IFRS 16 for the commissors. And, you, you're on the high teens. So I think that translates also, and and that corresponds to an about 5% EBIT a margin. So to, to get an idea about that one. More on the strategic side and Christian Oops from Vada was quite friendly enough to ask that.
Now going into hopefully the post pandemic phase, what is your sense? How we your customers want to adjust their supply chain strategy or their their their setup
Yeah. And one way or maybe maybe just if they go first, what I'm seeing also in my conversation, I'm sponsoring a number of customers myself, is that there's more and more demand of going into these, I guess, adaptive solution and these be more agile, be more responsive. We have what we have seen, number of disruptions, in many supply chains, going maybe potentially also a bit more, a bit more local, having them things like the European fulfillment network, where we, where we can, where we can source and help to bring the right product to the, to the point of consumption much, much closer would help. But I do get a lot of questions on how can we embark on this, digitalization journey. I think we have demonstrated in the crisis continue to invest in this.
Is this the future, of the supply chain? And that is something that that our customers, I think, will be will be all around the globe asking more, get us more of the solution to be, to be, able to respond to those crisis. And ensuring social distancing and things of that sort, much more easily.
Yeah. Because I agree with every discussion you have with customers, flexibility being in small within a site or the overall supply chain is key. And all digitization is a main contributor to providing flexibility going forward. So it is, it's flexibility. And the other thing is being able to respond fast.
That's also why we wanted to show you those, those those examples from these customers because those are examples where indeed within a week, we've set up something completely new. And and that is what the responsiveness that the customers of today need. We don't know what tomorrow will bring, but the one thing that we do know, is that a fast responsiveness agility and flexibility is what they need.
So to have these proven and tested technologies and this approach available is Is that sort of improving also our performance, for for startup projects? To the BCA then. Right? Yeah.
Well, Mark, you you can explain this
in in detail. Yeah. Obviously, I mean, we we are measuring, our, our performance on startups. But I I think I was mentioning before that, for example, that's a robotic solution that helps us, to cut time and risk quite substantially in the double digit numbers in terms of, percentages on cost and also time, is helping a lot, in terms of, ensuring that we know what we go live with. We've seen it before.
We know how it works. There is no risk and that brings our, our, achievement in terms of, achieving the BCAs into, into the right zone.
Yeah. Yeah.
I think with the standardization agenda that we started a while back, are the stability that we can give to in the security that an actual startup will be stable and and perform the quality that they require and are financial indicators. And you see that in all in all the numbers at the moment, that is definitely a big, a big step.
Okay.
Thinking further, Susie, you're targeting sort of 100% roll out effectively. If I go ahead a couple of years. Do do you see something like, dark warehouse where there's no human being any longer No.
And I think I think that the so if we did the first of this one, but I but I I think that's also what we're trying to convey today is that it's, the people aspect remains a very critical one. We have 150,000 people. With this, and the growth we're having, that still will be similar to that number. And, what is important is that our people are, trained, engaged, and, and we are trained for the way we operate tomorrow. What we actually see is that with these investments, when you talk about, well, many of the examples that was mentioned is it actually motivates people because the environment you operate in is far more interesting than, than the, let's say, the, the traditional dark warehouse that you would have in the past.
And now you suddenly, you work with robots. You work with data. You actually have on your on your risk. You actually have the the details. You can communicate with with your peers.
So the the is far more exciting to work. We get, obviously, we are addressing our people to make sure that they can cope with it but it's the whole thing about collaborative robotics. That actually is the, the key thing because we believe that a collaborative robotics piece depicts the biggest possibility to be flexible because then you, you, you can respond faster and act faster, on changes, on day to day basis.
Okay. So you mentioned growth, growth in terms of business in a given site, or do you see expanding expansion on the number of sites or customer industries, or what's your growth focus?
Yeah. We we we obviously have to have to read a little bit the market today and what, and what that many model indicates. But if I, if I just put COVID discussions aside, we see, 2 things. We see, growth in market share, which is 1. We see growth in in, in top line, post the, the, the impacts of COVID that we're, that we're having.
We're seeing, particularly growth with existing customers. So extending, activities with existing customers because they have seen the benefit that if you then can copy paste what you already have it, it makes it more interesting for them to, to grow with us. And and as I as I think we started saying about, 10 months ago, is where in the past 5 years, the focus of supply chain has been a lot on standardizing and and creating that, the quality level, and and the way we operate. By now having that platform, we can accelerate our overall growth. Now obviously with COVID, we will see obviously, some impacts on that, and then we will have to recover from that.
But we also see that customers have now learned to appreciate even more, the type of services that we can provide and how fast we can respond. And that was the point I was making before about this customer survey. I mean, it really has gone beyond any expectation of ours, in in these, in these weeks. The feedback that we get in our customer surveys. So it means that they do see, the value that we have been winning.
So therefore, I think that our sure renewals will go up and that will actually provide further growth.
Okay. We're getting closer to the full hour, but still a couple of is coming in, from David Kerstens, but also Angus, and it's through the Swiss. Technology that that you have identified. Do you do you feel like you want to be owner of that technology? Is is that potential M and A target that we would be looking at, or do you want to stay rather, provide or agnostic and see what comes next what
my view on this one is that that we are, going to stay in, rather, provide prognostically. The market is still moving quite quite dynamically. We have seen over the course of the last couple of 2, 3, 4 years, new partners coming up up to the scene. It's still something where where we are constantly looking at new solutions, which one is going to win the, the the the race here. We are we are partnering with those those providers, partners, I don't see us, in, in, at this moment in time investing in a majority share into those cost into those those partners.
Okay. One further from Christian Oops. Ecommerce e fulfillment, does this change the sort of the the the the average size of the operation that that we are running? Is it smaller sites, or is that more a case for multi user sites or campuses? It's a great question.
And, and, and the answer is all of the above.
Because, because, on the one hand, you will have for omnichannel where you you will have the large centralized stop points, which becomes multi channel stock points, so where you're not only providing to the traditional, retail chains, for instance, but also direct to consumer. You use the same stock for it, but you have different, operations, in order to, to pick and prepare and fill. So that one, it will still be big centers. But on top of that, you will actually use the, the presence that we have because we're practically in every every city, every main city you can imagine. And we're using those sites, and then we, yes, we're talking about a multi customer setting, where we then have those local, forward stocking locations.
So those indeed are smaller operations, but where you combine several smaller operations closer to a city where you then actually can fulfill on need and deliver same day, up to the needs of, of the customer, of our customers.
And if I could build on that, providing also visibility to our, our customers who want to go on the e commerce channel that they know where they have certain stock. Do they have something in in Barcelona still, or or is the next kind of available stock? Is it somewhere else? And we have a one stop, maybe one for next in our session, we have a solution which gives us that visibility in real time, or where to source from, and, where to fulfill the demand of a certain customer from.
Yeah. If you're interested, I think it would be really cool because at one slide that I showed, there's a whole thing behind it where you can see the total package that we provide them. Right. Yeah. Okay.
Good. That means we have pretty much worked down the list of questions we just got over the past 30 minutes. So thank you for all of you placing those questions. I hope I did a decent job in addressing them all to the to the right people. You mentioned that the next, upcoming events, we will continue, of course, with our, virtual formats.
The next one's going to be on data analytics on a group wide level. But of course, we're also very keen to, probably more towards the latter part of the year to get you all in front of actual operations on the on-site visits. So something to look forward to. In the meantime, thank you very much, Oscar Marcos, for taking the time and helping our investors and analysts to better understand how how to manage supply chain operations in in today's world. And for you, I hope this was a bit of a helpful exercise.
So if you are next confronted with some sort of investing propaganda from any of our peers, please feel free to cross check and to to see how how how workable that is Okay. That concludes today's tutorial session. Again, thank you very much.
Thank you so much.
And thank you out there for following. And, keen to to get your feedback later on and, keep in touch to see you sometimes.
Thanks for your time.
Thank you very much. Bye bye.