DHL South Africa: Evolution the Key to Growing Market Share

To attain the position of market leader is an accomplishment in any sphere of business; however to maintain and build on market share presents an altogether different challenge. When that business happens to be logistics, the need to evolve is a constant driver.

DHLThat was the challenge facing Hennie Heymans when he became the Managing Director for DHL Express South Africa in January 2013. Just over a year later, his plans to change the business are beginning to take effect, following a period of significant investment and a reinforced customer philosophy.

Heymans has worked for DHL Express in South Africa for the past 13 years, gaining notable experience across the Continent during the same period, which saw him manage a cluster of 6 countries which in time grew to 14, before he returned to concentrate on South Africa in his current role.

What we do at DHL Express, is consistent with our focus on the international markets. We have a network of 220 countries and our footprint in Africa is the most developed of all the major logistics companies in the world.

Our customer base is a broad spectrum of businesses from banks and financial institutions through to medical companies and the mining industry (which is very big for us in this region),” he describes.

The company provides a wide range of services divided into 4 areas:

DHL Express transports urgent documents and goods reliably and on time from door-to-door in more than 220 countries and territories, and operates the most comprehensive global express network.

DHL Global Forwarding takes care of a variety of customers’ logistics needs, from standardized logistics operations and multi-modal transport solutions to highly individualized industrial projects.

DHL Supply Chain is the global market leader in contract logistics, providing warehousing, managed transport and value-added services and offers solutions for corporate information and communications management.

DHL Global Mail is DHL’s worldwide expert in providing customized solutions for mail and business to commerce (B2C) parcels, maintaining one of the world’s largest delivery networks on 5 continents.

The role of the partnership cannot be understated in helping to develop DHL into such a big presence across Africa – and with high tech business an important and emerging industry now, the same principles are once again coming to the fore, as Heymans explains:

High tech has become a big market for us and over the last 15-17 months we have concentrated on the retail market, looking for partnerships. We are already partnered with Amazon and Kalahari and the whole B2C market is important to us.

Partnerships have also helped us to expand our footprint across the Continent. DHL first came to South Africa in 1978 – and was of course very small back then. Over time the business grew to become the market leader that we are today, in terms of value and volumes. That is something that we cherish and work hard to protect.

“DHL established a footprint in South Africa very early on which played a part in helping us to develop – not only here but across the sub-Sahara region, as many companies use South Africa as an entry point to opening up African opportunities and we are able to work with them as they expand.”

Whilst timing has undoubtedly helped DHL to become the success it is, Heymans says that the quality of people working for the business is vital:

It is the absolute passion of the people we have to deliver the very best customer service and they make the network that we have around the globe a success. Last year we ran a campaign here called “Insanely Customer Centric” (ICCC) and for that to work, it already has to be part of our workers’ DNA.

When we recruit staff (we have 720 permanent staff but of course that fluctuates according to the season) we look to bring onboard people that have that passion for the customer at the heart of what they do. But it goes beyond that and we also have to have awareness – our management have to ensure that every time there is an opportunity to interact with a customer, that we are able to delight them.

The third key element is empowerment and we put great focus on empowering our staff to take personal responsibility to resolve any customer issues. That starts with an engaged workforce and a recent Gallup report indicated that customers spend approximately 23 per cent more money with companies that are able to resolve their problems effectively.”

Staff training applies global standards and DHL operates its internal “Certified International Specialist” course – recognised as a leading global training programme.

Every employee has to complete a series of modules to become an International Certified Specialist based on their job role. We proudly carry our international passport once we have attained this qualification and it helps us to develop a unified workforce around the world, which strengthens our network and consequently customer service capabilities,” states Heymans.

Such endeavour continues to reward DHL and according to Heymans, 2013 was a good year for the retail business which enjoyed double digit growth thanks to the combination of partnerships, pricing the product right and simplifying the product and process for international shipping.

To assist the business, DHL runs a fleet of 17 aircraft in sub-Sahara and over 100  vehicles in South Africa and also relies on third party partnerships and commercial airlines to ensure customer expectations are met.

Globalisation has had a profound effect on South African business and DHL has been there to help make that transition as smooth as possible. South African operations are run from a Johannesburg head office while the company’s global HQ is located in Bonn, Germany.

Part of our success has been to think global but to act local,” says Heymans. “The processes we follow are all aligned to our global operations and internationally, DHL operates a programme that we call our “Global Standard Operating Procedures” which sets the benchmark and process for each customer application. However, we can still apply local knowledge when applicable.”

Technology has of course led quite a revolution in the field of logistics and continues to play a vital role at DHL, as Heymans explains:

One of the biggest logistics successes has been the reverse flow of information and its accuracy and we are today able to provide customers with real time data. We have made lots of investment in this area over the last couple of years and have worked hard to synchronise information.

We are now in the process of replacing our entire fleet of vehicles in South Africa and upgrading our main gateway in Johannesburg, having already completed this in Cape Town and Durban last year. Once again partnership has been a crucial deciding factor with our fleet of vehicles and it was imperative for us that the vehicles are serviceable at a local level.

That philosophy underlines the need for a modern logistics company to remain efficient – particularly given the prevalent economy.

Our single biggest challenge is rising costs and we have to constantly look at variable costs like fuel and the depreciating value of the Rand, to realign our business.

We have to drive better efficiency throughout the business and if my workforce can each introduce one incremental efficiency or productivity change per day, that can make a huge difference to the business.”

He says that the empowerment approach runs along similar lines to Six Sigma, encouraging an open approach to suggested improvements – once again underlining the importance of evolution for the market leader.

Just over a year after he began his present role, Heymans is looking to build on DHL South Africa’s success and foresees an exciting 18 months ahead:

We have to deliver the output that is expected of us within the company’s global strategy – as an investment proposition, an employer and a partner. We also have to make absolutely sure that we get a return on the investments we’ve made recently and that means we have to grow our volumes further.

That is all about looking after our existing customers and growing and adapting to their needs as well as growing our market share. There is still a big chunk of market share for us to target here in South Africa but also across the whole sub-Sahara region,” he concludes.