Name: Alhamd Khalif Rama
Student ID: 1412401924
DHL Express cuts costs with its analytical pricing system
called INSIGHT.
by Jennifer Niemela
Logistics is a competitive, price-sensitive business. Successful organizations must work hard to collect and analyse data to ensure profitability and stay one step ahead of their competition. In its bid to become and remain the “logistics company to the world,” DHL Express built an analytical pricing system called INSIGHT that works in any market and provides the critical data needed to stay on top of the other players in the industry while saving the company at least ¤500,000 per year. Graeme Aitken, vice president of business controlling for DHL Express, provides details about the project.
What was the catalyst for INSIGHT?
Aitken: When I joined the company back in 1995 I was working on building up a costing system, which at the time was pretty cutting edge, but it was based in [Microsoft] Access. People didn't update it properly and it was very expensive. Over time it just became less and less fit for the purpose so there was a realization: we didn't really have good costing data, good profitability data. The first step was just to get numbers that we could trust so we built a huge new, somewhat revolutionary, costing system.
How did you get support for such a major undertaking?
Aitken: The business case was pretty much built on a cost saving
… You make the investment, you build the new system … it will simply be cheaper and it will be a lot more accurate.
Where did you start?
Aitken: We create many, many transactions on a daily basis. Every time we pick up a shipment, it gets a scan as it passes through our network. From A to B, the shipment can be scanned 30 times. We use all of that transactional data to allocate costs and then we can load it into our data warehouse. Then we can start the analytics. We had to close the first part of the loop before we could even get to the analytics. So we replaced a whole suite of legacy tools and applications with a global platform where we have one database for every shipment that passes through the DHL network. And we built up one single, global application, called INSIGHT.
