Building partnership through innovation

BUILDING A PARTNERSHIP THROUGH INNOVATION18 March, 2015Speakers: Pascal KEMPS, Sector Head Passenger Vehicles

Pascal CLAES, Global Customer Manager

Agenda

Strategic Background1

Maintenance on Demand – the project2

Commercial Benefits3

Busting the myths4

In 2008, Deutsche Post DHL was at a turning point in its history

Creating the Base Continuous Global Integration

Unlocking PotentialInnovation, high

performance, advanced analytics, partnerships

Accelerating Organic Growth

Focus-Connect-Grow

DHL Strategic Context

1990–1997 1998–2008 2009–2015 up to 2020

Between 1997 and 2006, Deutsche Post DHL transformed itself into a global, fully integrated logistics provider

No. 1 in contract logistics

Leader in the forwarding business

Europe’s largest postal service

Partner for e-commerce and apioneer in secure digitalcommunications

No. 1 in international express delivery


Automotive Vision & Value proposition


VisionRemain THE logistics leader and become THE innovation leader

for the automotive industry

Value PropositionThe Trusted Partner to the industry for both replicating high quality

solutions around the world as well as thinking along and developing new innovative solutions to jointly address the challenges of tomorrow.

Volvo’s Strategic Context

creating value for customers in selected segments

working with energy, passion and respect for the individual

Volvo’s Strategic Context

Safety

QualityEnvironmental care

The Strategic Context

Our aspirations show a powerful convergence

We are a global team of high performing people

We are proven innovators of energy-efficient transport and infrastructure solutions

We are among the most profitable in our industry

We have captured profitable growth opportunities

We are our customers’ closest business partners

Energy1.4%

The Strategic Context

We are both part of a global problem… as well as part of the solution

Electricity and Heat

Production25%

Other Energy9.6%Industry

21%

Transport14%

Buildings 6.40%

AFOLU25%

49 Gt CO2eq(2010)

Direct Emissions Indirect CO2 Emissions

Industry11%

Transport0.3%

Buildings12%

AFOLU0.87%

Note: AFOLU stands for Agriculture, Forresting & Other and Land Use

The EC Framework Programmes offer a very powerful collaboration platform

Address European Transport System (s)

Develop greener, smarter and safer Surface Transport System (s)

Secure the leading role of EU transport industry in the global market

Kick Starting Strategic Collaboration

Agenda




Busting the myths4

The Maintenance on Demand Project

11 Integrated Work Packages re-defining the automotive aftermarket

Work package 1System Requirement and risk assessment

Phase 1: Enabling Technologies

Work package 2

Sensors

Work package 3

Wireless Sensor Network

Work package 4

Data management

Work package 5

Logistics

Work package 6

Condition Monitoring

Work package 7Methods/procedure to estimate

the Remaining Life Time

Phase 2: Services

Work package 8Maintenance on demand Part a) RTD Part b) DEM

Work package 9Maintenance on the Fly

Part a) RTD Part b) DEM

Management

Workpack-

age 10

Dissemination

Workpack-

age 11

So What?

TCO* Based Offers Optimized Service Planning

Investigation Areas

Increased productivity, no “just-in-case” maintenance

Total calendar time, 24 hours/day & 7 days/week

Planned time Idle Time

Uptime Idle TimeDown time


Service Parts & Logistics Optimized Service Planning

Investigation Areas

Total calendar time, 24 hours/day & 7 days/week

Planned time Idle Time


Net operating time Idle TimeFailure Service

Drive DriveServiceWait Paper work Paper workBreakdown, Unplanned Maintenance

Volvo’s take-away

What would be a market-compliant value proposition?

• DHL Fleet Procurement Financial parameters• DHL Fleet Engineering Maintenance and Operational parameters• DHL Fleet Operations Human-Machine Interface

DHL’s take-away

How do connected cars impact logistics?

Tota

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tanc

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m p

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ay)

Tota

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2(k

g pe

r day

)

• Volvo DealersWorkshop optimization opportunities & boundaries.

• Volvo OperationsGuardian of feasibility

• Volvo LogisticsDevelopment Financial & infrastructural boundaries

0 5000 10000 15000 20000 25000

Scenario 1

Scenario 2

Scenario 3

Outbound Return

Return

0 500 1000 1500 2000 2500

Scenario 1

Scenario 2

Scenario 3

Outbound Return

Return

Maintenance on Demand

The vision is becoming reality

• ShowcaseCenterpiece DHL’s new Innovation Center

• Trial Target logistics set-up being tested at a small scale

• Implement Follow-up project kicked off, including latest insights on Big Data

Agenda




Busting the myths4

Get behind the scenes – no gatekeepers

Mutual Commercial Benefits

A unique alignment at all levels facilities business development activities

Access to all functions and levels

Board level relevance – it is their strategy!

Pull in external expertise – increasing impact

Co-create your customers’ strategy


Strengthening each others’ brand

GlobalTeamworkPassionPersonal

commitmentCan-do spirit

SpeedTechnology

EnvironmentGlamour &

appeal

THE world’s premier offshore sailing event

THE logistics company for the world


Strengthening each others’ brand

New partnership around Volvo In Golf 2015

Venues: Incheon, KoreaEvent date: May 11

Venues: Göteborgs GK,Hovås Göteborg

Event date: June 29

Venues: Tromsö Golfpark, Norway

Event date: July 20

Venues: Whistling Straits, Milwaukee

Event date: September 28

Venues: Finca Cortesín, Spain Andalucía

Event date: October 12

Venues: Abu DhabiEvent date: November 23

Venues: Royal Golf & Country Club, Bangkok

Event date: December 14

A Positive Commercial Climate

Strategic Commercial Breakthroughs – DHL

• Japan• South East AsiaTake over

competitor business

• Production material in Europe• European dealer delivery serviceStrengthened

historic position

• Eastern Europe• South East Asia• Latin America

Jointly penetrated emerging markets

A Positive Commercial Climate

Strategic Commercial Breakthroughs – Volvo

• Expanded sales in Asia Pacific• Expanded sales in the Americas• Penetration of competitors’ home market:

Germany

• 1st ever 18t hybrid truck prototype tested by DHL UK

• Field testing of Bio-fuel trucks in Sweden• Purchase of start-up batch of Bi-fuel trucks

Expanded global footprint

Collaborative testing of new models

Agenda




Busting the myths4

Myth 1: It’s hard to get into the circle.

It’s much closer than you think

The European Commission

Your LinkedIn Network

Your companies’ representation office

Myth 2: Size matters

The SME’s in the Maintenance on Demand consortium thrived

Myth 2: Size matters

Avonwood expanded sales globally through their participation

Myth 3: Innovation is difficult in my industry

Innovation can be anywhere.

Companies experienced on average a 10% reduction in shareholder value, after a supply chain disruption4)

93% of the leaders of the worlds top companies in the CEO summit in 2012 said they were unprepared for supply chain disruptions2)

Only 9 % of American supply chain executives said that they could assess the impact of a disruption within hours3)

Source: 1) Business Continuity Institute & Experton Group; 2) World Economic Forum Supply Chain and Transport Risk Survey 2011; 3) Jeff Dobbs, Global Sector Chair, Diversified Industrials and a partner with KPMG in the U.S 4) Hendrick & Singhai, “The Effect of Supply Chain Disruptions on Long-Term Shareholder Value, Profitability and Share Price Volatility

73% of interviewed had companies at least one SC disruption in 2012 -costs caused by SC incidents are greater than EUR 1m in 17% of cases1)

Customer Network data Site contacts Volumes & priorities

Supply Chain expertise Best Practices in

Contingency Management People on the ground to

take actions worldwide

Partners Real time incident feeds Statistical risk evaluations Competences for risk-

specific deep-dives

Incident Monitoring Risk Assessment

Input from … …to create one joint platform forSupply Chain Risk Management

Source: DHL Resilience360

DHL

I1 I2

• Multi-tiered visualization of your global and end-to-end supply chain

• Create transparency on exposure and vulnerability in over 20 global risk categories

• Rate resiliency and ensure coverage of backup plans

• Identify risk hotspots and recommend suitable mitigations & alternatives

• Near real-time 24/7 alerts on supply chain relevant incidents and risk warnings

• Filtering options to alert, based on specific categorization of risk and its severity level

• Trigger follow-up actions immediately

Myth 3: Innovation is difficult in my industry

Critical points

Very strong common strategic value

Be aware of your role in the project

Assess your companies’ workload (and timing)

Leverage the dissemination budget

Own your internal & external communication

Building partnership through innovation

Documents

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