What To Build: Gina Chung (DHL)

Conversation with Gina Chung, Head of Innovation Americas @ DHL. We talk about DHL’s recent $300 million investment for integrating emerging technologies into their facilities, the types of startups that Gina would be most excited to see, and what happens when she does find such promising startups.

1. Tell us about yourself, where you currently work, and your path on getting there.

In a nutshell, my work focuses on combining the power of people and technology across our operations at DHL. Currently I manage a broad portfolio of projects focused on the rapid testing and adoption of technologies ranging from collaborative robotics to visual computing in our operations. More recently, I moved to Chicago to lead the development of DHL’s all-new Americas Innovation Center, a state-of-the-art platform to engage customers, startups and industries on the future of logistics.

Before moving to Chicago, I spent six years at DHL’s global headquarters in Germany shaping our global trend research and innovation agenda. I also helped launch our Group-wide incubator called the Startup Lab which is focused on accelerating the development of digital services and business models in logistics.

DHL, part of Deutsche Post DHL Group, is the leading global brand in the logistics industry. Its family of divisions operate in 220 countries and territories and generated revenues of over 61 billion euros in 2018. The Group offers a portfolio of logistics services ranging from national and international parcel delivery, e-commerce shipping and fulfillment solutions, international express, to industrial supply chain management.

2. Tell us about your role and what your mandate is and how this specifically relates to working with startups?

Our innovation team helps scout, benchmark, and on-ramp new technologies from startups into our organization. We work directly with our operations and customers to understand the key business challenges and opportunities and then we go about applying our expertise to evaluate potential solutions on the market.

If we find a promising startup, we set-up cross functional projects together with our operations, IT, customers and partners with the aim of piloting and scaling the right solutions. We also manage DHL’s startup eco-system in specific areas such as robotics, internet of things, and visual computing.

3. What are some of the interesting types of projects that you’re currently doing with startups?

Collaborative robotics is one area where we are strongly working together with an eco-system of startups to automate the movement of freight within some of our facilities. We are also continuously evaluating and on-boarding new sensors and analytics technologies from startups to help us drive better shipment visibility and security for our customers.

We are also working with several startups right now in the visual computing space to automate inspection activities in both indoor and outdoor environments.

4. What number of your startup projects move into production? By what criteria? One of the challenges we see startups facing is how to move a customer from pilot to production.

When we first started the rapid piloting approach at DHL several years ago, it was not an easy task moving successful projects into production. This was due a variety of different factors — for example, many of our internal processes and infrastructure were simply not geared to work with startups and new technologies. Vice versa, many startups struggled to scale up their operations to work with a global organization such as DHL. Since then, we’ve greatly matured in the way we engage with startups at DHL, and this has further been strengthened by digital being made a key priority in our management’s agenda.

To give an example, in 2016 we launched our first collaborative robots projects together with several robotics startups and our DHL Supply Chain division — the industry’s largest contract warehousing services provider. Our first pilot projects quickly demonstrated the immense potential of robotics for our business and fast forward just a few years later, we are systemically deploying robotics across our operations. Just recently we announced a $300 million investment to accelerate the integration of these technologies into our North American facilities in the coming years.

5. What are the major challenges in your industry these days, and specifically ones that you think can be addressed by the right type of AI and or robotics application? Can you give some detailed examples?

AI and robotics specifically can help address challenges we face surrounding e-commerce and labor shortages on supply chain operations. While e-commerce continues to drive growth in the logistics industry, it also drives new levels of complexity in our operations — real-time inventory visibility, rapid fulfillment, and returns management to name just a few challenges.

Automation solutions and advanced analytics will be key in helping us fulfill orders in the warehouse as fast and as effectively as possible. Robotics solutions are also helping us to bridge a growing labor gap we see in mature markets especially during seasonal periods.

6. What type(s) of startup would you be most excited to see?

We are first and foremost a logistics company, and therefore I’m always excited by startups designing solutions that democratize technology, and deliver technically simple solutions that empower our employees.

7. What should startups know about your industry before going in? What nuances or details about the industry are not so apparent to someone looking in?

Startups often underestimate just how fragmented the logistics industry is and that there are very few areas where you can truly “plug and play” a solution across our operations. For example, in the US alone, there are hundreds of thousands of individual trucking companies, so rolling out a new standard, hardware, or IT solution is a considerable challenge, especially in a low-margin industry such as logistics. From day one, startups should design their solution and business model in such a way that it will be scalable in the industry and make sure projects with companies have top management support.

8. Lastly, any recommended resources / reading (ex. Industry conferences, publications, experts to follow, etc.) for startups looking to build in your space?

We apply an open innovation approach at DHL. We regularly publish updates on the results of our innovation projects online, as well as our thought leadership on topics such as the impact of robotics and AI in logistics. I recommend reading our Logistics Trend Radar and trend reports if you’re new to the field, and reach out to our Innovation Centers for any further guidance.

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