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Thomas Nieszner, Head of Products, Marketing and Sales, DDAO
Introduction to the ENZO Program Overview of ENZO Program Areas – Sales – Air Freight – Ocean Freight – Operational Processes / IT Summary
Thomas Nieszner, The DDAO ENZO Program, Capital Markets Day, 06.09.2004
The DDAO ENZO Program.09.2004 Page 3 . 06.1 in Air and No. 2 in Ocean freight forwarding Excellent H1 2004 results! Secure achievement of financial targets 04/05/06 Fine-tune operational & sales performance through 9 global initiatives Further increase business transparency with KPIs and benchmarks Become the Dominent Player in our industry (Airand Ocean Freight) Build state of the art sales organization and deliver on growth ambitions Establish a new standard of productivity through process automation and standardization Thomas Nieszner.DDAO ENZO Two Phase Approach Kick Off by End 2004 Kicked Off in early 2004 “Next S-Curve” Activities Today Deliver on “Safety Net” ENZO “Safety Net” Activities “Pole Position” DDAO No. Capital Markets Day.
Capital Markets Day. The DDAO ENZO Program. 06.2004 Page 4 .ENZO: Four Areas in Phase 1 Focus Sales Air Ocean Operational Processes / IT Thomas Nieszner.09.
The DDAO ENZO Program.Profit Drivers Per Program Area ENZO Program Areas Sales Air Ocean Operational Processes/IT Regions EURO AMNO ASPA AMLA "Growth" File Volume Profit Drivers "Gross Profit" GP / File "Productivity" Oper. Capital Markets Day.09.2004 Page 5 . Expenses / File – x Operating Result Operating Result / File – Allocations EBITA Thomas Nieszner. 06.
Capital Markets Day. The DDAO ENZO Program.Profit Drivers Evolution DDAO performance YTD June 04 vs. 06.09. YTD June 03 ENZO Program Areas Sales Air Ocean Operational Processes/IT # Files: Up! (2-3 x market growth) GP / File: Up! GP / File: Up! Personnel Costs / File: Down! ∅ GP / File: Up! – Operating Profit / File: Up! x Operating Profit: Up! – Allocations: Stable! EBITA impact ENZO YTD: +10 million Euro Thomas Nieszner.2004 Page 6 .
Capital Markets Day.Agenda Introduction to the ENZO Program Overview of ENZO Program Areas – Sales – Air Freight – Ocean Freight – Operational Processes / IT Summary Thomas Nieszner. 06.2004 Page 7 .09. The DDAO ENZO Program.
F) Small Accounts GCS Proven Best Practices MNC Tradelane Thomas Nieszner.09. E. 06.2004 Page 8 .Overview Sales Program Area DHL Danzas Air & Ocean Market Segmentation and ENZO Sales Initiatives % of Net Sales 2003 Customer Segments ENZO Sales Stimulation Initiatives 30% 5% 55% 10% GC Multinationals Medium Accounts Small accounts (D. Capital Markets Day. The DDAO ENZO Program.
09. Capital Markets Day.Sales: Approach and Main Achievements YTD Sales Stimulation Initiatives GCS Approach Establish GCS interface and organization Develop a global approach to a set of defined MNC customers Segment tradelanes and invest in dedicated consignee sales & commercial actions Collect and roll-out proven best practices worldwide Achievements YTD Aug 04 GCS interface established GCS organization up and running 82 MNC accounts identified Clear procedures and teams in place ∼150 top tradelanes (split into core and growth groups) selected and teams in place Proven best practices identified. The DDAO ENZO Program.2004 Page 9 . Full roll-out of highest priority practices by end of 2004 planned MNC Tradelane Proven Best Practices Thomas Nieszner. 06.
2004 Page 10 . 06. Capital Markets Day.09.Example: Ambitious Targets for Tradelane Sales File Distribution by Tradelane Type Tradelane Targets: Secure position on core Tradelanes (10% growth) Capture share on growth Tradelanes (25% growth) Other TL ~ 63% Top TL ~ 37% Thomas Nieszner. The DDAO ENZO Program.
3% +9.6% #1 +17.3% Offer most competitive rates Provide innovative logistics solutions StarBroker Source: IATA (Preliminary Figures) Special Focus Area Asia Thomas Nieszner. The DDAO ENZO Program. 2002) DDAO Airfreight Goals Keep overall #1 position Provide global coverage #1 +33.2004 Page 11 .09. Capital Markets Day.Overview Air Freight Area Goals for Intercontinental Trade and Current ENZO Initiative DDAO ranking by Transported Volume 2003 and DDAO YOY Turnover Growth (2003 vs.7% #3 #1 +32. 06.
Air Freight: Approach and Main Achievements YTD Initiative StarBroker Approach & Key Activities Set-up of global organization acting as in-house airfreight capacity provider Central contracting and risk taking of aircraft capacities Set-up of de-/consolidation and feed/defeed services Coordination of DHL Express aircraft capacity optimization Development of DDAO AFR services Achievements YTD Aug 04 StarBroker organization in place in all regions (>5% of total volume handled) Better purchasing with airlines through capacity bundling Optimization of weight/ volume mix Realization of significant synergies with DHL Express Implementation of innovative services Thomas Nieszner.09. 06.2004 Page 12 . The DDAO ENZO Program. Capital Markets Day.
09.Example: ENZO Air Freight Case Transatlantic-/Middle-East Charter Starting Point Transatlantic DDAO and DHL Express with strong Transatlantic freight flow DDAO with high density goods DHL Express with high volume goods Middle East DHL Express with strong middle East export (BAH Middle East Hub) DDAO with strong flow into middle East Approach Achievements Above average aircraft space utilization due to combination of different sector strengths and volume mix Competitive selling rates in the market Competitive service in the market: – Space availability – Higher uplift performance than commercial aircraft JFK BRU BAH Dedicated aircraft put in place: Transatlantic: 2 x per week (end of week / weekend) Middle East: 1 x per week (weekend) Shared risk of DHL business units and operator Thomas Nieszner.2004 Page 13 . 06. The DDAO ENZO Program. Capital Markets Day.
`000 CBM 1. DDAO 2.2004 Page 14 . DDAO Volume. 2003 100% = 66 million TEU Controlled by carrier Controlled by freight forwarders / NVOCCs ESTIMATES Logistics provider 1. Kühne & Nagel 4.09.Overview Ocean Freight Area LCL and FCL Market Situation Worldwide Cargo Volume.) In ENZO focus: Controlled LCL 10% 90% 3.) 1. Kühne & Nagel 2.200 940 700 680 In ENZO focus: Controlled Non-Controlled Inland Logistics FCL 75% 25% 3.200 (est. 06.400 1. DB / Schenker 4. `000 TEUs 1. 15-20 Mio cbm** Logistics provider 1. ECU* Volume. The DDAO ENZO Program. Shipco * Includes Forwarders Cargo ** Corresponds to ∼ 1 million TEU (1 TEU = ∼ 20-30 cbm) Source: Global Insight Trade Database.) 800 (est. Capital Markets Day. Annual Reports Thomas Nieszner. Panalpina 100%=est.000 (est.
09.2004 Page 15 . The DDAO ENZO Program. 06. Capital Markets Day.Ocean Freight: Approach & Main Achievements YTD Initiatives Controlled Approach Get better rates from carriers – Central negotiation (FCL & LCL) – Inclusion of more than only port to port transport into negotiation (FCL) Reduce costs of consolidation (LCL) Increase sales hit rate through central risk taking Optimize handling process for noncontrolled business Transform into controlled business Re-negotiate prices for services with customers Bundle purchasing of inland transport capacity (FCL) Avoid empty container/truck movements Introduce software to support planning and dispatching Achievements YTD Aug 04 Central transparency on volumes/ flows available Non-Controlled Analysis of largest American and European customers concluded Implementation per customer ongoing Central dispatch centers up and running in Hamburg and Le Havre Inland Logistics Thomas Nieszner.
The DDAO ENZO Program. Capital Markets Day.Example: ENZO Ocean Freight Case Ocean Non-Controlled Starting Situation Customer x with low GP per file. but with complex file handling process Shipping line controlled Door-to-Port Overall customer loss making for DDAO Actions Taken Ralph J. 06.09. Dias Renegotiation of fees/commissions Obtained inland transportation as additional business for DDAO (shipping line involvement reduced to Port-to-Port) Impact So Far Increase of GP per file by 55% Thomas Nieszner.2004 Page 16 .
Overview Operational Processes / IT Area Two Waves of Improvements Through ENZO Operational Performance 2003-2006 Optimization 2000-2003 AEI Integration • Global Best Practices sharing • Operational alignment • Synergy realization Today 2006-2008 New Operational System “INCOSOFT” • Implementation of a state of the art IT system • Optimization of IT based workflows Time Thomas Nieszner.2004 Page 17 . The DDAO ENZO Program. Capital Markets Day. 06.09.
Example: ENZO Operational Processes / IT Case Global “Suitcase” Approach Benchmarking Tool e.g. Capital Markets Day.2004 Page 18 .09. Files per FTE (per month) UK Germany Denmark Norway Spain Finland Sweden Ireland Lithuania Latvia Belgium Italy France Switzerland Portugal Netherlands Luxemburg Creating Process Best Practice Packages Improvement Ideas Identify Best Practices Apply Best Practices Thomas Nieszner. The DDAO ENZO Program. 06.
improved data quantity and quality full transparency / visibility on performance (MIS) carrier integration (Cargo 2000. Capital Markets Day.09. The DDAO ENZO Program. 06. cost effective solutions implementation Productivity / Quality / Effectiveness (“user satisfaction”).g.Outlook “INCOSOFT” Overall Objective: Extend the IT underpinning target business processes and converge on a single production system Key Business Drivers: Customer Satisfaction.g. GFX) Lower Costs Thomas Nieszner. INTRA. service quality creativity and flexibility for new customer solutions rapid. e. e.2004 Page 19 .
06. Capital Markets Day.09.2004 Page 20 .Agenda Introduction to the ENZO Program Overview of ENZO Program Areas – Sales – Air Freight – Ocean Freight – Operational Processes / IT Summary Thomas Nieszner. The DDAO ENZO Program.
Summary The ENZO Program… is composed of four areas: Sales. Air Freight. 06.09. The DDAO ENZO Program. Ocean Freight and Operational Processes / IT has already proven its effectiveness by delivering improvements in all program areas in H1 2004 will deliver growth and cost savings required for DDAO to become the undisputed industry leader Thomas Nieszner. Capital Markets Day.2004 Page 21 .
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