Interview with Mr. Rolf Habben-Jansen

Mr. Rolf Habben-Jansen
Mr. Rolf Habben-Jansen
CEO
Damco (AP Moller-Maersk Group)
Damco (AP Moller-Maersk Group)

Planned investments of around USD250 bn in (Indian) infrastructure development over the next four years, by Govt, will have a positive impact on the logistics industry.
Headquartered in Denmark, Damco is one of the world’s leading third party logistics providers, specialist in customized freight forwarding and supply chain solutions, offering a broad spectrum of services to customers all over the world. The company is backed with workforce of around 9,500 employees in over 280 offices across 90 countries and presence marking 120 countries, encompassing Africa, Asia, Australia, Europe, North America, Middle East, and Latin America. Damco is an independent business unit within the A.P. Moller - Maersk Group. In 2010, Damco embarked a net turnover of over USD 2.7 billion, managed more than 2.4 million TEU of ocean freight and supply chain management volumes and air freighted more than 75,000 tons. Mr. Rolf Habben-Jansen is the CEO of Damco. Based in Copenhagen, he is responsible for all of the global activities of Damco. Mr. Jansen assumed the current position since January 1, 2009. Prior to this, he was the head of Global Customer Solutions with DHL. There, he was responsible for the account management and growth of the top 100 customers across all of DHL's Business Units since 2006. Before that, Mr. Jansen headed the Contract Logistics activities of DHL in most of Mainland Europe since 2001. In the 1990's, he has held various senior positions in Nedlloyd and Danzas. Both of these companies were merged into DHL later. Mr. Jansen is of Dutch nationality, and holds a degree in economics from Erasmus University of Rotterdam. In a one to one with Ms. Madhu Soni –Sr. Editor & Correspondent at Face2Face, along with a glimpse on current apparel logistics scene, globally, Mr. Rolf Habben-Jansen also provides his views on challenges facing industry, emerging markets, and green ways that Damco takes on sustainability course.

Mr. Jansen, thanks for joining us on Face2Face. Setting the conversational ball roll, can we hear your say on Apparel & Textiles business wing faring at Damco?

Damco has a rich history of providing end-to-end supply chain management solutions to the apparel, textile and retail industry, we count most of the world’s major brands amongst our customers. It is one of our focused and fastest growing industry verticals and holds strategic importance for us. Most of our leading customers in this vertical have been associated with us for over a decade and today our relationship with them have matured into strategic and collaborative partnerships. As a service provider we have been successful in not only the operational execution of the supply chain but also proposing and implementing several improvement initiatives that add value to their overall operations. As a result of managing the leading players in the apparel industry, today our offices across the globe have a deep understanding of the industry dynamics and the key challenges that an apparel supply chain faces. Reliability, visibility, agility, scalability, safety and responsiveness are critical in a global apparel supply chain. Damco today has established strong relationships with large apparel retailers and buyers and also with the vendors and suppliers in the emerging markets which enables us to remain very close to the industry and its key players. From our products and services perspective, our tailor-made solutions enable apparel industry players to achieve reliability and flexibility in their supply chains; whilst helping them to cut costs and gain end-to-end stock keeping unit (SKU)-level visibility. Our global team of dedicated industry specialists offers customized solutions to meet customer specific supply chain requirements. At the same time our global footprint enables industry players to implement flexible sourcing strategies to minimize risk, improve product quality, and reduce total costs.

That’s good. <br></br>Kindly, apprise us with the key trends that persist in global apparel logistics scene-

The global apparel supply chain has undergone changes in the past couple of decades and the majority of the manufacturing has shifted to emerging markets and cost effective locations like China, India, Vietnam, Indonesia, Bangladesh, Mexico, Pakistan and Egypt. The logistics requirement of large apparel players has indeed assumed global dimensions and has become intricate with thousands of vendors and multiple delivery points. With fashion being an industry where the product cycle is extremely short, the time to market from factory is very critical and it has become very important to have the latest products on the shelf at the right time. This leads to constant attention and tracking, and today technology is enabling this visibility right from factory to store through multiple modes. The competition has definitely increased in the apparel industry with many players competing to target the same consumer leading to an increased focus on ‘On time delivery’, quality and cost efficiency in the supply chain. Companies simultaneously want to optimize their costs right from design to production to logistics. The global apparel players look for reliable partners who are not only operationally efficient but also who can undertake vendor compliance programmes, quality checks, optimizing packaging solutions and also from time to time review the supply chain and propose improvement opportunities.

So, at Damco, what fundamentals go as base defining Supply Chain Management?

Damco is one of the world’s most experienced providers of integrated supply chain management solutions. We manage the complex global flows of goods, information, and financials for some of the world’s largest companies and are proud to have the one of the highest customer retention rate in the industry. Our supply chain management service covers all the export import activities right from Purchase Order Management to vendor co-ordination at the origin, export cargo consolidation, documentation management and import co-ordination. We have detailed and mutually agreed Standard Operating Procedures (SOP’s) and Key Performance Indicators (KPI’s) that form the basis of our business objectives agreed with the customers. During the years we have refined the principles of prevent, manage and resolve methodology ensuring supply chain control, visibility and reliability. Through constant internal and external measurements we know, and can act on, performance issues in our customer’s supply chain whilst driving consistency in performance and processes, thus reducing waste. Our visibility solution allows customers to always have the latest information on their supply chain performance, either through our extensive EDI (electronic data interchange) program or ad-hoc search and reporting capabilities through myDamco. Our global set up and local knowledge enables customers to explore opportunities in new markets with complete integrated solutions. From warehousing and distribution services to purchase order and quality management, we can get the right supply chain in place so customer’s business can move fast. Moreover, we also have a well defined supply management service offering in the Green logistics domain. Damco’s green logistic service focuses particularly on supplier and customer related activities, i.e. helping customers ascertain and reduce their carbon footprint. Damco has so far developed two supply chain products. 1.SupplyChain CarbonCheck – a product which was launched globally at the end of 2007 and implemented by some of the world’s largest retailers. With this product, Damco assists customers in estimating and reducing CO2 emissions from the customer’s logistics activities. 2.SupplyChain CarbonDashboard – a product which delivers a quarterly graphical representation of customer’s logistics footprint at shipment, product group and mode of transport (ocean, rail, truck, barge and air) levels. It enables the customer to get a detailed understanding of what causes carbon emissions and locate its carbon hot spots – and to closely track the effects of any new reduction initiatives. Also, as the newest addition to our green logistics services portfolio we started offering Packaging Optimization Service in 2010; a service that can reduce total logistics costs by 10% and at the same time minimize the environmental impact. Over and above we have industry leading capabilities in Supply Chain Development (SCD). We have on-the-ground experts located in main sourcing and consumption areas equipped with a practical and recognized approach to supply chain optimization. We thrive on bridging theory with practice and exploring new ideas that create innovative solutions, by benchmarking the customers supply chain performance with industry peers and identifying improvement areas that deliver dollar value and improved speed to market.

Interesting! <br></br> Well, amongst plethora of your Group’s services, there exist offerings for Petrochemical sector too. This sector demands high-risk management and set of special services different from apparel or footwear. Obviously, not a cakewalk! What say?

At Damco, we believe that no two customers are the same. This gives rise to our basis functional methodology of first building a thorough understanding of our customer’s business and then accordingly designing a best-suited solution, which caters to the specific logistic requirements of the customer. To achieve this we have teams of industry experts who work closely with our customers to continuously develop and share industry best practices. The same is followed for our Chemicals industry vertical, which like apparel and footwear is also a focus vertical for us. We have chemical industry experts in various locations who work closely with customers to design the best solution across their requirement. We specialize in providing robust and flexible solutions focused on safety and operational optimization, which will support inventory reductions whilst increasing customer’s profitability. In addition to our core transport and supply chain solutions, we offer a range of specific services and solutions such as bulk raw material storage and handling, process review, analysis and optimization through dedicated supply chain development chemical expertise, documentation and reporting, Supply chain carbon emission tracking, reporting and reduction, service to the chemical industry. Chemical industry by nature of its commodities requires logistics practices which are safe, secure and environmental friendly. To manage risks Damco has a well defined HSSE framework - Health, Safety and Security of all our employees and business operations and the protection of the Environment. At Damco, conducting our operations in a healthy, safe, secure and environmentally sustainable manner is a priority at all time.

Regionally speaking, which zones may see remarkable boost in category? What would be the factors?

Traditionally Middle-East has been the front runner as far as petro-chemicals sector was concerned. However, over the past few years, considerable movement of chemicals is taking place from China, Africa, India and other emerging economies. Factors such as rising internal consumption of end-products such as plastic, more spend on R&D to develop environment friendly chemicals, growing demand for automobiles particularly in India and China are going to drive the growth of chemical industry in these emerging economies. Moreover, these countries possess huge potential to become future export centers as and when the quality of chemicals produced in these countries is matched by global standards. We also see lot of government investment initiatives particularly in India to strengthen the infrastructure and establish port-based chemical parks in special economic zones.

On that note, while India is all set as potential market, in your view, are there any challenges in terms of Regulatory Policies, Tax and Fiscal provisions, and most importantly -Infrastructure?

The Indian market is an important market for us and we have been present here since the past 18 years. We have seen India developing into a very attractive market with improvements in the infrastructure and regulatory environment. Now with India being an emerging economy and as is the case with any emerging country, the business ecosystem is in the developmental stage meaning that everybody right from government to industry players to consumers are working to build/create a congenial business environment. Hence during this phase there is a likelihood of facing certain challenges and in the context of the Indian market, these could be - under developed infrastructure – which contributes majorly to increased logistics costs, low adoption of IT and other forms of technology to support the entire supply chain process, largely fragmented logistics industry, multiple taxation at different check points, absence of a single logistics authority for obtaining clearances and licenses etc. But we believe that this is a passing phase and the Indian growth story is going to be something that the entire world will be closely watching. There are just so many opportunities for any business to prosper and be a partner and thus gain immensely while simultaneously contributing as well. Moreover, the Indian government is displaying a strong commitment towards providing a better infrastructure and creating a business friendly environment through favoring policies and regulations. Planned investments of around USD250 bn in Indian infrastructure development over the next four years, by Indian Govt, will have a positive impact on the logistics industry, helping it to provide integrated logistics solutions, which are cost effective. The implementation of GST is a positive step for the logistics industry and will impact the customers favorably.

It’s been more than two years that Maersk Logistics and Damco merged together to form a single Damco brand. So, what difference has this development made on your business operations in India?

Earlier, Maersk Logistics and Damco operated as two different business units under the A.P. Moller-Maersk group. Our two-brand strategy served us well when we were an integrated part of Maersk Line and needed to have a separate approach to the NVO/forwarding segment, while working with Maersk Line and their customers to deliver supply chain solutions. It did, however, come at significant cost by creating duplication across the three organizations and two brands. Since the merger of Maersk Logistics and Damco took place two years ago, we have received positive feedback from our customers regarding this decision. The new Damco brand has allowed us to become a one-stop shop for providing all logistics services and strengthen our focus on customers, and to leverage our operations and processes across products. Coupled with this, being part of the A.P.Moller-Maersk has helped Damco to energize the strong global network allowing us to deliver solutions as per the client’s specific requirements. A more streamlined organization because of the single brand strategy has infused quicker decision-making and fostered a great team spirit in the organization.

These days, buzzword 4PL is replacing 3PL. Can you help us understand its role in the future logistics, and services evolving around this concept?

We have seen the process of outsourcing develop over the past few years into a fundamental business strategy for all industries across the globe. The process of outsourcing began with fringe activities but as the world has seen the benefits over the years, today the industry players have started outsourcing more and more core activities as well. The emergence of 4PL and LLP´s (Lead Logistics Providers) is a result of this trend coupled with the increase in complexity of global supply chains. Earlier a company could afford to manage a panel of outsourced 3PL service providers since their supply chains were geographically confined to a smaller area and involved few stake holders. But today the supply chains have become global with both procurement of raw materials, production and distribution being carried out across multiple continents involving a wide array of service providers across customs clearance, trucking, warehousing, ocean freight, air freight and domestic distribution. Selection and management of logistics service providers across such a wide spectrum has become a difficult task. Over and above, it has become difficult to drive analysis and improvement of supply chains with a strategic vision while managing the diverse supply chain operational requirements. This situation is what makes a 4PL or LLP relevant in today’s times. By combining processes and technology the 4PL or LLP brings value and a reengineered approach to the customer’s need by being neutral and by managing the entire logistics process, regardless of what carriers, forwarders or warehouses are used. The 4PL or LLP acts as an extended arm of its customers supply chain team and manages the entire process of 3PL selection, setting performance metrics, linking systems to provide visibility of agreed metrics and periodic evaluation of the selected 3PLs. So organizations outsourcing their logistics activities need to ask some basic questions – Should we outsource a function or a process? A 3PL focuses on the function, where as a 4PL, on the other hand, targets the process, which basically is the true need of the customer. Organizations should probe in detail if there are processes in place? If yes how good are these processes? How do they work? What are their shortcomings? How can these be overcome?

In what ways has ‘Environment Friendly’ concept been core to your CSR agenda?

As a global freight forwarding and supply chain management company, we are highly conscious of our responsibility to protect the environment. We want to be at the forefront of environment sustainability practices to be able to advise our customers and be recognized as thought leaders within green logistics. Thus to cater to the customer’s needs we have designed specific supply chain products - SupplyChain CarbonCheck, SupplyChain CarbonDashboard and Packaging Optimization Service. Through these value propositions we strive to reduce our customers’ carbon footprint across their entire supply chain processes leading to not only monetary savings but also helping them to contribute favorably towards environment. Damco, as an organization, understands its responsibility well towards environment sustainability and through a five-point strategy (mentioned below) we aim to achieve the targets that we have set for ourselves. Environmental performance o Focus on global environmental KPIs including carbon footprint and air miles o Reduction of carbon intensity to meet our goal of a 30% reduction by 2014 Responsible procurement o Mapping of main suppliers’ sustainability practices o Introduction of environmental criteria in supplier selection Supply chain carbon footprint o Helping customers to assess and reduce their carbon footprint o Development of low-carbon supply chain solutions Collaboration o Establishment of partnerships with environmentally renowned institutions o Sharing sustainability best practices with competition Green product portfolio o Assessment of sustainability opportunities for existing product portfolio o Introduction of new services with a lower environmental impact

It’s been very insightful speaking on the textile logistics with you, Mr. Jansen! Thanks a bunch for your time and enlightening comments.

Pleasure.

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Click here to view previous Face2Face with Maersk India.

Published on: 19/09/2011

DISCLAIMER: All views and opinions expressed in this column are solely of the interviewee, and they do not reflect in any way the opinion of Fibre2Fashion.com.