"When we invite countries to take part in a bidding process, it is up to them to evaluate whether they are able to provide an attractive offer. In this context, we always encourage our local organisations to meet with the customer to eliminate any doubts about the requirements. In this case, we ended up submitting bids for lanes where we knew we were competitive and capable of meeting customer expectations – while getting a good deal at the same time," says Paul Vercoulen, Global Business Development Director, DSV Road Holding.
The tender was invited by PPG, a global supplier of paints, coatings, optical products, special materials, chemicals, glass and fibreglass. The company has more than 140 manufacturing facilities and subsidiaries and does business in more than 60 countries. PPG is not a new DSV customer. The cooperation goes back many years, primarily comprising road transports, but also warehousing.
Many countries – one voice
PPG’s bidding round this spring involved anything but routine transport tasks. This made it more important than ever to involve the affected countries and organisations early on in the process. Thermo-controlled and dangerous goods transports account for a substantial part of the combined supply and, in some instances, required a tailored set-up to be built up in the areas that PPG wanted DSV to serve. Paul Vercoulen learned the lesson from a similar bidding round two years earlier that the whole deal could fall through if the countries involved didn’t provide the right response. This required an early implementation strategy and assembling the right people – on both sides of the table – to discuss the deal and the measures required.
"We expend vast resources on cultivating our organisation internally and promoting the communication between key teams to ensure that to the outside world, we appear as a single, trustworthy logistics provider, despite our decentralised organisation with vast decision-making authority delegated to the individual countries,” Paul Vercoulen says.
Immediately following a three-day meeting between DSV’s global business development team and PPG in Prague last spring, DSV GBD arranged a meeting between PPG’s relevant team and key staff members from DSV Poland (which was a new, but important country in the tender documents).
This bidding round afforded an excellent opportunity to substantially extend the cooperation with PPG by adding business in Poland, but DSV had to act quickly at the same time. As a result, the meeting with the Polish organisation was only the first of a series of meetings between PPG and local organisations; meetings were subsequently held in France, Germany, Italy, etc.
Development from the ground up
“It can be difficult to get a complete picture through the tender documents, as they’re usually made up of comprehensive, detailed requirements and descriptions. And our slim profit margins require us to be cautious about adding new business. We need an accurate picture of the business, because otherwise we risk losing money from the get-go,” Paul Vercoulen says. He explains that the DSV network is organic and that it notably develops on the basis of preferences and new requirements from customers, such as the extensive use of thermo-controlled transports by PPG, which not only require thermo-controlled trucks, but also thermo-controlled facilities in the cross-docking areas.
“A typical feature of the situation at DSV is that we develop from the ground up, not vice-versa. In this context, each country is responsible for coming up with solutions to customer requirements, after which new customers enter the picture and make use of the infrastructure for the benefit of all parties. In this respect, we will soon be holding an internal seminar where we present DSV countries with a number of the requirements and issues we have with our customers, notably relating to transporting thermo-controlled and dangerous goods and demonstrate what it takes to be successful.”
A decisive factor for the fact that DSV successfully and substantially widened its business with PPG was that DSV offers a centralised EDI set-up for digital transfer of data to the customer.
“We view our relationship with PPG as a partnership and we believe in a future together, so the greater the complexity of the data that we can process easily and smoothly, the more attractive we are as a transport and logistics company,” says Paul Vercoulen, who gets top marks for his communications with the customer:
“Doing business with DSV is easy, the customer has told us. Next to all the other factors, such as match, price and delivery time, it is essential that business transactions are easy and that the communication between the customer, operations and IT is smooth”.
Room for growth
As a result, it is very likely that the level of involvement with PPG can gradually expand beyond the current 10% of PPG’s total transport budget for Europe, the Middle East and Africa. DSV is praised for its “transparency and responsiveness”, and PPG fully understands why DSV at an earlier stage refrained from bidding for transports deemed unprofitable to manage: “You should never bid for lanes that you can’t deliver.”
The ultimate goal for the cooperation between DSV, as a major supplier, and PPG is to integrate interfaces and for the companies to jointly take the initiative for strategic development. This helps create a positive spiral where the customer and DSV jointly develop solutions that benefit both parties.
And perhaps widen the relationship to include air and sea transports and even more warehousing:
“The customer is paying for all the inefficiency at their external warehouses, so it’s obvious that they are on the lookout for efficient partners who keep a sharp eye on waste and who are willing to invest in automated solutions. We are that kind of a partner, so we expect to be invited to the next bidding round”.
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