DHL gets global, activity-based costing system


Logistics-based companies, such as package delivery giants FedEx, UPS and DHL, seem to be ideal fits for big data applications. This week, an article in CFO proved that to be true for at least one of them--DHL Express.

Looking to turn around a steadily declining level of data quality, DHL, which had used a Microsoft (NASDAQ: MSFT) costing tool deployed in the 200 countries to localize cost allocations, realized it couldn't be done when data wasn't available.

The company said it couldn't reconcile financial results or produce a standard cost of shipment, or pickup, because it lacked the data to distinguish fixed and variable costs. So, it looked to develop a single, worldwide costing system.

The resulting system, a cost and pricing platform called INSIGHT--built on top of a data warehouse platform--not only eliminated questions about customer profitability, but had the company looking toward ways to act on the data. DHL Express now can systematically manage cost in the same way using consistent data.

Big data also has done wonders for FedEx. Robert Carter, CIO and co-CEO of FedEx, has been profiled as one of seven people who are using data to literally change the world.

FedEx systems handle about 2.2 billion transactions per day and employ big data to enable customers to query systems directly, sensors to relay real-time metrics about the location, temperature and other conditions of a package and delivery notification.

On the flip side, UPS, which hasn't been as vocal about its big data efforts, reported a $1.75 billion fourth quarter loss today.

For more:
- see the CFO article

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