Investing approximately €1bn in a number of digitisation projects, Deutsche Bahn has become heavily focused on transforming its service delivery over the last five years. With an additional venture capital totalling up to €100mn, its ambitions have seen its overall operations and transport infrastructure overhauled, as well as adopting an enhanced ‘customer-centric’ attitude along the way.
Obtaining positive financial results in 2016, Deutsche Bahn has continued on its digitisation journey and has placed significant emphasis on guaranteeing positive customer experiences. “Since I started working at Deutsche Bahn, we have placed a greater focus on customer satisfaction. We see procurement as an integral part of the business, where collaboration between different departments has become vital,” explains Dirk Kleinow, Head of IT Systems.
Working within Deutsche Bahn’s procurement division for over 10 years, Kleinow has seen the company strenuously work to strengthen its partnerships with suppliers through the adoption of new, data-driven business models in order to become a leader within the transportation sector.
Utilising an ERP system to support its supply chain management operations, Deutsche Bahn has also begun to implement cloud-based services to not only simplify its procurement processes across its global base, but factors into its long-term ambitions to obtain World-Class Procurement.
“When we moved to the cloud, we had a depression in our pricing systems,” observes Kleinow. “Nonetheless, we have become more flexible in deploying these systems, and not just in Germany. Since we are now on the cloud, we are more linear and are able to deploy our systems within different countries. The time to invent and implement systems within different countries is getting shorter and shorter.
“We are continually trying to renew the system and get more outside information into our supplier management systems, which will support the procurement team to find better sources of supply. We think it is a good place to look at for the future.” To this effect, the company is also undertaking a number of pilots surrounding robotic process automation to further support data sharing on different platforms.
Not content with solely digitising its supplier management procurement operations, Deutsche Bahn’s logistics operations have also been overhauled. The implementation of autonomous and semi-automatic vehicles is currently something which the business is working towards, which will ultimately drive long-term benefits. “At the end of the day we are a logistics support company and we try to look at what the trends are and how we can participate in these trends or even get a lead in these trends,” comments Kleinow.
“We are also looking at artificial intelligence, but at the moment the maturity grade of AI is not at the level that we can apply it to our systems. I’m thinking three to five years and this will be a field where you will definitely see growth.”
So, how are customers benefiting? Throughout its digitisation, Deutsche Bahn has been committed to ensuring service quality remains exceptional and consistent throughout. Since the start of 2017, Wi-Fi, TV and films are all now freely available on all of the company’s rail services, highlighting the company’s commitment to listen to customer demand. All rail customers are also able to take advantage of Deutsche Bahn’s ICE portal, which provides detailed travel information and electronic newsletters to inform and entertain customers on their journeys. Listening to customers has become intrinsic to the very fabric of Deutsche Bahn, where it understands that customer satisfaction has become key to its innovation and continual success.
However, none of this would have been possible without Deutsche Bahn’s quality programme Zukunft Bahn. Launched in 2016, Zukunft Bahn enables Deutsche Bahn to listen better to customer requirements and eradicate any bottlenecks or concerns within its service delivery across its operations. “The two words translate to ‘the future of rail’,” says Kleinow. “We are looking at getting more information out of our systems, which we feed back to the responsible divisions. It also covers the sourcing of materials so that all rolling stock is ready in time.
“Sustainability is also a big issue for us,” continues Kleinow. “Our industry initiative, Railresponsible, concerns the green delivery chain for our goods which we are receiving into the company.” Launched back in 2015, the initiative focuses on improving sustainable practices and efficiencies across the railway supply chain, promotes transparency and enables capacity building with industry suppliers. Its members include Deutsche Bahn, Abellio, Alstom, Arriva, Bombardier and many more.
The future of rail
Deutsche Bahn has been strengthening its rail infrastructure in Germany, with the long-term ambition to support the development of smart cities. Its new rail line running from Berlin to Munich opens in December, which will reach speeds of up to 300 km/h. “It will link the capital with Munich in less than four hours, which is quite quick for 600km, which is around 325 miles,” comments Kleinow. “We are trying to get more people onto the rail, and attract customers with better prices and more availability within all of our trains. If we have more trains running more frequently, people will easily be able to change from using the car to utilising the rail.”
The company’s continued focus on delivering not only quality services, but also building strong partnerships with suppliers, will see it continue to go from strength to strength. Its long-term ambitions to remain a leading employer in Germany will also see it continue to innovate alongside the development of the market.
“Innovation will change our way of working, but it will also change how we gather information and improve the speed of our services,” Kleinow adds.
“I think that the procurement department will change its way of negotiating contracts; it will come to be the facilitator of ‘the sourcing event,’ put it that way,” concludes Kleinow. “We’ll gather all the information, bring all the parties together, and create collaborative teams. This, I feel, is the future of procurement.”
TwinThread: driving value-added technology in manufacturing
Deloitte delivers next generation strategic sourcing transformation through digital analytics and diverse talent
World Vision: digitalising operations to help the vulnerable
Digital transformation in the McAlpine Hussmann supply chain
Vodafone Qatar: global supply chain transformation
Two Roads Hospitality: Enabling unique travel experiences with a custom-built sourcing strategy
Becton Dickinson’s procurement operations transformed by technology
Nokia’s ‘conscious’ factory of the future
Dabur International: Using emotional intelligence and AI to transform the procurement
Fanshawe: Engaging a community through education
Maersk Egypt: Dealing with today’s challenges and preparing for a digitised tomorrow
Service New Brunswick: Value-based healthcare through strategic procurement
How Dicom is using technology to transform delivery services in Quebec and Ontario
How ZTE USA streamlined its supply chain to become a top smartphone supplier
Flowserve 2.0 and the journey to supply chain transformation
Company focus: Supply chain transformation helping Avaya aim higher
Behind the scenes of Abu Dhabi’s tourism industry procurement setup
How Burger King India aims to boost its share in the QSR market
Driving transformation at the DVLA
Staples: Driving the Chinese e-commerce market