Why logistics is now a dream job

Vision Vision Why logistics is now a dream job AustraliA Waiting for the school kids Oliver Bohm, director of operations for business development...
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Vision

Vision

Why logistics is now a dream job

AustraliA

Waiting for the school kids

Oliver Bohm, director of operations for business development AU/NZ and general manager NSW at Schenker Australia Pty Ltd. 12 | Logistics

Photos: Kiren Chang Photography (2)

They are called “Generation 2020,” and they are the leaders and workers of the future. They are still in elementary school today, but 15 years from now they will fill important positions in the Australian economy. “The workers of tomorrow are growing up in an aging society,” says Yvonne Villinger, general manager of human resources at DB Schenker in Australia. She says one trait marks these youngsters: “They are the best-educated generation in history, including in material issues.” Villinger spends lots of time today thinking about the managers of tomorrow. That’s because as the number of good, qualified and dedicated employees falls, competition for the best and brightest is already heating up. “The average age in the company corresponds to that of Australian society,” Villinger says. “Our average employee is 36 years old, the executives are 44, and middle management 42.” Says Oliver Bohm, director of operations and business development at Schenker Australia: “We already have to be concerned about finding the logistics people of the future, and we have to be faster than the competition. But we also have a lot to offer, because the business is astonishingly exciting.” Personnel management and advanced training are a priority at DB Schenker in Australia. But more important is maintaining the workers’ high level of commitment. “We have to keep developing our corporate culture, for instance through credible feedback, innovation, networks or coaching,” Villinger reports. “And of course, making it fun to work here.”

Our investigation shows that more and more global-minded business students are finding careers in supply chains. [ Text ] Thomas Ramge and Axel Novak

Yvonne Villinger, general manager of Human Resources at Schenker Australia Pty Ltd. Logistics | 13

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There is no shortage of reasons for choosing a career in the logistics business today

Talent management

Finding the best people

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Steffen Wurst, member of the board of management for Human Resources, Schenker AG, in the Transport and Logistics division at the DB Group.

Photos: Michael Neuhaus, Max Lautenschläger

Organizing talent management effectively in a decentralized, global corporation is a special task. Just ask Steffen Wurst, Schenker AG’s chief human resources executive and also head of personnel at DB Schenker. He demands more of his staff than just professional qualification. “Workers who succeed in this culture have a good ‘cultural fit.’ They are good local entrepreneurs and excellent networkers,” Wurst says. Talent management at DB Schenker seeks first to identify employees who have this cultural fit, and then to further develop their skills so that the right candidates can fill the important positions in the company. “Talent attraction” is what the company calls the process of bringing new workers to DB Schenker and keeping them there. Part of that process is employer branding; to make the company as attractive as possible. DB Schenker also finds gifted people through an activity known as “talent identification,” using a globally standardized process to judge performance and potential that is compulsory for the first and second management levels in the company’s regular management planning process. Finally, talent development means nurturing these people through DB Schenker’s international management development programs or, individually, on location. “Ultimately,” says Wurst, “our success as a company depends on the combination of local entrepreneurship and global networking.”

amburg, 1991. At his job interview at the local Schenker office, Oliver Bohm got straight to the point: “Can I travel the world with you?” At the time only 22, the forwarding manager was looking far beyond the highways surrounding Hamburg and its ports and shipyards. Two years later he landed in Perth, Australia. Eventually came Sydney, then San Francisco, Salt Lake City and New York. “It’s an amazingly interesting business,” Bohm says today. “The multitasking generates plenty of adrenaline – even now,” he adds. Probably inadvertently, Bohm represents a trend for today’s workers. In less than two decades the haulage business, once dismissed as boring, has become a booming economic sector. It is crisisresistant, international, and multicultural. Yesterday’s train drivers, truckers and loading helpers have given way to multitaskers in a business that steers the production of global corporations, around the world, 24/7. “People who go into this business today are interested in a company that’s active globally in all possible sectors and with all types of transport,” says Bohm, who currently calls the Sydney suburb of Alexandria, Australia home base. “No student assumes anymore that logistics operators just move boxes and crates from one place to another,” says Prof. Ralf Elbert, holder of the DB Schenker Chair for Logistics Services at Berlin Technical University and Director of DB Schenker Laboratories in far-away Germany. “In the past ten years young talent has

transformed the image of logistics for the better.” Every day, Elbert deals with young people facing the decision of in which sector to spend the coming years or even their entire professional lives. He is sure that logistics is a sector with a great future and steady growth against the backdrop of globalization. That also keeps demand high for logistics workers on both domestic and international labor markets. University graduates with specialized training look especially to big corporations for careers, but small and midsized companies also offer exciting opportunities for young job seekers. This has various reasons and most of them are closely

{ Prof. Ralf Elbert, TU Berlin }

»Logistics has developed a very positive image among today’s young people.«

related. First, universities have recognized that logistics is a driving force in the global economy and that the world therefore needs good logisticians. Germany, for example, has logistics professorships in universities almost everywhere in the country. At Berlin’s Technical University, a sprawling urban campus at the edge of the giant Tiergarten central park, the logistics department, consisting of four professors and numerous lecturers – in addition to guest professors from academia and the business community – teaches the theories and skills today’s students need to become the creators and managers of global supply chains of tomorrow.

The curriculum, meanwhile, grows along with the demands of students. This semester, for example, enrollment in the subject of transport logistics is up by 20 percent.What professor Elbert hears most from his students regarding their career goals is that they want to work in a field with a strong international dimension.“What line of work would be better suited than logistics?” is his frequent response. The openness of a global service segment in which one makes contact with various cultures every day is attractive for the current generation of global-thinking digital natives. But it’s not only the prospect of widening professional horizons abroad that is attracting more and more students to logistics. “Young people are also fascinated by the challenge of setting up and steering complex processes around the world,” Elbert says. When goods head around the world, information likewise flows from continent >  Logistics | 15

Interview

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Photos: Nicole Maskus, Roland Berger Strategy Consultants GmbH

»We seek dialogue« Ulrich Weber is the executive in charge of the personnel portfolio on the DB board. He wants employees to work even more closely, bringing benefits to clients. [ Interview ] Axel Novak Board member Ulrich Weber: Says top employees with a high degree of loyalty are the key to sustainable success.

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eutsche Bahn employs about 240,000 people around the world. Before joining DB recently, you were working for Evonik, a chemical and energy company whose workforce is only a fraction of that size... There are certainly differences, but also because the companies are in completely different sectors. One of the things that interested me in my first weeks with DB was how various groups of employees work closely together in the interests of our customers. This is similar to what I experienced in the mining business. Here at DB and in the mining business, workers see themselves as part of a unified community. The entire transportation sector is still being rocked by the economic crisis. Is there anything you can do? I think we have to concentrate on two aspects. One is to overcome the crisis. The other is to secure the company’s future. We have to do our part to make sure the bottom line stabilizes again. On the other hand, the only way we can have sustainable success is through top employees and managers who are loyal to the company. Jobs in our transport and logistics portfolio

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have taken the biggest hit by the economic crisis. From the start of the year until mid October we had some 12,300 on short-work programs. Of these, about 8,900 were at DB Schenker Rail. We had to let many people go outside of Germany. But at the same time, we have to be sure that we can hold on to enough good, highly-motivated people so that we can get right back to work when the crisis subsides.

What can the company do in the face of the crisis? To counteract the loss of sales at DB Schenker Logistics, for example, we’re canceling some of our contracts with subcontractors. This saves our own

PROFILE

Ulrich Weber ■ Top HR executive: Weber was appoint-

ed member of the management board at DB AG and DB Mobility Logistics AG in the summer of 2009, in charge of human resources. ■ Background: After law school, Weber joined the industrial sector in 1984. In 2001 he became labor director of Ruhrkohle AG and in 2006, labor director at the successor company, Evonik.

jobs because we don’t have to make people redundant at the same rate as our sales are dropping. It is a different situation at DB Schenker Rail though, because most of our sales come from our own work or our own vehicles. So there are fixed costs associated with this than we cannot simply lower overnight. Here in Germany, we have a companywide job placement market, so that helps a bit. We can move people from departments with too many workers to departments where there is a demand. We created a program called reACT 09 to sustain this success and gain better control of the internal jobs situation. Our first priority is to move people between jobs within the DB Group. If this is not possible – at the moment, though, we are finding new placements for three out of four workers – we offer retraining. As a train driver or traffic conductor, for example.

Do people like working for Deutsche Bahn? Yes, they do, but we have to become more attractive. Our problem is demographics. The age structure of Germany is changing. At the moment the average age of DB employees working within Germany is 45. But by the year

2015, it will be 50. We have to create a more attractive image to gain new, promising employees. Sometimes we are perceived as being a worse employer than we really are. And we have to do more to increase our bond with employees from the very start. Things like introductory programs, and opportunities for training. At the moment we are training 8,100 people companywide. We have 600 employees on our double track program, and some 500 young people in internships. And we have to offer employees a longer-term perspective. For this we have personal development programs and retraining opportunities. We have a large areas of operations, with a wide variety of skills and jobs, so we have a lot to offer. We should make more of this.

Would you say Deutsche Bahn has one central value? We want a culture of trust, and open dialogue. Part of achieving this is always being on the lookout for dialogue, and working in a spirit of cooperation on all levels of the integrated company. That’s why the board held a dialogue offensive this fall, bringing together about 5,400 managers and employee representatives. We will continue with this program in 2010. We want to achieve a common understanding of our goals and the strategies we will use to achieve them. Could you be a bit more specific? This will be a time of turmoil for the DB workforce. It is especially important to create trust in areas where there is insecurity. This is why we have to talk more. One of the ways could be employee dialogues, which we are already beginning to introduce. At these events, managers appear before their people in a direct and open exchange. What are you expecting from these events? Well, our customers will certainly benefit from more transparency and trust in the way we work within the company. First, they will find a culture of openness. And then they will be working with DB employees who are motivated and who stand behind the company. Satisfied employees create satisfied customers. I will see to it that this happens.

to continent. And finance too. And so on.“It’s become common knowledge that the sector provides fresh challenges every day, which is precisely what today’s generation of students wants,” Elbert says. Transport and logistics processes have to be developed, steered and constantly improved. This regular and continuing evolution and the sector’s steady growth create constant demand for both operative and concept-strategic jobs.

AT DB Schenker for example, this has had interesting consequences. With its 62,000 workers in about 130 countries, the company is a global leader in logistics services. DB Schenker has had to react to the global downturn by reducing excess capacity. The company froze hiring globally and was forced to let both temporary workers and full staff members go. “However, we haven’t lost sight of our main strategic goals, even in difficult economic times,” says Steffen Wurst, member of the management board for human resources at Schenker AG since 2005 and simultaneously head of personnel at DB Schenker. That means that in some regions, DB Schenker is expanding and hiring again. As a globally active service provider, the group is mostly represented by its national organizations in the world’s economic regions. Hotly contested contracts can only be secured today if national subsidiaries work well and closely together. Otherwise, they are legally independent and responsible for their own profits. According to Wurst, “there are always two forces at work when DB Schenker does its business: first there is local entrepreneurship, or the ability to gain the maximum profit from local know-how, and then comes global networking, the motivation to contribute to the entire group’s success through cooperation that spans borders and cultures and globally creates an inclusive sense of belonging. “Ideal employees are local entrepreneurs with a good business sense, who react robustly and flexibly, creatively and pragmatically. As outstanding global networkers, they strongly identify with the overall company,” Wurst explains. He cites one factor that is especially important today. “An em-

ployer’s attractiveness is measured not only by the number of continuing education courses, but by what creative freedoms it gives its workers.” But despite the economic crisis, finding these ideal workers is anything but easy. “The group’s success depends on qualified personnel. But these are a dwindling resource,” says Wurst. And that goes for the entire sector. Maren Hauptmann, analyst for personnel strategy and talent management at the German management consultancy Roland Berger, hears much the same from her logistics clients. “Good, flexible people with three to five years’ professional experience are

{ Maren Hauptmann, Roland Berger }

»Good, flexible candidates are hard to find these days.« hard to find even in times of crisis,” she says. Yet it is precisely these talented people who can keep an eye on the greater goal and whose work provides much added value for the company. From an employee’s vantage point, the logistics sector has gained attractiveness because divisions are typically much more “permeable” than in most other international industries. That opens up additional career opportunities for precisely the kind of flexible, ambitious worker most needed in the logistics business. Of course this does not mean that logistics personnel planning will become child’s play in the >  Logistics | 17

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The demands on logistics workers have changed drastically. Pressure and stress have increased lowed to suffer, as is mostly the result when temporary workers come on board. Customers’ tolerance for error has fallen dramatically in the last few years. In many cases, introducing work-time accounts on an annual or longer-term basis could be a step in the right direction. On the other hand, stress and time pressures have been growing among blue-collar workers for years now. This is also ultimately the result of increasingly demanding customers.

Training

Responsibility for the future ■ In September 2009, more than 2,700 young people started an apprenticeship and an additional 250 embarked on a double track study program at Deutsche Bahn. What’s more, more than 500 young people are now getting the chance to prepare for professional life through the company’s Chance Plus internship program.

at DB Schenker in Germany alone. And Schenker Deutschland AG, the largest national unit of DB Schenker Logistics, is currently training about 1,240 young people in commercial and technical professions. Deutsche Bahn also trains career starters for a host of jobs in countries outside of Germany, the company’s domestic market.

■ With some 8,700 apprentices and double track program students currently with the company, DB is one of Germany’s biggest professional training organizations. After their training, these young people have great prospects for a career at DB, which boasted an extraordinary acceptance quotient of 85 percent in 2008. In addition, so-called “development paths” open up many prospects within the DB Group.

■ Deutsche Bahn lives up to its social

■ DB also offers training in logistics. Some 360 young people learned a trade

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responsibilities through a great number of programs and projects for helping youngsters. Some ten years ago, firstyear apprentices began taking part in the DB Apprentices Against Hate and Violence project, to fight xenophobia and promote tolerance. More than 7,200 apprentices have so far taken part in 600 projects in this valuable program. For our German readers: For more about training at DB, go to: www.deutschebahn.com/schueler

That may be normal, but as the burden on workers increases, so should the quality of leadership to keep employee morale high. This is a strategic issue that many logistics companies neglected, especially during the sector’s long period of expansion. Asia, the source of much of the sector’s growth in recent years, is where the logistics giants have repeatedly had problems in covering their immense personnel needs with sufficiently qualified people.

Brazil

Keeping ahead of the job switchers

In the depths of the crisis, this problem became irrelevant, and there were no great waves of layoffs. But today, there is once again a shortage of good people. Because, for example, the government of Singapore tightened quotas for foreign workers, DB Schenker had to get creative to attract personnel from neighboring Malaysia. “In Malaysia we established a commuting service to the ferry to get more workers into Singapore,” reports Toh Seah Lim, DB Schenker’s head of human resources in the Asian city-state. The battle for the best and brightest has already begun again, and will probably get tougher. Because unlike in Europe, specialized logistics training is not widely available in universities in the Asia-Pacific region. “We hire people from different academic disciplines like economics and engineering,” says Fook Keon Wan, vice president of HR for DB Schenker Asia-Pacific. These are career changers. Worker qualification is a problem in Europe too. Rail cargo hauler DB Güterbahn, for example, is already looking for the next generation of personnel. “There are some qualifications that we do not find on the labor market, so we have to train them ourselves, > 

Photo: Paulo Fridman

future because everyone with talent flocks to the field. Human resources managers will face two main challenges, consultant Hauptmann says. On the one hand, logistics is and remains a pro-cyclical business. That means major fluctuations in using worker capacity are a given. Logistics companies must therefore find work-time models that guarantee a high degree of flexibility in personnel use. The problem here is that the quality of the service cannot be al-

A recovery from the global financial crisis is well underway in India, China... and Brazil. In fact, many experts now believe Brazil will emerge from the downturn stronger than before. This is already evident in the market for logistics employees. Finding qualified and experienced logistics workers remains difficult. “One main reason is the relatively small market for logistics managers in Brazil, and the lack of training,” says Claudia Formiga of Schenker do Brasil. “We are constantly looking for people on the labor market and offer secure jobs in a healthy and solid company and the opportunity to develop one’s own abilities.” Because job switching is commonplace in Brazil and loyalties to employers are weak, DB Schenker has launched its own program for continuing training and qualification. Logistics managers find themselves being concerned about their employees’ health. “We encourage our people to participate in sports regularly, and offer 15 minutes of gym three times a week,” Formiga says. Language courses, continuing education, training and seminars are additional ways that help Schenker do Brazil to avoid worker emigration. In 2008, DB Schenker booked 3,427 advanced training hours. That total is to grow by 14 percent.

Claudia Formiga, marketing manager at Schenker do Brasil Transportes Internacionais Ltda. Logistics | 19

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Tony Pheiffer, regional director Sub-Saharan Africa and CEO of Schenker (S.A.) Pty Ltd.

Young employees are growing more important for big companies with aging workforces says Dr. Rudolf R. Müller, member of the management board of DB Schenker Rail. The company is training future workers despite the current crisis. In 2009 the total was up to 360 trainees. But there is one thing that particularly worries the rail cargo company: “From 2014 the demographic situation at Deutsche Bahn in general will start to deteriorate, and of course in rail cargo as well,” Müller says. “We need to face facts,” he goes on. “Given Germany’s demographic trends, we face the danger of an excessively older work force.”

South Africa

Logistics in South Africa is a truly multi-ethnic enterprise. DB Schenker’s national unit there employs about 25  percent Africans, 12 percent Coloureds, 16 percent Indians and 47  percent whites. While there are 11 official languages in the country, the business language is English. All major religions are represented in the company. Bringing all that diversity together is an important issue in apprenticeships and advanced training. “We are bound by law to invest a minimum of three percent of our personnel costs in training of so called previously disadvantaged individuals,” says DB Schenker South Africa’s Tony Pheiffer. His company trains various industry-specific skills and is a shareholder in Global Trade Training, an e-learning institution for logistics workers. Local programs for leaders and production workers include customs law, international trade law and driving training. Then there are talent development and other international programs to promote a sense of Schenker spirit. “A good example of how this makes itself felt on the job is the training of the DB Schenker Sports Events team,” Pheiffer says. The unit will have the chance to show its stuff in 2010, when 32 national soccer teams vie in South Africa for the World Cup. “Human resources is a key element of our strategy,” Pheiffer says. “The secret is in having the best workers who cooperate well, have excellent leadership and who keep developing.” 20 | Logistics

Photo: Hannelie Coetzee/WPN/Agentur Focus

Where human resources is a key strategic element

That becomes especially difficult when workers have to be let go, Müller points out. That’s when the “last in, first out” principle takes hold. So as not to jettison their youngest and hungriest workers though, rail companies have to devise and develop special ways of keeping them on board, according to DB Schenker Rail board member Müller. Like their counterparts at DB Schenker Logistics, managers at DB Schenker Rail evaluate their workers’ potential through planning processes. “We know very well who has potential for other tasks,” says Müller. That becomes important when Deutsche Bahn acquires new companies from the transport sector. “We have to integrate management into our system. We are introducing the same processes and standards, and at the same time, we’re establishing a means of comparing and evaluating managers.” The right candidate in the right position? Anyone who leads workers has to recognize their potential. That is done through a so-called “talent management” program. “At

the core of talent management are our measures to identify and promote talent within the corporation,” Wurst explains. “That is how we ensure that we are investing in the right employees, encourage competence, and therefore get ready for the coming upswing. We invest in topics including employer branding and strategic HR marketing.” To be an attractive employer, DB Schenker must attain a corresponding market position in the competition for

talent. “Employer branding,” as personnel managers call the company’s image among prospective employees, takes place on a global, regional and local scale at DB Schenker. Says Wurst: “To establish a consistent image of a company in the public mind, generate a recognition effect and thereby be associated as a company with certain values around the world, we have produced a master plan for personnel marketing communication at the central level.” The concept in- > 

Tool BOX

Flex program for contract logistics Our custom business excellence program, Flawless Execution, also known simply as “Flex,” is the foundation for a continual process of innovation. With it, DB Schenker intends to make its mark in the contract logistics sector on a global basis. The goal is to illustrate customers’ production cycles in a more detailed and optimized fashion. Schenker AG’s global Flex team works together with local teams according to a predetermined plan. The “Flex Tool Box ”consists of these four elements: ■ Human resources: Flex includes development and execution of training programs for workers and detailed resource planning on the basis of a qualification matrix. Career development plans, a pro-active recruiting process, and finally a bonus plan which is based on key indicators complement the human resource aspect of Flawless Execution.

■ Continual improvement: This in-

cludes a global rollout of DB Schenker’s 5S/POP method. Six-Sigma-Lean methods aid the improvement process, as does an integrated score card system in contract logistics. ■ Knowledge management: The Flawless Execution program includes a series of workshops. The purpose is to build up a global business excellence network, in addition to a web-based knowledge exchange. ■ Workflow Management: Flex

supports a standardized business workflow that documents and accompanies the customer’s entire life cycle. Implementation of the business workflow is promoted through software support. Project monitoring as well as assessing and managing risks ensure constant development of the processes.

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The attractiveness of employers is measured by the freedom they allow their employees Acquisitions

“There’s a big difference between leading an Anglo-Saxon company and a continental European one,” says Rudolf R. Müller. The DB Schenker Rail board member for Human Resources worked abroad for many years and can now use that experience. In the United Kingdom, DB has integrated rail operator EWS into DB Schenker Rail. The latest purchase has been the PCC Logistics Group in Poland, bringing just under 6,900 new workers to the DB Group. “Of course we have to guide them,” Müller says. “But that is also a very sensitive process.” Less of a problem is employee migration after acquisitions. “Migration is overestimated as a topic,” according to Müller. Dr. Rudolf R. Müller, member of the board of DB Schenker Rail Deutschland AG and DB Schenker Rail GmbH for Human Resources.

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Photos: Bernd Roselieb, DB Schenker Illustrations: KircherBurkhardt Infografik

Integrating new workers

cludes guidelines for how DB Schenker should present itself as an employer around the world. What needs to be done to reach a position on the local labor market and accompany that process through communication is decided at the local level. This ensures that DB Schenker’s specific market and position within it in the respective countries enter into the equation. To attract and develop leadership personnel, the company evaluates performance globally through a management planning process. Assessments of performance and key competencies afford a glimpse of the managers’ potential. On this basis, development programs and possible additional career steps are planned and discussed by the next-highest management level. Procedures for workers at subsequent levels are also tuned to these processes. Central elements are found in all of the local processes for whose implementation the local personnel directors are responsible in their own specific countries.

Just how important this interplay of managers at the local and central levels can be is seen in the contract logistics area. There, DB Schenker uses a program called Flawless Execution or “Flex,” for short.“Flex is the foundation for our best practice management in contract logistics,” explains Hans Linicus, who has directed the program at DB Schenker since 2008. Classroom training, shared know-how, and global standards in workflow management should promote better business. “With Flex we want to illustrate and optimize a customer’s entire production cycle, including distribution,

implementation of new projects and day-to-day processess,” says Linicus. “By now we have trained several hundred employees worldwide,” he adds. In addition there is of course the network effect when people of various cultures, functions and backgrounds work together over time. Internationally-inclined, high-potential employees can expect three global development programs at DB Schenker that expand their management and leadership skills, besides offering a platform for networking. One employee who has taken part in nearly all of the company’s training programs is Oliver Bohm. Today

{ Hans Linicus, DB Schenker }

»Our programs create real added value for contract logistics.«

Bohm is 41, and director of operations and business development for Australia. And in the past 20 years, he has not only come to know the world, as he dreamed of doing in 1991. He has also completed an extensive regime of DB Schenker training and development programs. These include the International Trainee Program, the International Qualifying Program, Leadership Qualification, and finally the International Leadership Program. As if all this were not enough, there were also two coaching programs. With these skills, the continuing-education veteran has himself coached six leadership people in the past two decades. “That’s typical for DB Schenker, how consistently the programs take up where the last left off, and how they are implemented,” Bohm says. Each of the individual programs lasted a year and a half. Travel and tasks alternated with intensive training and seminars. “All that one learns about oneself, one’s strengths and weaknesses, really hurts. These programs are much better than I had imagined,” he says today. One highly beneficial side effect for the company is that managers who attend these programs tend to be highly loyal to the operation for the rest of their careers. Besides the high investment costs that DB Schenker puts into its people, it is the network that such programs create that pays off over time. “The programs always included very like-minded managers from different cultures and functions,” Bohm recalls fondly. “This created bonds among us.” These contacts are essential for survival today. For Bohm, personally, and for the company as a whole.  ■ Logistics | 23