Global Supply Chain ManagementBA 33303

Selected Company:DHL Company – Retailing Company

NAME MATRIX NUMBERCHIN FUI YIEN BB09110006GAN SIEW KIM BB09110307LAI KIM KHYUN BB09110089MARGARETH VIOLLITHA CHARLES BB09170476WANG JIN BB10170874

Overview of DHL Company• It commits expertise in international express, air and ocean

freight, road and rail transportation, contract logistics and international mail services to its customers. **(DHL Global, 2012)

• It has been found by 3 entrepreneurs – Adrian Dalsey, Larry Hillblom and Robert Lynn in San Francisco.

• Vision by Frank Apple – To improve if we want to maintain long-term relationships with our employees, customers and shareholders. And, we can improve tremendously if we systematically address our weaknesses. **(DHL, 2012)

Cont. • It has stands tall as the global market leader of the international

express and logistic industry. **(DHL, 2012)

• It keeps adapt and improve their service to meet the changing needs of the customers both at local and global level. **(DHL, 2012)

• It consists of 4 divisions: (1) express division, (2) global freight forwarding division, (3) supply chain division and (4) global mail division

• It follows ISO 14000 standard as guidance to build trust and credibility within their international environment.

Question 1

Discuss the statement “Time is equal to money”

within the context of supply chain management for both manufacturing and

retail organizations

Supply Chain Management

• The planning and management of all activities involved in sourcing and procurement, conversion and all logistics management activities which includes coordination and collaboration with channel partners such as suppliers, intermediaries, third-party service providers and customers. **(Wisner, Tan & Leong, 2012)

• It is a business solution to ensure the chain leading from suppliers to manufacturers then to the end users run efficiently. **(Said, 2006)

(1) Efficiency• It is an internal standard of performance and it constructs “for

doing the things right”. **(Pfeffer, Jeffrey & Salancik, 2003)

• Run in high efficient condition work will not be postponed smooth production & shipped out/sold out goods on time profit

• For example, DHL has used their commitment to innovation and disciplined approach to performance measurement, quality assurance, project management, environmental management and process improvement. **(DHL Global, 2012)

(2) Changing & Improvement• Firm has to be open to changing and improvement to ensure

continuous operation and survival in today’s uncertain business environment because time is equal to money. **(Borgström, 2011)

• Evaluation and modification are considered consistently in the business process, services, products and operations in order to be at equivalence with the changes on the systems and trends.

• DHL provides a range of industry-specific solutions throughout the supply chain so that their suppliers and customers able to rely on them from time to time . Healthy solutions are been made in industry and any environment – maintain long relationship between them.

(3) Strategies & Constant Monitoring• It enables guarantee its consistency to deliver outputs

to the customers’ at the most convenient time.

• Time & cost efficiency customers satisfaction business progress run smoothly

• DHL, time is important because of continous changes in customers’ demand. They learn how to handle up to the current trends and time in business and earn more profit as well as consider the changes in business arena.

(4) Technology Improvement• By introducing a modern solution, the dynamic route

planning with the support of DHL’s telematics software. **(DHL, 2008)

• It helps a large reduction of cost and pollution and improvement of efficiency at the same time.

• It applicable in urban area and sub-urban area. **(DHL, 2008)

• It allows the driver to hand-off or exchange parcels which will result time and fuel-saving.

Telematics software

Cont.• Just In Time (JIT) is a production strategy that strives to

improve a business return on investment by reducing in-process inventory and associated carrying costs. **(Wikipedia)

• Benefits: (1) Reduced costs, (2) higher productivity, (3) competitive advantage & (4) improved job satisfaction for retailers with complex supply chains.

• It helps DHL to create more flexible business, better communication with customers and suppliers and can react more quickly to market demands – gain greater customer loyalty and keep up with competitors.

Question 2

What systems/techniques do companies use for managing their inventory?

Discuss for both retail and manufacturing environments.

(1) Location Strategies

• It is important for a company to give service to customers as it gives long term profits of company subsequently. **(Wisner, Tan & Leong, 2012)

• It maximizes customer service, server productivity and overall efficiency.

• Factors that contribute the importance of good location: (1) global market opportunities, (2) global competitors & (4) technology and demographic changes.

Example

(2) Enterprise Resource Planning (ERP)• A software that integrates all departments and functions

across a company onto a single computer system that can serve all different departments’ particular needs. **(Wailgum, 2007)

• It allows DHL to link with all levels such as supply chain management, financial applications, HR management and customer relationship management.

• It is internationally standardized process which can reduce the number of changes of information in logistic.

Example

(3) Warehouse Management System (WMS)• It manages DHL inventories by offering every

combination of warehousing solution in supply chain.

• WMS has replaced Inventory Management System (IMS) in 1990s as WMS can do much more than IMS.

• It ease the complex storage and distribution management as it integrates with the framework of ERP to support the basic processes in warehouse areas. **(DHL, 2012)

(4) Barcodes• It located on all consumer goods and it is optical and

electronically readable representation of information that consists of various widths of parallel lines and spaces. **(DHL, 2008)

• 3 types: (1) 2-D Codes, (2) 3-D codes, and (3) 4-D codes

• DHL track, trace and record the stock receipts within a mature supply chain and it reduces inventories and improve data quality.

(5) RFID Technology

• It partially like the barcode which is the provision of information about a product, pallet or entire inventories. **(Juels, 2006)

• Everything is done by radio waves which DHL apply this system in its warehouse.

• It allows DHL warehouse activities contactless scanning of goods once the shipment passes a gate. **(DHL, 2008)

(6) Intra-logistics Application• It organizes, execute and optimize a company’s material

flow, information streams and handle the goods.

• It consists of telescopic conveyor belt, 3-D laser scanner and an interchangeable gripping system (articulated arm and grabber)

• The integration between logistics with information system and business administration area can be linked to each others with the contribution of robot and machine. **(DHL, 2008)

Question 3

What are the main factors that encourage logistics to change?

What changes do you think there will be in the next decade?

Social Environment – major factor• It is phenomenon of green environment.

• It encourages logistic activities become “least cost” to the environment in terms of external cost of logistic which associated with pollution, dumping waste, vibration and accidents.

• DHL seeks for sustainability to ensure that the decision that made do not have any adverse impact on future generations.

(1) Green Environment Concept – future

• The major components is transportation for logistic activities.

• Example 1, excess of carbon emission spread by transportation which changed environment landscape and destroyed ecosystem.

• Example 2, correct and incorrect packaging affects on how much products can be stored and how it stored and transported in a given s[ace.

Cont.

• DHL introduce Go Green Service – carbon neutral shipping options for DHL and Deutsche Post customers. **(DHL, 2012)

• Social Corporate Responsibilities (CSR) to generate more value on green environment solutions to minimize environmental impact.

• For example, DHL Canada launched Go Green Service, “Carbon Neutral” shipping options to enables the Canadian business ships their goods without any environment footprint. **(Dibenedetto B, 2009)

(2) Innovation of technology – Ongoing• Improvement in technology assists the monitoring of

materials flows and the handling process of goods and services. **(Johnsen G, 2007)

• Man power + technology reduce cycle and repair time, reduce no value-added interface and transaction occurred during logistical functions. **(Rodrique J. P., Slack B & Comtois C, 2011)

• Siemens joined DHL in 2010 to do R&D of DHL global network to improve the flows of goods and transport.

(3) The cost of fuel and oil• Transportation likewise truck, train, ship and plane are relying on

oil and fuel to function properly.

• It is a big challenge for DHL as high cost of fuel and oil ranked 1st in 2005, 2nd in 2006 and 3rd in 2007, and back to 1st ranking in 2008. **(MH&L Material Handling & Logistics)

• DHL Smart Truck + technology with dynamic route planning in vehicles = Efficiency pick up and delivery services

• Route planning system is supported by satellite and telemetric data. **(Deutsche Post DHL)

DHL Smart Truck + technology with dynamic route planning in vehicles = Efficiency pick up and delivery services

Question 4

In today’s business environment it is not unusual to outsource activities.

Discuss the advantages and disadvantages of outsourcing in logistic processes?

Outsourcing

• It defines the contracting of a 3rd party to manage a business process more effectively and efficiently that can be done in-house. **(Rob Aalders, 2002)

• DHL Company provides freight forwarding services that can be delivered through air, ocean, road or rail worldwide. **(DHL, 2008)

• DHL aimed to achieve substantial cost-savings and focus on core competencies by the outsourcing.

The contracting of a 3rd party to manage a business

process more effectively and efficiently

Advantages of Outsourcing

1. Cost advantage– Foreign suppliers offers a cost advantage because of

lower labor and material costs.

2. Increased quality, efficiency and sufficient capacity – To meet rapid change on customer’s demand.– To produce the components in-house when demand is

keep growing faster.

Cont.

3. Focus on core business– Quality is superior in purchased components.– To meet environmental and safety standards to manufacture

items.

4. To produce smooth-running finance and accounting function– To enhance more strategic relationship with business partners,

profitability & market performance.

5. Cost reduction– External parties help DHL to access skilled and trained labor and

man-power at extremely reasonable price.

Disadvantages of Outsourcing1. Operational risk– DHL does not has the managerial control over

outsourcing process.– Have to take risk if company’s partner bankrupt.

2. Lack of internal and external customer focus– DHL security and confidentiality of business at risk.– Wrong partners fail in service business more

expenditure dependency on partner increased

Conclusion

DHL Company can be counted as the No.1 ranking in freight forwarding services in the world through air, ocean, road and rail

worldwide.

DHL Company has tried their best to maintain and remain their customer or regular customer over these many years as it has

developed various and numerous innovation remedies to resolve and improve supply chain problems which faced by their customers.

It has helped their customers a lot by reducing the cost, time and risk.

Thank youAny questions?