Global supply chain management of DHL

1. Global Supply Chain Management
BA 33303
Selected Company:
DHL Company – Retailing Company
NAME
MATRIX NUMBER
CHIN FUI YIEN
BB09110006
GAN SIEW KIM
BB09110307
LAI KIM KHYUN
BB09110089
MARGARETH VIOLLITHA CHARLES
BB09170476
WANG JIN
BB10170874

2. 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)

3. 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.

4. Question 1
Discuss the statement
“Time is equal to money”
within the context of supply chain
management for both manufacturing and
retail organizations

5. 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)

6. (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)

7. (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.

8. (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.

9. (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.

10. Telematics software

11. Cont.
• Just In Time (JIT) is a production strategy that strives to
improve a business return on investment by reducing inprocess 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.

12. Question 2
What systems/techniques do companies
use for managing their inventory?
Discuss for both retail and manufacturing
environments.

13. (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.

14. Example

15. (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.

16. Example

17. (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)

19. (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.

21. (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)

23. (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)

25. Question 3
What are the main factors that encourage
logistics to change?
What changes do you think there will be in
the next decade?

26. 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.

27. (1)GreenEnvironmentConcept– 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.

28. 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)

29. (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.

30. (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)

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

32. Question 4
In today’s business environment it is not
unusual to outsource activities.
Discuss the advantages and disadvantages
of outsourcing in logistic processes?

33. 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.

34. The contracting of a 3rd
party to manage a business
process more effectively
and efficiently

35. 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.

36. 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.

37. Disadvantages of Outsourcing
1. 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

38. 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.

39. Thank you
Any questions?