DHL in United Arab Emirates - Essay Example

DHL in United Arab Emirates a. History DHL’s history in UAE dates back to 1977 when the mother company began shifting from pure delivery of documents to small parcels. In UAE, logistics services were essential given the presence of oil exports and the region’s geographic interface with Asia and Europe. In this regard DHL has continued to develop huge logistics impact in the region since then. The choice for Dubai as a logistics hub by DHL was also as a result of areas world’s largest habors, large free-trade zone, and the presence of freight airport. As a rule, international companies have to partner with local companies to offer their services in UAE and Postal service of Dubai was the choice partner for DHL. Additionally, United Arab Emirates has high potential growth in the courier, parcel, and express services which cause high demand for express product. b. Main products For the world, the logistics company is the major international product. The products for DHL Supply Chain include Lead Logistics provider, Technical Services, Packages services, Integrated Logistics Procurement, service parts logistics, airline business solutions, and e-fulfillment. The goal of this supply chain for DHL is to ensure that their customers’ information and products reach their markets efficiently and quickly. This way, the company manages to secure a competitive advantage. The services offered by Williams Lea include marketing solutions, consumer correspondence, and office document solutions. c. International presence DHL supply chain is categorized into three regions mainly Asian Pacific/Africa/Middle East, America, and Europe. DHL chain offers solutions in six areas of consumer, technology, retail, Healthcare and life science, energy & automotive. Each of DHL’s sectors is governed by a sector management given that the organizational management structure facilitates the development and implementation supply chain specialized on the basis of sector. Each sector head works with a team of specialists responsible for handling projects for customers. 1.0. Example of logistics activities from supply chain logistics solutions According to Tsen, Yue, & Taylor (2005), transportation is the determinant of efficient movement of products and information. Logistics enterprises are the involved in activities of value flow within the logistics value chain. These activities include warehousing, transportation distribution, packaging, distribution process, and handling loading and unloading (Zhou, 2013). Part II Q1: inventory management Inventory management offered involves warehousing and distribution through provision of dedicated operations using state-of-art software systems that monitor and control all critical warehouse processes including control over stock levels, stock reordering, and stock reorder time. The kinds of products available include raw materials, finished goods, automated; temperature controlled, and bonded solutions. For stock control, warehouse systems record all activities and events in product receipt, handling, and storage, and order levels which are monitored and system provide relevant notifications to reorder, or not. Stock control also involves postponing assembly, packaging and configuration to minimize inventory and deliver and cross-docking finished goods to increase delivery speeds and reduce storage costs. After goods have been received in the distribution warehouse at DHL, they are inspected for quality assurance. Packaging is also done for items like soft goods in quantities that are required by customers. At the distribution warehouse, different items are supplied with different packaging materials prior to shipment to the customer (Franklin Associates, 2004). The company also offers packaging for packets and parcels, and documents and printed matter. Q2. Types of inventory carried by the DHL Examples of different types of inventory services include supplier management, inventory management, inbound freight management, in quality inspection, kitting and de-trashing, and just-in-time inventory services. Q3. Explanation of the classification inventory According to DHL-discover logistics (2008), ABCD analysis at involves classification of goods based on the extent of their contribution to organizational sales. ‘A’ items are classified as very significant compared to ‘B’ and ‘C’ items in terms of company sales. ‘A’ items have very high value and any shortages could result to great losses. For A items, their high sales requires that they are stored in local warehouses; B items are stored in fewer preferred area supply warehouses; C items stored in factory warehouses; while D items which complement A, B, and C items are not stored at all. DHL also analyzes its postal service utilities in terms of urgent and important mail and important mail with no urgency, in UAE, DHL has recently introduced postal delivery service to home addresses or company DHL. Q4. EOQ components at DHL UAE Economic Order Quantity or EOQ model involves the following variables R = Annual rate of Demand (units) Q = Quantity Ordered – units A = Cost of placing an Order ($per order) V = Value or Cost of one unit of inventory ($ per order) W = Carrying cost per dollar Value of inventory per Year (% product value) S = VW = Inventory carrying cost per unit year ($ per unit per year) t = Time in days TAC = Total Annual Cost ($ per year) TAC= ½(QVW) + A(R/Q) At DHL UAE, the Quantity ordered or Q include all form of shipment like parcels and packets ordered per year; V = Value or Cost of one unit of inventory is dependent on ABCD categorization amongst other factors like size and weight; and t or time in days starts when shipment is taken from shipper to when it is delivered to consignee. All components dependent on costs vary for different kinds of shipment and organizational transport policies (DHL UAE, 2014). Q5. Personal opinion Through its categorized high end services, I belief that DHL UAE has efficiently and effectively managed its inventory especially since state-of-art warehouse and inventory management systems are used to control inventory whether raw materials, work in progress or finished goods. Such management has successfully resulted into reduced holding and ordering costs. References DHL UAE. (2014). DHL terms and Conditions of Carriage for DHL economy select. Retrieved from DHL: http://www.dhl-usa.com/en/express/resource_center/customer_service_faq.html Franklin Associates. (2004). Life Cycle Inventory Of Packaging Options for Shipment of Retail Mail-Order Soft goods. Oregon: Franklin Associates. Hoffman, K., & Bateson, J. (2010). Services Marketing: concepts, Strategies, & Cases. United States of America: Cengage Learning. Logistics, D. (2008). The right product in the right place. Retrieved from Discover logistics: https://www.dhl-discoverlogistics.com/cms/en/course/tasks_functions/inventories/selective.jsp Tsen, Y., Yue, W. L., & Taylor, M. A. (2005). The Role of Transportation in Logistics chain. Proceedings of the Eastern Asia Security for Transportation Studies, 1657-1672. Zhou, X. (2013). Research on logistics Value Chain Analysis and competitiveness Construction for Express Enterprise. American Journal of iindustrial management, 3(online), 131-135. Read More