DB Schenker Supply Chain Management - Report Example

DB Schenker Introduction This report is aimed at evaluating the existing supply chain and logistics processes of DB Schenker which is a transport and logistics division of the company named Deutsche Bahn AG. The company functions as a wholly owned auxiliary of the company called Deutsche Bahn AG. It is headquartered in Frankfurt, Germany. DB Schenker is a multinational company with its operations spread across the globe. There are more than 945600 employees of DB Schenker and the revenue of the company is 19.8 billion Euros as of February 2014. The company operates in various divisions including a logistic section and a rail distribution. The logistic division consists of air, sea and land freight services. The supply chain and logistics management processes of DB Schenker are evaluated and studied from various dimensions with the aim of providing suitable recommendations to the company. Discussion Brief company history The company was initially been formed by the rebranding and reorganization of the subsidiaries of Deutsche Banh and now operates as a significant and profitable unit of the parent company. The considered company has been operating as the cargo logistics supplementary of Deutsche Bahn AG since December 2007. The company operates in more than 2000 locations in 130 countries in various corners of the globe. DB Schenker deals with all the logistics and transport operations of Deutsche Bahn through the DB Schenker logistics and DB Schenker rail units. DB Schenker brought English Welsh and Scottish Railways in 2010 and subsequently went on to become the largest freight operating company in the United Kingdom. The company has recently entered into a joint venture with Etihad Rail for a project aimed at operating rails in the United Arab Emirates. The operations of DB Schenker are divided among Schenker AG and other subsidiaries of Schenker AG so that the worldwide transportation and logistics operations of the company can be handled efficiently. These logistics and transport operations include air, sea, rail and land freight services. The branch of the company operating in Europe is split in five different units which are Region West consisting of The United kingdom, France, Spain etc., Region Central which encompasses Belgium, Germany, Denmark, Italy, Switzerland and Netherlands, Region East consisting of Bulgaria, Russia, Romania and Poland, Intermodal business unit and Automotive business unit which are responsible for the business in all parts of Europe. (Source: XRail Europe, 2014). Strategic Advantage DB Schenker has established itself as a global player and the second largest logistics service provider after DHL. A number of strategic and competitive advantages can be identified for the company. The presence of a fully integrated network comprising of more than 430 operational units which are aimed at facilitating the worldwide operations of DB Schenker is one of the main strategic advantages available to the company. The global network and coverage acts as the competitive as well as strategic advantage for DB Schenker. Apart from this core advantage, the highly efficient customer relationship management, the employment of advanced technologies, the availability of a large self-owned fleet of trucks and loading units, the high volume of shipments, defined standard door to door lead time, real time customer information and product location tracking systems and an impressive number of scheduled services are identified to be other key strategic advantages for DB Schenker (Christopher, 2001). Green Sourcing DB Schenker has established itself as one of the most environment friendly logistics service provider in the world. The company has taken up the concept of lean and green supply chain. Also, the company has embarked on suitable efforts to address the issue of carbon footprints caused by the logistics and transportation activities. DB Schenker employs a 3 step approach for addressing the CO2 issues. This approach includes three steps which are “avoid, reduce and compensate". (Source: XRail Europe, 2014). The company focuses on sustainability issues and aims to be the eco pioneer in the logistics industry by the year 2020. The company has developed a green and sustainable product portfolio and stresses on eco consulting as the basis of their strategies. This also adds to the competitive advantage of DB Schenker and increases the acceptance of the future growth of DB Schenker among the global societies (DB Schenker Corporate Website, 2014). Process Management: Lean and Sigma Six Quality DB Schenker operates with a global supply chain that is suitably customized to meet the demands of the customers in various parts of the world. Since the company has its operations across the globe, therefore, it is obligatory for the company to maintain the worldwide recognized standards of quality management. The company has established integrated logistics centers strategically located at significant intersections where the movements of the goods converge to create an established link between all the logistics carriers. This has enabled the facilitation of a wide range of value added services that can be provided by the company. DB Schenker is a powerful player in the logistics industry and its activities go beyond the mere transportation of goods from one place to another. The company employs the use of highly innovative, sophisticated and technology oriented services for order management. The supply chain of the company employs operational excellence, knowledge excellence, workflow excellence as well as eco excellence. DB Schenker strives to make its processes efficient through the use of advanced quality monitoring and order tracking systems. Also the company focuses on minimizing waste and pilferage and promoting lean processes. Customer Relationship Management DB Schenker strives to provide the ultimate customer service experiences to its clients by ensuring the maintenance of superior processes and services in the company. DB Schenker focuses on developing a loyal base of customers through the maintenance of strong customer relationship management. The customers of DB Schenker belong to a varied group consisting of multinational and global companies along with the subsidiaries as well as the small local companies with limited requirements. The customers of DB Schenker come from a wide range of industries and thus the customer segments cannot be clearly defined or limited to a particular segment (Nauman and Geil, 2007). The company focuses on maintaining strong customer relationships so as to improve its competitive advantage in the highly concentrated and competitive logistics market. DB Schenker has been an avid user of tailored supply chain management and logistics systems with the aim of catering to the varying requirements of the diverse customer profiles. The maintenance of superior service provision along with an efficient customer relationship management employed in the company makes DB Schenker much equipped to become competitive and successful in the global logistics markets. Competing Internationally (Source: XRail Europe, 2014). The operations of DB Schenker logistics are spread across 130 countries in the world in more than 2000 locations. This has made it necessary for the company to develop products and services that make it capable of competing on an international platform. The company employs a complete end to end supply chain control and visibility which makes the logistics processes much efficient. The company produces more than 28 million outbound orders in a quarter which makes it one of the highest performing logistics providers in the world. The company has a well-established network of suppliers. The supplier network of DB Schenker comprises of a limited number of suppliers who are efficient and add much value to the services of the company. Concentrating on a comparatively smaller number of suppliers makes it possible for DB Schenker to increase the efficiency of its suppliers as well as to ensure more control on its supplier network (Anderson and Narus, 2004). The company has its international service locations in critical economic regions of the world which makes it more competitive in the international platform. The global position of DB Schenker in various types of freights in indicated in the diagram below. (Source: XRail Europe, 2014). Performance Measurement of the Supply Chain The integrated supply chain of DB Schenker is aimed to perform efficiently and successfully on a global scale. The company operates as a pioneer in logistics services and aims to puts together all the flow of products and services on water, air and land across the world. The objective of the company is efficiently met by the use of the strong transportation and logistics networks. The company sets standards for the effective use of resources and thus, empowering its total supply chain system (DB Mobility Logistics AG, 2013). The industry knowhow of DB Schenker has enabled it to enhance the performance of its supply chain. The performance measurement dimensions of DB Schenker are given in the diagram below. (Source: XRail Europe, 2014). Conclusion and Recommendation It can be identified that DB Schenker is an established logistics provider in the world. The success of DB Schenker can be attributed to the strategic approach taken up by the company to manage its services and operations in the best possible manner to fit the global industry requirements. However, the global supply chain and logistics industry is a small and competitive industry which is highly affected by the dynamicity of changes. Therefore, DB Schenker logistics should focus on developing and enhancing its processes on a continuous basis to remain competitive in the global platform. In order to make the business cost effective, the company should shift its production facilities in countries where low cost operations can be conducted. The company should also focus on maintaining high standards of procedures and systems so as to ensure continuous compliance with the international standards of supply chain and logistics. References Anderson, J. C. & Narus, J. A. (2004). Business market Management: understanding, creating and delivering value. New York: Pearson Education Inc. Christopher, M. (2001). Marketing Logistics. Oxford: Butterworth Heinemann. DB Mobility Logistics AG. (2013). Taking responsibility. Providing solutions. Retrieved from: http://www.rail.dbschenker.dk/file/4243020/data/environmental_brochure_2013.pdf. DB Schenker Corporate Website. (2014). Sustainability. Retrieved from: http://www.dbschenker.com/ho-en/sustainability/environment/. Nauman, E. & Geil, K. (2007). Customer Satisfaction Measurement and Management. Milwaukee: North Western Publisher. XRail Europe. (2014). DB Schenker -The Transportation and Logistics Division of Deutsche Bahn. Retrieved from: http://www.xrail.eu/IMG/pdf/2013_03_25_ressortprasentation_t_l_englisch.pdf. Read More