Supply Chain Management for DHL - Case Study Example

Supply Chain Management for DHL (Student Name) (Course No.) (Lecturer) (University) (Date) Abstract Supply Chain Management (SCM) covers all aspects relating projects sourcing, procurements, and supply management. Since SCM views all business activities from procurement of raw materials to consumption, it is, therefore, important to consider external partners including the suppliers, customers, and distributors. Practitioners refer to them as the external supply chain whose responsibility is to ensure they are offering services, which in turn have positive impact on the ultimate consumer. Since SCM encourages timely production of products, hence businesses ensuring their products are on the market fast are likely to increase their profit advantage. As a result, the report focused on DHL that operates within the logistic industry and ensures provision of delivery service through the air and the land. The main objective of the report was to analyze the SCM of the company, establish the major element of SCM used within the company, and assess the effectiveness. From the analysis, the report established that the supply chain of DHL majorly encompasses four elements including demand management, communication, integration, and collaboration. Supply Chain Management for DHL Introduction Supply Chain Management (SCM) entails all the activities taking place within an organization to ensure the resulting product meets the expectations of the consumers in the market. It takes consideration of the quality of the product and ensures that the product reaches consumers at right time. Moreover, it ensures there is proper planning that focuses on the current and future position of the product in the market, consumer purchasing power, product assembly, movement of the product from production to consumption, and customer related services. Business entities with properly functioning SCM have practitioners who ensure that the entire process helps in creating a positive brand image in the market for sustainable competitive advantage. This is only attainable when firms produce better products, faster, and cost effective among the consumers. The paper focused on SCM of the DHL Company to establish its effectiveness and efficiency to ensure better performance of the company. DHL Supply Chain ensures provision of customized logistic solutions. Besides, the chain ensures a complete perspective from the supplier to consumer through the retailer enabling organizations to achieve operational excellence in each stage. The services offered by the company range from consultation, design, management to execution. Additionally, the institutional supply chain involves two major businesses. The contract logistic business involves the ground based supply chain management that includes warehousing and distribution assembly and provision of the just-in-time services. On the other hand, the freight management business services are airfreight, ocean freight, the forwarding custom brokerage, and the multimodal services. DHL operates within the logistic industry, which involves getting the products and services whenever they are required. The accomplishment of the marketing objective might be difficult without the logistical support as it involves the integration of information, inventory, transportation, warehousing, material handling, and packaging. DHL has all the supply chain elements and logistical support systems, which influenced the decision to settle of the company for supply chain management analysis. Company’s Overview DHL acquired its name from the initials of the last names of the founder including Adrian Dalsey, Larry Hillblom, and Robert Lynn. The company began operating in 1969 within the service industry to transport papers mainly from San Francisco to Honolulu. To ensure efficient delivery, the founders shipped the papers personally through air transport. Such processes assisted in reducing the time taken waiting for the ships as the founders began customizing clearance of the ship’s cargo before the actual arrival. The idea that revolutionized the cargo industry was international air express since it paved the way for faster delivery of the shipments. Within two years, the company was able to expand its scope of operations into the Far East and the Pacific Rim. As a result, the company added more countries in its expansion lists that led to delivery in Japan, Hong Kong, Singapore, and Australia. The company has its headquarter located in Germany, Bonn, and currently operates in more than 220 countries. Moreover, DHL is the world’s largest express company that employees about 500,000 people across the various countries. In its early stages, the company offered door-to-door services, which led to the invention of the international air express industry. The mission and vision of the company is to simplify the lives of its customers and making the customers, employees, and the investors more successful (DHL, 2016). Furthermore, DHL aims at making positive contribution to the world and often demonstrate respect while achieving the results. The main services offered include DHL Express, DHL Solutions, and DHL Global Forwarding. Express services include domestic, prepaid, and international logistic services. Currently, the company is the global leader in providing international road, air, and rail based courier and express services. With regard to global forwarding, the company provides a wide range of freight solutions irrespective of the weight and dimensions. There are several services under the DHL solutions including the supply chain management, value added services, warehousing, outsourcing, outbound fulfillment reverse and return logistics, and distribution. Supply Chain Management Elements Supply chain management involves the management of the upstream and downstream relationships with the suppliers and customers with an aim of delivering superior customer value at a lower cost to the supply chain as a whole. Moreover, the supply chain entails a network of institutions involved through upstream and downstream connections in the distinct processes and activities producing value in form of products and services in the hands of the end consumer. Any good design is often at the centre of an effective supply chain solution. With reference to the DHL, the company derived its reputation through consistently ensuring the development of innovative solutions that aim to streamline the operations and enhance the control measures. Moreover, the institutional in-house teams play significant role in contributing to the solution designs of some of the leading brands in the world and enable them win important contracts (Supply Chain Visions & Council of Supply Chain Management Professionals, 2009, 242). The design teams in the DHL solutions contribute a huge portfolio of professionals and services, warehouse design and simulations, transport design, and operational improvement and inventory analysis. The international supply chain management solution of DHL focuses on assisting the customers take increased control of the international inbound supply chain to improve the value of the international and global sourcing. DHL’s supply chains elements ensure coordination and collaboration with the partners including customers, suppliers, distributors, and the service provides. The elements include demand management, communication, integration, and collaboration. Demand Management Demand management plays a significant role within the company as an element of the supply chain management since it allows the company meets the needs of the partners rather than focusing on the production process. Logistic industry is becoming highly competitive especially with more firms venturing into the business. Besides, the specific needs of the customers are continuously changing which makes it difficult for most companies to attain their desired competitive advantage and meeting the needs of the potential clients. Demand management within the supply chain allows DHL to be aware of the needs of the clients (Hugos, 2003, 187). Moreover, the element encourages the company to maximize its supply quality and add value to its services and products before reaching the potential clients. Through raising awareness on the needs of the potential clients and improving the level of collaboration, DHL has been able to improve its level of competitiveness, ensure effectiveness of the whole supply chain, and increase business opportunities for the involved parties. Communication The outcome of the supply chain depends on the effectiveness and proper integration of the communication skills. Through ensuring effective communication, DHL has been able to assist its supply chain enhance the efficiency and productivity of its operations through enabling all the involved parties to share similar demand and information on operations. Moreover, effective communications ensure that all the members are informed on the development issues that influence the contribution of the involved parties to the supply chain. As a result, it becomes easy to adjust quickly the organizational operations with regard to the ever-changing demand conditions within the logistic industry (Hugos, 2003, 201). Additionally, effective communication as an element of supply chain has also been able to ensure rapid response to the new business opportunities and assisting the company develop new products and services to the market. Following the successful marketing campaign of the DHL, the company increased its supply levels to various countries through expansion. Integration Supply chain management involves a series of activities that requires integration. Besides, integrating the various processes of the supply chain assist each of the involved parties to reduce the cost inventory. Reduction of the cost of inventory is the key to successful chain management. In DHL, the management often shares up –to-date information on demand with the potential customers to ensure onward shipment or delivery of services within the shortest time in the inventory. As a result, the company reduces the cost significantly, which enable it to offer the customers services on highly competitive pricing (Gattorna, 2009, 127). To achieve such level of integration, the company developed a single information network, which allows all the member parties to access, and shares the supply and demand information safely. Besides, the company ensures that the networks are based on the open standards like the Internet Protocol (IP) that allows all the involved parties to communicate even if the institutions have different internal networks. Collaboration Collaboration element within the supply chain ensures strong relationship between the involved processes and activities, enhancing teamwork, and assisting all the party members increase their businesses. As a lead company, DHL runs its business development and training programmes that aim to ensure improvement of the supply chain of the partners’ markets and the product or service knowledge. Collaboration element ensures efficiency of the supply chain, which is fundamental for the processes, and operations of the highly performing institution like DHL (Gattorna, 2009, 190). For example, to improve its service delivery efficiency, the company increased its scope of operation; improved the efficiency in timeliness of the support from the external parties; and increased speed to the market through timely freight management. However, development of the right strategy in supporting the efficiency of the company is the key to ensuring DHL meets its objectives and improve the level of inefficiencies. References DHL. 2016. Supply Chain Management. Retrieved April 8, 2016, from http://www.dhl.co.in/en/logistics/supply_chain_solutions/what_we_do/plan/supply_chain _management.html Gattorna, J. 2009. Dynamic supply chain alignment: A new business model for peak performance in enterprise supply chains across all geographies. Farnham, England: Gower Pub. Hugos, M. H. 2003. Essentials of supply chain management. Hoboken, NJ: John Wiley & Sons. Supply Chain Visions, & Council of Supply Chain Management Professionals. 2009. Supply chain management process standards. Lombard, Illinois: Council of Supply Chain Management Professionals. Read More