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    Logistics Logistics Document Transcript

    • 1 Introduction Logistics is concerned with getting the products and services where they are needed when they are desired. It is difficult to accomplish any marketing or manufacturing without logistical support. It involves the integration of information, transportation, inventory, warehousing, material handling, and packaging. The operating responsibility of logistics is the geographical repositioning of raw materials, work in process, and finished inventories where required at the lowest cost possible The formal definition of the word ‘logistics’ is: - it is the process of planning, implementing and controlling the efficient, effective flow and storage of goods, services and related information from the point of origin to the point of consumption for the purpose of conforming to customer requirements. In order to understand the concepts of logistics in terms of practical usage and to glimpse into the how a real company or organization uses logistics as a formidable tool to gain customer satisfaction, reduce overall cost and increase efficiency we selected “DHL” the worlds leading courier service company. But DHL is multi faceted and offers myriad types of services. History and background of DHL DHL are the first letters of the last names of the three company founders, Adrian Dalsey, Larry Hillblom and Robert Lynn. In 1969, just months after the world had marveled at Neil Armstrong's first steps on the moon, the three partners took another small step that would have a profound impact on the way the world does business. The founders began to personally ship papers by airplane from San Francisco to Honolulu, beginning customs clearance of the ship's cargo before the actual arrival of the ship and dramatically reducing waiting time in the harbour. Customers stood to save a fortune. With this concept, a new industry was born: international air express, the rapid delivery of documents and shipments by airplane. The DHL Network continued to grow at an incredible pace. The company expanded westward from Hawaii into the Far East and Pacific Rim, then the Middle East, Africa and Europe. By 1988, DHL was already present in 170 countries and had 16,000 employees. At the beginning of 2002, Deutsche Post World Net became the major shareholder in DHL. By the end of 2002, DHL was 100% owned by Deutsche Post World Net.In 2003, Deutsche
    • 2 Post World Net consolidated all of its express and logistics activities into one single brand, DHL The world's largest express and logistics Network DHL is the global market leader in international express, overland transport and air freight. It is also the world's number 1 in ocean freight and contract logistics. DHL offers a full range of customised solutions - from express document shipping to supply chain management. Below are the global facts and figures that show you the scale of the world's largest express and logistics network. Global Facts and Figures Number of Employees: around 285,000 Number of Offices: around 6,500 Number of Hubs, Warehouses & Terminals: more than 450 Number of Gateways: 240 Number of Aircraft*: 420 Number of Vehicles: 76,200 Number of Countries & Territories: more than 220 Shipments per Year: more than 1.5 billion Destinations Covered: 120,000 The reason for the success of DHL is due to its very effective and efficient way of carrying out the process of project management. The basic steps in it are as follows: Project Management DHL manages projects according to a six-step process:  Initiation: The formal start of the project  Design: The formal agreement on how to approach the project and its deliverables  Planning: Following agreement, a detailed plan is created  Execution: After detailed planning and preparation, the project goes 'live'  Closing: Gradually phase out and prepare for handover of the deliverables  Handover: The formal end of the project
    • 3 INTEGRATED LOGISTICS Logistics is viewed as the competency that links an enterprise with its customers and suppliers. Information from and about customers flows through the enterprise in the form of sales activity, forecasts and orders. As products and materials are procured, a value added inventory flow is initiated that ultimately results in ownership transfer of finished products to customers. Thus the process is viewed in terms of two inter-related efforts, inventory flow and information flow. Inventory Flow Suppliers Physical Manufacturing Procurement distribution support Customers Information Flow Inventory Flow The management of logistics is concerned with the movement and storage of materials and finished products. From the initial purchase of a material or component, the logistical process adds value. By moving inventory when and where needed. Thus the material gains value at each step. For a large manufacturer, logistical operations may consist of thousands of movements, which ultimately culminate in the delivery of the product to an industrial user, wholesaler, dealer or customer. In order to understand logistics it is useful to divide it into three areas:  Physical distribution  Manufacturing support  Procurement
    • 4 For DHL: DHL is completely service oriented therefore it does not have its own material movement but that of the customers both the sender, the receiver and also the intermediateries. That means it only involves physical distribution and procurement. Procurement also includes the material needed for packaging such as paper, moulded trays and boxes, wooden crates, standard containers wraps, plastic inlays etc. The materials or the goods collected from the senders (including papers, documents, physical goods like clothing, household good, chemicals, exotic animals etc) are weighed, checked for condition, and depending upon its various characteristics it is packed. The goods are then dispatched to their destinations. There is no value addition to the material itself but it is done to the service which is provided ( eg if there has to be a certain package delivered from India to UK the normal services would take about 2 days whereas as a super fast delivery would be done in about 9 hours) Information flow Information flow identifies specific locations within a logistical system that have requirements. Information also integrates the three operating areas. The primary objective of developing and specifying requirements is to plan and execute integrated logistical operations. • Logistical information involves two major types of flows: 1. Coordination flows 2. Operation flows 1. Planning and coordination flows Coordination is the backbone of the overall information system.  Strategic objectives: Strategic objectives detail the nature and location of customers, which are matched to the required products and services to be performed.
    • 5 For DHL It implies estimating the time requires for collecting the goods from the door step of the sender and then estimating the time for the goods to reach the final customer.  Forecasting Forecasting utilizes historical data, current activity levels, and planning assumptions to predict future activity levels. Logistical forecasting is generally concerned with relatively short –term predictions. The overall purpose of information planning/coordination flow is to integrate specific activities within a firm and to facilitate overall integrated performance. For DHL DHL’s whole business is dependent on the vital point of timely delivery. Based on the distance to the final receiver, the accessibility, the documentations and procedures that need to be handled etc they have fine tuned the process of delivery. They can accurately gauge how much time it will take for the goods to reach its end destination. 2. Operational flows The second aspect of information requirements is concerned with directing operations to receive, process, and ship inventory as required supporting customer and purchasing orders. Operational requirements deal with  Order management  Order processing  Distribution operations  Inventory management  Transportation and shipping  Procurement For DHL: DHL owns its success for the efficiency with which the operations are carried out. Here not only the company but the sender and sometimes the receiver can track the goods through their information center. They are given a certain password which they can use to trace via online or their customer service helpline.
    • 6 DHL WEB SHIPPING is the on-line express shipping tool that helps customers prepare documents, book pick-ups, store contact details and track their deliveries. Ideal for busy office managers, business travelers or receptionists, DHL WEB SHIPPING needs no special software or training. Purpose of DHL Web Shipping: DHL WEB SHIPPING's new, simplified navigation guides customers, quickly and easily, through the entire process. So they can respond to any shipping request within minutes. With a click of a mouse customers can:  Select the right shipping and value-added services for each shipment  Prepare air waybills and customs documentation on-line  Get the latest service bulletins and customs information  Book collections and track shipments on-line  Save up to 300 customer addresses  Access shipment records for 99 days  Alert recipients and other interested parties DHL WEB SHIPPING is also perfect for telecommuters. You can order a pick-up, check service availability or track your shipments from any location, in real time, direct from your wireless laptop.
    • 7 Supply Chain Management Definition for supply chain management “Supply chain management is the management of upstream and downstream relationships with suppliers and customers to deliver superior customer value at less cost to the supply chain as a whole.” Explanation: The supply chain is the network of organizations that are involved through upstream and downstream linkages, in the different processes and activities that produce value in the form of products and services in the hands of ultimate consumer. For DHL: Supply Chain Optimisation Good design is at the heart of an effective supply chain solution. DHL has developed a reputation for consistently developing innovative solutions that streamline operations and improve control. Their in-house teams have contributed to the solutions design of some of the world's leading brands and enabled to win key contacts. DHL solutions design team offers a wide portfolio of expertise and services, from logistics network strategy, transport design, warehouse design and simulation, through to operational improvement and inventory analysis. International Supply Chain Extended Supply Chain Services Implementation Services Outsourcing Projects
    • 8 International Supply Chain DHL’s international supply chain management solutions are focused on helping customers take increased control of international inbound supply chain to maximise the value of international and global sourcing. DHL helps customers :  Give visibility of the upstream supply chain, and enable earlier decision making  Create a more agile supply chain, better able to respond to changes in consumer demand  Reduce lead times, inventories, and associated storage costs Customer-focused solutions are built up from the following core services:  Origin management, including: vendor management; supplier collections; customs brokerage; consolidation services and value-added services  Global forwarding, including: air/ocean/road/rail freight forwarding and management; European managed transport  Destination management, including: port and demurrage management; customs brokerage; de-consolidation and pre-retail services; port to distribution centre transportation; direct store delivery (US only)  Supply chain visibility and management, including: purchase order management; RFID product tracking; exception management; planning and forecasting; inventory management.  Global forwarding services are provided across all major routes. Logistical services that are offered. Reverse Logistics Service Logistics Inbound to Manufacturing Medical Device Distribution Distribution to Stores Management Engineering Response
    • 9 Reverse Logistics DHL’s reverse logistics solutions help customers plan, implement and control flow of materials and manage related information, back up the supply chain to recapture values and ensure the safe disposal of goods. Items include the recovery of obsolete or non- operational white goods such as refrigerators, plus the removal of old furniture on delivery of new or replacement products. Services include:  Roll in Management: de-installation of finished goods at the customer's site  Returns Management: receiving, sorting, verifying and managing returned products  Express Delivery: Exchange of Dead On Arrival products Service logistics Service and replacement parts DHL’s service and replacement parts service involves the management of manufacturers' replacement parts delivered to and from customers according to pre-defined service levels or warranty agreements on a one-, two-, four- or eight-hour and next-day basis, 24 hours a day, seven days a week. DHL works closely with customers to overcome common issues such as:  Poor parts availability  High inventory investment  Long lead times, accentuated by global sourcing  High levels of customer returns  Poor visibility, reporting and control  Cost control of the demand chain Key services include:  International freight forwarding  Domestic and regional inbound deliveries  Inventory planning, forecasting, procurement and analysis
    • 10  Distribution centre operations  Outbound delivery The entire process is underpinned by a web-enabled electronic order processing and order monitoring tool. Inbound to Manufacturing Inbound to manufacturing is the complete end-to-end logistics management of inventories, facilities and labour associated with the inbound flow of materials from vendors and supplier origins to consumption points in manufacturers production lines. The service encompasses:  Network, transportation and facility design  Inventory optimisation  Supplier management  Transportation management  In-plant services Key to the service is integrating manufacturers' forecasting, order management and supply chain execution processes with their component suppliers. DHL implements warehouse management and supply chain event management systems to manage just-in-time deliveries and allow supply chain participants to exchange forecast requirements in real time. Value is created for manufacturers and component suppliers throughout the world by:  Enabling a robust and cost-effective supply chain  Providing the necessary visibility so that the location of all components within the supply chain is known to all supply chain participants  Reduce inventory and investment costs  Improve delivery times  Co-ordinate multiple components more efficiently
    • 11 Medical Device Distribution DHL country-based warehouses for a number of manufacturers to service a local customer base. This includes the receipt of product from local or global manufacturing sites and downstream distribution to hospitals. Distribution to stores management DHL distribution to store services are focused on helping retailers create efficient and flexible supply chains to deliver product to retail outlets at high levels of service. These solutions are built from several core services: reverse logistics collections; sortation; processing; repair/refurbishment; value recovery; disposal and compliance. Engineering Response Through our Engineering Response services, we manage the materials supply chain from works planning and inbound goods through to on-site works, delivering stock out to engineers, builders and construction workers in the field. Extended Supply Chain Services DHL not only provides physical logistics services but also manages other enhanced supply chain services, improving efficiencies and reducing costs. • Order Management Receipt, management, execution, sequencing and dispatch of orders in a timely manner. • Call Centre Management A Call Centre manages orders, monitors sales activities, provides customer services and functions as a Help-desk. • Global Inventory Management DHL gives the customer a global view of inventory, thus enabling informed decisions regarding the disposition of stock.
    • 12 • Consolidated Billing Services The creation of a consolidated and categorized invoice, based on all services performed in a specific time-period by more than one service provider, made available in an agreed format. • Freight & Customs Solutions DHL's many years of experience with international trade requirements and formalities, combined with the European Competence Centre and country expertise, gives customers the leading edge in service, quality and management in cross border transactions. Implementation Services • Implementation and Project Management Implementation starts by defining project aims, setting the targets and describing the deliverables in detail. The major topics in implementation include business processes, engineering, real estate, IT systems, migration, HR, finance and legal considerations. • Quality Management Total Quality Management is a management strategy that integrates quality orientation into the whole structure and workflow of a company by using methods and techniques of quality management Corporate Policy for Quality, Environment, Health and Safety (QEHS) is based on five corporate values:  Customer satisfaction: Providing our customers and their customers with excellent, high value logistics solutions  Employee motivation: Building on the know-how and stimulation of individual potential in multi-cultural teams
    • 13  Operational excellence: Continuous improvement of processes and services to fulfil or exceed expectations  Corporate citizenship: Acting as a responsible corporate citizen in all countries  Shareholder reward: Developing a sustainable business to provide increasing shareholder value Globally, DHL management systems are certified according to the international standard for quality management systems ISO 9000 in almost every operating unit. Performance Management : Performance management is a key part of the supply chain. Measured elements are reviewed as a system, as each component interacts with all the other parts around it. Performance measuring not only records historical performance but also provides early indication of any service slippage. In this second role, the measures provide a valuable contribution to DHL's Continuous Improvement Programme. Outsourcing Projects Outsourcing involves DHL taking over and managing previous in-house logistics operations, including:  Distribution centres  Transport operations  Back-office functions  Supply chain management functions  After sales services Innovative Supply Chain Development
    • 14 Supply Chain Management services are delivered across industry sectors and provide expertise, knowledge and resources in terms of personnel and supply chain tools. All services are targeted at optimising logistical operations in both process and strategy, and are aligned to the client's commercial expectations. The services are as follows:  Strategic Logistics Consulting  Lead Logistics Provider  Consulting and providing Transport optimisation: Route-Pro and Trans-Pro  Consulting and providing Supply Chain Design  Consulting and providing Transportation  Engineering, optimisation and re-engineering  Implementation and Project Management  Process Management  Outsourcing DHL’s consulting services also offer re-organisation of customer facilities, project management for customers, implementation of new IT Systems, creation of tender documents and tender processing. • Supply Chain Re-engineering DHL works with customers to review supply chain efficiencies. One of the main tasks is to evaluate cost efficiency to ensure that costs are being driven down throughout the contract duration. Data analysis allows DHL to provide customers with 'what if modeling' or the impact of changing the business rules. • After Sales Optimisation Optimising return logistics and spare parts logistics as well as maintenance and repair services. • Vehicle Management Services Our vehicle management services focus on the management of sales and marketing support programmes for automotive manufacturers. Combining a range of services and
    • 15 systems to deliver a global response, we help you overcome challenges at the end of the automotive supply chain. • Distribution to Stores Management DHL’s distribution to store solutions are focused on helping retailers create efficient and flexible supply chains to deliver product to retail outlets at high levels of service. These solutions are built from several core services including reverse logistics:  logistics network strategy  warehouse design and simulation  transport modelling. • After Sales Optimisation Optimising return logistics and spare parts logistics as well as maintenance and repair services. Vehicle Management Services Our vehicle management services focus on the management of sales and marketing support programmes for automotive manufacturers. Combining a range of services and systems to deliver a global response, we help you overcome challenges at the end of the automotive supply chain. • Distribution to Stores Management DHL’s distribution to store solutions are focused on helping retailers create efficient and flexible supply chains to deliver product to retail outlets at high levels of service. These solutions are built from several core services including reverse logistics:
    • 16  logistics network strategy  warehouse design and simulation  transport modelling. TRANSPORTATION Transport Functionality Transportation is one of the most visible elements of logistics operations. Transportation provides 2 major functions: product movement & product storage. Product Movement Whether the product is in the form of materials, components, assemblies, work-in-process, or finished goods, transportation is necessary to move it to the next stage of the manufacturing process or physically closer to the ultimate consumer. A primary transportation function of product movement is moving up and down the value chain. Since transportation utilizes temporal, financial, and environmental resources, it is important that items be moved only when it truly enhances the product value. Transportation involves the use of temporal resources because product is inaccessible during the transportation process. Such product, commonly referred to as in-transit inventory, is becoming a significant consideration as a variety of supply chain strategies such as just – in – time and quick response practices reduce manufacturing and distribution center inventories. Transportation uses financial resources because internal expenditures are necessary for private fleets or external expenditures are required for commercial or public transportation. Transportation uses environment resources both directly and indirectly.
    • 17 In direct terms, it is one of the largest consumers of energy (fuel and oil) in the domestic United States economy. In fact, it accounts for close to 67% of all domestic oil use. Indirectly, transportation creates environmental expense through congestion, air pollution and noise pollution. The major objective is to move product from an origin location to a prescribed destination while minimizing temporal, financial and environmental resource costs. Loss and damage expenses must also be minimized. At the same time the movement must take place in such a manner that meets customer demands regarding delivery performance and shipment information availability. Principles There are two fundamental principles guiding transportation management and operations. They are economy of scale and economy of distance. Economy of scale refers to the characteristic that transportation cost per unit of weight decreases when the size of the shipment increases. E.g. truckload shipments cost less per pound than less-than-truckload shipments. It is also generally true that larger capacity transportation vehicles such as rail or water are less expensive per unit of weight than smaller capacity vehicles like motor or air. Transportation economies of scale exist because fixed expenses associated with moving a load can be spread over the load’s weight. The fixed expenses include administrative costs of taking the order; time to position the vehicle for loading or unloading, invoicing and equipment cost. These costs are fixed because they do not vary with shipment volume. E.g. suppose the cost to administer a shipment is $ 10.00. Then the 1-pound shipment has a per unit of weight cost of $10.00, while the 1,000 pound shipment has a per unit of weight cost of $0.01. Thus, it can be said that an economy of scale exists for the 1000-pound shipment. Economy of distance refers to the characteristic that transportation cost per unit of distance decreases as distance increases. e.g. a shipment of 800 miles will cost less than two shipments (of the same combined weight) of 400 miles. Transportation economy of distance is also referred to a se tapering principle since rates or charges taper with distance. The rationale of distance economies is similar to that for economies of scale. Longer distances allow the fixed expenses to be spread over more miles, resulting in lower overall per mile charge.
    • 18 These principles are important considerations when evaluating alternative transportation strategies or operating practices. The objective is to maximize the size of the load and the distance that is shipped while still meeting customer service expectations. Transport Infrastructure Transportation infrastructure consists of the rights-of-ways, vehicles, and carrier organizations that offer transportation services on a for-hire or internal basis. The nature of the infrastructure also determines a variety of legal and economic characteristics for each mode or multimodal system. A mode identifies the basic transportation method or form. • RAIL NETWORK Since olden times, railroads have handled the largest number of ton-miles. As a result of the early establishment of a comprehensive rail network connecting almost all the cities and towns, railways dominated the intercity freight tonnage till World War II and in some cases of Europe, Asia and Africa they even connected the countries. This early superiority enabled railways to transport large shipments very economically. • MOTOR CARRIERS Highway transportation has increased rapidly since the end of World War II. This is because Motor carrier industry results from door-to-door operating flexibility and speed of intercity movement. They are even flexible because they can operate on each and every kind of roadways. In comparison to railroads, motor carriers have relatively small fixed investments in terminal facilities and operate on publicly maintained highways. Although the cost of license fees, user fees, and tolls are considerable, these expenses are directly related to the number of over-the-road units and miles operated. The variable cost per mile for motor carriers is high because a separate power unit and driver are required for each trailer or combination of tandem trailers. Labor
    • 19 requirements are also high because of driver safety restrictions and the need for substantial dock labor. Motor carriers are best suited to handle small shipments moving short distances. • WATER TRANSPORT It is the oldest mode of transportation. First it was the sailing vessels, which was replaced by steamboats in early 1800’s and by diesel power in the 1920’s. Domestic water transportation – involves the Great Lakes, canals, and navigable rivers. In every country, fewer system miles exist for inland water than any other transportation mode. The main advantage of water transportation is the capacity to move extremely large shipments. Water transport employs 2 types of vessels. Deep-water vessels, which are generally designed for Ocean and Great Lakes use, & are restricted to deep-water ports for access. In contrast, diesel-towed barges, which generally operate on rivers and canals, have considerably more flexibility. Water transport ranks between rail and motor carrier in the fixed cost aspect. Although water carriers must develop and operate their own terminals, the right-of-way is developed and maintained by the government and results in moderate fixed costs as compared to railways and highways. The main disadvantage of water transport is the limited range of operation and speed. Unless the origin and destination are adjacent, supplement haul by rail or truck is required. The capability to carry very high cargo at an extremely low variable cost places this mode of transport in demand when low freight rates are desired and speed of transit is a secondary consideration. • AIR TRANSPORT
    • 20 Air transport is the newest and the least utilized mode of transport. Its major advantage being its speed, which is accompanied by high costs. A coast-to-coast shipment via air requires only a few hours contrast to days taken by other mean of transportation. The high cost of transport can be traded off for high speed, which allows other elements of logistical design, such as warehousing, inventory to be reduced or eliminated. But still air transport remains more of a potential opportunity than a reality because it is very much under utilized. The high cost of jet aircraft, coupled with erratic nature of freight demand, has limited the assignment of dedicated planes to all-freight operations. However premium carriers provide planes dedicated for freight operations. This premium service started off with documents and has moved onto large parcels, which is an ideal service for firms with a large number of high-value products and time-sensitive service requirements. FOR DHL: DHL uses all the modes of transportations that is • airways • roadways • waterways • rail freight DHL has its own fleet of airplanes and motor vans. Depending upon the final destination where the goods have to finally reach and the type of package the customer has paid for, DHL uses the individual modes of transport or a combination of either of these or all. Once again the geographical location and how fast the goods have to be delivered are the factors for the final selection of modes of transportation . The concept of economies of scale and economies of distance are both taken into consideration in case of larger consignments where DHL provides an appropriate logistical solution which helps in reducing the overall cost for the customers.
    • 21 Inventory Management and Warehousing. Warehouse Infrastructure Networks Warehouse Management Solutions Inventory Optimisation Special Warehouse Solutions Outsourcing Projects Warehouse Infrastructure Networks DHL warehouse service supports inbound logistics, distribution and aftermarket services in a way that improves inventory management, reduces total operating costs and improves cycle times. DHL facilities offer our customers warehousing that is fully integrated into the wider supply chain and meets demanding service levels. This encompasses the design implementation and operation for both dedicated and multi user sites. Benefits include improvements in:  Customer service levels  Stock accuracy  Lead times  Redundant stock costs  Productivity responsiveness to a company's strategic needs
    • 22 • Multi User Centres We provide a network of multi-user warehouses, enabling manufacturers to hold inventory at local level, whilst avoiding expensive, dedicated storage solutions. These facilities can receive products from both local and global manufacturing sites, providing downstream distribution. • Strategic Part Centres (SPC) Our Strategic Part Centers (SPCs) are in-country facilities offering:  1, 2 and 4 hour order fulfillment  stock optimisation across the complete network of SPCs  guaranteed performance against agreed business rules • Express Logistics Centres (ELC) Our Express Logistics Centres (ELCs) are regional centralised facilities offering:  order processing  outsourced repair facilities  custom final assembly  kitting services Warehouse Management Solutions • Warehouse Management Systems The Warehouse Management System (WMS) records all events and actions in the receipt, handling and storage of products and orders in a warehouse environment. The WMS also accurately records the location of inventory whilst stored in the warehouse. Our Prologs WMS manages all critical processes in the warehouse, and is also an important support for varied transport and distribution concepts (planning, time controlling, booking of transport capacity, communication with customs and other authorities).
    • 23 • Strategic Inventory Management Strategic Inventory Management (SIM) has been created to deliver urgent shipments to main business areas within a 2 to 4 hour time frame, usually time critical spare parts with a high value and high impact on business. • Direct Express Inventory Management Direct Express Inventory (DEI) allows customers to centralise stock in one warehouse and use express distribution to deliver components the next day. Entire management is done by DHL. • Repair Return Inventory Management Return & Repair Inventory (RRI) manages the physical flows for Return material authorisation. In this case, DHL will be responsible for picking up the broken part, sending a new one, bringing the broken part to a repair centre and moving repaired parts back into stock. • Cross Docking Cross-dock operations are facilities where shipments are received from one mode of transport and transferred to another mode, or where shipments complete one leg of a journey prior to commencement of another journey. Shipments are consolidated or deconsolidated. Product received into the facility is not taken into inventory. Inventory Optimisation Through effective inventory management, inefficiencies can be driven out of the supply chain, overall costs reduced and high service levels achieved. We optimize inventory at a line-item level at every stage of the supply chain. DHL focuses on driving results in:  Supplier management  Expediting  Order replenishment  Demand forecasting  Safety stock setting
    • 24  Order pipeline monitoring  Excess stock management Inventory optimisation is supported by inventory management software that calculates 'line item risk profiles' that measure the variability of demand and supply for each line item within a customers inventory. DHL offers:  Average of 20% inventory reduction and 8% improvement in product availability  Reduced inventory and overhead costs  Improved sales, profitability and return on investment  High service standards  Better matching of supply with demand  More streamlined and responsive supply chain • Shared-user Warehousing Our shared-user facilities are designed to meet the needs of organisations of any size. Currently, we provide shared-user services to leading manufacturers and retailers of medical supplies, consumer products, industrial equipment, chemicals and technology. Through sharing of DHL's resources, such as space, labour, equipment and transportation, customers benefit from synergies that considerably reduce supply chain costs. This environment returns significant value to a small business requiring distribution operations without long term lease or capital commitments, or a large enterprise handling a new acquisition, product launches or seasonal overflow. • Campus Solutions We pioneered the campus model to provide regional customers with a flexible solution designed to capitalise on similar distribution channels, minimise labour costs, and increase specialized equipment utilization. Campuses are strategically located at key distribution points in North and South America, Europe and select locations in Asia, allowing for expedited transit times to large concentrations of consumers.
    • 25 Special Warehouse Solutions • Vendor Hubs Warehousing and delivery of service parts, based on demand pull. Vendor hubs are usually located in close proximity to the manufacturing facility. • Reverse Centres Specially designated facilities for the receipt and handling of returned parts for repair, recycling or disposal. • Bonded Warehousing Bonded warehouses provide secure environments in which customers' products can be held without immediate payment of local duties and taxes. • Shared-user Warehousing Our shared-user facilities are designed to meet the needs of organisations of any size. Currently, we provide shared-user services to leading manufacturers and retailers of medical supplies, consumer products, industrial equipment, chemicals and technology. Through sharing of DHL's resources, such as space, labour, equipment and transportation, customers benefit from synergies that considerably reduce supply chain costs. Consequently, the customer can increase efficiencies throughout their distribution network and maintain a higher level of service to their customers. Outsourcing Projects Outsourcing involves DHL taking over and managing previous in-house logistics operations, including:  Distribution centres  Transport operations  Back-office functions
    • 26  Supply chain management functions  After sales services Technological Electronics/Telecom solutions Electronics/Telecom Core and Value-added Technology Solutions Inbound to Manufacturing Service Parts Logistics Technical Distribution Technical Services Electronics/Telecom Technology Manufacturers have some of the most complicated supply chain requirements of any industry because of the nature of the products: complex, high value and rapid obsolescence. Our logistics solutions help technology companies reduce inventory and cycle time, while providing control and visibility through to final delivery. This is achieved by focusing on product availability and optimisation of product flows and supply chain costs. For optimum flexibility and speed, you can outsource your entire logistics operation, including distribution centers, transport, back-office, supply chain management and after sales, to DHL. Electronics/Telecom
    • 27 DHL provides the know-how to optimize flows and drive down supply chain costs. You reduce stock but not quality, and maintain flexibility to meet market needs. Services include:  Modular networks consisting of warehouses and hubs, downstream links enabling merge-in-transit, and delivery capabilities for any size, speed and dimension  Inbound logistics (VMI or JIT)  Electronics Distribution Network (EDN)  Reverse logistics  After sales logistics - spare parts  Lead Logistics Provider (SCM) - integrated supply chain services from DHL, whether end-to-end solutions or management of partial supply chain solutions  Complete outsourcing, including transfer of staff, infrastructure financing, business optimisation and supply chain integration Core and Value-added Technology Solutions Responding to customer needs, we provide a range of core and value-added services that reduce cycle times and improve performance. These include:  inbound logistics to production facilities, including vendor managed inventory hubs kitting, assembly and light manufacturing operations  order fulfillment and finished goods distribution  integrated freight management and contract logistics services  product delivery and installation, including reverse logistics  aftermarket and critical service parts logistics Inbound to Manufacturing Our Inbound to Manufacturing service enables our customers to more effectively manage the inbound flow of materials from collection points at their component suppliers' facilities to consumption points in their production lines. We help address the constant challenge for both finished goods manufacturers and component and sub-assembly suppliers who must adapt to shorter product lifecycles and the migration of production facilities to developing countries. Service Parts Logistics
    • 28 Our Service Parts Logistics service involves the management of technology manufacturers' replacement parts delivered to and from customers according to pre-defined service levels or warranty agreements on a one-, two-, four- or eight-hour and next-day basis, 24 hours a day, seven days a week. Technical Distribution Supporting companies in a wide range of industries including computer equipment and peripherals, medical equipment, vending equipment, office equipment and telecommunications, our technical distribution service meets the challenges associated with the effective and safe movement of high-value goods. Technical Services Technology manufacturers expect every link in the supply chain to have capabilities to add value to their product or process. Our tailor-made solutions can be integrated into existing customer operations at our warehouses. The strength is the integrated approach with other segments of the business which improves time-to-market and reduces the cost for the customer. Value Added Services • Co packing • Product assembly • Other value added services • Co-packing We offer a comprehensive selection of manufacturing and packaging services through Power Packaging a DHL Company. By integrating manufacturing and packaging operations within their supply chains, our customers can:  Add flexibility  Improve service levels  Reduce costs  Accelerate time to mark  Increase asset utilisation In addition to these core packaging services, Power Packaging brings a unique set of services and capabilities for customers that include:
    • 29 Dry foods manufacturing: Blending and production of complex, multi-component products Carton, pouch and canister filling in the following types of containers  Rigid containers (composite and plastic canisters, metal cans, glass or plastic jars)  Flexible containers (form fill and seal pouches, cartons, slim-sticks and standup/recloseable pouches) Beverage manufacturing: Blending, mixing and filling of hot and cold fill beverages and concentrates in the following types of containers:  Plastic bottles (PET) and glass containers (10 oz up to 128 oz)  Shelf-stable containers (paperboard, plastic cup and bag-in-a-box) Dedicated facility services: Turnkey manufacturing solutions including:  Site selection/development  Facility and systems design  New facility start-up and operation. Other services:  Packaging and raw material sourcing, procurement and assembly  Batch/quality control tracking via digital easy-to-trace coding system  Full range of secondary packaging services • Product Assembly Postponement, quick response and mass customisation are breakthrough business strategies enabled via packaging services. Integrating packaging operations into distribution centres streamlines fulfillment reducing cost, enhancing product visibility and control, and improving speed-to-market and flexibility in the supply chain. Packaging services include:
    • 30  Postponement packaging - primary, secondary and specialty components  Co-packing, kitting, assembly and repackaging  Retail-ready, point-of-purchase displays  Lot control via variable digital and laser printing  Machinery system engineering - labelling, bagging, carton filling, club store packs, clamshells and printed and unprinted film over-wraps  Make-to-order pallets  Product rework/redress Other Value Added Services Kitting/Pre-Assembling Kitting is the addition of items such as accessories and batteries to the product pack. Pre- assembling is completion of a finished product from component parts or pre-programming of products. Sequencing/Linefeeding Sequencing is the consolidation, pre-assembly and sequencing of material flows. Line feeding covers the delivery of assembled components to a production line. Re-Working/Re-Packing Repacking for a specific customer can include repalletisation. Reworking is the modification of products to suit a local market. Packaging/Bundling Packaging includes packing of products into suitable media for transportation and retail display. Bundling is the assembly of a number of pre-packaged products to make up an integrated product offering. QA Control Quality control ensures that product is received into and dispatched from the warehouse in a suitable condition, free from faults and defects. Labelling/Merchandising The application of labels either to the product or to the packaging. Merchandising can include the addition of price stickers or promotional items ready for retail display.
    • 31 External Performance Measurement While internal measures are important for detailed organizational monitoring, external performance measures are also necessary to monitor, understand and maintain a focused customer perspective and to gain innovative insights from other industries. The topics of customer perception measurement and best practice benchmarking, which address these requirements, are discussed and illustrated below. Customer Perception Measurement To succeed in any activities of business one has to always cater to and satisfy the needs of the customer. To do so, it is essential for one to know how the customer thinks in order to meet his needs in a more satisfying manner. Therefore, an important component of leading edge logistical performance is the regular measurement of customer perceptions. Such measures can be obtained through surveys or by systematic order follow up. These surveys can be company - or industry – sponsored. Such surveys ask questions regarding the firm’s and the competitor’s performance in general or for a specific order in particular. Most of the surveys incorporates measurement of customer perceptions regarding availability, performance-cycle time, information availability, problem resolution and product support. The survey may be developed and administered by the firm itself or by consultants, delivery agents or industry organizations.
    • 32 Conclusion Logistics is one the most important and integral part of any organisations strategy and function. When the logistical process is carried out accurately then not only the company reduces the production cost but also improves the efficiency and customer satisfaction. Overall logistics management is very important for today’s highly competitive and cut- throat corporate world. DHL has the worlds largest express and logistics Network. Over the past decades it had turned delivering goods into a finely oiled process. Be it a book, pen, WIP material, drugs, hazardous chemicals, clothes, documents, wild animals and any other thing under the sun DHL delivers it . With a network spanning 200 countries and with its private fleet of airplanes, mobile vans, cargo ship carriers & even rail way automotives in some countries DHL can handle any type of goods. Not only that with international network there comes the hassle of documentation and paperwork, standard packaging and other formalities to adhere to. But DHL has its own department which looks into the international laws and other formalities. In the end what maters is delivering good in good condition at the door step of the customer. A happy and satisfied customer makes the business grow. Competitors have come and gone but DHL has been able to keep its No 1 position intact. This is because of its dynamic nature and attitude of maintaining good customer relations. Logistics management is important for every organisation but more so DHL. We have tried to incorporate all the facets of logistics which propel DHL to be the best delievery and carriage-service around the world. No wonder that DHL is head and shoulders above all of its competitors!
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