A Detailed Examination of DHL's Distribution Management Issues

This report examines the major issues and problems faced by DHL in its distribution management, focusing on challenges related to global expansion, supply chain complexity, and operational inefficiencies. The analysis highlights the difficulties in resource utilization, customer service, and the impact of globalization and risk management. The report recommends outsourcing some operations, implementing lean processes, restructuring distribution networks, and leveraging key performance indicators (KPIs) to control risks and reduce costs. Furthermore, the report emphasizes the importance of viable transport lines and improved internal and external logistics relations to enhance DHL's competitiveness and reputation. The study also discusses the impact of digital communication and logistics relationships on DHL's competitiveness.

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Major Issues and Problems of DHL
Initially, the DHL logistics company was established to operate in the local market
and was later expanded to global markets. However, it was a challenge to create a shipment,
and air transport means to reach out to the customers as the company grows. Therefore, it was
a challenge to invest huge capital on new hubs. Finally, the company was recognized as being
amongst the most significant distribution and logistics company after developing out
successful strategies on warehousing, inventory, and transport management. Unfortunately,
after all this success, multiple issues and problems have been facing the company so more on
the sector of distribution management (Dhir, 2019).
Despite having many suppliers over the world and multiple product lines amongst
business units, the company is challenged to utilize sufficient resources available. All this
results in low service than expected by customers through delivery using effective
distribution, like in Japan. DHL company is also aiming to optimize all local networks of
distribution, including their logistics operations, thus aiming to minimize operating costs.
However, this was not achievable accordingly since building responding capacity, which is
greater and able to recover natural disasters, was impossible to distribution channels (Baxter,
and Srisaeng, 2018). Therefore, the company was demanded to look for an alternative to
improving and redesigning of customer services, warehouse activities, and distribution
networks and centers.
Lean production and globalization throughout the company have been risking the
entire supply chain operations. Huge losses have occurred during 2015, with an average of
$117 billion annually and expected to be higher, thus influencing the modern economic run.
The risk management system towards the entire distribution channel of supply was unable to

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work due to the complexity of supply chain, distance, and global climate changes (Jiang,
2018).
Competitiveness and reputation challenges were much affected due to the reduced
production level as demanded. Areas like design, material handling, warehouse management,
security, maintenance, and safety are the most operation which is affected to improve DHL
reputation. Lack of proper and digital communication among all distribution networks as
resulted amongst the main issue. Also, poor logistics relation with other companies has
contributed to this challenge of competitiveness (Perenc, 2018).
Recommendation and Justification
Every organization facing issues and challenges in its operation is recommended to
look for an effective solution or alternative. DHL Company is amongst those global
organization which needs serious actions towards its services. The following are some of the
recommendations and justification DHL is required to work on.
To outsource some of the supply chain and logistics operations to the third-party
organization, which is single. The third organization will provide and operate as a Lead
Logistics Provider, which will produce effective operation at a higher percentage than before.
DHL is required to develop and implement long term logistics lean processes, which will
help in cost-saving mechanisms. In the additional, the end-to-end design of distribution
networks and supply chain is required to have maximum control and other operations like
packages and logistics (Suryono, and Julius, 2019).
DHL is required to restructure its both domestic and global distribution networks by
opening better and full facilitated channels. However, the new system will maximize
warehouses operations, thus standardizing and having quality economic of scale towards
organization production. Key Performance Indicator (KPI) will visible to access, therefore,

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having a potential supply chain system that can control un-necessary risk occurrence.
Additionally, the new network will reduce all logistic, inventory, and warehousing expenses.
Finally, the company is recommended to consider viable transport lines, which will
improve shipping and destination points in different regions. Therefore, developing and
implementing both external and internal logistics relations is an essential factor. However,
this will enhance organization reputation and increase its competitiveness strategies.

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References
Baxter, G., and Srisaeng, P., 2018. Cooperating to compete in the global air cargo industry:
The case of the DHL express and lufthansa cargo ag joint venture airline ‘AeroLogic.'
Infrastructures, 3(1), p.7.
Dhir, S., 2019. DHL. In Cases in Strategic Management (pp. 55-72). Springer, Singapore.
Jiang, Z., 2018. Impact of external factors That Affecting Operational Risk of Logistic
Company in North America. Available at SSRN 3181701.
Perenc, J., 2018. Logistics as a tool to improve the competitiveness of DHL
services. European Journal of Service Management, 27(3/2), pp.339-346.
Suryono, D.W., and Julius, H., 2019, February. Third-Party Logistic Selection Analysis with
the Analytical Hierarchy Process (A Case Study on PT Pro-Health International). In the 5th
Annual International Conference on Management Research (AICMaR 2018). Atlantis Press.