Detailed Analysis of DHL's First Choice Program for Management

This report provides an in-depth analysis of DHL's First Choice program, a company-wide initiative aimed at optimizing business processes and enhancing customer satisfaction. The report begins with an overview of DHL's background and its commitment to customer service. It then details the First Choice program, highlighting its use of the DMAIC cycle (Define, Measure, Analyze, Improve, Control) derived from Six Sigma and Lean methodologies. The report examines how DHL utilizes this methodology, along with tools such as customer surveys and KPIs, to identify and address service-related issues, improve customer focus, and increase employee involvement in the process. The report further describes the benefits of the First Choice program, including high-quality processes, streamlined services, and enhanced customer experiences. The conclusion emphasizes the systematic approach of the program, its applicability to the service industry, and its role in continuous process optimization and customer satisfaction. This report is designed to provide a comprehensive understanding of DHL's approach to service excellence and process improvement.

Company Background
DHL - the Logistics Company for the world
The DHL success story started with a revolutionary entrepreneurial idea. In 1969,
Adrian Dalsey, Larry Hillblom and Robert Lynn were the first to fly freight bills ahead of
ships and their cargo, dramatically speeding up customs clearance. Their pioneering spirit
and focus on customer needs created a whole new industry and these are still among the
most important features of our DHL brand
DHL commits its expertise in international express, air and ocean freight, road
and rail transportation, contract logistics and international mail services to its customers.
A global network composed of more than 220 countries and territories and about 275,000
employees’ worldwide offers customers superior service quality and local knowledge to
satisfy their supply chain requirements. DHL accepts its social responsibility by
supporting climate protection, disaster management and education.
DHL is part of Deutsche Post DHL. The Group generated revenue of more than
53 billion Euros in 2011. To cover all of customer extensive service needs with the right
level of focus and expertise, DHL operates under four specialized divisions, Express,
Global Forwarding, Freight, Supply Chain and Mail.
DHL takes its responsibility to society, to the communities in which they operate,
to their employees and to the environment seriously – so seriously that they were one of
the first companies to include corporate responsibility (CR) as an integral component in
their corporate strategy. Deutsche Post DHL aims to advance and promote sustainable
development, taking into account their specific business activities, our competencies and
the challenges their company faces.

First Choice Program in DHL
DHL launched its Group-wide service offensive First Choice at the beginning of
2007. First Choice is the worldwide service optimization campaign developed by DHL to
fundamentally change the way they do the business. The aim of First Choice is provide
customers with service excellent that last, thereby becoming customer’s first choice
among service provides.
The First Choice makes use of various tools borrowed from Six Sigma and Lean
methodologies. The so-called DMAIC cycle (Define, Measure, Analyze, Improve and
Control) is at the heart of the method employed by First Choice. DHL have been able to
improve their service performance significantly in a highly structured and systematic way
by using this method.
The focus of First Choice is putting customers first. DHL have developed process
to help them better understand the needs of customers and they have implemented
measures to increase and improve the level of customer focus within the company. Here
are some of the most significant benefits for the customers:
 High-quality processes and services geared toward customers' real needs
 Simplified and streamlined services and improved customer interfacing,
making communication and cooperation with the customer easier
 A holistic and systematic approach to solving and rectifying service-related
problems/shortcomings
 Tangible and quantifiable service improvements with added value for the
customer and the customer's business
 An enhanced customer experience that builds trust and strengthens customer
loyalty

The First Choice Methodology
What makes First Choice so different from other programs? The fact that it
thrives on the participation of each and every employee worldwide. Each and every
employee from the members of the Board of Management to the company’s managers
and employees is asked to take an active part in the First Choice Program. All employees
are encourage to develop and implement improvement measures at their particular lines
of work. They bring valuable front-line experience and insight to the table. To support
employees in the service optimization process, First Choice program provides employees
with a tried-and-true method for identifying problem areas and developing solutions to
right them. This includes specially designed tools and formats.
Employees need to be introducing to First Choice and the methodology behind it
gradually and systematically. DHL has developed series of methods, management tools
and employee training formats to archive this.
One of the methods employed is called the DMAIC cycle, a five-phase procedure
for initiating and implementing process improvements projects. As part of the Six Sigma
improvement strategy, it enjoys widespread application throughout the industry. DMAIC
stands for Define, Measure, Analyze, Improve and Control.
There are different ways to describe the DMAIC cycle and what is important in
each phase. The five core questions shown below represent the customer centric version.
Define: What is important to customer?
 Define problem and scope.
 Set measurable project goals and objectives.
 Define business situation.
 Prepare work plan with end product and responsibilities.
Measure: How are we doing in customer’s eyes?
 Set up data collection plan.
 Draw data from system or take sample data if necessary.
 Conduct stakeholder analysis.
 Identify current process capability.

Analyze: What are we doing wrong for customers?
 Separate the problem in a comprehensive and structural way.
 Map process in detail.
 Identify and verify underlying factors.
Improve: What need to be done to improve customer’s satisfaction?
 Develop and evaluate solutions to root causes of the problem.
 Assign clear responsibilities.
 Set up communication and change plan.
 Pilot the solution and validate against customer requirements.
 Document solution in details.
 Execute solution and roll-out.
Control: How can we deliver our customer’s requirement consistently?
 Assess long-term impact.
 Create and implement control plan.
 Knowledge management: Compile lessons learned, etc.
Larger First Choice projects are processed through the DMAIC cycle in order to
maintain constant improvement in the area of service quality. These initiatives can last up
to half-year – or however long it takes to effect long-lasting improvements for the
customer. The DMAIC cycle is not always necessary for the smaller problems
encountered by employees day-to-day work, First Choice offers specially designed
workshop to mobilize the employee in developing their own suggestion for improvement.
Market Research Service Center (MRSC) supports the First Choice project
teams in pinpointing customer needs. Utilizing a broad range of tools including
questionnaire, surveys and outsourced data, the MRSCC researches and analyzes the
expectations and experience of customer in the Group’s core market.
Up to 170 customer satisfaction surveys are carried out each year for various
country organizations. The crucial yardstick in this context are the so-called Key
Performance Indicators (KPIs), which are used to translate otherwise non-quantifiable

such as the quality of collection service or complaints management into figures they can
work with. This not only quantifies the problem at the start, i.e. the initial situation, it also
provides a measure of success once the optimization process is implemented.
Each First Choice project involves workshops and brainstorming sessions. DHL
has developed extensive materials and tools to support the initiative teams, including a
toolkit with moderator cards, audio files and posters. This approach assures global
continuity and transparency, with First Choice teams using the same method and the
same tools no matter where they are in the world. It also allows for employees, no matter
where they work within the Group, to get involved and unleash their full potential in the
name of improving service and pleasing customers.
Conclusion
First Choice is a systematic approach that allows DHL to optimize the business
processes and services and increase customer satisfaction levels over the long term. The
DMAIC optimization cycle that is used in First Choice projects is based on the Six Sigma
and Lean methodologies. DMAIC, an acronym for the five steps comprising in the
process (Define, Measure, Analyze, Improve and Control), is designed to optimize the
business processes that impact customers directly by eliminating errors and
inefficiencies.
Whereas Six Sigma and other strategic management tools, such as Kaizen or the
Toyota Production System, focus primarily on the manufacturing industries, DHL's First
Choice is a standardized approach for continuous process optimization in the area of
logistics, making it applicable to the entire service industry. First Choice makes process
excellence an all-inclusive endeavor by actively involving every single one of the
company's employees.