MGT5PSC: Analyzing & Improving DHL's Supply Chain Management

This report provides a comprehensive analysis of DHL's supply chain management, examining its supply, operations, information, integration, and sustainability aspects. It highlights DHL's focus on sustainable procurements, computerized inventory management, and lean processes to enhance supply chain visibility and efficiency. The report details the company's procurement chain, emphasizing cost-effective savings, risk management, and global sourcing. It also explores DHL's improvement programs related to employee care, corporate citizenship, and environmental protection, illustrating how these initiatives contribute to achieving the company's vision, mission, and strategic goals. The analysis includes the application of technological tools like RFID and GPS, as well as strategies for mitigating the bullwhip effect and fostering strong supplier relationships. Ultimately, the report underscores DHL's commitment to sustainability and customer satisfaction through integrated and adaptable supply chain practices.

Report on supply chain management
Case of DHL Company
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Executive Summary
In the current status of competitive world, organizations employ new and unique ways to
control the flow of products. To address the challenges faced by supply chain management, DHL
company is focusing on sustainability of procurements. Also, the outsourcing purchases and
inventory management is computerized to link all the suppliers to the company. In addition,
DHL implements lean process which has ensured better visibility and enhance improvement in
all levels of supply chain. Suppliers are involved in maintaining business relationships with the
company. The company leverages various technological tools to aid in service delivery,
inventory management and administrative efficiencies.

Table of Contents
Report On Supply Chain Management In DHL Company..............................................................5
1. Introduction..............................................................................................................................5
1.1 Vision, Mission and Strategic Goals Of DHL Company.......................................................5
1.2.Supply analysis...................................................................................................................5
1.3 Operation analysis..............................................................................................................6
1.4 Information analysis...........................................................................................................7
1.5 Integration analysis.............................................................................................................8
1.6 Sustainability analysis......................................................................................................10
2. The DHL company procurement chain..............................................................................11
2.1 The Supply Chain of DHL Company...............................................................................12
3. Improvement programs.......................................................................................................13
3.1 Caring about employees...................................................................................................13
3.2 Corporate citizenship...............................................................................................................13
3.4 The GoHelp Program...........................................................................................................13
3.5 Company’s environmental protection program...................................................................13
4. How improvement programs assist DHL Company achieve its vision, mission and
strategic goals.............................................................................................................................14

5. Conclusion..............................................................................................................................15
6. References..............................................................................................................................16

Report on Supply Chain Management in DHL Company
1. Introduction
1.1 Vision, Mission and Strategic Goals of DHL Company.
Adrian Dalsey, Larry Hillblom and Robert Lynn founded DHL company the vision of DHL
company is to provide postal services in Germany and act as a logistics company across the
world. The company aims at attracting people across the world and being the original choice to
people not only in shipping but also provide a background for investment opportunities. Mission
of the company is to foster the success the customers, investors and employees. DHL company
improves the lives of its customers by making the world a better home. The strategic goals are to
focus, grow and to connect the company’s plan for the future.
1.2. Supply analysis
The key products categories that are managed by procurement department include
logistic solutions that are provided in contract. The solutions are based on worldwide
standardized and integrated components which include transport, warehousing and value-
added amenities. Basically, the value chain involved focuses on packaging, returns, planning,
sourcing and recycle services. The company is focusing on automotive, technology, healthcare
and life science. Deutsche post DHL is the only logistics company that is structurally positioned
with an intention of benefiting from the trends in the market (Blanchard, 2010). Significantly,
the recent trends that has greatly impacted DHL include outsourcing, emerging markets and
globalization of the existing markets. Customer services is built on a long-term partnership in
fifty countries.

The company offer sector proficiency, consistent solutions and relevant services to
develop the existing contracts and new customers. In addition, sourcing items is beneficial
because the company can note the optimum supplier base and reduce the cost of transactions
(Burnson, 2017). Furthermore, a better understanding on the type of purchase, the buyer, the
supplier, the quantity, frequency of purchase the cost of items tend to assist drive process and
improvements which reduces the cost of businesses. Supplier selection in DHL company is based
on the competition both locally and internationally where the company profit and honor
competition by other companies (Carbone, Moatti & Wood, 2012). To evaluate its suppliers, the
company uses DHL Resilience 360 machine to analyze online suppliers and detect the
interruptions on the company’s supply chain. Moreover, the company has established supplier
development program that aims at fostering the competitiveness of its suppliers.
1.3 Operation analysis
DHL company is in the forefront because of its sales market strategies. As a result, the
company experiences improved customer sales and service provision globally. The company
provides relevant information about emerging and existing products through TV commercials
and advertisements on magazines and newspapers (Haraburda, 2017). To reach a large number
of people, the company offer its services through the internet and in their various locations
worldwide (DHL Supply Chain ,2018). Consequently, the company provides door to door
transport. Positive relationship between the customer and the company foster customer loyalty,
profits and sales. The key customers to DHL company are corporations who operate in various
industries. The government organizations and individual people looking for logistics solution.
The customers are present in more than 220 countries making the company popular and
competitive. DHL company uses a quantitative technique to forecast the demand of its products.

It uses the historical information to predict the demand level and determine the cost the product
(Kamalahmadi & Mellat-Parast, 2016). Also, extrinsic techniques are applied especially in
automotive industry to make relevant decisions and control the number of suppliers. The
company has a web based inventory that joins the company’s suppliers and streamlining of
information making the inventory easy to manage. The use of web based inventory helps in
providing a framework used for maintainable achievements in supply change (Kildow, 2011).
Importantly, has reduced transportation and improved supplier’s time management. Major
problems associated with inventory management in DHL involve misplacement of items in the
warehouse or in the store. Competition is a major challenge that affect the demand of
engineering and manufacturing products and services (Lee and Katzorke, 2010). Sometimes, the
use of computers to assess stock might bring inaccurate information which causes confusion.
1.4 Information analysis
Bullwhip effect alters the information as it is transmitted across the chain. The distorted
information in all the level of supply chain causes vital inefficiencies. As a result, there would be
extreme inventory investment, lost revenues, poor consumer service and unproductive
transportation of materials (Mentzer, 2004). In DHL company, lack of coordination by the
suppliers and interruptions on manufacturing besides procurement contributes to bullwhip effect.
The remedy to end bull-whip that is applied by DHL company is the improvement of
communication and information across supply chain which enables the company to forecast
demand (New & Westbrook, 2004). In addition, delays are reduced and the cost of products and
services are maintained. DHL is leveraging the logistic management software with an aim of
improving its productivity. Moreover, the software ensures monitoring of various warehouses
and reducing the burden of distribution.

The technological tools embraced by DHL involve radio technology that provides Radio
Frequency identification (RFID) chips helps to monitor products during production and supply
period. It allows the employees to correct mistakes before it ruins the whole process in supply
chain. The company uses social media to open many channels that helps the company to reach
more stakeholders and communicate changes in the cost of products and services (Rand & Van
Wasssenhove, 2012). Computerized supply chain and data analytics improves the experience of
the customers and lower the mistakes that made during the process (Robben & Probert, 2015).
DHL company protects the profit margins, keep inventories and improve customer services by
working together with partners, intermediaries and logistics providers. logistics provider work
hand in hand with customers to foster demand forecasting and pool financial flows that aim in
balancing supply and demand.

1.5 Integration analysis
Fig.1
Map of the company’s supply chain
The first step is to get rid of wastes and maintain the value of goods. DHL company,
suppliers work hand in hand with the supply chain management to ensure that the products are
provided on time. Considering technological tools is the second step which enhances
technological investments (Samson, 2010). For instance, DHL company uses RFID chip to
detect the problems incurred during production of products. In addition, the company also uses
GPS device to track the all the freights. The customer usage is made visible to all people
involved in supply chain (Siegel, 2018). The flow is determined by the customer and the
company is able to forecast the demand of a particular product. The company uses lead time by
Transportation
Factory
Customers
warehousing Vendors, plants & ports
Warehousing
Transportation
Transportation
Transportation
Information
flows
Figure 1 Map of the Company’s supply chain

decreasing outbound and inbound transport logistics which enhances flexibility and decrease
overproduction of products.
DHL company achieves the fourth step by embracing a computerized inventory system.
The fifth step involve the levelling of flow of materials which reduces the waste of materials.
Employment of Kanban software system ensure easy planning and reduce overproduction of
products. To fulfil the customer needs, through increasing velocity, use of throughput and
reducing variations of products. DHL company, deliver reduced shipments which improved
velocity hence creating throughput (Sehgal, 2011). It has led to reduced inventory and adjust
deliveries. Value Stream Mapping (VSM) has allowed the DHL company to rebuild its supply
chai process effectively. Lastly, there is need to focus on total cost to fulfill the customer
expectation at a lower cost (Samson, 2010). DHL company make decisions that favor al the
customers in the stream. To improve the visibility of the customers, the company embraces
agility by improving the collaboration between suppliers and the design of the product (Simchi-
Levi,2010). The use of adaptability by DHL company enhances creating a network which
responds to the needs of the customers. The use of alignment strategy ensures that the firm puts
the interest of their firm into consideration.
1.6 Sustainability analysis
The company employs procurement and supply chain practices that provides
opportunities to assimilate various sustainability parameters. There are various approaches that
are employed by the company (Samson, 2010). The use of sustainable logistics has decreased the
load of transportations and environmental related burdens. Similarly, employment of reverse
logistics practices fosters business opportunities and enhance the recycling of goods and
materials that comprise the post-sale item activities. DHL company develops a sustainable

supplier and merchant management which focuses on justifiable supplier selection, their
performance and supplier development. The sustainable internal operation management that is
protecting the internal programs of the company. They include; inventory management material
exchange, modification processes and core operations of the company. (Yawar, 2015) postulates
that organizations that develop their sustainability programs upon materiality analysis always
receive greater benefits. DHL company’s interest in sustainability of the company has provide a
mainstream of innovation and rapid growth for its customers and business associates.
DHL company has implemented sustainability through reporting the status and
development of the sustainable programs. Basing on the triggers model, DHL company has
developed new tactics to make the services provided by the company to stick in the minds of the
customers. The implementation of sustainability programs in the company creates desire which
foster customer loyalty (Mentzer, 2004). The company attaches the services they provide to the
customers daily practices and emotions. Sustainability is an approach that create a unique
outcome in the company’s reputation. Many customers are attracted to DHL company because
of its responsibility and discipline in terms of decision making.
2. The DHL company procurement chain
The procurement experts of DHL are able to offer considerable cost reserves on the wide
variety of non-fundamental products. Therefore, they deliver all the products that are from
promotional provisions and consumables in the working operations. In the same context,
because some of the goods may wear the company is still able to provide the operational spare
parts including other goods which are not intended to be resold (Haraburda, 2017).
Consequently, according to the research, it is evidenced that through leveraging the company’s

universal supply chain and reach specialists, DHL can manage all the risks related to global
sourcing.
The DHL procurement has led to the improvement of the services and goods in many
businesses in the following ways. First of all, the organization’s deliverance of the cost-effective
savings has advocated for the minimized risk, reduced overheads and optimized supply chain
processes. The procurement strategies have encouraged business administration to focus on the
main operations instead of being concerned with non-basic and indirect purchases. Additionally,
the company’s procurement has made the corporation global delivery chain network to
acknowledge both customer and suppliers’ approaches in internal and incipient economies
(Wasssenhove, 2012). Similarly, through the DHL procurement, the management of the tenders
of the individuals and specific projects are achieved on behave of the management board
(Yawar, 2015). Moreover, the coordination of the transaction in all stages of supply chain by the
company procurement services to ensure reliability and quality adds value to many firm’s
operations. The company is adapting to dynamic business environment and bring into line
leaders, employees and managers around a compelling strategy as shown in the dynamic
alignment model.