DHL - Supply chain and Logistics

Nivesh aa

Agenda

• About the company

Operations 220

countries &

territories

300000 employees world wide

Revenue of 46 billion Euros in 2009

Touches about 5% of global

trade volume through

extensive network

& infrastruc

tureDHL strengths

in numbers

Business divisions

DHL

Express Global MailGlobal

Forwarding and Freight

Supply Chain

Supply chain in terms of DHL

Management of flow of materials, information and assets as they progress from suppliers to installation through complete asset life cycle

DHL supply chain solutions

Plan

Supply chain Analysis &

Design

Lead Logistics provider services

Environmental compliance

Source

Procurement services

Raw material warehousing & transportation

International SCM

Make

Industrial projects

transportation

Inbound to manufacturing

In-plant logistics

Contract manufacturing

Store &Customize

Finished goods warehousing

Assembly & Co-packing

Deliver

Transportation & Distribution

Service parts logistics

Home delivery

E-fulfillment

In-store logistics

Return

Reverse logistics

Environmental Compliance

Individual Customers Corporate Customers

DHL Office

Central Location Office

drop

DHL Pack

pickup drop

Local or National / International

Distributionlocal

Region sorting and bulk packing

Regional Hub Distribution if local

truck

A

A typical Supply chain at DHL

Cargo or Courier

Airport

Destination / Hub

cargocourier

Blue Dart Flights

Air India or Kingfisher Passenger

Destination Warehouse

Destination

truck

truck

Destination found?

yes

DHL Office at Destination

no

Reverse logistics to sender

A

Sectors served

Consumer & retail•Highest revenue sector•Priority growth area•Manage source of supply to retail shelves

Technology•Inbound-to-manufacturing•Warehousing & distribution•Integrated packaging•Returns management•Technical service solutions

Life sciences•Good business opportunity•Existing supply chain is immature•Pressure to reduce cost is high•Mainly procurement and distribution services•AutomotiveDHL developed successful supply chain model

for the British National Health Service (NHS) that aims to generate savings for the NHS of

approximately EUR1 billion over 10 years

Sectors served

Automotive Energy•Integrated logistics solutions

for both the build and run phases of major energy projects

Airline•Airlines•Airport operators•Aircraft manufacturers

DHL operate one of the world's largest fourth-party logistics services in Oman, transporting cargo and water and coordinating the movement of about 40 land-based oil rigs a month.

In 2009, DHL won a new contract with British Airways to

provide catering and logistics for short-haul flights from Heathrow

Airport

Lead logistics Services

Instigating and managing change across your entire supply chain

Reduced

Operating cost

Lower working capital

Lower fixed capital

Enhanced

customer

serviceAdded Value

Global Logistic Contracts

DHL will provide a full range of third party logistics (3PL) services, including origin pre-distribution, inventory management, consolidation, packaging and labeling, order right sizing, generic ordering and call off to market

Its biggest automotive sector deal - to manage in plant logistics and the collection of UK and European sourced component parts for Jaguar and Land Rover vehicles

DHL provides supply chain services, including warehousing, distribution management and reverse logistics, to Ekono’s 110 stores nationwide.

Staples

Jaguar and Land Rover

Wal-Mart-Chile

Procurement Services

•DHL's procurement specialists delivers substantial cost savings on a wide range of non-core products•Over 500,000 in-scope products • 450 NHS trusts and hospitals as well as other healthcare organizations•Deliver over £1bn savings to UK NHS

Integrated Supplier Base •Food•Bed•Cleaning products•Surgical equipment

DHL Control Tower

Order wellPurchasingSupplier managementPaymentPODOrder matching

TRUST & Hospitals

BenefitsMore time and resources to patient care

Ex-pricing

Orders

DeliveryApproved supply

Contract ManufacturingServices

Site selection and development

Facility and systems design

New facility start-up and operation

Packaging and raw materials sourcing, procurement and assembly

Batch/quality control tracking via digital, easy-to-trace coding

Full range of secondary packaging services.

Inbound Logistics Services

Provide complete end to end management of inventory facilities and labor associated with inbound flow of material

Services include

• Supplier management• Transport and freight management• Customs Brokerage• Suppliers park• Inventory optimization• In plant logistics• Vendor Managed Inventory

DHL Connect

•Establishing air-bill identification numbers

•Checking addresses to confirm deliverability

•Tracking the shipment

Functions

•Comprehensive list of commodity classifications (for example, dutiable vs. non-dutiable)

•Can integrate with personal information management (PIM) systems such as MS Outlook

•Alerts if delivered to the wrong address.

•Any person can initiate and monitor shipments from their desktop 

Benefits

Inbound Logistics partners

Jaguar Land Rover

• Acts a 4PL to JLR • An expansive operation with

over 980 full and partial load collections every week

• Four weeks from project approval to implementation

• More than 10 % improvement in supply chain efficiency

• Collection strategies - full truck loads & milk round collections.

• Greater transparency and supply chain visibility.

Fashion & Apparel Industry• Carrier and logistics provider to

 the $250-billion fashion and apparel industry

• The official express carrier and logistics provider for IMG Fashion's Mercedes-Benz Fashion Week.

• DHL operated shipping service kiosks for guests  at the New York, Los Angeles, and Miami Fashion Week shows

Assembly & co-packing Services

• Subassembly

• Co-packing• Customization• Postponement• Kitting• Sequencing• Pre-retail activities

Services

• Reduced costs• Reduced inventories• Better demand-supply match

Benefits

Warehousing

Types of warehouses at

DHL

Ambient

Temperature controlled

Bonded

Raw Materials

Finished goods

Automated

Reverse Logistics

• The key to a successful supply chain is not only planning how to distribute your product

• Managing returns effectively lets you recapture value, reduce write-offs and keep your customers happy

Example: Technology support company Regeneresis

Benefits:•Reduction in Cost of after sales • Increasing the speed of repair turn around times.•Broader customer base

Services Offered•Inventory sharing• Assembly and kitting• Screening and repair•Call centre services•Covering both avoidance of returns and retail support

Supply Chain Metrics used at DHL

• The Supply Chain Balanced Scorecard tracks a limited number of key metrics.

• The measurements usually cover 4 areas: – Financial - Example: The cost of manufacturing,

warehousing, transportation etc. – Customer - Example: Order Fill Rate, Backorder Levels, On

Time Delivery – Internal Business - Example: Adherence-To-Plan, Forecast

Error – Training: Example: In house Training Hours

DHL’s Supply Chain Innovation

Supply chain flows

Physical

Information

Financial

VMI

DHL’s Innovation

• Partnership with a leading financial company• Access to low cost capital• Delay buyer purchases, free up cash tied in inventories• Ownership of inventory from seller’s shipment point to buyer’s JIT

point of purchase• Improve cash to cash cycles, reduce inventory balance sheet &

increase inventory turnover

Client as-is Supply chain

Adding DHL and a Financial Services Provider (FSP) into the Supply chain

Recent ventures

• Entered into BPO procurement market by delivering solutions to both public and private sector companies

• Tied up with BPCL for a retail alliance with their In & Out convenience stores across India.