Logistics Systems

Project Report on
Logistics Systems in
DHL Pvt Ltd.

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TABLE OF CONTENT
Executive summary 3
Objective of the project 4
Research methodology 5
Introduction To Logistics 6
History and background of DHL 6
The world's largest express and logistics Network 7
Global Facts and Figures 8
Project Management by DHL 8
INTEGRATED LOGISTICS 9
Inventory Flow 9
Information flow 11
Logistical information involves two major types of flows: 11
Forecasting 12
Purpose of DHL Web Shipping: 13
Supply Chain Management 15
Definition for supply chain management 15
Explanation: 15
Supply Chain Optimisation 16
DHL International Supply Chain 16
Reverse Logistics 18
Service logistics 18
Inbound to Manufacturing 19
Medical Device Distribution 20
Distribution to stores management 20
Extended Supply Chain Services 21
Implementation Services 22
Performance Management : 23
Outsourcing Projects 24
Innovative Supply Chain Development 24
TRANSPORTATION 27
Transport Functionality 27
Principles 29
Transport Infrastructure 30
 RAIL NETWORK 30
Inventory Management and Warehousing. 34
Warehouse Infrastructure Networks 34
Multi User Centres 35
Strategic Part Centres (SPC) 35
Express Logistics Centres (ELC) 35
Warehouse Management Solutions 36
Strategic Inventory Management 36
Direct Express Inventory Management 36
Repair Return Inventory Management 37
Cross Docking 37
Inventory Optimisation 37

Shared-user Warehousing 38
Special Warehouse Solutions 39
Outsourcing Projects 40
Technological Electronics/Telecom solutions 41
Value Added Services 44
 Co-packing 44
 Product Assembly 46
Other Value Added Services 46
External Performance Measurement 48
Conclusion 49
BIBLIOGRAPHY 50

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Objective of the project

(1) Primary Objective

(i) To know about the effectiveness of logistics management at DHL

Pvt ltd.
(ii) To know the work of DHL Pvt ltd in the logistic sector.
(iii) To study about their benchmarks in the industry.

(2) Secondary Objectives :

(i) To study about Logistic Industry.

(ii) To learn the values they follow in this sector.
(iii) To know how logistics industries meet up their customer’s
expectation.

Introduction to Logistics

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.

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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
Daley, 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
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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 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

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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 by DHL

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

INTEGRATED LOGISTICS

Logistics is viewed as the competency that links an enterprise with its customers
and suppliers. Information from and about customer’s 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.

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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:

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 Physical distribution

 Manufacturing support

 Procurement

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
intermediaries. That means it only involves physical distribution and
procurement. Procurement also includes the material needed for packaging such
as paper, molded 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 ( egg 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

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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.

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

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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

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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.
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

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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.

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 Optimization

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.

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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

DHL International Supply Chain

DHL’s international supply chain management solutions are focused on helping

customers take increased control of international inbound supply chain to
maximize 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:

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 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

Reverse Logistics

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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

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 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
 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:

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 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

Medical Device Distribution

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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
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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.

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.

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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
 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

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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

Supply Chain Management services are delivered across industry sectors and
provide expertise, knowledge and resources in terms of personnel and supply
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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 optimization: Route-Pro and Trans-Pro
 Consulting and providing Supply Chain Design
 Consulting and providing Transportation
 Engineering, optimization and re-engineering
 Implementation and Project Management
 Process Management
 Outsourcing

DHL’s consulting services also offer re-organization 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.

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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 programs 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:

 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.

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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:

 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
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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.

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.
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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.
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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.

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

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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 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
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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

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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
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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.

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

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 Lead times
 Redundant stock costs
 Productivity responsiveness to a company's strategic needs

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 Centers (ELC)

Our Express Logistics Centers (ELCs) are regional centralized facilities offering:

 order processing

 outsourced repair facilities

 custom final assembly
 kitting services

Warehouse Management Solutions

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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).

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 centralize 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
authorization. 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.

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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 Optimization
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
 Order pipeline monitoring
 Excess stock management

Inventory optimization 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:
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 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 organizations 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, labor, 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

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We pioneered the campus model to provide regional customers with a flexible

solution designed to capitalize on similar distribution channels, minimize labor
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.

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 Centers

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
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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
 Supply chain management functions
 After sales services

Technological Electronics/Telecom solutions

Electronics/Telecom
Core and Value-added Technology Solutions
Inbound to Manufacturing

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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 optimization 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

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
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 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 optimization 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.
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Service Parts Logistics

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
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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 utilization

In addition to these core packaging services, Power Packaging brings a unique set
of services and capabilities for customers that include:

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/reclose able pouches)

Beverage manufacturing:
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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 customization are breakthrough

business strategies enabled via packaging services. Integrating packaging
operations into distribution centers streamlines fulfillment reducing cost,
enhancing product visibility and control, and improving speed-to-market and
flexibility in the supply chain.

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Packaging services include:

 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/Line feeding

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.

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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.

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.

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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.

Conclusion

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Logistics is one the most important and integral part of any organizations
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 delivery and carriage-service around the world. No wonder that DHL
is head and shoulders above all of its competitors!

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BIBLIOGRAPHY

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