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Rajesh Pandey,
By: GROUP 10
Name Roll No
Shashank Ayyala 1
Anirudh G 18
Shruti Jain 27
Gopalakrishnan 28
Harish Mohan 33
Raghaw Mundhra 36
Deepikaa S S 52
DHL Distribution Network
Executive Summary
Logistics and supply chain management (SCM) as an area of research has been
getting increasing attention from academicians and practitioners over the last two decades
since it may lead to reduced operational costs, improved delivery performance and increased
customer satisfaction levels, thereby making an organization more competitive in terms of
cost, quality, delivery and flexibility. The importance of logistics and SCM is increasing also
due to globalization as more and more multi-national companies (MNC) are sourcing,
manufacturing and distributing on a global scale, making their supply chains very complex to
manage.
While SCM deals more with the linkages in the chain, contracts and relationships,
supplier selection, information and financial flows besides materials flows, creating new
facilities such as plants, warehouses and distribution centres, and broader issues such as
society, economy, government and environment, the scope of logistics is more or less
confined to the routine job of transportation and storage of goods. However, if one deeply
ponders, one may realize that logistics is the core of SCM, and if logistics fails, the whole
chain snaps. Though logistics deals with mundane vehicles, warehouses, layouts, material
handling equipment, Motor, Vehicles Act, toll tax, sales tax, documentation etc., efficient
management of it has the potential to make the chain taut and agile. Therefore, there is
growing interest in logistics, and hence in SCM, around the world.
With fierce competition in today’s global markets, the introduction of products with
shorter life cycles, and the heightened expectations of customers have forced business
enterprises to invest in, and focus attention on, their supply chains. This, together with
continuing advances in communications and transportation technologies (e.g., mobile
communication, Internet, and overnight delivery), has motivated the continuous evolution of
the supply chain and of the techniques to manage it effectively.
DHL has been one of the leading logistics providers in the world mainly because of
their efficient supply chain network. Any logistic player's key to successful operation is how
well synergized their supply chain is and how they are able to gel together their warehousing
and distribution. It is here that DHL has got a very effective and an efficient distribution and
warehousing system. We will analyze their distribution system in detail as it plays a critical
role in logistics.
DHL was founded by 3 Entrepreneurs: Larry Hillblom, Adrian Dalsey and Robert
Lynn in the year 1969 in San Francisco. DHL derives its name from the Initials of its
founders and delivered only documents and important papers initially. The company
expanded its operations quickly in Japan, Hong Kong, Australia and Singapore. In 1979,
DHL started delivering packages apart from documents. DHL established many International
Distribution centres (Brussels, Cincinnati) across the Globe in the 80s. In 2002, Deutsche
Post acquired DHL and absorbed it into its Express Division. In 2004, DHL Express became
the major stakeholder in the Indian domestic courier, Blue Dart. Deutsche Post acquired
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many companies and used the brand name of DHL in all its subsidiaries; Deutsche Post was
also renamed as Deutsche Post DHL. In 2007, Aerologic, a new Cargo airline was established
under the collaboration of DHL Express and Lufthansa Airlines. Then a state of the art Hub
in Leipzig, Germany was opened which helped in expanding its international reach. In 2009,
DHL made an exit from the US domestic courier market leaving it to FedEx and UPS. It also
has a tie-up with the USPS (United States Postal Service) for local deliveries. DHL has now
grown by leaps and bounds into a powerful brand known for personal commitment, proactive
solutions and local strength.
EXPRESS DIVISION:
DHL Express is the global market leader in the international express business. It serves over
500 airports in Europe, Asia Pacific, Latin America, Middle East and Africa. With such an
extensive global coverage and density, their air network is unparalleled in the express
industry. Their headquarters is in Bonn, Germany with revenue of 11.8 Billion Euros. DHL
Express has a dedicated fleet of 250 aodern Aircrafts, 100,000 employees, 31,000 vehicles
and 3 global hubs at Leipzig, Hongkong and Cincinnati. It also has partnered with many
global Airlines such as Aerologic, Kalitta Air, Polar Air Cargo and Southern Air to serve in
more than 200 countries.
In India, DHL Express has a strong presence offering its customers the entire spectrum of
express services from international air express to high-end logistics solutions including repair
and return, strategic inventory management and direct express inventory distribution.
DHL Express India has many firsts to its credit, including India’s first and only 24-hour
customer service call centre in the express industry, the first to introduce customised
solutions such as DHL EXPRESS EASY JUMBO for customers as well as the first to
provide track-and-trace services via email, SMS, Internet and WAP phones.
FREIGHT DIVISION:
It provides perishable goods, Full Container Load (FCL) and Less-than-Container Load
(LCL) shipments across all continents. State of the Art Communication Technologies are
used: Communication of shipment information, such us shipping instructions to the carrier, is
conducted via EDI in paperless form. Multimodal transport is also provided to reduce
expense and quicken delivery: DHL SEAIR is the perfect match and combines ocean and air
freight, this multimodal solution best serves import and exports with Asia. It is quicker than
ocean freight and cheaper than air freight. DHL DOOR-TO-MORE unlocks the potential of
direct distribution allowing customers to reduce their time to market and improving their cash
cycles. DHL picks up the goods, transfers them to an export facility and from there
transports them via air or ocean freight before clearing them through customs and distributing
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them to multiple end-users at destination. It eliminates the need for intermediate warehousing
and speeds up the customer’s order-to-delivery cycle.
DHL provides support in many stages of Supply Chain such as Planning stage,
Sourcing, Manufacturing, Delivery and Reverse Logistics.
Planning: DHL helps its customers in Supply Chain analysis & design, Supply chain
management and as a Logistics Provider. It helps in reducing costs associated with supply
chain and increasing its efficiency.
Sourcing: By leveraging DHL's global reach and supply chain expertise, they can effectively
manage the risks associated with global sourcing. DHL provides a range of services, from
procurement consulting and outsourcing, to an integrated service combining procurement and
logistics management to ensure that procured products are delivered when and where they are
required. It also provides warehousing facilities, transportation services for raw materials to
ensure that customer gets all the raw materials at the right time at the right place.
Manufacturing & Delivery: DHL has specialised knowledge and expertise in moving huge
machinery and outsized cargos. It also provides consultancy services on In-plant logistics and
inbound to manufacturing. Inbound to manufacturing is maintained by managing the flow of
goods into production. Warehousing and packing facilities for finished goods are also
provided.
Reverse Logistics: DHL helps in managing returns and product recall effectively allowing its
customers to recapture value or reduce write-offs. This helps the DHL’s clients to save time
and satisfy their customers.
MAIL:
DHL Global Mail is a specialist in International Business Mail, B2C Parcel and
Hybrid or fully Digital Services. With international postal solutions, DHL makes its
customers' lives easier. A good example of Digital Service is Bayer: DHL Global Mail
collects the invoices at Bayer’s locations in Asia and transports them to their scan centres in
Hong Kong and Shanghai, where the invoices are bar-coded and scanned. The scanned
invoices are hosted on a DHL Global Mail’s server and transferred to the Bayer ERP system
every working day.
A supply chain is the flow of goods, information and finance. It typically starts by sourcing
raw materials or semi-finished goods, which are scheduled and transported into factories to
be made into finished product shown in the diagram. These then pass through warehouses or
distribution centres and are delivered to retailers, wholesalers or direct to consumers'
premises. Finally, aftermarket activities involve the maintenance and repair, or the return and
recycling, of products at the end of their life. Supply chain planning optimises overall flows
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DHL’s vision for the future is nothing less than to transform the logistics industry –
and to deliver beyond customer’s expectations wherever and whenever they need - by
offering the most comprehensive suite of services and becoming the only genuine one-stop
source for logistics solutions, globally.
Four main functional teams of DHL staff are involved during these 9 stages to capture
the various checkpoints which provide information on a shipment’s status. They are Courier,
Gateway, Operations and Hub.
Courier: Couriers have direct contact with the DHL customers and therefore their
interaction with the customers is either during the pick-up of a shipment or during the
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delivery of a shipment. As soon as a shipment is picked up from the customer, the courier
scans the shipment to capture the PU – Shipment Pickup checkpoint.
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DHL Supply Chain, which started operations in India in 1997, currently has more
than 103 warehouses spread across more than 50 cities. Indian logistics firms had grown at
over 25% in fiscal 2011-12 led by large-scale outsourcing of logistics services by
manufacturing and services sector and a steady rise in rural consumption.
The growth comes at time when the sector has been witnessing a paradigm shift with
many small-scale and large-scale firms trying to improve their presence in the 3PL (third
party logistics) market.
DHL Supply Chain, a division of global logistics provider DHL, will invest more than
Rs 680 crore (100 million euros) in India as part of its expansion drive. According to the
company, DHL Supply Chain will invest in developing an additional 5 million square feet of
warehousing space across India and eight world class multi-client sites across the country.
Multi-client sites are large scale warehousing spaces at strategic locations to help different
companies. It will also invest in improving its transportation business.
The distribution channel moves goods and services from producers to consumers. It
overcomes the major time, place, and possession gaps that separate goods and services from
those who would use them. Members of the marketing channel perform many key functions.
Some help to complete transactions:
Matching: shaping and fitting the offer to the buyer's needs, including activities such
as manufacturing, grading, assembling, and packaging.
Negotiation: reaching an agreement on price and other terms of the offer so that
ownership or possession can be transferred.
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Financing: acquiring and using funds to cover the costs of the channel work.
Risk taking: assuming the risks of carrying out the channel work.
Distribution channels can be described by the number of channel levels involved. The below
figure shows several consumer distribution channels of different lengths.
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A distribution channel consists of firms that have banded together for their common
good. Each channel member is dependent on the others. Conflicts like horizontal conflict and
vertical conflict keep occurring and it needs a strong distribution network to handle them and
fix the same in time to ensure no bottlenecks in the system.
DHL offers every combination of warehousing & distribution solution that the supply
chain might require:
Ambient.
Temperature-controlled
Bonded
Raw Materials
Finished goods
Automated
Customs/bonded warehousing
Rail-connected warehousing
Provision of IT services
Two critical issues in a company’s distribution strategy are the sales channel’s design and the
institutions that are involved. In determining the channel of distribution for products, a
company must decide whether the products will be delivered directly to the end customer or
whether other companies like retail businesses acting as sales agents are to be used. The
question of how sales are to be organized must be addressed as well - by a company’s own
sales agents, such as members of the management and traveling representatives, or by third-
party sales agents like commercial representatives and brokers. A close relationship between
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DHL Distribution Network
distribution logistics and sales outlets results from the fact that the sales-outlet decision
determines the number of points of receipt that are to be served by the logistics system - e.g.,
few wholesalers or many retailers.
A close link may be created between the sales force and distribution logistics e.g., when the
members of the sales force assume logistics functions related to order processing.
Distribution logistics has various types of flow. In general terms, a distinction can be drawn
between the physical flow of goods - the so-called logistics channel - and the flow of
ownership and the flow of rights to goods - the so-called contracting channel. In the process,
it is not necessary for all types of flow to pass through the same groups.
The members of a sales channel must coordinate their logistics systems for the distribution of
goods. To prevent shortages, integrated information systems are set up in the context of
efficient consumer-response - or ECR - programs. Based on retailing’s merchandise
management systems and scanner cash registers, sales and point-of-sales-data are reported to
the retailer’s central warehouse and then are passed to the manufacturer along with inventory
data. As a result, the manufacturer has an overview of the sales and inventory of his products
and can continuously modify his sales projections and production. An important module of
ECR is the continuous replenishment program (CRP). In this program, the manufacturer
assumes responsibility for the retailer’s supply availability by handling inventory
management in the central warehouse. ECR requires manufacturers and retailers to work
closely together. It must coordinate the data-processing systems, and the deliveries must be
worked out by both partners. In addition, joint teams between retailers and manufacturers
must be formed. These teams will handle logistics issues and develop joint marketing
strategies, e.g., product introductions and sales promotions. Both sides profit from this
partnership. The manufacturers receive improved information, can base their production
levels on demand, strengthen customer loyalty and have a larger say about sales promotion
activities. Retailers, in turn, can lower their warehousing costs and capacities, and profit from
optimized availability of products.
The transportation and distribution system of DHL are two of the cornerstones for the
continued success of DHL. DHL transportation management solutions are built from the
following core services:
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Supplier collections
Linehaul and trunking
Store delivery
Reverse logistics
Track-and-trace/Electronic Data Interface (EDI) visibility solutions
Cross-docking and merge-in-transit
Home delivery (integrated with e-fulfillment warehousing services)
Managed transport services
Air, ocean, rail and road freight forwarding services
Express parcel delivery services
Supply chain consultancy, including logistics network strategy and transport modeling
Carrier management
Control Tower services.
Nothing makes consumers happier than getting what they ordered, delivered to their
door, right on time, as promised. By combining distribution centre operations with our home
and office delivery operations, DHL helps you service your customers more efficiently and
effectively than ever before. Though delivery is the focus, DHL also offer responsive reverse
logistics solutions for big-ticket items, to maximize the total asset recovery and safeguard the
customer relationships. These services include the recovery of obsolete or non-operational
white goods and the removal of old goods on delivery of new or replacement products.
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Focused on the last leg of the supply chain with distribution from distribution centers
to stores and all related in-store activities
Supports in-store operations by creating efficiencies including inventory optimization,
labor productivity and promoting stock availability
Activities include splitting down totes, separating products by department, removing
packaging, moving stock to point of use to support merchandisers
Operational cover is provided to ‘Non-Trading’ activity – loading bay, sales floor
recovery, returns
It incorporates consolidation, stockroom and shelf replenishment management
Inputs innovation to store processes
Improvement in supply chain visibility to support buyers and merchandisers in their
decision making
Increased stock availability, while reducing quantities of needless stock
Ultimate goal of improving customer service while targeting cost reductions
When you need critical spare parts delivered to your customers within an agreed timescale,
DHL’s Service Parts Logistics (SPL) solutions can meet your needs. DHL designs and
maintains systems that not only get your customers the parts they need quickly, but also help
you to anticipate and prepare for that demand. It’s all managed by an end-to-end model,
integrating transportation, warehousing, and repair-cycle management. We support all types
of service: repair and return, product exchanges, advanced replacements and on-site repair.
Services Include:
Express logistics
Reverse logistics
Returns logistics
Exchange logistics
Transportation management
Reverse Logistics:
DHL will help you design, plan and implement a reverse supply chain that supports your
profit goals and maximizes your assets’ value. Whether DHL is handling your product returns
to help you recapture value, or managing your recycling processes to help you safely dispose
off your goods, it will provide a better experience for your business. Services Include:
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DHL EDI:
DHL EDI Solutions help you link the marketplace, distribution network, manufacturing
processes and purchasing activities. DHL EDI Solutions upgrade shipping from being an
"outside service" to a vital, fully-manageable link within your total business flow. DHL EDI
Solutions allow customers to exchange business information between computer systems
using industry-standard EDI messaging. Such close integration allows better support and re-
engineering of business processes to achieve greater speed, reliability, control, and cost
savings.
DHL Multishipping:
DHL Multishipping uses the internet technology. Without any installation of software DHL
Multishipping simplifies freight management as you can handle the entire freight process
from your own PC - and you don't actually need to be in telephone contact with DHL. It
automates your booking of a pick-up, helps you search for delivery details, produces the
necessary documents and you can print it all on your own laser or label printer.
Warehouse Automation:
DHL can offer you a variety of automated systems within its warehouse offering, all of which
are designed to bring significant efficiencies to your operations. For instance, carousels and
automated retrieval systems, although involving relatively high investment costs, can deliver
higher efficiency and shorter cycles, thanks to their elimination of human endeavor. The most
common example of the carousel’s application is in electrical spare parts and kit assemblies.
From voice picking to complete warehouse automation and sortation systems, DHL has the
design, operations, IT and project management skills and experience to deliver the required
solution.
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Pick/put to light.
Handling devices include:
Automatic order selectors (AOS)
Layer picking technologies
Palletizers and robots.
Storing devices include:
Automated storage and retrieval systems
Carousels.
Software and visualization services include:
WMS
Inventory visibility
Labor management and task interleaving
Yard management
WMS simulation software.
Data integration services include:
EDIFACT
RosettaNet
SAPidec
GS1 XML.
Whether you are outsourcing existing operations or creating new ones, DHL has a regional
and global network of best-in-class, strategically located operations for you to leverage. DHL
provides comprehensive range of cost – and time – effective solutions. DHL warehousing and
order fulfillment services:
Retail:
DHL has significant infrastructure and operational presence in most global retail markets,
with a portfolio of services that spans everything from supply chain strategy and network
design to in-store logistics. DHL works for a wide variety of retailers, from hypermarkets to
convenience stores, e-retailers to department stores; DIY, electrical and furniture retailers, to
coffee shops. DHL has unmatched worldwide presence to support you across your end-to-end
global supply chains, optimizing logistics processes at every stage.
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DHL Distribution Network
From tangible functions like securing a location, building the facility, getting systems up and
running and generating a workforce, to the intangibles of ensuring accuracy, efficiency and
controlled costs, DHL provides a full range of smart, state-of-the-art warehousing and order
fulfillment capabilities. From design to implementation, DHL have the people, practices,
experience and technologies to handle every aspect of the warehouse development and
operations. The services support inbound logistics, distribution and returns capabilities in
ways that enhance inventory management, reduce total operating costs and improve cycle
times.
Distribution to Stores:
DHL manages effective transport operations from the own distribution centers or cross-docks
to the stores. DHL also manages the return of goods and equipment from store to warehouse.
By working with the suppliers, DHL maximizes opportunities for backloads, to reduce empty
running and the overall carbon footprint. DHL solutions design specialists help continually
optimize the transport and warehousing network to minimize costs, as the characteristics of
the business change, through changing product volumes, mix, or store portfolio. And by
working with the "upstream" supply chain to deliver the products in a store-friendly format,
DHL can streamline your store backroom and shelf-replenishment operations.
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Different Channels:
Redistribution channels are identical to distribution channels for target products. Only
the direction of the flow is different. A single-stage redistribution channel, in which
the end customer returns residual matter directly to the manufacturer, is one option if
the residual matter is relatively single line and large amounts of it can be returned. In
addition, it must be possible for the end customer to make regular deliveries to the
manufacturer in a disposal cycle. In multi-stage redistribution channels, retailers and
wholesalers are used as intermediaries. This is the case for the return of empty bottles
in standard-sized cases.
Residual cycles are designed to ensure the reusability of secondary raw materials. As
a result, the residual matter will be recycled in any case. For instance, the
manufacturer of the used or worn-out products himself can recycle the residual matter.
In this process, disposal-logistics specialists can perform the tasks of warehousing,
transport, handling, collection and separation, packing and order processing. In single-
stage residual-matter cycles, residual matter is channeled directly from the company
where it is created to the site of its further use. In multi-stage residual-matter cycles,
the residual-matter stream is disrupted by someone like a recycling company. The
reuse can then be initiated by the manufacturer or by another company.
Disposal channels manage the residue stream between the residue producer and the
facilities that are responsible for the orderly disposal of wastes, e.g., incineration
plants or landfills. The single-stage disposal channel is suitable for all residual matter
that is created in large amounts and does not have to be separated for disposal. Multi-
stage disposal channels are necessary when residual matter has to be collected for
long-distance transport, analyzed or specially processed.
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CONCLUSION
RECOMMENDATIONS
The company needs to focus on their core domestic products to expand the market
share and consolidate unique and premium position in the Indian market. They should also
leverage its vast customer base for global distribution through its alliances. The domestic
network should continue to differentiate itself in all areas of our core competencies - supply
chain management, logistics and Ecommerce.
To fulfil the aims of on organization, some recommendations are suggested by
mapping the transit time of surface transportation and Rail transportation. Analyzing the
observed routes by comparing beneficial routes of the company with the competitor, we find
the routes which are beneficial in terms of cost cutting and time saving. From this we find
that the Eastern part of the network is showing desirable response.
Ultimately, if the company works on Eastern part of present network, it may prove
beneficial, to fulfil the objectives which are defined by the organization.
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Bibliography:
http://www.dhl-
discoverlogistics.com/cms/en/course/processes/distribution_logistics/distribution.jsp
www.dhl-innovation.com
http://www.dhldiscoverlogistics.com/cms/en/course/management/scm/concept.jsp
Lambert / Copper / Pagh 1998. In: The International Journal of Logistics Management
9(1998)2
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