SUPPLY CHAIN MANAGEMENT: A STUDY FROM DHL

OPENING THOUGHT

“Logistics is the Ball and Chain of Armored Warfare”

-Heinz Guderian-World War II German’s General

Conceptual Framework

Logistic Compa

ny

WHAT

HOWWHYH O W d o e s Lo g i s t i c C o m p a n y D e a l w i t h t h e Fu t u re ?

W H Y i s Lo g i s t i c

C o m p a n y I m p o r t a n t ?

W H AT i s Lo g i s t i c

C o m p a n y ?

Conceptual Framework

Logistic Compa

ny

WHAT

HOWWHYH O W d o e s Lo g i s t i c C o m p a n y D e a l w i t h t h e Fu t u re ?

W H Y i s Lo g i s t i c

C o m p a n y I m p o r t a n t ?

W H AT i s Lo g i s t i c

C o m p a n y ?

WHAT What is Logistic Company?

A company specialized in assisting a firm’s process of planning, implementing, and controlling the efficient, cost effective flow and storage of raw materials, in-process inventory, finished goods and related information from point of origin to point of consumption for the purpose of meeting customer

requirements

Source: Council of Logistics Management

L O G I S T I C C O M P A N Y

WHAT What is Logistic Company?

Mail Delivery

Freight Transportation

Warehousing & Distribution

Consultancy

Value Added Services

Services Provided by Logistics Service

Providers

WHAT What is Logistic Company?

Mail Delivery

Freight Transportation

Warehousing & Distribution

Consultancy

Value Added Services

Services Provided by Logistics Service

Providers

WHAT What is Logistic Company?

Mail Delivery(Fully modular mail

services)

Direct Mail

Press Shipment

Business Mail

Parcel

WHAT What is Logistic Company?

Mail Delivery

Freight Transportation

Warehousing & Distribution

Consultancy

Value Added Services

Services Provided by Logistics Service

Providers

WHAT What is Logistic Company?

Freight Transportation

Air Freight Services

Ocean Freight Services

Road and Railway Services

WHAT What is Logistic Company?

Mail Delivery

Freight Transportation

Warehousing & Distribution

Consultancy

Value Added Services

Services Provided by Logistics Service

Providers

WHAT What is Logistic Company?

Warehousing and Distribution

Temperature Controlled

Raw Materials

Finished Goods

Automated

WHAT What is Logistic Company?

Mail Delivery

Freight Transportation

Warehousing & Distribution

Consultancy

Value Added Services

Services Provided by Logistics Service

Providers

WHAT What is Logistic Company?

Consultancy Supply Chain Consultancy and Network Design

WHAT What is Logistic Company?

Mail Delivery

Freight Transportation

Warehousing & Distribution

Consultancy

Value Added Services

Services Provided by Logistics Service

Providers

WHAT What is Logistic Company?

Value Added Services

Product Assembly

Packing

Packaging

Labeling and Tagging

WHAT What is Logistic Company?

A focal firm is “the initiator of an International business transaction, they convince, design and produce the offerings (goods and services)

intended for consumption”

F O C A L F I R M

WHAT What is Logistic Company?

INTEL CHIP PC

WINDOWS OPERATING SYSTEM

OTHER HARD-WARES

WHAT What is Logistic Company?

Role of Logistics Service Provider’s Services in Focal Firm’s Value Chain

Integrate Supply Chain of firm

More Time to Focus on The Core Business

Minimize the risks

Increase in Flexibility

WHAT What is Logistic Company?

America

WHAT What is Logistic Company?

AsiaPacific

WHAT What is Logistic Company?

Europe

WHAT What is Logistic Company?

EEMEA

WHAT What is Logistic Company?

7 ATTRIBU

TES

?

?

?

??

?

?

WHAT What is Logistic Company?

Reliable Performance

WHAT What is Logistic Company?

Customer Interaction

WHAT What is Logistic Company?

Price

WHAT What is Logistic Company?

Supply Chain Recovery

WHAT What is Logistic Company?

Professionalism

WHAT What is Logistic Company?

Supply Chain Innovation

WHAT What is Logistic Company?

Supply Chain Capacity

WHAT What is Logistic Company?

7 ATTRIBU

TES

Reliable Performance

Customer Interaction

Price

Supply Chain Recovery

Professionalism

Supply Chain Innovation

Supply Chain Capacity

WHAT What is Logistic Company?

Industry Consideration

Factors

Automotive Industry

Reliable Performa

nce

Professionalism

Supply Chain

Innovation

WHAT What is Logistic Company?

Industry Consideration

Factors

Consumer Goods Industry

Reliable Performa

ncePrice

Supply Chain

Capacity

Supply Chain

Innovation

WHAT What is Logistic Company?

Industry Consideration

Factors

Fashion Industry

Reliable Performa

nce

Supply Chain

Innovation Customer

Interaction

WHAT What is Logistic Company?

Industry Consideration

Factors

Retail Industry

Reliable Performance

Professionalism

Supply Chain Capacity

Conceptual Framework

Logistic Compa

ny

WHAT

HOWWHYH O W d o e s Lo g i s t i c C o m p a n y D e a l w i t h t h e Fu t u re ?

W H Y i s Lo g i s t i c

C o m p a n y I m p o r t a n t ?

W H AT i s Lo g i s t i c

C o m p a n y ?

Conceptual Framework

Logistic Compa

ny

WHAT

HOWWHYH O W d o e s Lo g i s t i c C o m p a n y D e a l w i t h t h e Fu t u re ?

W H Y i s Lo g i s t i c

C o m p a n y I m p o r t a n t ?

W H AT i s Lo g i s t i c

C o m p a n y ?

WHYWhy is Logistic Company

important?

Creation

Era

Integration Era

GlobalEra

Specialize Era

SCM 2.0

C O N T I N U U M O F S C M

WHYWhy is Logistic Company

important?

Customization

Firm

Industry

Nation

Quality

Dilemmas and Paradoxes

© KC Chan 2011

Government Support for

Green Environment

Variety

Global Financial Integratio

n

SpeedCrude Oil Scarcity

Convenience

Technology

Lowest Cost

Infrastructure

Free Trade Agreemen

t

Customization

13 Forces of

Globalization

WHYWhy is Logistic Company

important?

Customization

Firm

Industry

Nation

Quality

Dilemmas and Paradoxes

© KC Chan 2011

SpeedCrude Oil Scarcity

Convenience

Technology

Lowest Cost

Infrastructure

Free Trade Agreemen

t

Customization

13 Forces of

Globalization

Government Support for

Green Environment

Variety

Global Financial Integratio

n

WHYWhy is Logistic Company

important?

Customization

People wants Innovation

CK Prahalad

Be Different

WHYWhy is Logistic Company

important?

Speed

Microelectronic Industry

Less Price

Faster Growth

www.dhl-discoverlogistic.com

WHYWhy is Logistic Company

important?

Technology

RFID Tag

WEB 2.0

SCM 3.0

WHYWhy is Logistic Company

important?

Crude Oil Scarcity

WHYWhy is Logistic Company

important?

Lowest Cost

Economic Uncertainty

Outsourcing

High Competitiveness

WHY Why Logistic Company important?

Creation Era

Integration Era

GlobalEra

Specialize Era

SCM 2.0 ?

C O N T I N U U M O F S C M

WHYWhy is Logistic Company

important?

Future Trends

of SCM

Process Standardization

System and Security

Flexible and Responsive

WHYWhy is Logistic Company

important?Process

Standardization

• Standardized work flows

• Outsource more low value-added process

System and Security

• Insurance company become the security factors

• More automated and visible transport system

Flexible and Responsive• Rapid

respond to sudden demand

• Creative management in changing environment

• More efficient energy usage

WHYWhy is Logistic Company

important?

Creation Era

Integration Era

GlobalEra

Specialize Era

SCM 2.0

Future

Trends of SCM

C O N T I N U U M O F S C M

Conceptual Framework

Logistic Compa

ny

WHAT

HOWWHYH O W d o e s Lo g i s t i c C o m p a n y D e a l w i t h t h e Fu t u re ?

W H Y i s Lo g i s t i c

C o m p a n y I m p o r t a n t ?

W H AT i s Lo g i s t i c

C o m p a n y ?

Conceptual Framework

Logistic Compa

ny

WHAT

HOWWHYH O W d o e s Lo g i s t i c C o m p a n y D e a l w i t h t h e Fu t u re ?

W H Y Lo g i s t i c C o m p a n y i s I m p o r t a n t ?

W H AT i s Lo g i s t i c

C o m p a n y ?

HOWHow does Logistic Company deal with the

future?

STRATEGY

PURPOSETo know the

strategy that can be implemented

by logistic companies to take advantage of SCM

future trends

FRAMEWORK PROJECT

Tools Process

People

I N P U T P R O CE S S

O U T PU T

E V A L U AT I O N

HOWHow does Logistic Company deal with the

future?

STRATEGY

PURPOSETo know the

strategy that can be implemented

by logistic companies to take advantage of SCM

future trends

FRAMEWORK PROJECT

Tools Process

People

INPUT PROCESS

OUTPUT

EVALUATION

Concept Diagram Purpose

To know the strategy that can be implemented by logistic companies to take

advantage of SCM future trends

P U R P O S E

HOWHow does Logistic Company deal with the

future?

STRATEGY

PURPOSETo know the

strategy that can be implemented

by logistic companies to take advantage of SCM

future trends

FRAMEWORK PROJECT

Tools Process

People

INPUT PROCESS

OUTPUT

EVALUATION

HOWHow does Logistic Company deal with the

future?

STRATEGY

PURPOSETo know the

strategy that can be implemented

by logistic companies to take advantage of SCM

future trends

FRAMEWORK PROJECT

Tools Process

People

I N P U T P R O CE S S

O U T PU T

E V A L U AT I O N

Concept Diagram Project

Concept Diagram Project

Founded in 1969 in USA

Fully owned by Deutsche Post in 2002

Headquarter: Bonn, Germany

275,000 employees in more than 220 countries

The DHL Express Service has ceased domestic operations in the USA, as of February 2009.

Concept Diagram Project

Founded in 1969 in USA

Fully owned by Deutsche Post in 2002

Headquarter: Bonn, Germany

275,000 employees in more than 220 countries

The DHL Express Service has ceased domestic operations in the USA, as of February 2009.

Concept Diagram Project

The DHL Express Service has ceased domestic operations in the USA, as of February 2009

Mounting Losses (High Cost) High Competition Not Their Core

Competence

9%

24%

17%

49%

US International CEP Market 2007

DHL

FedEx

UPS

Others

Concept Diagram Project

WHAT DID DHL DO NEXT?

Maintaining leading position in the international express market

Concentrating on the international express business in the USA

Increasing presence in growth markets

Managing global network costs

Concept Diagram Project

WHAT DID DHL DO NEXT?

Maintaining leading position in the international express market

Concentrating on the international express business in the USA

Increasing presence in growth markets

Managing global network costs

Concept Diagram Project

WHAT DID DHL DO NEXT?

Maintaining leading position in the international express market

Concentrating on the international express business in the USA

Increasing presence in growth markets

Managing global network costs

Concept Diagram Project

WHAT DID DHL DO NEXT?

Maintaining leading position in the international express market

Concentrating on the international express business in the USA

Increasing presence in growth markets

Managing global network costs

Concept Diagram Project

WHAT DID DHL DO NEXT?

Maintaining leading position in the international express market

Concentrating on the international express business in the USA

Increasing presence in growth markets

Managing global network costs

Concept Diagram Project

DIVERSITY

CODE OF CONDUCT

INDUCTION

EMPLOYEE PARTICIPATION

STRUCTURE AND CULTURE

Concept Diagram Project

GOAL

Winning the heart, mind, and

spirit

?

OBJECTIVE

Serving stakeholder

s all over the world

with quality service

People Process Tools

Structure & CultureDiversity, Code of Conduct, Participation, & Induction

Target Brand Equity

Balanced Score CardInternational BSC

HOWHow does Logistic Company deal with the

future?

STRATEGY

PURPOSETo know the

strategy that can be implemented

by logistic companies to take advantage of SCM

future trends

FRAMEWORK PROJECT

Tools Process

People

INPUT PROCESS

OUTPUT

EVALUATION

HOWHow does Logistic Company deal with the

future?

STRATEGY

PURPOSETo know the

strategy that can be implemented

by logistic companies to take advantage of SCM

future trends

FRAMEWORK PROJECT

Tools Process

People

INPUT PROCESS

OUTPUT

EVALUATION

Concept Diagram Framework

INPUT PROCESS

OUTPUT

E VA LU AT I ON

Concept Diagram Framework

The Future of

SCMHOKAM

FasterBetter

Cheaper

B a l a n c e d S c o re c a rd

Concept Diagram Framework - Input

INPUT PROCESS

OUTPUT

EVAL

Future Trends

of SCM

Process Standardization

System and Security

Flexible and Responsive

Concept Diagram Framework

INPUT PROCESS

OUTPUT

E VA LU AT I ON

Concept Diagram Framework

The Future of

SCMHOKAM

FasterBetter

Cheaper

B a l a n c e d S c o re c a rd

Concept Diagram Framework - Process

INPUT PROCESS

OUTPUT

EVAL

HOKAM

People

Planning

Process

Concept Diagram Framework - Process

INPUT PROCESS

OUTPUT

EVAL

Trend Watching and

Forecasting

Resource

Planning

Scenario Study with

Stakeholders

Planning Collaboration with stakeholders to hedge the future

Concept Diagram Framework - Process

INPUT PROCESS

OUTPUT

EVAL

Process

Efficient Route

Planning

Effective Vehicle

Utilization

Green Energy Source

Route planning and decarbonization path of logistic

Concept Diagram Framework - Process

INPUT PROCESS

OUTPUT

EVAL

People

Real-Time Tracking System

E- customs

Supply chain visibility and security

Concept Diagram Framework

The Future of

SCMHOKAM

FasterBetter

Cheaper

B a l a n c e d S c o re c a rd

Concept Diagram Framework - Output

INPUT PROCESS

OUTPUT

EVAL

Planning

Process

People

Collaborative Future Hedging

Route Planning and

Decarbonization

Visibility and Security

FA S T E R

C H E A P E R

B E TT E R

Concept Diagram Framework

The Future of

SCMHOKAM

FasterBetter

Cheaper

B a l a n c e d S c o re c a rd

Concept Diagram Framework - Control

INPUT PROCESS

OUTPUT

EVAL

Balanced Scorecard

Concept Diagram Framework - Control

INPUT PROCESS

OUTPUT

EVAL

Learning and

Growth

Language Course

Leadership Training

Learning Center National

Training Award

Outsource Trainer

Scholarships Center

Employee Self Development

Online Learning Program

Earn & Learn Training

Safety Training

Source : trainingreference.co.uk Source : fedex.com Source : ups.com

Concept Diagram Framework - Control

INPUT PROCESS

OUTPUT

EVAL

Business Process

Speed Performance(Source : Livescience.com)

3/5 Loca t ion 1/5 Loca t ion1/5 Loca t ion

Concept Diagram Framework - Control

INPUT PROCESS

OUTPUT

EVAL

2006 2008 2010 2012

-3000

-2000

-1000

0

1000

2000

3000

4000

5000

DHLFedEx

Net Income Data (in million USD)

FinancialPerforma

nce

Source: Income Statement

Concept Diagram Framework - Control

INPUT PROCESS

OUTPUT

EVAL

Customer Perspecti

ve

Reliability Performance(Source : Unishippers.com)

90 .66% 90.83% 88.02%

After Sales Servicebased on rating(Source : Unishippers.com)

1 2 1

Concept Diagram Framework - Control

INPUT PROCESS

OUTPUT

EVAL

Awards and Achievements

HOWHow does Logistic Company deal with the

future?

STRATEGY

PURPOSETo know the

strategy that can be implemented

by logistic companies to take advantage of SCM

future trends

FRAMEWORK PROJECT

Tools Process

People

INPUT PROCESS

OUTPUT

EVALUATION

HOWHow does Logistic Company deal with the

future?

STRATEGY

PURPOSETo know the

strategy that can be implemented

by logistic companies to take advantage of SCM

future trends

FRAMEWORK PROJECT

Tools Process

People

INPUT PROCESS

OUTPUT

EVALUATION

Concept Diagram Strategy

PEOPLE

PROCESS

?PLANNING

CEM

SCM IPM

Concept Diagram Strategy

PEOPLE

PROCESS

Agile

Logistic

PLANNING

CEM

SCM IPM

Concept Diagram Strategy

A strategy that enables logistic companies to survive in economic recession and grow during economic expansion

A G I L E L O G I S T I C

Reduction of Complexity

Flexibility Innovation

Concept Diagram Strategy

Systematic

Adaptable

Creative

Standardization

Flexible

Innovation

Strategic Planning

Scenario Study

Partnership

PEOPLE PROCESS TOOLS

S T R AT E GY

A G I L E L O G I S T I C

HOWHow does Logistic Company deal with the

future?

PURPOSETo know the

strategy that can be implemented

by logistic companies to take advantage of SCM

future trends

FRAMEWORK PROJECT

Tools Process

People

INPUT PROCESS

OUTPUT

EVALUATION

PEOPLE

PROCESS

Agile Logistic

PLANNING

Conclusion Delta Matrix

PEOPLEPURPOSE PROCESS

SCHEDULE

SYSTEM

SUPPORT

STRUCTURE

SCOPE

STRATEGY

Conclusion

Delta Matrix - PURPOSE

PEOPLEPURPOSE PROCESS

SCHEDULE

SYSTEM

SUPPORT

STRUCTURE

SCOPE

STRATEGY

PURPOSE

Preparing DHL and any logistics company to face the future trend.

Conclusion Delta Matrix - PEOPLE

PEOPLEPURPOSE PROCESS

SCHEDULE

SYSTEM

SUPPORT

STRUCTURE

SCOPE

STRATEGY

PEOPLE

VISIONARYSYSTEMATI

C

FLEXIBLE CREATIVE

Conclusion

Delta Matrix - PROCESS

PEOPLEPURPOSE PROCESS

SCHEDULE

SYSTEM

SUPPORT

STRUCTURE

SCOPE

STRATEGY

PROCESS

Strategic Planning

Employee Training

Resource Allocation

Conclusion Delta Matrix - SCOPE

PEOPLEPURPOSE PROCESS

SCHEDULE

SYSTEM

SUPPORT

STRUCTURE

SCOPE

STRATEGY

SCOPE

Conclusion

Delta Matrix - SUPPORT

Firm

Industry

Nation

Quality

Dilemmas and Paradoxes

© KC Chan 2011

SpeedCrude Oil Scarcity

Convenience

Technology

Lowest Cost

Infrastructure

Free Trade Agreemen

t

Customization

Government Support for

Green Environment

Variety

Global Financial Integratio

n

PEOPLEPURPOSE PROCESS

SCHEDULE

SYSTEM

SUPPORT

STRUCTURE

SCOPE

STRATEGY

SUPPORT

Conclusion

Delta Matrix - SCHEDULE

Reducing Cost

Preparation

Expansion

SHORT TERM

MEDIUM TERM

LONG TERM

PEOPLEPURPOSE PROCESS

SCHEDULE

SYSTEM

SUPPORT

STRUCTURE

SCOPE

STRATEGY

SCHEDULE

Conclusion

Delta Matrix - STRATEGY

PEOPLE

PROCESS

Agile Logis

ticPLANNI

NG

CEM

SCM

IPM

PEOPLEPURPOSE PROCESS

SCHEDULE

SYSTEM

SUPPORT

STRUCTURE

SCOPE

STRATEGY

STRATEGY

ConclusionDelta Matrix -

STRUCTURE

PEOPLEPURPOSE PROCESS

SCHEDULE

SYSTEM

SUPPORT

STRUCTURE

SCOPE

STRATEGY

STRUCTURE

Mail

Express

Logistic

Global Forwarding

Supply Chain

EUROPE AMERICA ASIA AFRICA

INTERNATIONAL DHL

© KC Chan 2011

Conclusion Delta Matrix - SYSTEM

PEOPLEPURPOSE PROCESS

SCHEDULE

SYSTEM

SUPPORT

STRUCTURE

SCOPE

STRATEGY

SYSTEM

Balanced

Scorecard

Learning and

Growth

Business Process

FinancialPerforma

nce

Customer

Perspective

Conclusion Delta MatrixPEOPLEPURPOSE PROCESS

SCHEDULE

SYSTEM

SUPPORT

STRUCTURE

SCOPE

STRATEGY

Preparing DHL and any logistics

company to face the future trend.

VISIONARYSYSTEMATI

C

FLEXIBLE CREATIVE

Mail

Express

Logistic

Global Forwarding

Supply Chain

EUROPE AMERICA ASIA AFRICA

INTERNATIONAL DHL

Reducing Cost

Preparation

Expansion

SHORT TERM

MEDIUM TERM

LONG TERM

Strategic Planning

Employee Training

Resource Allocation

CONCLUSION LESSON LEARNT

GOAL

Winning the heart, mind, and

spirit

A G I L E LO G I S T I C

OBJECTIVE

Serving stakeholder

s all over the world

with quality service

People

Stakeholders all over the world

ProcessStandardization, Flexible &

Innovation

ToolsStrategic Planning, Scenario

Study & Partnership

Target

Market Share and Brand Equity

Balanced Score CardInternational BSC

Structure & CultureDiversity, Code of Conduct, Participation, & Induction

Closing Thought

“The line between disorder and order lies in logistics.”

-Sun Tzu-