production and operation

management
Term Paper Topic :
Supply Chain Practices In
Logistics Companies

Vivek Mohan
RT1809A14
10811582

[2010]

[LOVELY PROFESSIONAL UNIVERSITY]

 Acknowledgement

I owe a great many thanks to a great many people who helped

and supported me during the writing of this book.

My deepest thanks to Lecturer AVNEET KAUR GILL, the

Guide of the project for guiding and correcting various documents of
mine with attention and care. She has taken pain to go through the
project and make necessary correction as and when needed.

I would also thank my Institution and my faculty members

without whom this project would have been a distant reality. I also
extend my heartfelt thanks to my friends and well wishers.

VIVEK
MOHAN

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 • Logistics: Logistics is the management of the flow
of goods, information and other resources, including energy and
people, between the point of origin and the point of consumption in
order to meet the requirements of consumers. Logistics involves the
integration of information, transportation, inventory, warehousing,
material handling, and packaging, and occasionally security.
Logistics is a channel of the supply chain which adds the value of
time and place utility. Today the complexity of production logistics
can be modeled, analyzed, visualized and optimized by plant
simulation software.

These are the first letters of the last names of the three company
founders, Adrian Dalsey, Larry Hillblom and Robert Lynn. In 1969,
just months after the world had marvelled 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.
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 countries and had 16,000
employees.

Deutsche Post World Net and DHL Consolidation: 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
DHL brand was further strengthened by Deutsche Post World Net
acquisition of Exel in December 2005. The DHL expertise is pooled from a
number of companies acquired by Deutsche Post World Net. To name a

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few:
Exel: at the time
Deutsche Post World Net acquired Exel in December 2005, it had around
111,000 employees in 135 countries. Exel primarily offers transport and
logistics solutions for key customers.

• Logistics of DHL: DHL is the global leader in logistics with

more highly experienced professionals at more locations in more
countries than any other provider. Our goal is to build strong, long-
term partnerships with customers by providing world class services,
across all our operations. In India, we have formed a new joint
venture DHL Lemuir Logistics, which consolidates our position as the
leader in International Freight Forwarding, Supply Chain
Management, Project Transport and Customs Brokerage. We are the
first choice for companies looking for end to end logistics solutions
and high quality servicing capabilities. Our logistics customers
include over 75% of the world's largest quoted non-financial
enterprises. These organisations trust us with their brands and
reputations not simply because we're the worldwide market leader,
but because we strive to deliver globally consistent services of the
highest quality, wherever they work with us.

Supply Chain Model

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
products. These then pass through warehouses or distribution centres and
are delivered to retailers, wholesalers or direct to consumers' homes or
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business 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 and inventories, by
balancing resources with demand at all stages.

• Supply Chain practices in DHL:

1. Supply chain planning: The strategic and operational
design and execution of supply chains on behalf of customers large
and small on a global, regional, national or local scale. In this
following steps should be taken :

Network Integration: DHL integrates customers' supply chains

into its global network, providing cost-effective surface and air
transport solutions and shared-user warehousing facilities.

Implementation and Project Management: The

capability to successfully lead, manage and deliver projects or new
customer solutions to required specifications on time and on budget
is a core competence at DHL. Our proprietary global project
management process, Depict, is deployed by skilled and
experienced project professionals to ensure effective management
of change. The approach combines all project stakeholders into one
cohesive team, with a clear ownership and accountability structure.
Implementation of new projects is divided into five main
stages - defining, planning, implementing, controlling and
transitioning - and covers business processes, engineering,
real estate, IT and systems, migration, HR, finance and
legal. All projects start with a definition of aims, plus target setting
and a detailed description of the deliverables.

Quality, Environment, Health & Safety (QEHS): DHL

take quality, environmental and health & safety principles into
account in our business decisions and operations. DHL apply the
highest ethical standards, and train and motivate our employees to
behave in a responsible manner to live up to their promises, to
deliver on time, and to avoid risks to health, safety and the
environment.

Process and Performance Management: Process and

performance management are essential elements of every modern
supply chain. We take a structured approach to process
improvement, IT enhancement, customer implementations, training

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 and employee engagement with the objective of continuously
improving performance, increasing customer satisfaction and
generating efficiencies.DHL adopts the DMAIC method for team-
based process improvement that sits at the heart of Six Sigma.
Many of our global customers have their own longstanding process
improvement programs including Six Sigma. This helps us to speak
their language and means we can readily align our processes with
theirs. The methodology comprises five steps:

 defining opportunities: establishing goals and ensuring they are

consistent with customer requirements
 measuring performance: collecting data on the current process
for future comparison using key performance indicators (KPIs)
 analysing opportunities: assessing performance to determine
ways to improve or optimise the process
 improving performance: implementing the improvements
 controlling performance: setting up pilots to establish process
capability, then transitioning and monitoring

 Supply chain planning typically covers production, sourcing and

procurement, demand and supply planning, logistics network
design, inventory optimisation, supply chain visibility and data
management.

 Good design is crucial for effective logistics operations and DHL has
a worldwide reputation for producing innovative solutions that
streamline processes and improve control.

Supply chain partner: A strategic partnership with a customer

for the management and execution of logistical activities, with the
focus on planning and integration. The tendency for companies to
concentrate on their core competencies through outsourcing has
resulted in an increase in the number of organisations involved in the
supply chain. For many companies this has led to a loss of day to day
management control of their logistics operations.DHL's approach to
supply chain partnerships is to bring internal and industry best practice
to bear on integrating our customer's physical, informational and
financial flows. We improve collaboration and trust among supply chain
partners, enabling significant efficiencies to be introduced - including
raising inventory velocity and improving stock visibility.

Supply Chain Outsourcing: Supply chain outsourcing covers

the contracting out of the management and executional aspects of
the supply chain to a service provider. Lead logistics provider
concentrates on the executional aspects, while supply chain partner
brings the additional dimension of strategic planning. Both offerings
provide a carrier neutral approach to ensure the greatest value to
the customer. Supply chain outsourcing is used by leading
companies worldwide to effect fundamental business process
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 change or to concentrate on core competencies.DHL has developed
a market-leading position in supply chain outsourcing worldwide by
successfully supporting such companies, and by adapting to the
challenges of globalisation and increased competition.DHL
specialise in major logistics outsourcing and change management,
and have the resources, experience and intellectual capability to
take on projects of any scale across any geography, including:

 distribution centres
 transport networks
 back-office functions
 fulfilment centres
 supply chain management functions
 after sales/ service logistics operations.

Lead logistics provider: A strategic partnership with a

customer for the management and execution of logistics activities,
with the focus on operations.DHL's approach to lead logistics
provider partnerships involves the management, optimisation and
execution of inbound and outbound logistics including the
implementation of origin-based networks. We take responsibility for
assembling and controlling the resources, capabilities and
technologies of our own organisation with those of complementary
service providers. As a lead logistics provider (LLP) or fourth-party
logistics (4PL) provider, DHL assumes accountability for the
management, performance, cost and development of all supply
chain functions, transactions, systems and suppliers. The customer
receives agreed service levels across the supply chain, along with
one contact point and one invoice if required. Value is added for our
customers in the following ways:

• operating cost reduction in distribution, transport, procurement and

staffing

• working capital reduction from reduced inventory and shorter order

cycle times

• fixed capital reduction from efficient asset transfer and higher asset
utilisation.

The result for our customers is enhanced product quality, availability and
customer service performance, plus reduced capital investment,
increased profitability and greater shareholder value.

LLP Transport: Services that improve the visibility, transparency and

service levels (including timeliness, accuracy and lead times) of transport
operations, while reducing complexity and cost.
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LLP Warehousing: Services that enhance stock visibility and
transparency, lower inventories and reduce supply chain complexity, while
improving stock availability, accuracy and lead times, along with
warehouse productivity.

International supply chain: Logistics solutions focused on helping

our customers take greater control of their inter-continental supply chains
especially inbound, thereby maximising the value of global or
international sourcing.DHL assists customers to:

 gain better visibility of the upstream supply chain, enabling 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.

DHL not only provides physical logistics services, but also manages other
supply chain components to improve efficiency and reduce costs.

Procurement: ntegrated sourcing and supply chain solutions that offer

our customers substantial cost savings on a wide range of non-core
purchases.

Hospital/Health Services Procurement: DHL offers a range of

specialised procurement services for the hospitals and health services
sector. In 2006 we entered into a 10-year procurement and logistics
contract with the English National Health Service (NHS), under which we
are responsible for managing a total spend of £22 bn on behalf of the UK
Government's Department of Health.The project covers the procurement
and physical distribution of an initial 500,000 product types (SKUs)
including food, bed linen, office equipment, stationery, cleaning materials,
patient clothing, medical and surgical equipment (such as operating
theatre equipment and machinery), dressings and provisions.

Supply chain consultancy: Provision of independent consultancy

services to determine a customer's optimum business strategy along with
solutions for supply chain networks, transportation and
warehousing.DHL's supply chain consultancy services are provided across
all industry sectors, and include supply chain analysis, network design and
engineering, plus provision of expertise and leading edge supply chain
tools. Services also cover reorganisation of customer facilities, project
management on behalf of the customer, implementation of new IT
systems, creation of tender documents and tender processing. Our
logistics consultancy skills deliver faster, more efficient supply chains that
are flexible and highly scalable, offering our customers accelerated access
to logistics best practice and best-in-breed technologies.

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Supply Chain Re-Engineering: DHL reviews logistics efficiencies
and service levels through the re-engineering of entire supply chains and
then implements agreed enhancements. We help our customers take a
fresh look at their supply chains, taking into account optimal or preferred
location of manufacture, product profiles, volumes and seasonality’s,
freight and transport costs, congestion, customs and duties, the
destination market and corporate social responsibility considerations. All
costs are identified (including hidden costs) and a new streamlined,
integrated, end-to-end supply chain is developed.

Planning and optimisation: Supply chain planning and optimising

the flow of information and stock, plus associated control of costs and
service levels. Planning and optimisation activities encompass strategic
partnerships with supply chain partners and carriers, plus provision of
visibility systems and supply chain consultancy. DHL works closely with
customers to review supply chain efficiencies and ensure that wherever
possible costs are driven down. Our data analysis technologies provide
'what if' modelling helping our customers to assess the impact on their
business of changing the rules of the game.

A single plan can be developed and implemented across an entire supply

chain, to meet customer requirements and reduce costs whatever the
complexities of the chain or the variations in demand.

Forecasting and Demand Planning: Forecasting and demand

planning services are performed in collaboration with our customers to
develop tailored consumption plans for each product category in order to
achieve better balanced and timed deployment of inventory. By
identifying and analysing marketing factors, seasonality aspects and other
conditions affecting sales, DHL can help businesses achieve more
accurate forecasts allowing them to make proactive responses to changes
in demand. Sales and customer satisfaction can thus be maximised
without the need to invest in costly buffer stocks or risking stock-outs.

Inventory Optimisation: Inventory optimisation is the balancing of

supply chain service and cost objectives by managing product availability
and inventory investment. Effective inventory optimisation drives
inefficiencies out of supply chains reducing overall costs while raising
service levels. DHL believes that inventory should be managed by
exception at a line item level, in a knowledge led process based on
measured risks. We focus on achieving results in supplier management,
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expediting, order replenishment, demand forecasting, safety stock
setting, order pipeline monitoring and excess stock management.
Inventory optimisation is supported by inventory management software
that calculates line item risk profiles measuring the variability of demand
and supply for each line item.

Visibility: Technologies and methodologies that provide our customers

with supply chain information, focusing on stock location and status.
DHL's independent platforms exchange relevant data with supply chain
participants, enabling our customers to track and-trace orders, shipments
and items according to reference numbers actually used on business
documents - such as sales, purchase, transport or warehouse orders,
whatever their origin.

Supply Chain Event Management (Control Towers):

Consolidation of logistics information from diverse sources worldwide into
a single integrated view, showing how our customer's supply chain is
performing. DHL's supply chain event management and 'control tower'
solutions employ sophisticated visibility technology to create overviews of
stockholdings, processes and other 'events' occurring along our
customer's supply chain. Our solutions increase opportunities for supply
chain collaboration and allow problems to be detected, evaluated and
resolved speedily, in real time.

Industrial project: DHL Global Forwarding's Industrial Projects

transportation services provide tailor made solutions for customers
working in industries such as:

• oil and gas exploration and production

• petrochemicals
• engineering and construction
• power and energy
• mining
• industrial plants
• infrastructure projects.

Transport:

 packaging design (industrial)

 multimodal transport design
 feasibility studies and consulting

Project Logistics Management:

 risk management planning

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  project freight-forwarding services
 document process management
 expediting, including order management, tracking and tracing

Project Cargo Logistics Monitoring:

 packaging control
 port/Airport handling supervision

Heavy Load Installation:

 job-site delivery up to final positioning at factory, work site or

project destination

customer programme management: CPM supports a wide

range of customer logistics management needs from standardised
packages delivering tools and services that bring value quickly and
economically, to fully customised & integrated supply chain management
programs that enhance the entire supply chain.CPM focuses on the
management of:

• data
• integrated logistics processes and data visibility from origin to
destination (Door to Door)
• implementation of new initiatives
• performance against customer defined KPI's
• process improvement

2. Inbound / manufacturing: A wide variety of inbound

logistics services, usually offered as a package tailored to our
customers' needs including supplier management, consolidation,
inbound transport, storage, vendor managed inventory, kitting and
sequencing with line side feed and in plant logistics. Suppliers and
manufacturers are increasingly being affected by shorter product
life cycles and longer and more complex supply chains (created
through the migration of production to low cost factories in
developing countries). These changes are intensifying the business
challenge of delivering the right products to the right customers at
the right time in the most cost-efficient manner to satisfy consumer
demand.

Custom brokerage: A range of customs clearance and regulatory

compliance services for imports and exports. As the world's largest and
most experienced logistics service provider, DHL understands the
complexities of handling cross-border consignments better than anyone.
Our comprehensive, highly automated customs brokerage, clearance and
compliance services combine in depth expertise in global customs
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regulations with local knowledge ensuring the smooth and expeditious
flow of international shipments to and from any location worldwide.
Importers and exporters are facing a growing number of customs agencies
and government organisations, each with a multitude of rules and
regulations. We help our customers to clear the regulatory hurdles
through a network of strategically located customs brokerage offices
around the world.

DHL file many millions of customs entries each year, and handle all
aspects of customs processes, including: import/export clearance,
declarations, pro-forma invoices and certificates of origin. Our expertise
also covers customs regulations, bond requirements, duty rates, and
petition and protest procedures.

Consolidation: The combining of diverse cargoes into single

shipments for delivery to international locations in order to achieve
service level improvements and savings on freight costs. At DHL we use
our scale and global footprint to provide cost-effective consolidation
services for customers worldwide. We operate our own consolidation
centres in some of the world's major manufacturing hubs, and also
manage consolidation processes at our customers' and third party
premises.

Raw materials warehousing: Temperature controlled storage of

low processed goods, including raw materials, components, sub-
assemblies and other semi-finished products. DHL's raw materials
warehousing services complement our raw materials transport solutions,
and include:

 unloading
 sorting, combining and consolidation
 storage
 order-processing
 inventory management/
 pick, pack and despatch
 in-plant logistics replenishment (just-in-time and kanban)
 capturing logistics costs for low-processed goods
 customs brokerage and declarations
 ingredient sampling and product concepts
 quality control/QC testing
 vendor hubs

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Vendor Hubs: Vendor hubs handle the warehousing and delivery of
spare parts and components from original equipment manufacturers
(OEM) based on demand pull. Also known as 'supplier parks' and 'inbound
hubs’; they are usually located close to manufacturing facilities and are
typically shared by a number of suppliers. Combining multiple-customer
operations and services in integrated facilities, DHL supports
manufacturers' production operations by providing core inventory
management expertise and value added services such as kitting, quality
control, sequencing and assembly. We also provide logistics support for
our customers in free trade zones by managing the complexities of duty
payments, bonded warehouses and inventories on their behalf even in
countries where they have no fiscal representation.

Raw material transportation: Dedicated, network or group page

transport of low processed goods including planning and management,
transport equipment management and yard work.DHL ensures the
effective flow of raw materials, components, sub assemblies and other
semi finished products and offers a complete range of transport and
transport management services by road, rail, intermodal, air and ocean
freight. We provide domestic and international transportation by any
mode at any time, to any destination worldwide. Services complement
our raw material warehousing solutions. Companies outsource their entire
shipment processes to DHL to leverage our expertise and buying power in
all aspects of international transportation including the proper assignment
of tariff classifications for smooth customs clearance. DHL also has
extensive experience in the developing countries, where challenging
transport and communications infrastructure and a lack of standards can
impact efficiency and service levels. Products handled include:

 ambient and temperature-controlled food (dry, liquid, powdered and

semi-manufactured)
 chemicals
 forest products
 electronic components
 metals
 engineering sub assemblies
 bulk products, including petrochemicals.

Transport capabilities include:

 shared user fleets (asset and labour sharing)

 dedicated fleets
 transport management
 carrier management
 time-defined services
 transport scheduling and dispatch
 shuttle services
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  mode transfer (e.g. bulk rail to truck or export container)
 cross-docking

The management of raw materials and components

flows for customers includes:

 just in time and just in sequence for high volume suppliers

 'milk run' and hub and spoke services for less time critical suppliers
 consolidation service
 picking at source
 value added services at source
 quality control
 rolling production scheduling
 delivery against bill of materials (BOM)
 flow consolidation of all goods from a single source (plant or
warehouse).

Inbound to manufacturing: Operation and management of end-

to-end inbound materials flow from supplier collection points to
consumption points in manufacturers' production lines. DHL's
comprehensive inbound to manufacturing services include:

 network, transportation and facility design

 supplier management
 transport and freight management
 customs brokerage
 supplier parks
 inventory optimisation
 vendor managed inventory
 in plant logistics, including just in time and kanban replenishment of
raw materials/components to manufacturing

DHL implements sophisticated warehouse management and supply chain

event management systems to control just-in-time deliveries and allow
supply chain participants to exchange forecast requirements in real time.
Key to the solution is integrating manufacturers' forecasting, order
management, and supply chain execution processes with their component
and raw material suppliers.

Vendor Managed Inventory (VMI): A vendor managed inventory

program optimises supply chain performance by allowing the vendor to
assume responsibility for generating purchase orders to replenish its
manufacturing customer's inventory. Ownership of inventory only changes
when goods are 'consumed' by the manufacturer. Core to DHL's inbound
to manufacturing solution is our vendor managed inventory program,
where we act as an intermediary between manufacturers and inventory
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suppliers. This helps suppliers to reduce investment, inventory holding
and transportation costs and better synchronises demand and supply
thereby minimising, if not eliminating, inventory obsolescence.

Infrastructure Logistics: Management of the inbound materials

supply chain for construction and infrastructure projects

Procurement services: Integrated sourcing and supply chain

solutions that offer our customers substantial cost savings on a wide
range of non-core purchases.

Hospital/Health Services Procurement: DHL offers a range of

specialised procurement services for the hospitals and health services
sector. In 2006 we entered into a 10 year procurement and logistics
contract with the English National Health Service (NHS), under which we
are responsible for managing a total spend of £22 bn on behalf of the UK
Government's Department of Health. The project covers the procurement
and physical distribution of an initial 500,000 product types (SKUs)
including food, bed linen, office equipment, stationery, cleaning materials,
patient clothing, medical and surgical equipment (such as operating
theatre equipment and machinery), dressings and provisions.

In plant logistics: The movement within the manufacturing plant of

raw materials, components and sub-assemblies either to/from stocking
points or line side for turning into finished goods plus the movement of
finished product out to the factory gate. DHL's in plant logistics services
cover a range of activities undertaken within our customers' facilities and
property fence boundaries that integrate fully with their production
processes and external supply chains. Services include:

 storage and distribution

 line side feeding
 packing
 blending
 yard management
 container management
 returnable asset management (e.g. tote bins)
 sample packing and shipping
 transportation scheduling and dispatch.

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Contract manufacturing: A range of assembly and packing
services that combine to create a complete contract manufacturing
solution. DHL's contract manufacturing services are designed for
customers wishing to take logistics outsourcing to an advanced level.
They fall into two broad categories:

• food and beverage including blending, mixing and filling

• engineering/automotive assembly including sequencing, kitting and
sub-assembly.

These are combined with our core services of raw materials transport,
raw materials warehousing, co-packing and in-plant logistics as
required. By integrating manufacturing and packing operations within
their supply chains our customers gain:

• increased flexibility

• improved service levels

• reduced costs
• accelerated time-to-market
• increased asset utilisation
• cost-effective postponement and localisation services.

DHL believes that collaboration in planning and execution with

suppliers and logistics partners is the key to efficient supply chain
operations. For manufacturers this means streamlining and integrating
inbound supply chains. For component and sub-assembly suppliers it
means delivering more cost-effective and extended supply chains to
support manufacturing customers.

3. Warehousing/distribution:
Deconsolidation : Breaking down a large shipment, such as the
contents of air or ocean containers or road trailers, into smaller shipments
for onward delivery to customers or distribution centres, in an effort to
achieve economies and/or service enhancements. At DHL we handle
deconsolidation at conventional distribution centres and special
deconsolidation/transload facilities, generally located close to ports and
airports. Arriving containers are destuffed and the cargo recombined into
full trailer loads where possible for efficient onward distribution. Using a
deconsolidation centre has many advantages for our customers:

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 • reduced safety stocks/inventory in the supply chain
• improved inventory allocation based on up to date demand data and
forecasts
• shorter time to market
• enhanced customer service.

Significantly, by using a deconsolidation centre our customers do not have

to allocate goods to a particular destination warehouse or customer when
they leave the country of origin which increases flexibility and extends
their decision-making time.

DHL's deconsolidation services include:

 order verification
 unloading/unpacking/de stuffing
 palletisation
 reconfiguration (e.g. labelling and other pre-assembly /
postponement services)
 re-consolidation, marshalling, reloading and despatch
 product visibility and track-and-trace.

At DHL we provide consolidation services anywhere in the world for

increased flexibility and greater cost-effectiveness in international freight
shipments.

Finished goods warehousing: Dedicated and shared-user,

ambient and temperature-controlled warehousing of ready-for-sale
merchandise including order processing, inventory management, pre-
retailing and other added value services. Most finished goods warehouses
act as distribution centres, in which stock is split and recombined for
delivery to retail outlets, etc., in accordance with orders received. Our
sophisticated finished goods warehousing solutions offer customers:

 higher service levels

 improved inventory management and stock accuracy
 shorter lead times
 reduced inventory obsolescence
 increased productivity
 greater responsiveness to its strategic objectives
 fast and reliable start-ups
 flexibility to allow volumes to grow and fluctuate
 unrivalled IT and electronic business integration know-how
 the recruitment, training and motivation of workforces
 transfer of industry best practice from other sectors and regions.

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DHL also handle the design, implementation and operation of both
dedicated and shared-user sites including narrow-aisle, high-bay,
temperature controlled, automated, semi-automated, hanging garment,
bonded, rail-connected and mezzanine, as well as sector-specific and
conventional warehousing. Whether warehouses or distribution centres
are provided by us or managed on behalf of our customer, we aim to
ensure they are integrated into the wider supply chain, and that they
meet the most demanding service levels. Services include:

 warehouse/distribution centre design and consultancy

 shared-user and dedicated operations
 receipt and put-away
 bar coding, RFID tagging and labelling
 storage
 inventory management and optimisation
 picking (unit, case and pallet), packing and despatch
 ambient, chilled, frozen, deep-frozen and composite operations
 value-added services (e.g. labelling, and pick-and-pack)
 customs/bonded warehousing
 rail-connected warehousing
 automation and auto-sortation systems
 provision of IT solutions (e.g. WMS and interfacing)
 cross-docking
 returns processing
 recycling of packaging, end-of-life (EOL) products and waste
materials
 re-usable transit equipment management.

Dedicated Warehousing: Dedicated warehouses and distribution

centres are devoted to handling merchandise for a single customer. At
DHL we manage and operate dedicated local, national (NDC) and regional
distribution centres (RDC). RDCs may serve one area within a country or a
group of countries. A special example of the latter is the European
distribution centre (EDC) a mega warehouse holding all European stock for
a customer prior to distribution to the active countries. Such stock may be
held in generic form (i.e. as common product) for subsequent
customisation by DHL for particular local markets.

Shared-User Warehousing: DHL provide a network of shared-user

warehouses and distribution centres enabling our customers to hold
inventory at a local level more economically than possible with dedicated
operations. These facilities can receive product from both local and global
manufacturing sites and provide downstream distribution. DHL provide
shared user warehousing services for leading manufacturers and retailers
of medical supplies, consumer products, industrial equipment, chemicals,
technology and other products. Through sharing resources including
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space, overheads, labour and equipment our customers benefit from
synergies that can significantly reduce supply chain costs. Such solutions
are particularly suited to smaller businesses requiring distribution
operations without long-term lease or capital commitments, or larger
enterprises handling a new acquisition, product launch or seasonal
overflow.

Campus Solutions: DHL pioneered the campus model where shared-

user warehouses / distribution centres are strategically located close to
large concentrations of consumers. This approach offers regional
customers with similar distribution channels flexible logistics solutions,
designed to exploit synergies, minimise labour costs and increase asset
utilisation.

Finished goods distribution: National and regional distribution of

ready for sale merchandise, generally involving road or intermodal (road-
rail) transport and deliveries to retailers, wholesalers and other businesses
(e.g. food service companies), plus end-users (e.g. via home delivery). At
DHL our customer focused finished goods distribution solutions are built
from the following core services:

 supplier collections
 warehousing and inventory management
 line haul/trucking
 store delivery
 managed transport services
 reverse logistics
 track-and-trace/ visibility solutions
 cross-docking and merge-in-transit
 home delivery.

Network solution: At DHL we operate the world's largest express

and logistics network. We are the global market leader in international
express, overland transport, air and ocean freight forwarding and contract
logistics both for full container load (FCL) and less-than container load
(LCL) traffics. Our domestic and international transport services are
provided to and from any location in the world. Our modular networks
comprise warehouses and hubs, plus downstream links and offer merge in
transit, and delivery capabilities for cargoes of any type and dimension.
Services include:

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  dedicated facilities and transport
 shared-user facilities and transport
 inbound to manufacturing logistics (vendor managed
inventory or just-in-time)
 managed facilities and transport
 carrier management
 time defined services
 customs clearance
 value added services
 network consultancy
 electronics distribution networks (EDN)
 reverse logistics
 after sales logistics/service logistics (spare parts)
 lead logistics provider (LLP) integrated end to end or partial
solutions
 complete supply chain outsourcing, including transfer of staff
and distribution assets, financing, business optimisation and supply
chain integration.

DHL's solutions design team offers a wide portfolio of experience and

support from logistics network strategy, transport design, warehouse
design and simulation, through to operational improvement and inventory
analysis.

In- store logistics: Solutions that help retailers bring warehouse

management disciplines to bear on in store logistics operations improving
cost-efficiency and on shelf/rail availability.DHL seek to help our
customers:

 work with the 'upstream' supply chain to focus on store friendly

deliveries
 improve back room and shelf/rail replenishment processes
 raise productivity by applying warehouse management disciplines to
the store environment
 focus on the core issues at the store that contribute to stock outs
 maximise the use of high-cost store space for selling by using
remote backrooms/offsite consolidation centres where appropriate.

Offsite Consolidation Centres: At DHL we also design, manage

and operate remote backrooms/offsite consolidation centres for shopping
malls (including airport malls) and city centres, plus the retailers
operating within these environments. For such customers we seek to:

• reduce the number of vehicles accessing the delivery point, and cut
traffic congestion/environmental impact in the surrounding area

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 • increase sales through improving the range and availability of
merchandise - by providing fast replenishment from (cheaper)
offsite storage
• provide pre-retailing services offsite so merchandise is delivered
to store in a shelf/rail-ready format
• Enable store staff to focus on their core competencies i.e. serving
customers and selling rather than back-room activities.

4. Delivery and installation / aftermarket: At DHL we are

serious about delivering effective supply chain solutions and are
personally committed to fulfilling our customers' promises whether from
store, phone and/or internet-based retailing.DHL offer a delivery and
installation service that covers business equipment as well as home
delivery direct to consumers. We will even supply equipment and
materials to field engineers, along with taking responsibility for the
management of returns and repairs. For example, with the delivery and
installation of electronic equipment we will include configuration, on-site
commissioning, user training, equipment return, asset recovery and even
disposition.

Delivery and installation: At DHL we consider that the

management of all aspects of the supply chain is absolutely fundamental
in ensuring goods arrive on time and in excellent condition. However the
final delivery and installation is sometimes the most visible to the end
consumer. At DHL we offer a wealth of global and local experience in
managing the delivery and installation of products to the end consumer,
whether this is at home or on their business premises. Following the
delivery and installation of goods we also have a wide and varied
knowledge of the aftermarket in our key sectors too. We ensure that we
are able to meet the complex challenges our customers are facing, such
as demands for shorter lead times, visibility of parts in stock and in
motion, here are just a few examples of the types of services we offer:

Medical Device Distribution

Hospital Logistics
Distribution to Stores Management
Engineering Response
Home Delivery
Technical Distribution
Technical Services

Medical Device Distribution:

We provide 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.

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Hospital Logistics: Traditionally, hospitals are often challenged with
supply chain in efficiencies such as product duplication, overstocking,
wastage and obsolescence.
Our Hospital Logistics service re-engineers the supply chain between
hospitals and suppliers delivering improved management information and
inventory visibility to ensure effective control and planning.

Distribution to Stores Management: Our distribution to store

services are focused on helping retailers create efficient and flexible
supply chains to deliver products 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 to engineers,
builders and construction workers in the field.

Home Delivery: Our home delivery solutions are focused on helping

retailers service existing and new markets from catalogue, store, phone
and internet-based retailing. Our aim is to fulfil our customers promise to
their customers by providing a high quality and cost efficient home
delivery service. We have particular expertise in the home delivery of
furniture and appliances.

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 services meet the
challenges associated with the effective and safe movement of high-value
goods. They encompass end-to-end supply chain services for heavy,
fragile and sensitive equipment from order to point of use and subsequent
de-installation including:

• specialist final mile delivery

• on-site installation and configuration
• user training and instruction
• reverse logistics and waste disposal
• call centre and helpdesk management
• site surveys.

Technical Services: Technology manufacturers expect every link in

the supply chain to have capabilities to add value to their product or
process. This results in finished goods that are customised just before
they are shipped to the final address and returned goods that are
recovered/repaired just after collection from the end user.DHL offer our

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customers a range of solutions and capabilities to create tailor made
solutions that 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. The benefits to our customers include:

 capability to customise their products before delivery

 supply chain cost reduction combining multiple services of our
service portfolio
 high level of visibility through existing IT infrastructure moving
products faster to end-user from order fulfilment to final delivery
 consistent level of quality in all parts of the supply chain leverage
on the distribution costs in any part of the distribution chain.

Service logistics
Service logistics: overview:
Tailor-made supply chain solutions for the global
aftermarket: At DHL we offer tailor-made solutions based on proven,
pre-designed and standardised logistics modules for global, regional and
local service supply chains. Since 1996, DHL has built a worldwide
network and team of specialised resources to ensure that we provide the
all important global support to our customers. Our service logistics
experts can analyse your business and aftermarket strategies to evaluate
logistics options and their consequences to your key financial indicators:
adding value not cost.

The right service for the right product: No matter what

products you are selling, DHL supports all types of service: repair and
return, product exchanges, advanced replacements and on site repair. We
offer all types of service fulfilment levels, from economical scheduled
service to mission critical same-day deliveries with lead times as short as
one, two and four hours. At DHL, we aim to optimise your reverse supply
chain by providing screening, testing and even depot repairs. We can
proactively manage your aftermarket business through our integrated 24
hours a day, seven days a week Logistics Customer Service Centres. We
believe that our service parts logistics solutions combine the best practice
processes and systems, reliability, scalability and continuous
improvement initiatives ensuring that the value is clear:

We deliver the right part, at the right place, at the right time, and
at the right cost.

Service logistics: solution:

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Service Parts Logistics: At DHL we offer a global provision of
service parts to end customers and field engineers. Whether it be for
mission critical on-site intervention with shortest lead times or for
scheduled maintenance: we will manage the end to end service parts
supply chain 24 hours a day, seven days-a-week ensuring that your assets
are efficiently employed.

Exchange Logistics: At DHL we will manage product exchanges at a

central depot, through swapping items at point of sale or through time
critical advanced replacements on site. We manage the substitution of
defective products as a whole, including updating, upgrading and
configuration of products prior to dispatch.

Return Logistics: DHL also offers a wealth of experience in managing

the return of goods, from basic return for repair fulfilment using efficient
low cost resources to express repair programmes all with a transition time
of three to five working days. We provide a full suite of solutions
optimised to meet budgetary and service level requirements. NDF testing
and depot repair services can also be provided.

Reserve logistics: At DHL our reverse logistics solutions help our

customers to plan, implement and control the flow of materials and
manage related information, back up the supply chain to recapture values
and ensure the safe repair, recycle and/or disposal of goods. Items include
the recovery of obsolete or non-operational white goods such as
refrigerators, plus the removal of old furniture upon the 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.

Time-critical services: Our range of time critical delivery services

ensures rapid product movement. Our customers benefit from our flexible
approach to the changing requirements of 'move' sensitive or valuable
goods and documents quickly. Standard overnight air services are
supported by same day air services for time-critical business documents
and other goods.

Environmental compliance: All companies are increasingly

compelled to reduce their environmental impacts, driven by a
combination of customer and shareholder pressure, burgeoning legislation
and competitive pressure. At DHL we are engaged in a wide range of
projects in this area. We can help you to ensure that your compliance is
within the complex rules and regulations and, where appropriate, we can
improve your supply chain with a range of cost-effective and innovative

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environmental services. Our experts are able to review any aspect of your
supply chain to identify the priorities from legislative compliance (WEEE,
packaging, batteries etc.) and the use of less environmentally damaging
logistics, to an environmental redesign of the supply chain with the
objective of achieving carbon neutral status.

Our WEEE and RoHS compliance services have been designed for
brand owners, importers and retailers of electrical and electronic
equipment. These services aim to ensure our customers are compliant
with the current and impending requirements of the EU directives
on Waste Electrical and Electronic Equipment (WEEE) and on the
Restriction on the use of certain Hazardous Substances in new
electrical and electronic equipment (RoHS).Our WEEE services not
only help collect and recycle end of life products on behalf of our
customers but also help with registration, weight data collection and
auditing, obligation calculation and regulatory reporting. DHL's RoHS
services help businesses ensure that products placed on the European
market comply with the material restrictions and reporting obligations.
Our Packaging Compliance Services help businesses ensure
compliance with the Packaging Waste and Essential Requirements
Regulations. In various countries we can examine your supply chain,
business, products or processes to ensure that your business is compliant
with the legislation, provide assistance with packaging data collection,
auditing and reporting, and seek to identify savings in compliance costs
through packaging optimisation and process redesign.

Our approach to environmental compliance has enabled us to

provide a range of innovative products and services to help businesses
fulfil their environmental obligations arising from the increasing raft of
Producer Responsibility Legislation. As well as being a standalone service,
environmental compliance is part of DHL's continued commitment to
provide value added services to its global customer base. Our view of the
aftermarket for logistics is that it is the end to end management of service
and replacement of all parts. For DHL this encompasses the international,
regional and domestic collection and distribution of parts, the
management of distribution centres and the provision of inventory
services to balance investment and service targets across the entire
supply chain.

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