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Logistics is concerned with getting the products and services where they are needed when
they are desired. It is difficult to accomplish any marketing or manufacturing without
logistical support. It involves the integration of information, transportation, inventory,
warehousing, material handling, and packaging.

The operating responsibility of logistics is the geographical repositioning of raw materials,
work in process, and finished inventories where required at the lowest cost possible

The formal definition of the word „logistics‟ is: - it is the process of planning,
implementing and controlling the efficient, effective flow and storage of goods,
services and related information from the point of origin to the point of consumption
for the purpose of conforming to customer requirements.

In order to understand the concepts of logistics in terms of practical usage and to glimpse
into the how a real company or organization uses logistics as a formidable tool to gain
customer satisfaction, reduce overall cost and increase efficiency we selected “DHL” the
worlds leading courier service company. But DHL is multi faceted and offers myriad types
of services.

History and background of DHL

DHL are the first letters of the last names of the three company founders, Adrian Dalsey,
Larry Hillblom and Robert Lynn.

In 1969, just months after the world had marveled at Neil Armstrong's first steps on the
moon, the three partners took another small step that would have a profound impact on the
way the world does business.

The founders began to personally ship papers by airplane from San Francisco to Honolulu,
beginning customs clearance of the ship's cargo before the actual arrival of the ship and
dramatically reducing waiting time in the harbour. Customers stood to save a fortune.

With this concept, a new industry was born: international air express, the rapid delivery of
documents and shipments by airplane.

The DHL Network continued to grow at an incredible pace. The company expanded
westward from Hawaii into the Far East and Pacific Rim, then the Middle East, Africa and
Europe. By 1988, DHL was already present in 170 countries and had 16,000 employees.

At the beginning of 2002, Deutsche Post World Net became the major shareholder in DHL.
By the end of 2002, DHL was 100% owned by Deutsche Post World Net.In 2003, Deutsche
Post World Net consolidated all of its express and logistics activities into one single brand,

The world's largest express and logistics Network

DHL is the global market leader in international express, overland transport and air freight.
It is also the world's number 1 in ocean freight and contract logistics. DHL offers a full
range of customised solutions - from express document shipping to supply chain

Below are the global facts and figures that show you the scale of the world's largest
express and logistics network.

Global Facts and Figures
Number of Employees: around 285,000
Number of Offices: around 6,500
Number of Hubs, Warehouses & Terminals: more than 450
Number of Gateways: 240
Number of Aircraft*: 420
Number of Vehicles: 76,200
Number of Countries & Territories: more than 220
Shipments per Year: more than 1.5 billion
Destinations Covered: 120,000

The reason for the success of DHL is due to its very effective and efficient way of carrying
out the process of project management. The basic steps in it are as follows:
Project Management
DHL manages projects according to a six-step process:
 Initiation: The formal start of the project
 Design: The formal agreement on how to approach the project and its deliverables
 Planning: Following agreement, a detailed plan is created
 Execution: After detailed planning and preparation, the project goes 'live'
 Closing: Gradually phase out and prepare for handover of the deliverables
 Handover: The formal end of the project

For DHL:

DHL is completely service oriented therefore it does not have its own material movement
but that of the customers both the sender, the receiver and also the intermediateries.
That means it only involves physical distribution and procurement. Procurement also
includes the material needed for packaging such as paper, moulded trays and boxes,
wooden crates, standard containers wraps, plastic inlays etc. The materials or the goods
collected from the senders (including papers, documents, physical goods like clothing,
household good, chemicals, exotic animals etc) are weighed, checked for condition, and
depending upon its various characteristics it is packed. The goods are then dispatched to
their destinations. There is no value addition to the material itself but it is done to the
service which is provided ( eg if there has to be a certain package delivered from India to
UK the normal services would take about 2 days whereas as a super fast delivery would be
done in about 9 hours)

Information flow

Information flow identifies specific locations within a logistical system that have
requirements. Information also integrates the three operating areas. The primary objective
of developing and specifying requirements is to plan and execute integrated logistical

Logistical information involves two major types of flows:
1. Coordination flows
2. Operation flows

1. Planning and coordination flows
Coordination is the backbone of the overall information system.

 Strategic objectives:

Strategic objectives detail the nature and location of customers, which are matched to
the required products and services to be performed.
It implies estimating the time requires for collecting the goods from the door step of the
sender and then estimating the time for the goods to reach the final customer.
 Forecasting

Forecasting utilizes historical data, current activity levels, and planning assumptions to
predict future activity levels. Logistical forecasting is generally concerned with relatively
short –term predictions.
The overall purpose of information planning/coordination flow is to integrate specific
activities within a firm and to facilitate overall integrated performance.

DHL‟s whole business is dependent on the vital point of timely delivery. Based on
the distance to the final receiver, the accessibility, the documentations and procedures
that need to be handled etc they have fine tuned the process of delivery. They can
accurately gauge how much time it will take for the goods to reach its end destination.

2. Operational flows
The second aspect of information requirements is concerned with directing operations
to receive, process, and ship inventory as required supporting customer and
purchasing orders. Operational requirements deal with
 Order management
 Order processing
 Distribution operations
 Inventory management
 Transportation and shipping
 Procurement

For DHL:

DHL owns its success for the efficiency with which the operations are carried out. Here not
only the company but the sender and sometimes the receiver can track the goods through
their information center. They are given a certain password which they can use to trace via
online or their customer service helpline.
Supply Chain Management

Definition for supply chain management
“Supply chain management is the management of upstream and downstream relationships
with suppliers and customers to deliver superior customer value at less cost to the supply
chain as a whole.”
The supply chain is the network of organizations that are involved through upstream and
downstream linkages, in the different processes and activities that produce value in the
form of products and services in the hands of ultimate consumer.
For DHL:
Supply Chain Optimisation
Good design is at the heart of an effective supply chain solution. DHL has developed a
reputation for consistently developing innovative solutions that streamline operations and
improve control. Their in-house teams have contributed to the solutions design of some of
the world's leading brands and enabled to win key contacts.

DHL solutions design team offers a wide portfolio of expertise and services, from logistics
network strategy, transport design, warehouse design and simulation, through to
operational improvement and inventory analysis.

International Supply Chain
Extended Supply Chain Services
Implementation Services
Outsourcing Projects

International Supply Chain

DHL‟s international supply chain management solutions are focused on helping customers
take increased control of international inbound supply chain to maximise the value of
international and global sourcing.

DHL helps customers :
 Give visibility of the upstream supply chain, and enable earlier decision making
 Create a more agile supply chain, better able to respond to changes in consumer
 Reduce lead times, inventories, and associated storage costs

Customer-focused solutions are built up from the following core services:
 Origin management, including: vendor management; supplier collections; customs
brokerage; consolidation services and value-added services
 Global forwarding, including: air/ocean/road/rail freight forwarding and management;
European managed transport
 Destination management, including: port and demurrage management; customs
brokerage; de-consolidation and pre-retail services; port to distribution centre
transportation; direct store delivery (US only)
 Supply chain visibility and management, including: purchase order management; RFID
product tracking; exception management; planning and forecasting; inventory
 Global forwarding services are provided across all major routes.
Logistical services that are offered.
Reverse Logistics
Service Logistics
Inbound to Manufacturing
Medical Device Distribution
Distribution to Stores Management
Engineering Response

Service logistics

Service and replacement parts

DHL‟s service and replacement parts service involves the management of manufacturers'
replacement parts delivered to and from customers according to pre-defined service levels
or warranty agreements on a one-, two-, four- or eight-hour and next-day basis, 24 hours a
day, seven days a week.

DHL works closely with customers to overcome common issues such as:
 Poor parts availability
 High inventory investment
 Long lead times, accentuated by global sourcing
 High levels of customer returns
 Poor visibility, reporting and control
 Cost control of the demand chain

Key services include:
 International freight forwarding
 Domestic and regional inbound deliveries
 Inventory planning, forecasting, procurement and analysis
 Distribution centre operations
 Outbound delivery
The entire process is underpinned by a web-enabled electronic order processing and order
monitoring tool.

Inbound to Manufacturing

Inbound to manufacturing is the complete end-to-end logistics management of inventories,
facilities and labour associated with the inbound flow of materials from vendors and
supplier origins to consumption points in manufacturers production lines.

The service encompasses:
 Network, transportation and facility design
 Inventory optimisation
 Supplier management
 Transportation management
 In-plant services

Key to the service is integrating manufacturers' forecasting, order management and supply
chain execution processes with their component suppliers. DHL implements warehouse
management and supply chain event management systems to manage just-in-time
deliveries and allow supply chain participants to exchange forecast requirements in real

Value is created for manufacturers and component suppliers throughout the world by:
 Enabling a robust and cost-effective supply chain
 Providing the necessary visibility so that the location of all components within the
supply chain is known to all supply chain participants
 Reduce inventory and investment costs
 Improve delivery times
 Co-ordinate multiple components more efficiently
Medical Device Distribution

DHL country-based warehouses for a number of manufacturers to service a local
customer base. This includes the receipt of product from local or global manufacturing sites
and downstream distribution to hospitals.

Distribution to stores management

DHL distribution to store services are focused on helping retailers create efficient
and flexible supply chains to deliver product to retail outlets at high levels of service.
These solutions are built from several core services: reverse logistics collections; sortation;
processing; repair/refurbishment; value recovery; disposal and compliance.

Engineering Response

Through our Engineering Response services, we manage the materials supply chain from
works planning and inbound goods through to on-site works, delivering stock out to
engineers, builders and construction workers in the field.

Consolidated Billing Services
The creation of a consolidated and categorized invoice, based on all services
performed in a specific time-period by more than one service provider, made available
in an agreed format.

Freight & Customs Solutions
DHL's many years of experience with international trade requirements and formalities,
combined with the European Competence Centre and country expertise, gives
customers the leading edge in service, quality and management in cross border

Implementation Services

Implementation and Project Management
Implementation starts by defining project aims, setting the targets and describing the
deliverables in detail. The major topics in implementation include business processes,
engineering, real estate, IT systems, migration, HR, finance and legal considerations.
Quality Management
Total Quality Management is a management strategy that integrates quality orientation
into the whole structure and workflow of a company by using methods and techniques
of quality management
Corporate Policy for Quality, Environment, Health and Safety (QEHS) is based on
five corporate values:
 Customer satisfaction: Providing our customers and their customers with
excellent, high value logistics solutions
 Employee motivation: Building on the know-how and stimulation of individual
potential in multi-cultural teams
 Operational excellence: Continuous improvement of processes and services to
fulfil or exceed expectations
 Corporate citizenship: Acting as a responsible corporate citizen in all countries
 Shareholder reward: Developing a sustainable business to provide increasing
shareholder value

Globally, DHL management systems are certified according to the international
standard for quality management systems ISO 9000 in almost every operating unit.

Performance Management :

Performance management is a key part of the supply chain. Measured elements are
reviewed as a system, as each component interacts with all the other parts around it.
Performance measuring not only records historical performance but also provides early
indication of any service slippage. In this second role, the measures provide a valuable
contribution to DHL's Continuous Improvement Programme.

Outsourcing Projects

Outsourcing involves DHL taking over and managing previous in-house logistics
operations, including:
 Distribution centres
 Transport operations
 Back-office functions
 Supply chain management functions
 After sales services
Innovative Supply Chain Development
Supply Chain Management services are delivered across industry sectors and provide
expertise, knowledge and resources in terms of personnel and supply chain tools. All
services are targeted at optimising logistical operations in both process and strategy, and
are aligned to the client's commercial expectations.
The services are as follows:
 Strategic Logistics Consulting
 Lead Logistics Provider
 Consulting and providing Transport optimisation: Route-Pro and Trans-Pro
 Consulting and providing Supply Chain Design
 Consulting and providing Transportation
 Engineering, optimisation and re-engineering
 Implementation and Project Management
 Process Management
 Outsourcing

DHL‟s consulting services also offer re-organisation of customer facilities, project
management for customers, implementation of new IT Systems, creation of tender
documents and tender processing.
Supply Chain Re-engineering
DHL works with customers to review supply chain efficiencies. One of the main tasks is
to evaluate cost efficiency to ensure that costs are being driven down throughout the
contract duration. Data analysis allows DHL to provide customers with 'what if
modeling' or the impact of changing the business rules.
After Sales Optimisation
Optimising return logistics and spare parts logistics as well as maintenance and repair
Vehicle Management Services
Our vehicle management services focus on the management of sales and marketing
support programmes for automotive manufacturers. Combining a range of services and
systems to deliver a global response, we help you overcome challenges at the end of
the automotive supply chain.

Distribution to Stores Management

DHL‟s distribution to store solutions are focused on helping retailers create efficient and
flexible supply chains to deliver product to retail outlets at high levels of service.

These solutions are built from several core services including reverse logistics:
 logistics network strategy
 warehouse design and simulation
 transport modelling.

After Sales Optimisation
Optimising return logistics and spare parts logistics as well as maintenance and repair
Vehicle Management Services
Our vehicle management services focus on the management of sales and marketing
support programmes for automotive manufacturers. Combining a range of services and
systems to deliver a global response, we help you overcome challenges at the end of
the automotive supply chain.

Distribution to Stores Management

DHL‟s distribution to store solutions are focused on helping retailers create efficient and
flexible supply chains to deliver product to retail outlets at high levels of service.

These solutions are built from several core services including reverse logistics:
 logistics network strategy
 warehouse design and simulation
 transport modelling.

Transport Functionality
Transportation is one of the most visible elements of logistics operations. Transportation
provides 2 major functions: product movement & product storage.

Product Movement

Whether the product is in the form of materials, components, assemblies, work-in-process,
or finished goods, transportation is necessary to move it to the next stage of the
manufacturing process or physically closer to the ultimate consumer. A primary
transportation function of product movement is moving up and down the value chain. Since
transportation utilizes temporal, financial, and environmental resources, it is important
that items be moved only when it truly enhances the product value.

Transportation involves the use of temporal resources because product is inaccessible
during the transportation process. Such product, commonly referred to as in-transit
inventory, is becoming a significant consideration as a variety of supply chain strategies
such as just – in – time and quick response practices reduce manufacturing and
distribution center inventories.

Transportation uses financial resources because internal expenditures are necessary for
private fleets or external expenditures are required for commercial or public transportation.

Transportation uses environment resources both directly and indirectly.

In direct terms, it is one of the largest consumers of energy (fuel and oil) in the
domestic United States economy. In fact, it accounts for close to 67% of all domestic oil

Indirectly, transportation creates environmental expense through congestion, air
pollution and noise pollution.

The major objective is to move product from an origin location to a prescribed destination
while minimizing temporal, financial and environmental resource costs. Loss and damage
expenses must also be minimized. At the same time the movement must take place in
such a manner that meets customer demands regarding delivery performance and
shipment information availability.

Transport Infrastructure

Transportation infrastructure consists of the rights-of-ways, vehicles, and carrier
organizations that offer transportation services on a for-hire or internal basis. The nature of
the infrastructure also determines a variety of legal and economic characteristics for each
mode or multimodal system. A mode identifies the basic transportation method or form.

Since olden times, railroads have handled the largest number of ton-miles. As a result
of the early establishment of a comprehensive rail network connecting almost all the
cities and towns, railways dominated the intercity freight tonnage till World War II and in
some cases of Europe, Asia and Africa they even connected the countries. This early
superiority enabled railways to transport large shipments very economically.

Highway transportation has increased rapidly since the end of World War II. This is
because Motor carrier industry results from door-to-door operating flexibility and speed
of intercity movement. They are even flexible because they can operate on each and
every kind of roadways.

In comparison to railroads, motor carriers have relatively small fixed investments in
terminal facilities and operate on publicly maintained highways. Although the cost of
license fees, user fees, and tolls are considerable, these expenses are directly related
to the number of over-the-road units and miles operated.

The variable cost per mile for motor carriers is high because a separate power unit and
driver are required for each trailer or combination of tandem trailers. Labor
requirements are also high because of driver safety restrictions and the need for
substantial dock labor. Motor carriers are best suited to handle small shipments moving
short distances.


It is the oldest mode of transportation. First it was the sailing vessels, which was
replaced by steamboats in early 1800‟s and by diesel power in the 1920‟s.

Domestic water transportation – involves the Great Lakes, canals, and navigable rivers.
In every country, fewer system miles exist for inland water than any other transportation
The main advantage of water transportation is the capacity to move extremely large
shipments. Water transport employs 2 types of vessels. Deep-water vessels, which are
generally designed for Ocean and Great Lakes use, & are restricted to deep-water
ports for access. In contrast, diesel-towed barges, which generally operate on rivers
and canals, have considerably more flexibility.

Water transport ranks between rail and motor carrier in the fixed cost aspect. Although
water carriers must develop and operate their own terminals, the right-of-way is
developed and maintained by the government and results in moderate fixed costs as
compared to railways and highways.

The main disadvantage of water transport is the limited range of operation and speed.
Unless the origin and destination are adjacent, supplement haul by rail or truck is
required. The capability to carry very high cargo at an extremely low variable cost
places this mode of transport in demand when low freight rates are desired and speed
of transit is a secondary consideration.

Air transport is the newest and the least utilized mode of transport. Its major advantage
being its speed, which is accompanied by high costs. A coast-to-coast shipment via air
requires only a few hours contrast to days taken by other mean of transportation. The
high cost of transport can be traded off for high speed, which allows other elements of
logistical design, such as warehousing, inventory to be reduced or eliminated. But still
air transport remains more of a potential opportunity than a reality because it is very
much under utilized.

The high cost of jet aircraft, coupled with erratic nature of freight demand, has limited
the assignment of dedicated planes to all-freight operations. However premium carriers
provide planes dedicated for freight operations. This premium service started off with
documents and has moved onto large parcels, which is an ideal service for firms with a
large number of high-value products and time-sensitive service requirements.
DHL uses all the modes of transportations that is
rail freight
DHL has its own fleet of airplanes and motor vans. Depending upon the final destination
where the goods have to finally reach and the type of package the customer has paid for,
DHL uses the individual modes of transport or a combination of either of these or all. Once
again the geographical location and how fast the goods have to be delivered are the
factors for the final selection of modes of transportation .
The concept of economies of scale and economies of distance are both taken into
consideration in case of larger consignments where DHL provides an appropriate logistical
solution which helps in reducing the overall cost for the customers.
Inventory Management and Warehousing.

Warehouse Infrastructure Networks
Warehouse Management Solutions
Inventory Optimisation
Special Warehouse Solutions
Outsourcing Projects

Warehouse Infrastructure Networks
DHL warehouse service supports inbound logistics, distribution and aftermarket services in
a way that improves inventory management, reduces total operating costs and improves
cycle times.
DHL facilities offer our customers warehousing that is fully integrated into the wider supply
chain and meets demanding service levels. This encompasses the design implementation
and operation for both dedicated and multi user sites.
Benefits include improvements in:
 Customer service levels
 Stock accuracy
 Lead times
 Redundant stock costs
 Productivity responsiveness to a company's strategic needs
Multi User Centres
We provide a network of multi-user warehouses, enabling manufacturers to hold inventory
at local level, whilst avoiding expensive, dedicated storage solutions. These facilities can
receive products from both local and global manufacturing sites, providing downstream
Strategic Part Centres (SPC)
Our Strategic Part Centers (SPCs) are in-country facilities offering:
 1, 2 and 4 hour order fulfillment
 stock optimisation across the complete network of SPCs
 guaranteed performance against agreed business rules
Express Logistics Centres (ELC)
Our Express Logistics Centres (ELCs) are regional centralised facilities offering:
 order processing
 outsourced repair facilities
 custom final assembly
 kitting services

Technical Services
Technology manufacturers expect every link in the supply chain to have capabilities to add
value to their product or process. Our tailor-made solutions can be integrated into existing
customer operations at our warehouses. The strength is the integrated approach with other
segments of the business which improves time-to-market and reduces the cost for the

Value Added Services

Co packing
Product assembly
Other value added services
We offer a comprehensive selection of manufacturing and packaging services through
Power Packaging a DHL Company.
By integrating manufacturing and packaging operations within their supply chains, our
customers can:
 Add flexibility
 Improve service levels
 Reduce costs
 Accelerate time to mark
 Increase asset utilisation

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

Dry foods manufacturing:
Blending and production of complex, multi-component products

Carton, pouch and canister filling in the following types of containers
 Rigid containers (composite and plastic canisters, metal cans, glass or plastic jars)
 Flexible containers (form fill and seal pouches, cartons, slim-sticks and
standup/recloseable pouches)

Beverage manufacturing:

Blending, mixing and filling of hot and cold fill beverages and concentrates in the following
types of containers:
 Plastic bottles (PET) and glass containers (10 oz up to 128 oz)
 Shelf-stable containers (paperboard, plastic cup and bag-in-a-box)

Dedicated facility services:

Turnkey manufacturing solutions including:
 Site selection/development
 Facility and systems design
 New facility start-up and operation.
Other services:
 Packaging and raw material sourcing, procurement and assembly
 Batch/quality control tracking via digital easy-to-trace coding system
 Full range of secondary packaging services
Product Assembly
Postponement, quick response and mass customisation are breakthrough business
strategies enabled via packaging services. Integrating packaging operations into
distribution centres streamlines fulfillment reducing cost, enhancing product visibility
and control, and improving speed-to-market and flexibility in the supply chain.

Packaging services include:
 Postponement packaging - primary, secondary and specialty components
 Co-packing, kitting, assembly and repackaging
 Retail-ready, point-of-purchase displays
 Lot control via variable digital and laser printing
 Machinery system engineering - labelling, bagging, carton filling, club store packs,
clamshells and printed and unprinted film over-wraps
 Make-to-order pallets
 Product rework/redress
Other Value Added Services

Kitting is the addition of items such as accessories and batteries to the product pack. Pre-
assembling is completion of a finished product from component parts or pre-programming
of products.


Sequencing is the consolidation, pre-assembly and sequencing of material flows. Line
feeding covers the delivery of assembled components to a production line.


Repacking for a specific customer can include repalletisation. Reworking is the
modification of products to suit a local market.


Packaging includes packing of products into suitable media for transportation and retail
display. Bundling is the assembly of a number of pre-packaged products to make up an
integrated product offering.

QA Control

Quality control ensures that product is received into and dispatched from the warehouse in
a suitable condition, free from faults and defects.


The application of labels either to the product or to the packaging. Merchandising can
include the addition of price stickers or promotional items ready for retail display.

External Performance Measurement

While internal measures are important for detailed organizational monitoring, external
performance measures are also necessary to monitor, understand and maintain a focused
customer perspective and to gain innovative insights from other industries. The topics of
customer perception measurement and best practice benchmarking, which address these
requirements, are discussed and illustrated below.
Logistics is one the most important and integral part of any organisations strategy
and function. When the logistical process is carried out accurately then not only the
company reduces the production cost but also improves the efficiency and customer
satisfaction. Overall logistics management is very important for today‟s highly competitive
and cut- throat corporate world.

DHL has the worlds largest express and logistics Network. Over the past decades it
had turned delivering goods into a finely oiled process. Be it a book, pen, WIP material,
drugs, hazardous chemicals, clothes, documents, wild animals and any other thing under
the sun DHL delivers it . With a network spanning 200 countries and with its private fleet of
airplanes, mobile vans, cargo ship carriers & even rail way automotives in some countries
DHL can handle any type of goods. Not only that with international network there comes
the hassle of documentation and paperwork, standard packaging and other formalities to
adhere to. But DHL has its own department which looks into the international laws and
other formalities. In the end what maters is delivering good in good condition at the door
step of the customer. A happy and satisfied customer makes the business grow.
Competitors have come and gone but DHL has been able to keep its No 1 position intact.
This is because of its dynamic nature and attitude of maintaining good customer relations.
Logistics management is important for every organisation but more so DHL.

We have tried to incorporate all the facets of logistics which propel DHL to be the
best delievery and carriage-service around the world. No wonder that DHL is head and
shoulders above all of its competitors!