DHL-GLOBAL FORWARDING : CONSOLIDATION

PROGRAM – Case Study

• Submitted by:
• Abhinav Chaubey
• Dhananjay Das
• Kovalan Rajagopal
• Rajesh Kumar Murugesan
• Sruthi NSP
• PGCSCM – Batch 1 – Sec – A, Group - 2
 Challenges And Options Available
Challenges
Stagnant Revenue from last three
years (2013, 2014 & 2015)
Reduction in operating profit from 450
millions Euro in 2013, then 250 millions
Euro in 2014 & further reduced to 200
millions Euro in 2015.
Increase in revenue & operating
profit.
Options Available
• Improving operating profit by
properly utilizing the
combination of road & air
transport by reducing the cost.
• Optimization of cost reduction
will come by dispatching once a
week or twice a week or thrice a
week.
 Options of reducing the cost
Weekly Transportation Cost • Study 1 – Daily dispatch of consignment
will have increase in transportation cost by
2%.
• Study 2 – Dispatches thrice a week
consignment by lowest airline and also
utilizing road transport shows reduction in
Series2
Series1
transport cost by 1%.
• Study 3 - Dispatches twice a week
consignment by lowest airline and also
utilizing road transport shows reduction in
Series2
Current Practise Study 1
2%
Study 2
-1%
Study 3
-2%
transport cost by 2%.
Series1 4196000 4294200 4148400 4092600
Different Studies

• DGL has planned to ship the consignment on all 6 days of the week, using low cost
airlines and also using road transport to connect the low cost airline. from the nearest
airport. This increases the cost by 2%.
• DGL has planned to ship the consignment as per their initial dispatch plan of Tuesday,
Thursday & Saturday using low cost airlines and also using road transport to connect the
low cost airline from the nearest airport. This will reduce the cost by 1%.
• DGL has planned to ship the consignment on the 2 days of the week where freight cost is
the lowest. These 2 days are Tuesday & Saturday using low cost airlines and also using
road transport to connect the low cost airline from the nearest airport. This will reduce
the cost by 2%.
Conclusion

• Ship the consignment on the 2 days of the week where freight cost is the
lowest. These 2 days are Tuesday & Saturday using low cost airlines and
also using road transport to connect the low cost airline from the nearest
airport.
• This model gives us cost reduction by 2%.
• Dispatching once a week is not a feasible option as it will cross the transit
time of 5 days.