Operations and Logistics Management of a DHL Company - Case Study Example

Operations and Logistics Management: DHL Company The success of a business entity depends on an interplay of internal and external factors. Internalfactors take into account people skills, company’s resources, systems and processes needed to efficiently operate and manage the business. External factors are inherent in the firm’s environment which directly or indirectly affects its operations. In this current time of financial crisis, there have been several business organizations that had no other recourse except to announce bankruptcy. As a repercussion, innumerable workers have been without jobs and left with no sources of income. However, there are noteworthy organizations that were able to survive the economic glitch which affected global organizations in vast areas of the world. One of the organizations that survived despite challenges and difficulties is DHL. DHL is considered a multinational organization focused on express shipping services. It has already expanded its operations to 220 countries worldwide. The number of people employed by DHL has been reported to total approximately 22,000 people and the organization has the capacity to deliver about 1.2 million packages in one day (Scott 2007). In this regard, this essay is written to proffer how the operations management department of a DHL Company will control the use of logistics and quality within the supply chains of that company. Likewise, the discourse would critically analyze the role of the operations management department of DHL Company, in the control and measurement of these two elements of the supply chain. Company Background The history of DHL can be traced to the founder, Adrian Dalsey, Larry Hillblom and Robert Lynn. The combination of the first letters of these founders’ last names, DHL formed what is now to become a legend in express shipping (DHL, 2010). It was a milestone when the Dalsey, Hillblom and Lynn innovatively thought of shipping documents with airplane as the means of transportation from San Francisco to Honolulu, reducing time spent in waiting. The concept of express delivery of documents thereby begun. For the first 20 years of operations, DHL was able to reach extensive destinations in Asia, Middle East, Europe and Africa. At present, due to the demands of its global operations, DHL already has in its employ approximately 300,000 personnel worldwide. Considering brand association and retention, customers all over the world acknowledge DHL as the leader in its field of endeavor. Its four divisions assist in the delivery of documents, to assisting in supply chain management, freight services, and logistics services. Definitions of the Supply Chain, Logistics and Quality at DHL Company Investor Word (2010) defines supply chain as the “network of retailers, distributors, transporters, storage facilities and suppliers that participate in the sale, delivery and production of a particular product”. Logistics, on the other hand, is the “management of business operations, such as the acquisition, storage, transportation and delivery of goods along the supply chain” (Investor Word, 2010). At DHL Company’s Supply Chain Management Division provide a variety of services With the following distinct elements: planning, sourcing, making or producing, storing and customizing, delivering and returning when not needed. Logistics being the management of business operations ensures that all products and services designed by the company conform to the highest quality standards expected by the customers. Accordingly, DHL creates unique solutions which cater to the customers’ needs and requirements. Solutions are designed and created by DHL’s design team from the customer’s clearly and explicitly stated objectives. Finally, the company ensures that the customers get what they truly ask for through their quality assurance team. According to their official website, “quality, in logistics, is about having no errors in shipments, low product damage, on-time orders, high productivity, excellent alignment with customer requirements, and full regulatory compliance. With DHL, its also about finding ways to constantly move the bar higher” (DHL: Quality Assurance, 2010). Interviews with various customers of DHL have attested that the company adheres to its promise of reliability and good service. Our group interviewed a total of 30 customers from diverse locations patronizing different DHL branches. According to 75% of them, there was never a single case of late delivery by DHL. They have a company policy that in cases of late deliveries, the customers are reimbursed in full and the package is shipped for free. However, for the 25%, there were cases where the customers had been expecting the delivery to come on specified days and the package never arrived. According to one lady, the package was forwarded to a third party courier without proper and prior advice. When asked how come the package was not delivered, the response from their staff was that the customer refused the shipment (which was impossible because the package’s content is critical and important as it is expected to be delivered on the date specified). Role of Operations Management Operations management at DHL ensures that all elements in the supply chain are flow continuously from one channel to the other and are being undertaken according to standards set by the International Organization of Standardization (DHL: Quality Assurance, 2010). The company set up a customer resource area which serves as a feedback mechanism to determine any deviation of any elements in the chain of supply from the defined standards of operations. The strategy of DHL Company is to enforce brand association and retention with customers all over the world acknowledging DHL as the leader in worldwide international express shipping and other freight forwarding services. The locations of its branches and offices are strategic in terms of identifying target markets in commercial and business areas. Operations management has the critical role of identifying and managing corporate resources in terms of strengths and weaknesses. In addition, the external environment is regularly scanned for opportunities and eminent threats that need to be immediately addressed (Koontz 2006). To enable this multinational company to keep tract of environmental factors affecting all its operations and branches, it recently opened a research and development center to serve as a venue for meetings and present innovations in the services they offer (DHL Global 2010). Finally, since a business’ environment is ever changing, continuous monitoring is necessary to ensure that operations proceed as originally planned. Most organizations, DHL included, engage in environmental scanning to determine the specific factors that are most likely to change in the firms’ immediate future. During this activity, a SWOT analysis is being conducted and implemented on a regular basis, among other strategic modes of analyses (PEST, Portal’s five forces). A collaborative effort of various departments assists operations management in the control and measurement of both logistics and quality at DHL. Conclusion The management of the supply chain, logistics and quality is a process of strategic decision that must be concerned principally with continuous surveillance of the environment and determining if the internal capability of the firm is congruent with the external factors of change that affect its operations. It is of utmost importance to consider initially that product design and delivery of services satisfy customers’ needs. The success of a firm in terms of product design and delivery depends not so much on its ability to reduce the environmental impact affecting these activities, but more so, on its ability to utilize the changes in their environment to their strategic advantage. Through time, DHL has been known to be committed to satisfying the needs of their clientele and to focus on protecting the environment. The company still adheres to its vision that “customers trust DHL as the preferred global express and logistics partner, leading the industry in terms of quality, profitability and market share” (DHL Vision, Mission and Values). Their success is highly attributable to offering services which are of high quality, ensuring customer satisfaction, continuously scanning their environment, and retaining the most qualified and competent league of employees who are dedicated to making DHL the leader in express services, supply chain and logistics market. Reference List DHL Global. 2010. Innovation Center. Available at: http://www.dhl.com/publish/g0/en/information/excellence/innovation_center.high.html. [Accessed 15 July 2010]. DHL. 2010. Quality Assurance. Available at: http://www.dhl.com/en/logistics/supply_chain_solutions/how_we_work/quality_assurance.html [Accessed 15 July 2010]. DHL. 2010. Vision, Mission and Values. Available at: http://www.dhl.com/publish/etc/medialib/g0/downloads/general.Par.0028.File.tmp/vision.pdf. [Accessed 15 July 2010]. Investor Word. 2010. Definitions of Logistics and Supply Chain. Available at: http://www.investorwords.com/2874/logistics.html and http://www.investorwords.com/4823/supply_chain.html. [Accessed 15 July 2010]. Koontz, C. (2006). Environmental Scanning: Discover What is Happening Outside of the Library Doors. World Library and Information Congress. Seoul, Korea. Available at: http://www.ifla.org/IV/ifla72/papers/133-Koontz-en.pdf. [Accessed 15 July 2010]. Scott, M. 2007. Brand Builder. Smart Business: The Management Journal for Corporate Growth. Available at: http://www.dhl-usa.com/company/pdf/SmartBusinessHicklerStory.pdf. [Accessed 14 July 2010]. Read More