2. DHL GLOBAL CUSTOMER LOGISTICS Sacha Van Hoever, Senior Logistics Consultant, DHL Global Customer Logistics Brussels, October 19, 2002
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4. The business environment is changing Globalisation Creation of virtual enterprises E-commerce One stop shopping Organisational Integration Time to market compression Customer Service Explosion Focus on core competencies PLC Reduction
7. DHL Global Customer Logistics Vision long term preferred partner of choice for the leading global companies “ To enable DHL to become the long term preferred partner of choice for global express distribution and express supply chain solutions for the leading global companies within DHL’s target industries”
8. Global Logistics Organization Structure Global Virtual Teams Global Logistics Global Partner Alliance Global Business Acquisition Support Global Pricing & Profitability Analysis Global Logistics Infrastructure Global Quality Global After Sales Program Management Logistics EMEA Logistics AP Logistics NA Partner Alliance Business Acquisition Support Pricing & Profitability Analysis Logistics Infrastructure Quality After Sales Program Management Geographical Logistics Organization Global “Virtual” Functional Team
10. DHL Global Logistics Vision DHL Global Logistics will be the Global Leader in (time-sensitive) parts distribution with real-time information technologies supporting consistent global offerings. DHL will develop integrated solutions targeted at high value, high impact goods.
11. DHL Global Logistics Our approach e.g. DPWN and Others ‘ Brain’ Consultative Services Call Center Management Consultancy Manage Partners IT Capability Customer Relationship Management Special reporting ‘ Muscle’ Physical Services Core transportation <250 kg Heavy Weights Def’d. services Door-to-Airport Airport-Airport Sameday NFO Domestic Warehousing Repairs IT systems Build expertise ourselves DHL How will DHL tap into the total SC market..? Use partners and joint bidding Build expertise ourselves
16. 3 Types of Logistics Service Offering Single DHL 3PL Solution Customer Division/ Account DP Bus. Unit Service Provider Single Managed 4PL Solution Customer Division/ Account 4PL Service Platform DPWN Bus. Unit DPWN Bus. Unit Partner DPWN 4PL service platform Partner Joint Bid Solution Customer Division/ Account DPWN Bus. Unit DPWN Bus. Unit DPWN Bus. Unit Partner CRM Management Tender coordination amongst members LSP expertise (CRM) Logistics Consultant Joint Bidding IT Capability
21. Do you leave money on the table? Excess service parts inventory Unnecessary scrap and obsolescence Poor coordination with suppliers, customers and other companies Penalties for missing service level agreements High service logistics costs Poor utilization of physical and people assest
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23. Revenue and Profit life cycle Service Finished Goods Time Profit Revenue $ Service Finished Goods Time Relationship
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25. The significance of Service Parts cannot be neglected ,,Spare parts represent $700 billion in spending and 8% of GDP in the United States alone’’ Piper Jaffray, U.S. Bancorp
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28. SL typical process description Call reception Diagnostic Job assignment Match field engineer & part Repair on site Return part Call closed Call management Field service operation Job acceptence by fieldservice Part request at warehouse Part delivery Return part received in repair center
29. Service Parts Supply Chain strategy Demand/Supply characteristics Plan & execute (lean) React & execute (agile) Hedge & deploy (hold inventory) Continuous replenishment Demand characteristics Predictable Unpredictable SERVICE PARTS LOGISTICS Supply characteristics: Service level agreement Long lead-time: +3 days Short lead-time: 2-4 hours 24-48 hrs
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31. Key customer support logistics area Primary logistics challenge Service parts inventory management Maximising parts availability with minimum inventory and costs Service parts transportation Providing rapid parts delivery while minimising costs Service parts sourcing Finding and developing low-costs/high-quality sources of supply Service technician capacity planning Maintaining the appropriate number of technicians to support demand Service technician dispatch Managing deployment of service technicians on an hour-to-hour basis End-user customer service management Managing appropriate response to customer service issues Service parts warehousing Maximising order fulfilment effectiveness while minimising costs Services parts order processing and fulfilment Maximising order entry and processing while minimising costs Service parts procurement Ensuring timely delivery of high-quality parts at minimum costs Service technician scheduling Ensuring service technician capacity is effectively utilised End-user service requirements determination Accurately identifying customer satisfaction needs and expectations
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34. Example: remote diagnosis Service centre Real time transmission of data analysis Spare parts Aircraft engineers Scheduling of service and part requirements of next maintenance stop Big reduction of unplanned stops and aircraft downtime Next maintenance stop
37. Service Parts Supply Chains Engineers Parts & Materials Service Event Repair Returns
38. Network Design Multi-level decoupling points Service level High service level: 2-4 hrs ‘ Lower’ service level Replenishment Direct shipment Replenishment Direct delivery (24-48 hrs) Replenish 2-4 hrs Production Strategic parts centre Service event Regional distribution Suppliers Repair Centre Return Cycle
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41. Effect on the Total Turn around time by combining models and infrastructure 5 days 4 days 3 days 1 day hours Transit Time 3 Leg Repair and Return 2 Leg Repair and Return Advanced Exchange from central stock End of Runway Advanced Exchange from strategic stock
50. DHL Global Logistics Solution Elements Total Quality System Total Quality System Warehouse Network (ELC/SPC) Transportation Services Logistics Call Centers State of the art IT systems Skills/ People
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54. Global Network SPCs & ELCs 9 Express Logistics Centers 273 Strategic Parts Centers Asia Pacific 93 Europe, Africa Middle East 109 United States 45 Latin America 35
55. SPC Network Europe - ME - Africa 106 SPC locations as at 01/08/2002 3 ELC locations as at 01/08/2002 (Brussels, Johannesburg, Bahrain) HAM MUC BER HAJ NUE STR FRA DUS BRS MIL Padova PRG BUD WAW MOW CPH STO GOT Skelleftea TLS BOD NTE LYS CDG (3) LIL MZM SXB MRS LHR (3) IST NCE KLL ZRH Rennes LJU GLA Leicester Middlesbrough MAN BUH BSL BFS BGO SVG BRI NAP Dijon OPO Bilbao XML BLQ Tours ORK CTA VLC XVQ La Coruna OVD LEJ BTS BRU AMS ESB HEL LIS DUB GDN KTW OSL DRE Livingston VIE ZAG TRN POZ WRO (NOT INDICATED ON MAP): Existing SPC Locations: Tel Aviv Israel Cairo Egypt Dubai Dubai Dahrain Saudi Arabia Jeddah Saudi Arabia Riyadh Saudi Arabia Kuwait Kuwait Larnaca Cyprus Las Palmas Canary Islands Lausanne Switzerland Indicative SPC locations Ankara Turkey Belgrade Yugoslavia Developments subject to change August 2002 QPG AOI Plymouth Grenoble BEG PAL BRQ BCN ATH MAD GVA ROM
56. SPC Network APAC - 1 Brisbane Sydney Melbourne Perth Adelaide Auckland Taoyuan Seoul Tokyo Beijing Manila Kuala Lumpur Available SPC Active/live SPC ELC Bangkok Wellington Bombay Calcutta Delhi Madras Nagoya Okayama Kanazawa Fukuoka Atsugi Shanghai Tainan Jakarta Ho Chi Minh Singapore Penang Hong Kong Guangzhou Bangalore Chengdu Pusan Urumqi Xian Wuhan Shenyang Futian Christchurch Planned SPC Hushiro Sapporo Aomori Sendai Hanoi Colombo Canberra Islamabad Dhaka Darwin Hobart Kuching Hyderabad Ahemabad Pune Johor Bahru Hsinchu Kiheung Matsumoto Hiroshima Osaka Oita Taipei
57. SPC Network US Miami Los Angeles Chicago Teterboro San Francisco Cincinnati ELC 3 Existing/Operational Express Logistics Centers (Cincinnati, Miami and San Francisco) -DHL owned and operated regional distribution facilities offering a complete menu of value added logistics services 6 Existing/Operational Strategic Parts Centers -Local parts centers offering a selected menu of value added logistics services 36 Planned Strategic Parts Centers (2002) -Local parts centers offering a selected menu of value added logistics services Guam San Juan Myaguez New York Washington Atlanta Sacramento Portland Boise Salt Lake City Dallas/Ft. Worth Houston Minn/St. Paul Detroit Cleveland Pittsburgh Philadelphia Rochester Burlington Boston Baltimore Hartford San Diego Fresno Las Vegas Phoenix Denver Albuquerque El Paso San Antonio Austin St. Louis Indianapolis Orlando Tampa Columbus Nashville Raleigh Durham Seattle
58. SPC Network Canada Planned Strategic Parts Center (2002) -Local parts centers offering a selected menu of value added logistics services Toronto
59. SPC Network Latin America Miami US Bermuda Hamilton San Juan PR Mayguez PR Monterrey Guadalajara Mexico City Santo Domingo DR Barbados Trinidad & Tobago Jamaica Panama Costa Rica Guatemala Venezuela Columbia Ecuador Quito Peru Lima Chile Santiago Bolivia Argentina Buenos Aires Brazil, Rio De Janeiro Sao Paulo Existing/Operational Express Logistics Centers (Miami) -DHL owned and operated regional distribution facilities offering a complete menu of value added logistics services 15 Existing/Operational Strategic Parts Centers -Local parts centers offering a selected menu of value added logistics services 19 Planned Strategic Parts Centers (2002) -Local parts centers offering a selected menu of value added logistics services Cordoba Cordoba Rosario Porto Alegre Curitiba Brasilia Recife Salvador Belo Valencia El Salvador Nicaragua Ciudad Juarez
60. Global ELC Network Coverage Cincinnati USA Brussels Europe Miami Latin America Bahrain Middle East Johannesburg Southern Africa Hong Kong Asia Pacific Singapore Asia Pacific Sydney Asia Pacific San Francisco USA
77. DHL Logistics Solutions STRATEGIC INVENTORY MANAGEMEN (SIM) The complete control of physical and information process flows involved in managing a time-critical service contract on behalf of our Customers DIRECT EXPRESS INVENTORY (DEI) The management of centralised inventory, related information and express distribution of products and/or component parts within a promised time window RETURN REPAIR INVENTORY (RRI) Management of the pick-up and delivery cycles: the packaging and the documentation required to move defective, repaired and replacement parts between the Customer, an Express Logistics Centre, a repair centre and a supply centre; and, the management of inventory and shipment information throughout the process
79. D.E.I- Direct Express Inventory CUST Customers/Engineers CUST LCSC ELC CUST Suppliers 3 1 8 12 5 11 Event Info flow Physical flow 13 14 4 6 7 9 2 Breakdown occurs 1 CUST validates order (Optional : request can be direct to LCSC) 3 DHL LCSC validates order 5 Customer request spare part 2 Transmission to DHL LCSC 4 Order confirmation 6 Order to pick and pack 7 Delivery of part to destination 11 Pick & Pack 8 Dispatch Confirmation 9 Stock level ELC drops below reorder level 12 Parts ordered 13 New parts delivered to ELC 14 Optional 10 Optional (EDI only) : Dispatch Confirmation to CUST 10
82. S.I.M - Strategic Inventory Management : Detailed CUST Customers / Engineers CUST SPC ELC SPC CUST Supplier LCSC 1 1 Breakdown occurs 2 2 Customer request spare part 4 3 3 CUST validates order (Optional : request can be direct to LCSC) 5 4 Transmission to DHL LCSC 5 LCSC determines SPC & ETA 6 6 Order confirmation & ETA 7 7 Order to pick and pack 8 8 Pick & Pack + Order Bullet Van 9 9 Dispatch Confirmation 11 13 12 Stock level SPC drops below reorder level 12 10 Optional (EDI only) : Dispatch Confirmation to CUST 13 New part delivered from ELC (either automated in SELIS, either via replenishment order by customer to LCSC 14 14 Stock level ELC drops below reorder level 15 Parts ordered at CUST manufacturing 16 New parts delivered to ELC 15 16 Event Info flow Physical fl. Delivery of part to destined person 11 10 Optional
85. R.R.I - Return Repair Inventory: Detailed ELC CUST Customers/Engineers CUST CUST Supplier LCSC CUST Repair Centre 1 1 Breakdown occurs 2 2 Customer informs CUST 4 3 3 CUST validates request (Optional : request can be direct to LCSC) 5 4 Transmission to DHL LCSC 5 Order Validation 6 6 Order confirmation 7 7 Order to pick and pack 8 8 Pick - Pack & include Return kit 9 Dispatch Confirmation 12 Defective parts consolidated 12 13 Defective parts sent to Repair Centre 15 15 Stock level ELC drops below reorder level 16 Parts ordered at CUST supplier 17 New parts delivered to ELC 16 Event Info flow Physical fl. Delivery of part to destined person 10 11 Defective part sent to ELC 11 9 10 13 17 14 14 Repaired parts sent to ELC Optional Optional : defective parts can be sent directly to repair vendor
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87. E.O.R - End OF Runway ELC CUST Customers/Engineers CUST CUST Supplier LCSC Repair Centre 1 1 Breakdown occurs 2 2 Customer informs CUST 4 3 3 CUST validates request (Optional : request can be direct to LCSC) 5 4 Transmission to DHL LCSC 5 Order Validation 6 6 Order confirmation 7 7 Order to pick and pack 8 8 Pick - Pack & include Return kit 9 Dispatch Confirmation 12 Defective parts immediately sent to Repair Centre (in or next to ELC) 14 14 Stock level ELC drops below reorder level 15 Parts ordered at CUST supplier 16 New parts delivered to ELC 15 Event Info flow Physical fl. Delivery of part to destined person 10 11 Defective part sent to ELC 11 9 10 12 16 13 13 Repaired parts sent to ELC Optional
90. How does the designed solution work ? Advanced Exchange Business Model Lucent Customer suffers maintenance failure 1 Lucent EMEA CRC triggers maintenance order via DHL web 2 Order attributed to SPC or ELC 3 Defective Repair process 6 Defective Returned to ELC 5 Overnight Order delivery from ELC 4 Auto replenishments from ELC to SPC 4 2 or 4 hour Order delivery from SPC 4 New Stock process 7 Lucent Customers (FLM) Manufacturing Repair DHL ELC DHL CRC DHL SPC