Logistics and Supply Chain Management DHL Narrative
Logistics and Supply Chain Management DHL Narrative
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in partial fulfilment
of the requirements in
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Submitted to
Submitted by:
MARIE FE S ABALOS
GABRIEL FLORES
JEREMIE MIRAMONTE
ESTELITO PERELLO
SHERWIN VELASCO
MARCH 2018
INTRODUCTION
The purpose of the field education is to provide students within the MBA
excursion to top Logistics and Supply Chain Company, DHL Philippines provides
Field excursion is very important not only to teach students regarding their
future career but also to show the students the reality and aspects of the
business. The students will be exposed to the actual work related to the course
that they are taking. It also allows those with no experience observe and learn at
the same time. It helps the students understand how the classroom theories are
acquainted with real professionals and meet people having different positions in
the company, either high or low. It can be a source of recommendation when
they take that big lift from being students to being managers or professionals that
Management which includes all activities to move the product and other relevant
information that use to, from and the people behind the supply chain
OBJECTIVE
supply
DESCRIPTION OF METHODOLOGY
DESCRIPTION OF ACTIVITY
and in some cases even to the point of disposal. The process of planning,
implementing and controlling the efficiency and effective flow and storage of
people, with all they can, helped us in making our company excursion a possible
one.
continuously growing as an MBA student. To all our professors who shared and
continuously parts their knowledge with students like us and keep on molding us
into a better persons. We are extending our thanks especially to Dr. Annabelle
Bughao who, with all that she can, share with us everything that she knows and
keep on inspiring us to pursue our goals in life. We thank her patience during
times that we commit failures and big thanks for touching our lives and motivating
To DHL Supply Chain, Philippines, for their war welcome to us. To our
speaker Mr. Jeff Lim, we are very grateful for having us tour the warehouse,
offices and facilitate the business overview of DHL Supply Chain, Philippines.
For all his advices and for everything that he taught us during our stay with him
and most of all, for the memories we have shared – the happy moments, the
We thank him and his staff so much for accommodating us during our visit.
To our friends and classmates, for the happiness and for being there to
our ideas, our differences with our personal schedules. Special thanks to our
classmate, Mr. Lito Perello, who took the initiative to research on the best
Logistics and Supply Chain companies in the Philippines and who have initiated
our excursion be permitted by the DHL Supply Chain Human Resource General
Above all, to our Almighty God, for His unconditional love and for all the
blessings He is showering upon us each day of our lives. With love and gratitude,
we thank him for guiding us, providing wisdom, keeping us and our loves ones
always safe and for giving us enough knowledge and ability to perform each task
that are assigned to us. By His grace, we are able to finish this field excursion
Marie Fe S Abalos
Mary Vianney Alcaide
Gabriel Flores
Michael Ivan S Maglangue
Jeremie Miramonte
Estelito Perello
Sherwin Velasco
MBA Students
EXECUTIVE SUMMARY
DHL Supply Chain (DSC) offers a wide range of logistics services and
operates for major companies around the world. In the Philippines, DSC services
one of the largest networks for all major Modern Trade consumer product
nationwide.
They are focused in the Consumer, Retail and Technology sector, and will
continue to invest and grow this segment. We will leverage our experiences in
implementing and operating other key sector customers to provide the best in
sustainable operations and network through integrating your businesses into one
that will bring about the best efficiencies, to save cost, improve services and
Contract Logistics
a. The company has a proven track record in implementing and
transitioning to DHL
requirements
and RF
for IT
4. Dedicated and Proficient Customer’s Account and Management
Structure
recommendations accordingly
5. Compliance
COMPANY PROFILE
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
To cover all of your extensive service needs with the right level of focus
and expertise, DHL operates under four specialist divisions: DHL Express, DHL
the chosen division and due to DHL’s enormous operation and management
functions.
transportation services as well as value added solutions along the entire supply
chain for customers from various sectors of industry, including the key
fashion sectors.
The subsidiary Williams Lea is the heart of the business unit Corporate
archives documents of all types. Williams Lea is also the right point of call for
DHL are the first letters of the last names of the three company founders,
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
the actual arrival of the ship and dramatically reducing waiting time in the
With this concept, a new industry was born: international air express, the
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
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
DHL connects people and improve their lives. And they do it by being
By bringing people together and making life simpler – for our customers, our
employees, our investors, and our society – they help make the world a better
place.
Being The Logistics Company for the World goes well beyond their global
presence in over 220 countries and territories, or our tireless pioneer spirit when
it comes to new markets. It also extends beyond our unique ability to offer a
DHL wants to be the logistics company people turn to – the first choice not
only for all shipping needs, but also the first choice for career and investment
opportunities, and being the global benchmark for responsible business practice.
simplistic. Built on the three pillars of Focus, Connect and Grow, we have laid out
a clear plan for the coming years with ambitious yet achievable goals.
focused on logistics as our core business. The company also reconfirm their
Responsibility.”
working diligently to find new ways to tap into this treasure trove and share it
across our global family of businesses. One very significant step we have taken
in growth markets and segments, especially in emerging markets and the vibrant
business success and gain market share, and aim to broaden logistics services
Logistics and Supply Chain has a language all of its own as well as
terminologies that can appear a little complicated at times. DHL presents some of
the more common terms you will come across when shipping dutiable goods
internationally.
Ad Valorem
This is a Latin term meaning “according to the value.” All duties and taxes
are calculated on the basis of value, so you may see this used quite often.
Bonded Goods
These are goods stored in a secure warehouse. While they remain there,
they are not liable for any payment of import duty. That is, until the duty is
Brokerage
Often refers to customs brokerage, where a third party is used for the
Cargo Manifest
transport-unit.
The manifest gives the commercial details of the goods, such as:
Certificate of Origin
This is a specific document that expressly certifies that the goods to which
CIF
selling price includes all “Costs, Insurance and Freight” for the goods sold.
This means that the seller arranges and pays for all relevant expenses
import. In trade statistics, “CIF value” means that all figures for imports or
exports are calculated on this basis, regardless of the nature of individual
transactions.
CITES
Consular Invoice
Customs Declaration
De Minimis
minimis non curat lex” meaning “the law does not care about very small
therefore bring goods of foreign origin into such areas without paying
prosperous when tariffs were higher many years ago. Some still exist in
capital cities, transport junctions and major seaports, but their number and
zones may also be known as "free ports," "free warehouses," "free trade
Harmonized System
trade.
Goods are grouped in Sections, Chapters and sub-Chapters that are governed
by rules.
Incoterms® rules and trade terms are recognized and accepted as the
standard for international trading and are regularly updated as commercial
Landed Cost
The cost of the imported goods at the port or point of entry into a country,
including the cost of freight, insurance and port and dock charges. All
charges occurring after the goods leave the import point are not included.
Phytosanitary Certificate
a shipment has been inspected and found free from harmful pests and
plant diseases.
A lower duty rate based on the value of the goods and dependent on the
country of origin.
Pro-forma Invoice
informing the buyer of the kinds and quantities of goods to be sent, their
international level.
comprehensive suite of services drawing on our global scale and local insight to
From the initial consultancy and design, to final mile delivery and reverse
sectors.
1. PLAN
studies, DHL help customers with the big picture; what's working
2. SOURCE
your products not only saves money but removes steps in the
packaging facility means you can reduce your lead times and
3. MAKE
of materials
4. DELIVER
5. RETURN
only get your customers the parts they need quickly, but also
help you to anticipate and prepare for that demand. DHL gives
DHL’s dedicated and shared user warehousing solutions are not just
about holding stock. There are a wide range of additional services that it offers,
as part of an overall solution that can improve the performance of your supply
kitting, sequencing to pre- retail activities across all industry sectors, the
company helps you reduce costs, reduce inventories, and better match supply
with demand.
FUNCTIONALITIES AND PRINCIPLES
ConnectedView and their link that connects seamlessly to the client’s IT system.
General Manager Jeff Lim said that DHL uses 2 systems; the client’s
system and the WMS. WMS depends on the complexity of the operations, the
more complex, the higher the cost. He also stated that there is no server here in
the Philippines. All data and communications goes through their server located at
Cyber Jaya in Malaysia. All information are gathered there and disseminated for
Open System in the retail market. The WMOS is based on the leading WMS from
solution. ; 3. Industry leading depth and breadth of both core and extended WMS
capabilities.
IT solutions play an integral part on the day to day operations. In inbound
reduces inventory aging by apply in FIFO(First In, First Out) principle and
accurate and real time information and communication. Accurate order entry.
alphabetically and depend on what company they are from. Also special
considerations are observed such as in the case of Cisco product. Items are
all, DHL has the best systems in maintaining a seamless flow of operation in
which they are able to perform better and give the best service in terms of supply
chain management.
WAREHOUSING DECISIONS
It is said that warehousing provides time and place utility which is primarily
time wise for raw materials, industrial goods, and finished products, allowing
system, especially for fairly large businesses that deal with bulk sales &
stabilization.
With that being said, warehousing is actually very common in the industry
operations for major companies around the world, so DHL is one of the largest
network for all modern trade consumer in which they do offer contract logistics
added services.
they have 15 locations nationwide which are not owned, but instead are
by DHL Supply Chain Philippines but still they are the ones who are there to
means or basis, because it will always depend on the client’s requirement and
that is where supply chain management operations will base from. In short,
everything is client-specific so that DHL will be able to provide the best service
and solutions for their clients; may it be lay-out or flow of operation in the
within the warehouse will depend on the material and the provided flow
requirement; knowing that for every different client, in equivalent will also be
different products including the number of its volume. And with that in mind, one
must know of what is the fast-moving, slow-moving, and what procedure must be
done with the particular product. One must consider also if these products that
were received in the operating facility are the ones that are good to go, or the
ones that still needs to be opened for item inspection. That is why there is a
designated staff in the warehouse will pick a piece for pallet pick; this procedure
is usually done on consumer clients so there are times that the ordered goods
are all the same in one or two pallets, and then another one is called Piece-pick
were the warehouse staff opens it per piece. So everything will still depend on
the requirement of the client because of the idea that standardized operations
cannot be possible for in return the result will only end up in a disorganized
Situations such as these must be considered that is why the overall lay-
them so that they will be able give their requirement inputs. And from those
information that the client provided is where DHL Supply Chain will create
better serve the clients is not standard but will always depend specifically to the
dispatching and delivering, but the one who is involved in receiving will always be
different.
The nature of warehousing is so important that one must put in mind the
business saying “You don’t require them, if you really don’t need it” knowing that
the cost will only increase higher. That principle goes very much the same in
buying a warehouse, that nowadays the concept of buying the best one for a
client wants a “Class A” Warehouse but the client’s products can be stored in a
“Class C” Warehouse it is very obvious that in this case the products’ price will
increase because the logistics cost is high, so the question is will it be necessary
or unnecessary to avail such type of warehouse? In this point of view this is one
the idea of receiving, storing, dispatching, and delivering. Hence, there is a risk of
identify or track something especially in handling the client’s bulk and rapid
A barcode is just a barcode but it will depend on the client’s system which
is mostly the same in procedure, but what differs is the environment for specific
use of inventory that DHL Supply Chain Philippines call it the “Select Upgrade”.
Now coming from the origin warehouse going to the hub as the certain
destination point, it will then be put in the system. So using these barcodes, it will
be scanned for encoding and then an LPN (Licensed Plate Number) is placed to
the client’s product with the unit number representing the SKU (Stock-keeping
Unit) as part of the serial number or unique number as they call it in logistics. In
every procedure done in the warehouse it must be 100% barcoded because from
that barcode together with the Licensed Plate Number is where they can trace
through the system where the product have been or in other terms the history of
the item.
the packaging or the box itself. Some clients are very meticulous regarding
markings on the box that if it is delivered to them with some markings on it, the
questioning the item that is delivered. So DHL is very strict to those particular
small details that will surely affect those clients that are sensitive in such small
dents and markings on the box. Though logistics companies here in the
Philippines still accepts those boxes that are old, DHL Supply Chain Philippines
does its best to provide the needed requirement of their clients from other
clients accepts the package as long as it is well packed and are good to go, but
attention.
Warehousing forms a crucial link in the overall logistics value chain, which
is why in every aspect of supply chain management, one must be informed that
warehouse is not simply just a place to store finished goods, inbound functions
that prepare items for storage and outbound functions that consolidate, pack and
ship orders provide important economic and service benefits to both the business
and its customers. Rather, warehouses can serve as part of a contingency plan
to ensure outbound orders that are filled in full and on time, and it provide
location.
all critical warehouse processes. They also provide support for transport and
Moreover, unlike many of their competitors, the scale means we deploy a large
number of these systems in any given year, the benefit therefore from this
hosting
underlying business issues and needs. Many customers come to them with a
business problem, and not necessarily a supply chain problem. They listen and
competitive issues, and cost service tradeoffs. It's the best way to see where
their supply chain, revenue, and profitability intersect. By working closely with the
clients across all disciplines, they jointly design a holistic supply chain solution
after-sales, our customers can rely on us to provide robust solutions that work for
Solution design is the art and science of analyzing your supply chain and
finding ways to improve it. The keys know what to look for and where to look.
DHL study all aspects of customer’s logistics operations, and use proprietary
tools that reveal hidden problems and opportunities. DHL works with clients in
determining the optimal network solution for your business - optimizing operating
costs, transportation, and inventory. They start with end demand and work
locations and transportation options. No one has designed more facilities and
distribution operations than DHL. They understand that successful facilities are
about more than the space, and successful distribution operations are about
more than pure transportation. It's about how people, processes. Technology,
reality.
Fail to plan and you're planning to fail. We know it's a fact. That's why DHL
has made project management a core discipline and key differentiator. They've
designed, from the ground up, a proprietary management approach that simply
works better. They know that one missed deadline can jeopardize the entire
risks, expectations, scope, the critical path and goals in incredible detail, then
monitor projects so closely that they can anticipate and respond to risks and
Quality Assurance
Each site completes a monthly scorecard. The results are reviewed by senior
to the associates. They advocate and demand quality for our customers as well
as their own business. With a quality program in place, they will meet or exceed
standards such as ISO 9001:2000, TS 16949, ISO 14001, ISO 13485 and others.
The robustness and flexibility of the quality management system provides the
requirements.
DHL has a governing council that manages their global operation with a
Management under the German Stock Corporation. Deutsche Post has a dual
activities.
The mother organization gives direction to and helps align supply chain
strategy. It is very important for DHL that the supply chain strategy be in direct
correlation with the company strategy. The DHL governing council provides
the supply chain efforts in such a manner to ensure that the supply chain
service organization. It sees that the executive leadership is fully embracing the
supply chain organization, likewise the key business unit stakeholders follow suit
and willing to work with and support the supply chain efforts and initiatives.
One significant challenge for DHL is how to organize the function in order to
realize the full potential and benefit of being an effective organization. Certainly,
DHL organizational structures will take on different looks from other companies.
For others, it is well served to embed a proficient supply chain professional in the
internal business unit, and for others the most effective way is to provide a more
centralized approach. And a “hybrid” approach of these two would also merit
consideration. But for DHL as leading strategy of progressive companies is in
their services.
effectiveness, DHL is set to roll up under the supply chain leader the functions of
Contract Management.
automotive and life sciences. DHL Philippines has a clear work space of about
305,000 sqm., employing almost 2,000 employees with a sub contracted fleet of
about 339.
Technical skills. DHL are recruiting for analytical skills to assist sourcing
looking for professionals who can partner with business unit leaders to: (1)
follow their customers’ changing needs, and (2) find key suppliers who can
merely recruits and places workers to the principal without any formal of
DHL offers a fully compliant labor solution eliminating the use of sub
non-regularized workforce
of supplies, but will result in the obtainment of overall lower total cost,
needs.
DHL strategic sourcing is not just a purchasing department initiative. It
requires input from all functional areas such as integrated supply and inbound
ability to select key suppliers and to manage supplier alliances for critical spend
areas. Perhaps DHL most strategic sourcing efforts is the follow through with the
relationships with their key suppliers so that maximum focus can be achieved for
the major or core spending areas. With a well- founded and fundamentally sound
organizations are equipped to use the talents of the supply base to not only
create sustained value, but constantly seek continuous improvement. The seven
primary areas are the following: manufacturer & raw materials, export/import
Working with various customers, DHL want to leverage this potential. This
is call the GOGREEN. DHL believe that environmental protection and business
With DHL expertise and global presence, DHL can offer business
Carbon Reports , DHL show them where they stand in terms of greenhouse gas
emissions. Though CO2 emissions have the biggest impact on climate change
within logistics DHL also report other greenhouse gases (GHG) like methane or
take upstream emissions into account that originate in the production and
carbon credits from selected projects, reducing emissions and benefitting local
communities. Since January 2014 DHL do not only offset CO2 but other
greenhouse gases like methane or nitrous oxide as well, taking GOGREEN from
carbon neutral to climate neutral. Based on the new GHG Protocol for Products
DHL also include upstream emissions from the production and transport of fuels
and energy.
OPERATIONS EXCELLENCE
systematic and sustainable approach to putting the customer first and delivering
the best services. It is comprised of facet of tools taken from Six Sigma and
Lean. The core disciplines of first choice includes business metrics and process
process which involves checking the performance against the standards that
have been fixed to be followed. It leads to compare the actual performance with
deviations ensuring that such deviations do not occur gain. Thus the
physical inventory should match that listed in your database, but realistically
there's often a disparity in any large distribution center. A high rate of inaccuracy
efficient they are at addressing and fixing reported issues. While issues are
bound to happen, it is important that they are resolve within a suitable period of
time., delivery on time seems simple but is actually quite nuanced and this is the
during the company visit. They have a proper segregation of different products
and storage of goods in the warehousing they organize thru the global WMS
The DHL supply chain Philippines has each industry expertise in key
Technology. They grew in the year under review with our acquisition of
its supply chains to providers who can ensure compliance with stringent
markets such as China, India and Mexico. Integrated solutions such as Lead
Logistics Provider (LLP), offer growth opportunities in this highly competitive
outsourcing sector.
chain to handle fast-moving products with short life-cycles quickly and cost-
DHL is not just a company that commits to their profitability but has their
is important to their employees. The high rate of participation shows just how
their local communities, they not only make a contribution to society, but create a
sense of community and teamwork that carries over into the workplace.
COMMUNICATION LETTER TO DHL SUPPLY CHAIN PHILIPPINES