You are on page 1of 100

DHL GLOBAL

LOGISTICS

CUSTOMER

Brussels, October 19, 2002


Sacha Van Hoever, Senior Logistics Consultant, DHL Global Customer Logistics

Contents

Introduction to GCL DHL Global Customer Logistics Vision & Strategy DHL & Partners Service Parts Logistics Reverse Logistics Service Parts Logistics Survey 2002 Case Study

    

The business environment is changing


Globalisation Focus on core competencies E-commerce Customer Service Explosion

Time to market compression

Organisational Integration

Creation of virtual enterprises One stop shopping


4

PLC Reduction

Global Customer Logistics

DHL International
Global Customer Logistics

DHL Airways

Global Customer Logistics

Created in 2001 for addressing the needs and requirements of DHL s global customers

GCL

developing
GAC National Advantage

implementing proactively managing

Large National Regular

integrated express distribution and logistics solutions on a regional and truly global level
6

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
7

Global Logistics Organization Structure


Global Virtual Teams
Global Logistics

Logistics EMEA

Logistics AP

Logistics NA Global Partner Alliance Global Business Acquisition Support Global Pricing & Profitability Analysis Global Logistics Infrastructure

Geographical Logistics Organization

Partner Alliance

Business Acquisition Support Pricing & Profitability Analysis Logistics Infrastructure

Global Virtual Functional Team

Quality After Sales Program Management

Global Quality Global After Sales Program Management

DHL GLOBAL

LOGISTICS
Global Logistics Vision and Strategy

CUSTOMER

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.

10

DHL Global Logistics


Our approach
Brain Consultative Services
Customer Relationship Management

Build expertise ourselves

How will DHL tap into the total SC market..?

IT Capability Consultancy Manage Partners Special reporting


Call Center Management

DHL
Heavy Weights Defd. services Core transportation <250 kg

Build expertise ourselves

Use partners and joint bidding

e.g. DPWN and Others

Door-to-Airport

Sameday NFO

Muscle Physical Services

Airport-Airport

Warehousing

IT systems

Domestic

Repairs

11

DHL GLOBAL

LOGISTICS
DHL and Partners

CUSTOMER

Our Partner Relationships

START

Global/Regional

   

No. of shared Services Larger Investments Longer Duration Enhanced Process Integration Geographical scope Importance Number of Projects

Shareholder Partners Strategic Partners

Selection Protocol

 

Local

Third Party (3PL) Service Providers


Number of Partners

13

DHL Shareholders

1%

76%

Two Investment Trusts = remaining 23%

14

Deutsche Post World Net

33 bln EUR turnover, 318 k people

Germany


Europe


Worldwide
  

Germany


69 Mio letter items per day High speed

Pan-European parcel network

Danzas, AEI 150 countries 38,000 people

130 bill. Euro on balance sheet 10 Mio clients 13,500 branches

 

Worldwide


DHL in 228 countries & territories

15

3 Types of Logistics Service Offering

Single DHL 3PL Solution


Customer Division/ Account

Partner Joint Bid Solution


Customer Division/ Account

4PL Solution
Customer Division/ Account

DP Bus. Unit Service Provider

LSP expertise (CRM) Logistics Consultant Joint Bidding IT Capability

4PL Service Platform

DPWN Bus. Unit

DPWN Bus. Unit

DPWN Bus. Unit

Partner

DPWN Bus. Unit

DPWN Bus. Unit

Partner

Single Managed

CRM Management Tender coordination amongst members

DPWN 4PL service platform

DPWN 4PL Platform

A Joint Venture between:

17

DHL GLOBAL

LOGISTICS
Service Parts Logistics

CUSTOMER

The importance of supply chain management

As we are moving from competing brands to competing supply chains, logistics has become one of the key drivers of competitive advantage. Some companies have recognised this, however they have been focussing on the supply chain driving the production and sales of finished goods (e.g. Dell). Yet there is another supply chain within these companies, also heavily affecting customers and business results, which is often largely being ignored:

The Service Parts Supply Chain


19

The Service Parts Supply Chain

Traditional bases of competitive advantage no longer suffice; the search is on for new opportunities for differentiation Competitive advantage is sought in parts of the value chain that thus far have been overlooked or under-addressed. After sales is one of those areas: Traditionally too fragmented Poorly linked with other parts of the organisation Received little management attention However, by reengineering the service parts supply chain companies can: Create competitive differentiation Improve customer retention Increase earnings from after sales support Reduced cost of after sales support Customer satisfaction

20

Do you leave money on the table?

Poor utilization of physical and people assest

Excess service parts inventory

High service logistics costs

Unnecessary scrap and obsolescence

Penalties for missing service level agreements


21

Poor coordination with suppliers, customers and other companies

Strategic importance

Initial equipment sales  High sales costs  No relationship  Poor customer info  Low profitability

Operational after market service  Relatively low sales cost  Ongoing relationship  Good margins  High support costs Back to square 1  Missed opportunity for customer loyalty  Repeat sales will be just like the initial sale  Lost after market service account

Poor AMS performance

Repeat equipment sales  Low sales costs  Established relationship  In-depth customer info  Increased profitability Good AMS High switch costs performance 

22

Revenue and Profit life cycle

Finished Goods Relationship Service

Time

Finished Goods

Revenue Profit

Service

Time

23

SC impact on shareholder value

Service logistics has a significant impact on shareholder value


Revenue Profitability Obsolescence First time fix High margins Customer retention

Costs

Shareholder value Working capital Invested capital Fixed capital Outsourcing Centralization Inventory pooling Speed instead of inventory Virtual warehousing Information instead of inventory

24

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

25

Service Logistics in after market service

Service logistics is an important enabler to improve after market service

Customer

Call center

The goal: Is to get the right person with the right skills at the right place at the right time with the right parts for a first time fix at the LOWEST COST

Field service

Service control

Logistics based activities can account for more than 90% of the total costs of delivering after market service - source: Accenture.

26

Building blocks for service logistics

Several building blocks are added to build service logistics related supply chain configurations:

Operations
Vendors Plants DC Platform VAL Call centers Field engineers Repair centers Disposal centers

Transport
Modes Inbound Inter DC Outbound

Inventory
Plant DC In transit Consignment Strat. Inv. Depl. Parts replen.

Handling
Handling in Handling out VAL Repair Recycle Upgrade Re manufacture De manufacture Refurbish

Others
Duties Info. substitute

27

SL typical process description

Call management
Call reception

Field service operation

Diagnostic

Job assignment Job acceptence by fieldservice Match field engineer & part Repair on site Return part

Call closed

Part request at warehouse


28

Part delivery

Return part received in repair center

Service Parts Supply Chain strategy Demand/Supply characteristics

Long lead-time: +3 days Supply characteristics: Service level agreement 24-48 hrs

Plan & execute (lean)

Hedge & deploy (hold inventory)

Short lead-time: 2-4 hours

Continuous replenishment
Predictable

SERVICE React & PARTS execute LOGISTICS (agile)


Unpredictable

Demand characteristics
29

Drivers / characteristics of a service parts supply chain


 

Large number of sku s (DC - optimization) High percentage of slow or non-movers (forecastability, obsolescence) Large variation in form / size / weight (handling) Relation with finished product serial number (information) Long term service obligation (end of life decisions) High standards for: product availability responsiveness / speed (cost of downtime) Service Level Agreements (SLA) common Consumables versus spare parts

   

 

30

Key customer support logistics area


Service parts inventory management Service parts warehousing Service parts transportation Services parts order processing and fulfilment Service parts sourcing Service parts procurement Service technician capacity planning Service technician scheduling Service technician dispatch End-user service requirements determination End-user customer service management

Primary logistics challenge


Maximising parts availability with minimum inventory and costs Maximising order fulfilment effectiveness while minimising costs Providing rapid parts delivery while minimising costs Maximising order entry and processing while minimising costs Finding and developing low-costs/high-quality sources of supply Ensuring timely delivery of high-quality parts at minimum costs Maintaining the appropriate number of technicians to support demand Ensuring service technician capacity is effectively utilised Managing deployment of service technicians on an hour-to-hour basis Accurately identifying customer satisfaction needs and expectations Managing appropriate response to customer service issues

31

Characteristics - trade off required

Business profit

Cost to service

Customer satisfaction

Service quality

Cost elements:
y Inventory costs y Downtime costs y Repair costs y DC operating costs y Transport costs y (Second) call costs y Human resources costs y Distribution costs What drives my ability to.. - compete on price - meet profit margin targets?

Quality elements:
y First time right (diagnosis and repair y Minimum downtime (response & repair) y Simple communication (hassle free, 24/7) y Parts availability y Job planning (part, engineer, site) y Right tools and skills utilized y Right parts

How do I deliver quality service?

32

Trends

    

Increasing customer demands Dramatic expansion in range and sophistication of service offerings Increasing complexity in service techniques requirements Global service requirements due to globalization Integrated service chain planning and operations (parts, repair, DC, transport, engineer, installed base) Ability to turn logistics errors into marketing and sales opportunities Increasing differentiation of similar products Remote diagnosis / pre- alerts (self diagnostic capabilities) Inventory pooling Design consistency across product offerings Full parts inventory visibility (network-wide)

     

33

Example: remote diagnosis

Real time transmission of data analysis

Service centre
Scheduling of service and part requirements of next maintenance stop

Spare parts

Aircraft engineers

Next maintenance stop


Big reduction of unplanned stops and aircraft downtime
34

Example: Inventory pooling

Cycle stock

Cycle stock

Safety stock
Company x

Safety stock
Company y

Pooling
Cycle stock Lower safety stock and lower average inventory
Safety stock Company x & y
35

With same service level!

DHL GLOBAL

LOGISTICS
Reverse Logistics

CUSTOMER

Service Parts Supply Chains

Engineers Service Event Parts & Materials

Repair

Returns

37

Network Design Multi-level decoupling points


High service level: 2-4 hrs

Replenishment

Replenish

2-4 hrs

Service level

Replenishment

Direct delivery (24-48 hrs)

Lower service level

Direct shipment

Suppliers

Production

Regional distribution Repair Centre

Strategic parts centre

Service event

Return Cycle

38

Different models within service parts logistics

Distribution Models


Ways to Influence TAT




Repair and Return Retrieve defective unit Repair defective unit Send back repaired unit Inbound and outbound item are identical Exchange / Replacement Retrieve defective part Send spare part Inbound and outbound item are different Consumable No Return only outbound

Early delivery Before 9:00 Before 12:00 Delivery the same day Bullet van On board courier/NFO Private jet renting Repair at the central hub End of runway Stocking Locations Regional storage location Strategic parts centers

39

Different DHL products

Transportation & Real Time Info 3 Leg Repair and Return (No packaging available) 2 Leg Repair and Return (Packaging available) End of Runway (12 h repair window) Transportation, Warehousing & Real Time Info Return Repair Inventory (4 leg RMA from central stock) Direct Express Inventory (Consumable from central stock) Strategic Inventory Management (Consumable from strategic stock) Variations of the above

40

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

End of Runway

Advanced Exchange from strategic stock

Advanced Exchange from central stock

41

Parameters influencing the model choice

Customer organisation The service mindedness of the organisation


Do you see service as a means to gain a competitive advantage?

Availability of local field engineers Willingness to hold stock (value of the items)


Item type Consumable vs. serviceable High end vs. low end High value vs. low value

Customer s customer What does the enduser expect (management of the expectations) High value vs low value

Installable by customer Impact of the product Physical aspects

42

DHL GLOBAL

LOGISTICS
Spare Parts Logistics Survey

CUSTOMER

Barkawi & Partner and DHL are currently conducting a global study on spare parts Barkawi & Partner and DHL are currently conducting a global study on spare parts logistics logistics
Spare Parts Survey 2002

Major issues Major issues


Position of SPL division within organization Key performance indicators Level of SPL Globalisation Scope of outsourcing IT systems and Supporting technologies Best practice features Trends
44

Participants (excerpt) Participants (excerpt)

Interlog2002 15-16.05.2002 - 1

The initial phase of the study revealed interesting findings The initial phase of the study revealed interesting findings
Preliminary results of "Spare Parts Survey 2002" (1)

Spare parts logistics is not yet considered a core competency in more than 50% of the companies Spare parts logistics is not yet considered a core competency in more than 50% of the companies interviewed interviewed Major KPI's used in SPL division's are still isolated logistics metrics rather than customer Major KPI's used in SPL division's are still isolated logistics metrics rather than customer satisfaction measures (e.g. systems uptime) satisfaction measures (e.g. systems uptime) More than 60% of the companies still lack global stock visibility More than 60% of the companies still lack global stock visibility Less than 30% of the study participants have incorporated central ownership of spares Less than 30% of the study participants have incorporated central ownership of spares None of the companies interviewed are currently pooling inventory with third parties None of the companies interviewed are currently pooling inventory with third parties
45
Interlog2002 15-16.05.2002 - 2

The initial phase of the study revealed interesting findings The initial phase of the study revealed interesting findings
Preliminary results of "Spare Parts Survey 2002" (2)

More than 50% of the service organisations are still working on proprietary IT systems More than 50% of the service organisations are still working on proprietary IT systems Most of the companies are currently adding material planning tools to their ERP landscape Most of the companies are currently adding material planning tools to their ERP landscape Less than 20% of the companies claim to have a full-loop part tracking system in place, Less than 20% of the companies claim to have a full-loop part tracking system in place, but more than 60% of the companies are in the process of establishing it but more than 60% of the companies are in the process of establishing it The opportunities of Web based enhancements are clearly not exploited The opportunities of Web based enhancements are clearly not exploited A very low percentage of SPL costs are managed under global contracts A very low percentage of SPL costs are managed under global contracts The variable (i.e. transaction based) share of SPL costs are below 50% on average The variable (i.e. transaction based) share of SPL costs are below 50% on average

46
Interlog2002 15-16.05.2002 - 3

Most of the companies interviewed have ambitious goals for the future Most of the companies interviewed have ambitious goals for the future
Preliminary results of: "Spare Parts Survey 2002" (3) Stock turn rate Stock turn rate
-

Costs1) Costs1)
-

Service level Service level


-%-

Return lead time2) Repair lead time Return lead time2) Repair lead time
- Days - Days -

+58%
2.30
100

-14%

+2%
96

-61%
22,5

-49%

94 86

15,1

1.46
11,5 5,8

Today
47

Target

Today

Target

Today

Target

Today

Target

Today

Target

1) Inventory reduction target: 17%, cost reduction target: 14% 2) Average for the EU

Interlog2002 15-16.05.2002 - 4

Outsourcing will be extended to value added activities such as planning, Outsourcing will be extended to value added activities such as planning, procurement and inventory ownership procurement and inventory ownership
Scope of Outsourcing by Function
-%-

100

100

67 60

64

69 56 38 23 13 13 0

Transportation Warehousing 1)

Repair

Planning

Procurement

Inventory ownership

Percentage share of companies which outsource this function today Percentage share of companies which believe that this function could be outsourced in the future
48
1) Central warehousing, 57%/ 61%, local warehousing and depots 62%/ 73%

Interlog2002 15-16.05.2002 - 5

DHL GLOBAL

LOGISTICS
Solution Components

CUSTOMER

DHL Global Logistics Solution Elements

Total Quality System State of the art IT systems Warehouse Network (ELC/SPC)

Logistics Call Centers Skills/ People Transportation Services

Total Quality System

50

DHL Global Logistics Solution Elements

DHL s logistics solutions consist of:




Strategically positioned storage locations Express Logistics Centers Strategic Parts Centers Logistics Customer Service Center DHL Worldwide Express Transportation network Same day dedicated transportation Group of dedicated people offering support on day-to-day operations Comprehensive IT solution

   

51

Logistics Capabilities

DHL s logistics solutions consist of:




Strategically positioned storage locations Express Logistics Centers Strategic Parts Centers Logistics Customer Service Center DHL Worldwide Express Transportation network Same day dedicated transportation Group of dedicated people offering support on day-to-day operations Comprehensive IT solution

   

52

ELC vs SPC Products Coverage Stored


Express Logistics Center (ELC)


Speed of Transport


Main Function
Value added services  Distribution  Repair (EOR)  Bonded stock


Regional Center

(Semi) finished  Repair parts  Spare parts  High product value or high opportunity cost


Overnight (International)

Strategic Parts Center (SPC)

Local/Area WH

Spare parts  Very high product value or very high opportunity cost


(domestic) same day

Distribution

53

Global Network SPCs & ELCs


9 Express Logistics Centers 273 Strategic Parts Centers

United States

45

Europe, Africa Middle East

109

Asia Pacific

93

Latin America

35

54

Developments subject to change August 2002

SPC Network Europe - ME - Africa


106 SPC locations as at 01/08/2002 3 ELC locations as at 01/08/2002 (Brussels, Johannesburg, Bahrain)
BGO SVG BFS GLA

Skelleftea

OSL STO GOT

HEL

(NOT INDICATED ON MAP):


DUB

Livingston KLL

MOW

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

MAN ORK Plymouth BRS

Middlesbrough Leicester LHR (3) AMS BRU

CPH HAM HAJ FRA STR BER LEJ DRE GDN WAW POZ WRO BT S BUD ZAG BEG IST BRI NAP ESB BUH KTW

Rennes NTE La Coruna OVD OPO LIS MAD BCN VLC Bilbao BOD TLS

LIL CDG (3)MZM Tours SXB Dijon LYS BSL GVA

DUS

NUE PRG BRQ MUC LJU Padova VIE

ZRH MIL

Grenoble MRS NCE

TRN QPG

BLQ AOI ROM

XVQ

XML

PAL CTA ATH

55

Sapporo

Hushiro

SPC Network APAC

Urumqi

Islamabad

Aomori Sendai Tokyo Matsumoto Atsugi Kanazawa Shenyang Nagoya Seoul Osaka Okayama Beijing Kiheung Hiroshima Pusan Oita Fukuoka Xian Shanghai Wuhan Taoyuan Chengdu Hsinchu Taipei Futian Tainan Guangzhou Hong Kong

Delhi Ahemabad Bombay Bangalore Pune Dhaka Calcutta

Hanoi Manila Ho Chi Minh

Hyderabad Bangkok Madras Penang Colombo Kuala Lumpur

Johor Bahru Kuching Singapore

Jakarta

Darwin

Active/live SPC Available SPC Planned SPC ELC


Perth Adelaide Brisbane Sydney Canberra Auckland Wellington Christchurch

Melbourne Hobart
-1

56

SPC Network US

Seattle Portland Boise Minn/St. Paul Detroit Chicago Sacramento San Francisco Fresno Los Angeles San Diego Phoenix Dallas/Ft. Worth El Paso Austin Houston San Antonio Tampa Las Vegas Salt Lake City Denver

Burlington Rochester Boston Hartford New York Teterboro

Philadelphia

Cleveland Columbus Pittsburgh Indianapolis St. Louis Cincinnati ELC

Baltimore Washington

Albuquerque

Nashville Atlanta

Raleigh Durham

Orlando Miami

San Juan Myaguez

Guam

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 57

SPC Network Canada

Toronto
Planned Strategic Parts Center (2002) -Local parts centers offering a selected menu of value added logistics services 58

SPC Network Latin America


Ciudad Juarez Monterrey Guadalajara Mexico City

Bermuda Hamilton Miami US

Mayguez PR San Juan PR Santo Domingo DR Nicaragua Jamaica Valencia Venezuela Columbia Ecuador Quito Recife Salvador Brasilia Bolivia Brazil, Rio De Janeiro Chile Santiago Cordoba Cordoba Rosario Argentina Buenos Aires Belo Barbados Trinidad & Tobago

Guatemala El Salvador Costa Rica Panama

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

Peru Lima

Sao Paulo Curitiba Porto Alegre

59

Global ELC Network Coverage

Brussels Europe Cincinnati USA


San Francisco USA
Latin America

Bahrain Middle East

Hong Kong Asia Pacific

Miami

Singapore Asia Pacific Johannesburg Southern Africa Sydney Asia Pacific

60

Logistics Capabilities

DHL s logistics solutions consist of:




Strategically positioned storage locations Express Logistics Centers Strategic Parts Centers Logistics Customer Service Center DHL Worldwide Express Transportation network Same day dedicated transportation Group of dedicated people offering support on day-to-day operations Comprehensive IT solution

   

61

Logistics Customer Service Centers

Brussels Europe Phoenix US Singapore Asia Pacific

62

Logistics Customer Service Centers

Fact file:
        

Regional Logistics Call Center Located in Brussels, Singapore & Phoenix (AZ) Provides Multi Lingual Call Center Services 24 x7 Coverage Emergency order handling Remote Call Collection RMA Handling Single Point of Contact into multi SPC network The heart of many DHL Logistics Solutions

63

Logistics Customer Service Centers

Languages Covered
Brussels
English French Dutch German Spanish Italian Finnish Polish Russian

Phoenix
English Spanish

Singapore
English Cantonese Korean Japanese

64

Logistics Capabilities

DHL s logistics solutions consist of:




Strategically positioned storage locations Express Logistics Centers Strategic Parts Centers Logistics Customer Service Center DHL Worldwide Express Transportation network Same day dedicated transportation Group of dedicated people offering support on day-to-day operations Comprehensive IT solution

   

65

DHL Global Network Fact File

Region

Number of countries/ Territories

Number of offices

Number of Employees

Number of Courier Vehicles 7,266 6,360 519 387 5,034

Number of Owned/Leased Aircraft

Numbe r of Hubs

E&A/ME -Europe -Africa -Middle East The AMERICAS (incl. US, Canada, MEX) ASIA PACIFIC TOTALS

130 70 49 11 58

1,350 880 366 104 1,165

32,037 28,238 2,166 1,633 18,963

122 94 21 7 125

16 11 3 2 17

40 228

3,424 5,939

17,732 68,732

4,026 16,326

7 254

3 36

66

Logistics Capabilities

DHL s logistics solutions consist of:




Strategically positioned storage locations Express Logistics Centers Strategic Parts Centers Logistics Customer Service Center DHL Worldwide Express Transportation network Same day dedicated transportation Group of dedicated people offering support on day-to-day operations Comprehensive IT solution

   

67

Network of Sprinter Couriers


Same Day Service
Bullet

Vans Dedicated transport 24 x 7 service 365 days per year Escalation Procedures Direct contact with LCSC

68

Logistics Capabilities

DHL s logistics solutions consist of:




Strategically positioned storage locations Express Logistics Centers Strategic Parts Centers Logistics Customer Service Center DHL Worldwide Express Transportation network Same day dedicated transportation Group of dedicated people offering support on day-to-day operations Comprehensive IT solution

   

69

Day to Day Support


Account Management
Global Coordination
Network Global Account Manager

Regional Offices

Regional Global Account Manager EMEA

Regional Global Account Manager Americas

Regional Global Account Manager APAC

Countries

Key Account Managers

Key Account Managers

Key Account Managers

 

Responsible for all communications with Global and regional customers Ultimately responsible for resolving functional issues within its respective regions Resolve, deploy, and mobilize the individual functional areas to deliver against action

70

Day to Day Support


Business Acquisition Support Group
Business Acquisition Support Group

Andr Benning

Supply Chain Systems Consultancy Group Reninca Verbrugghe

Project Implementation Group Thierry Veys

Logistics Consultants RFQ Coordinators


Design high-level supply-chain solutions RFQ response management Coordinate development of proposal Supply chain studies

Logistics Systems Consultants


Roll-out of IT systems Design customer IT solutions Develop functional IT specifications Coordinate implementation of IT solution

Implementation Managers
Design process models Design of detailed solution Implementation of the solution

  

  

 

71

Day to Day Support


Program Management
Global After Sales Program Manager

Regional After Sales Program Manager EMEA

Regional After Sales Program Manager Americas

Regional After Sales Program Manager APAC

Program Analysts

Program Analysts

Program Analysts

To as per a set of pre-agreed service level agreements. Performance measurement will be done against Key Performances Indicators (KPI). To be the for all follow-up activities requested by global or regional customers.

72

Logistics Capabilities

DHL s logistics solutions consist of:




Strategically positioned storage locations Express Logistics Centers Strategic Parts Centers Logistics Customer Service Center DHL Worldwide Express Transportation network Same day dedicated transportation Group of dedicated people offering support on day-to-day operations Comprehensive IT solution

   

73

RMA IT System: Main features

    

Full RMA-RTV tracking and visibility Customer Business rules embedded in software License plate technology (bar codes) Event driven Exception management through various alert mechanisms Target Stock Level management Web based

 

Advantages

       

Better allocation of capital expenditure Vendor consolidation Expand capability and coverage Single point of contact for total solution (LCSC) Total visibility on RMA cycles across partners Increase scalability and flexibility Increase field engineer productivity Decrease in costs stock reduction shorter turn around times simplified processes Improve customer satisfaction ...

 
75

The Solutions
76

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

77

Direct Express Inventory (DEI)

78

D.E.I- Direct Express Inventory


CUST Suppliers
13 14

LCSC

7 9 8 12

ELC
4 6

Event Info flow

10

11

Physical flow

CUST

CUST Customers/Engineers
8 9 10 11 12 13 14

1 2 3

Breakdown occurs Customer request spare part CUST validates order (Optional :
request can be direct to LCSC)

Pick & Pack Dispatch Confirmation


Optional (EDI only)

: Dispatch Confirmation to CUST

4 5 6

Transmission to DHL LCSC DHL LCSC validates order Order confirmation Order to pick and pack

Delivery of part to destination Stock level ELC drops below reorder level Parts ordered New parts delivered to ELC Optional

79
7

DEI Key Benefits


          

Improved consistent service levels Late cut-off times Reduced Inventory Cost Maximized Profit Window Less Capital Investment Improved Cash Flow Shorter Distribution Increased efficiency, control and transparency Rapid Customer Response Reduced Communications Cost Allow concentration on core activities

80

Strategic Inventory Management (SIM)

Customer

81

S.I.M - Strategic Inventory Management : Detailed


CUST Supplier
15 16

LCSC

14

ELC
13 9

Event Info flow

10

SPC
11

12

SPC

Physical fl.

CUST
1 2 3

CUST Customers / Engineers


9 10 11

Breakdown occurs Customer request spare part CUST validates order (Optional :
request can be direct to LCSC)

Dispatch Confirmation
Optional (EDI only)

: Dispatch Confirmation to CUST

Delivery of part to destined person Stock level SPC drops below reorder level New part delivered from ELC (either automated in SELIS, either via replenishment order by customer to LCSC Stock level ELC drops below reorder level Parts ordered at CUST manufacturing New parts delivered to ELC Optional

4 5 6 7

Transmission to DHL LCSC LCSC determines SPC & ETA Order confirmation & ETA Order to pick and pack Pick & Pack + Order Bullet Van

12 13

14 15 16

82

SIM Key Benefits


         

Free up capital to focus on core competencies Unleash management time and in-house resources Add flexibility for changing market conditions Speed cycle times for faster market response Lower costs of inventory storage and handling Enhance customer service regionally and globally Simplified and centralised information and communication Reliable high speed delivery 24/7/52 Global coverage

83

Return and Repair Inventory (RRI)

84

R.R.I - Return Repair Inventory: Detailed


CUST Supplier
16 17

CUST Repair Centre


13 14

LCSC
4

7 9

15

Event Info flow

ELC
10

12

11

Physical fl.

CUST
1 2 3

CUST Customers/Engineers
9 10

Breakdown occurs Customer informs CUST CUST validates request (Optional :


request can be direct to LCSC)

Dispatch Confirmation Delivery of part to destined person Defective part sent to ELC Defective parts consolidated Defective parts sent to Repair Centre Repaired parts sent to ELC Stock level ELC drops below reorder level Optional Parts ordered at CUST supplier New parts delivered to ELC
Optional: defective parts can be sent directly to repair vendor

11
12 13 14 15 16 17

4 5 6 7

Transmission to DHL LCSC Order Validation Order confirmation Order to pick and pack Pick - Pack & include Return kit

85

RRI Key Benefits


      

Improved customer service levels Increased efficiency and transparency in the logistic pipeline Reduced total pipeline costs and length Allows concentration on core activities Simplified and centralized information and communication Effective and efficient returns of parts Synergy effects through central repair instead of local repair action Detailed reporting of services and failures

86

E.O.R - End OF Runway


CUST Supplier Repair Centre
15 16 12 13

LCSC
4

7 9

14

Event Info flow

ELC
10

11

Physical fl.

CUST
1 2 3

CUST Customers/Engineers
9 10

Breakdown occurs Customer informs CUST CUST validates request (Optional :


request can be direct to LCSC)

Dispatch Confirmation Delivery of part to destined person Defective part sent to ELC Defective parts immediately sent to Repair Centre (in or next to ELC) Repaired parts sent to ELC Stock level ELC drops below reorder level Parts ordered at CUST supplier New parts delivered to ELC Optional

11
12

4 5 6 7

Transmission to DHL LCSC Order Validation Order confirmation Order to pick and pack Pick - Pack & include Return kit
13 14 15 16

87

DHL GLOBAL

LOGISTICS
Case Study

CUSTOMER

Who is Lucent ?

  

Revenue $34 billion in fiscal year 2000 Employees 87,000 people worldwide as of June 30, 2001 Leading global supplier of communications networking equipment, Internet infrastructure for service providers, Optical networking, Wireless networks and Communications networking support and services. June 16th, 2000 DHL - Lucent contract signed DHL Logistics program include: Strategic Inventory Management, Direct Express Inventory & Repair Return Inventory

 

89

How does the designed solution work ?


Advanced Exchange Business Model
Manufacturing
7
New Stock process

Repair
6
Defective Repair process

DHL CRC
3

Order attributed to SPC or ELC

DHL ELC
4
Auto replenishments from ELC to SPC

DHL SPC
4
2 or 4 hour Order delivery from SPC

Defective Returned to ELC

Overnight Order delivery from ELC

Lucent Customers (FLM)


2
Lucent EMEA CRC triggers maintenance order via DHL web

Lucent Customer suffers maintenance failure

90

What has been the biggest impact since Lucent changed strategy ? Before


After


Service Logistics seen as a costly necessary evil Inventory scattered throughout the countries Duplication & lack of structure in work efforts Lack of inventory & performance visibility

A source of competitive advantage (& future revenue streams) Centralized & controlled inventories Professional & dedicated support structure Immediate real time visibility on performance

91

What are the highlights of the solution ?

    

Spares delivery anytime day or night within 2-4 hours Repair times monitored and managed Certification of deliveries immediately fed back to Lucent All daily movements visible on-line New spares placed anywhere in Europe within 2 days

92

Delivery Performance Q1 2002


Number of orders
500 400 300 200 100 0 Jan Feb Mar SameDay order NextDay orders

Delivery performance
100% 95% 90% 85% 80% 75% Jan Jan Feb Feb Mar Mar SD ND SD ND SD ND total stock value in millions of US$
$70 $60 in repair in field good on hand $50 $40 $30 $20 $10 in repair in field good on hand

delayed on time

number of parts
20000 15000 10000 5000 0
93

Jan

Feb

Mar

$0

Jan

Feb

Mar

What are the 3 driving forces behind the success ?


Centralized logistics

The power of

Information Technology

Lean & flexible logistics

Looking at these 3 forces in detail...


94

The Power of Centralized Logistics ?


Cost visibility & efficiencies End-to-end business process set to Lucent s Business rules Customs clearance invoices automatically All Logistics information accessible on line Inventory levels Delivery performance Customer entitlements Inventory turnover Significantly reduced Repair cycle times Standardized metric and management reporting
Centralized logistics

 

Information Technology

Lean & flexible logistics


95

The Power of Lean and Flexible Logistics?

Immediate access to any stocking location, anywhere in the world with a limited amount of time Ability to turn on/off logistics operations anywhere in the world with a limited amount of investments by customer Ease of stock repositioning within 1 day Customer service contracts are no longer dictated by logistics limitations, now lean & flexible logistics accommodates and drives the service contracts

Centralized logistics

Information Technology

Lean & flexible logistics

96

The Power of Information Technology?

Orders, reports & inventory can be queried via the web any time, any place Shipment delivery information automatically sent to your Mobile or PDA via SMS Inventory moves automatically reflected on Customer Data repository for financials An all bar code driven logistics operation ensures 100% error free process Automated material planning ensures stock level efficiencies

Centralized logistics

Information Technology

Lean & flexible logistics

97

What is the key component ?

Centralized logistics

PARTNERSHIP ?
Information Technology Lean & flexible logistics

98

After Sales Program Management enablement




Navigation & evolution of shared open actions via Weekly conference calls Continuous improvements on flows through performance KPI s & availability of information Value added services illustrated through implanting DHL key decision maker into the Lucent organization Honest and open communication Shared objectives & goals are driving the team forwards through new challenges

 

99

DHL GLOBAL

LOGISTICS
Thank you for your attention Questions?

CUSTOMER