Professional Documents
Culture Documents
CUSTOMER
LOGISTICS
■ Introduction to GCL
– DHL Global Customer Logistics
– Vision & Strategy
■ DHL & Partners
■ Service Parts Logistics
■ Reverse Logistics
■ Service Parts Logistics Survey 2002
■ Case Study
3
The business environment
is changing
Globalisation E-commerce
DHL
International
Global
Global
Customer
Customer
DHL Airways Logistics
Logistics
5
Global Customer Logistics
GCL
developing
GAC
implementing
National Advantage
proactively managing
Large National Regular
6
DHL Global Customer Logistics
Vision
long term
“To enable DHL to become the long term
preferred partner of choice for global
preferred
express distribution and express supply
chain solutions for the leading global
partner of
companies within DHL’s target industries”
7
choice for the
Global Logistics Organization Structure
Global Virtual Teams
Global Logistics
Global Partner
Partner Alliance
Alliance
10
DHL Global Logistics
Our approach
‘Brain’ Consultative
Services
Customer Relationship Build How will DHL tap
Management expertise
ourselves into the total SC market..?
IT Capability
Consultancy
Manage Partners
Use partners and
Special reporting Build e.g. DPWN
DHL expertise
ourselves
joint bidding
and Others
Call Center Management
Heavy Weights
Door-to-Airport
Sameday NFO
Def’d. services
‘Muscle’
Airport-Airport
transportation
Warehousing
IT systems
Domestic
Physical
<250 kg
Repairs
Core
Services
11
DHL GLOBAL
CUSTOMER
LOGISTICS
DHL and Partners
Our Partner Relationships
START
■ Larger Investments
■ Longer Duration
■ Enhanced Process Shareholder Selection
Integration Partners Protocol
al
■ Geographical
scope
■ Importance Strategic
■ Number of Partners
Projects
Loca
Service Providers
Number of Partners
13
DHL Shareholders
1% 76%
14
Deutsche Post World Net
CRM Management
Single Tender coordination amongst DPWN
Managed members 4PL service platform
DPWN 4PL Platform
17
DHL GLOBAL
CUSTOMER
LOGISTICS
Service Parts Logistics
The importance of supply chain
management
Yet there is another supply chain within these companies, also heavily
affecting customers and business results, which is often largely being
ignored:
20
Do you leave money on the table?
Excess service
Poor utilization parts inventory
of physical and
people assest
Poor coordination
with suppliers,
Penalties for
customers and
missing service
other companies
level agreements
21
Strategic importance
‘Back to square 1’
Repeat equipment sales
■ Missed opportunity for ■ Low sales costs
customer loyalty ■ Established relationship
■ Repeat sales will be just like ■ In-depth customer info
the initial sale
■ Lost after market service Poor AMS Good AMS
■ Increased profitability
account performance performance ■ High switch costs
22
Revenue and Profit life cycle
Finished Goods
Relationship
Service
Time
Revenue
Finished Goods Profit
$ Service
Time
23
SC impact on shareholder value
• High margins
Revenue • Customer retention
Profitability
• Obsolescence
Costs • First time fix
Shareholder value
• Inventory pooling
• Speed instead of inventory
Working capital • Virtual warehousing
• Information instead of inventory
Invested capital
• Outsourcing
Fixed capital • Centralization
24
The significance of Service Parts cannot
be neglected
25
Service Logistics in after market service
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
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 Transport Inventory Handling Others
Vendors Modes Plant Handling in Duties
Plants Inbound DC Handling out Info. substitute
27
SL typical process description
Call reception
Diagnostic
Job assignment
Job acceptence
by fieldservice
Match field
engineer & part
Repair on site
Return part
Call closed
Long
Plan & Hedge &
lead-time:
+3 days execute deploy
Supply (lean) (hold inventory)
characteristics: 24-48 hrs
Service level
agreement SERVICE
React &
Continuous
PARTS
execute
Short replenishment
lead-time:
LOGISTICS
(agile)
2-4 hours
Predictable Unpredictable
Demand characteristics
29
Drivers / characteristics of a service
parts supply chain
30
Key customer support Primary logistics
logistics area challenge
Service parts inventory management Maximising parts availability with minimum inventory and costs
Service parts warehousing Maximising order fulfilment effectiveness while minimising costs
Service parts transportation Providing rapid parts delivery 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 capacity planning Maintaining the appropriate number of technicians to support demand
End-user service requirements determination Accurately identifying customer satisfaction needs and expectations
End-user customer service management Managing appropriate response to customer service issues
31
Characteristics - trade off required
Business
profit
Cost to Service
service Customer quality
satisfaction
32
Trends
33
Example: remote diagnosis
Real time
transmission of
data analysis
Service centre
Scheduling of service
and part requirements of
next maintenance stop
Aircraft
Spare parts
engineers
Big reduction of
unplanned stops and
aircraft downtime
34
Example: Inventory pooling
Company x Company y
Pooling
35
DHL GLOBAL
CUSTOMER
LOGISTICS
Reverse Logistics
Service Parts Supply Chains
Engineers
Service Event
Parts & Materials
Repair Returns
37
Network Design
Multi-level decoupling points
High
Replenishment Replenish 2-4 hrs
service
Service level
level:
2-4 hrs
‘Lower’
service
level Direct shipment
Repair
Centre
Return Cycle
38
Different models within service parts
logistics
39
Different DHL products
40
Effect on the Total Turn around time by
combining models and infrastructure
5 4 3 1 Transit
hours
days days days day Time
3
3 Leg
Leg Repair
Repair End
End of
of Advanced
Advanced Exchange
Exchange
and
and Return
Return Runway
Runway from
from strategic
strategic stock
stock
2
2 Leg
Leg Repair
Repair Advanced
Advanced Exchange
Exchange
and
and Return
Return from
from central
central stock
stock
41
Parameters influencing the model
choice
■ Customer organisation
– The service mindedness of the organisation
■ Item type
– Consumable vs. serviceable
42
DHL GLOBAL
CUSTOMER
LOGISTICS
Spare Parts Logistics
Survey
44
The
The initial
initial phase of
of the
the study
study revealed
revealed interesting
interesting findings
findings
¥¥ Spare
Spare parts
parts logistics
logistics is
is not
not yet
yet considered
considered aa core
core competency
more
competency in
in than
more than 50%
50% of
of the
the companies
companies
interviewed
interviewed
¥¥ Major
MajorKPI's
KPI'sused
used in
in SPL
SPL division's
division's are
are still
still isolated
isolated logistics
logistics metrics
her
metrics rat
ratthan
her than customer
customer
satisfaction
satisfaction measures
measures (e.g.
(e.g. systems
systems uptime)
uptime)
¥¥ More
More than
than 60%
60% of
of the
the companies
companies still
still lack
lack global
global stock
stock visibilit
yy
visibilit
¥¥ Less
Less than
than 30%
30% of
of the
the study
study participants
participants have
have incorporated
incorporated centra
ll ownership
ownership of
centra of spares
spares
¥¥ None
None of
of the
the companies
companies interviewed
interviewed are
are currently
currently pooling
pooling inventor
yy with
with third
inventor third parties
parties
45
Interlog2002 15-16.05.2002 - 2
The
The initial
initial phase of
of the
the study
study revealed
revealed interesting
interesting findings
findings
¥¥ More
More than
than 50%
50% of
of the
the service
service organisations
organisations are
are still
still working
proprietary
working on
proprietary
on IT
IT systems
systems
¥¥ Most
Most of
of the
the companies
companies are
are currently
currently adding
adding material
material planning
ls
planninglstoo
to
to their
too their ERP
ERP landscape
landscape
¥¥ Less
Less than
than 20%
20% of
of the
the companies
companies claim
claim to
to have
have aa-loop
full
full part
-loop part tracking
tracking system
system in
in place,
place,
but
but more
more than
than 60%
60% of of the
the companies
companies are
are inin the
the process
process ofof establi
shing
shing itit
establi
¥¥ The
The opportunities
opportunities of
of Web
Web based
based enhancements
enhancements are
are clearly
clearly not
notoited
expl
oited
expl
¥¥ AA very
very low
low percentage
percentage of
of SPL
SPL costs
costs are
are managed
managed under
under global
globalracts
cont
racts
cont
¥¥ The
The variable
variable (i.e.
(i.e. transaction
transaction based)
based) share
share of
of SPL
SPL costs
costs are
ow
are
owbel
50%
50% on
bel on average
average
46
Interlog2002 15-16.05.2002 - 3
Most
Most of the
the companies
companies interviewed
interviewed have
have ambitious
ambitious goals
goals for
foruture
the
the ff
uture
Costs1)1)
Stock 2)
Stock turn
turn rate
rate Costs Service
Service level
level Return
Return lead
lead time2) Repair
time Repair lead
lead time
time
- - -%- - Days - - Days -
1.46
11,5
5,8
¯ Today ¯ Target ¯ Today ¯ Target ¯ Today ¯ Target ¯ Today ¯ Target ¯ Today ¯ Target
47
1) Inventory reduction target: 17%, cost reduction target: 14%
2) Average for the EU Interlog2002 15-16.05.2002 - 4
Outsourcing
Outsourcing will
will be
be extended
extended to
to value
value added activities
activities such lanning,
as
as pp
lanning,
procurement
procurement and
and inventory
inventory ownership
ownership
100 100
67 69
64
60
56
38
23
13 13
Transportation Warehousing
1) Repair Planning Procurement Inventory
ownership
Logistics Call
Centers
Skills/ Transportation
People Services
50
DHL Global Logistics Solution Elements
51
Logistics Capabilities
52
ELC vs SPC
53
Global Network SPCs & ELCs
9 Express Logistics Centers
273 Strategic Parts Centers
54
Developments subject to change
August 2002
SPC Network Europe - ME - Africa
BGO
OSL
HEL
SVG STO
BFS GLA
Livingston
(NOT INDICATED ON MAP): GOT MOW
DUB Middlesbrough KLL
MAN
Existing SPC Locations:
Leicester CPH
Tel Aviv Israel ORK BRS
AMS HAM GDN
Cairo Egypt Plymouth
LHR (3) BER
WAW
Dubai Dubai HAJ
BRU DUS LEJ POZ
Dahrain Saudi Arabia LIL
Rennes FRA DRE KTW
Jeddah Saudi Arabia CDG (3)MZM WRO
Tours NUE PRG
Riyadh Saudi Arabia NTE SXB STR BRQ
Kuwait Kuwait BT
Dijon BSL MUC S
Larnaca Cyprus La Coruna BOD VIE
LYS GVA ZRH LJU
BUD
Las Palmas Canary Islands OVD
Bilbao
TLS Padova
Grenoble ZAG BUH
Lausanne Switzerland OPO MIL
LIS TRN BLQ
MAD BCN MRS NCE BEG
Indicative SPC locations AOI
Ankara Turkey QPG
ROM IST
Belgrade Yugoslavia XVQ VLC BRI
ESB
NAP
XML PAL
CTA ATH
55
Sapporo Hushiro
Penang
Johor Bahru
Kuala Lumpur
Colombo Kuching
Singapore
Jakarta
Darwin
Active/live SPC
Available SPC Brisbane
Planned SPC
Sydney
ELC Perth
Canberra
Adelaide Auckland
Melbourne Wellington
Hobart Christchurch
56
-1
SPC Network US
Seattle
Burlington
Portland Boise
Minn/St. Paul Rochester
Boston
Detroit Hartford
Chicago Philadelphia New York
Cleveland Teterboro
Sacramento Salt Lake City
Columbus
Pittsburgh Baltimore
Denver Indianapolis
San Francisco Washington
Las Vegas Cincinnati ELC
Fresno St. Louis
Dallas/Ft. Worth
Orlando
El Paso
Austin Miami
Tampa
Houston San Juan
San Antonio
Guam
Myaguez
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
58
Bermuda
SPC Network Hamilton
Monterrey
San Juan PR
Santo Domingo DR
Guadalajara
Nicaragua Barbados
Mexico City
Jamaica
Trinidad & Tobago
Guatemala
Valencia
El Salvador
Costa Rica
Venezuela
Panama
Columbia
Ecuador
Quito
Recife
59
Global ELC Network Coverage
Brussels
Europe
Johannesburg
Southern Africa
Sydney
Asia Pacific
60
Logistics Capabilities
61
Logistics Customer Service Centers
Brussels
Europe
Phoenix
US
Singapore
Asia Pacific
62
Logistics Customer Service Centers
Fact file:
■ Regional Logistics Call Center
■ 24 x7 Coverage
■ RMA Handling
63
Logistics Customer Service Centers
Languages Covered
64
Logistics Capabilities
65
DHL Global Network Fact File
66
Logistics Capabilities
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
69
Day to Day Support
Account Management
Network Global Account
Global Manager
Coordination
70
Day to Day Support
Business Acquisition Support Group
Business Acquisition Support
Group
André Benning
71
Day to Day Support
Program Management
72
Logistics Capabilities
73
RMA IT System: Main features
75
The Solutions
76
DHL Logistics Solutions
77
Direct Express Inventory (DEI)
78
D.E.I- Direct Express Inventory
CUST Suppliers
13 14
7
5
LCSC 9
8 12
Event
ELC
Info flow
4 6 10 11 Physical flow
80
Strategic Inventory Management (SIM)
Customer
81
S.I.M - Strategic Inventory Management :
Detailed
CUST Supplier
16
15
14
LCSC 5
ELC
Event
13
Info flow
9
Physical fl.
4 6 10 7 8 SPC 12 SPC
11
5LCSC
New
13 part delivered from ELC (either automated in SELIS,
determines SPC & ETA either via replenishment order by customer to LCSC
6Order confirmation & ETA Stock
14 level ELC drops below reorder level
7Order
Optional
to pick and pack Parts ordered at CUST manufacturing
15
82 16New
8Pick & Pack + Order Bullet Van parts delivered to ELC
SIM
Key Benefits
83
Return and Repair Inventory (RRI)
84
R.R.I - Return Repair Inventory: Detailed
16 17 13 14
7 15 Event
LCSC 5
9
ELC 8 12
Info flow
4 10 11 Physical fl.
6
3CUST
Defective
11 part sent to ELC
validates request (Optional : Optional: defective parts
request can be direct to LCSC) Defective
12 parts consolidated can be sent directly
4Transmission to DHL LCSC to repair vendor
Defective
13 parts sent to Repair Centre
5 Order Validation
14Repaired parts sent to ELC
6 Order confirmation
Stock
15 level ELC drops below reorder level
Optional
7Order to pick and pack
16Parts ordered at CUST supplier
85 8Pick - Pack & include Return kit 17New parts delivered to ELC
RRI
Key Benefits
86
E.O.R - End OF Runway
CUST Supplier
Repair Centre
15 16
12 13
7 14 Event
LCSC 5
9
ELC 8
Info flow
4 10 11 Physical fl.
6
3CUST
Defective
11 part sent to ELC
validates request (Optional :
request can be direct to LCSC) Defective
12 parts immediately sent to Repair Centre
4Transmission to DHL LCSC (in or next to ELC)
5 Order 13Repaired parts sent to ELC
Validation
6 Order confirmation Stock
14 level ELC drops below reorder level
Optional
15Parts ordered at CUST supplier
7Order to pick and pack
16New parts delivered to ELC
87 8Pick - Pack & include Return kit
DHL GLOBAL
CUSTOMER
LOGISTICS
Case Study
Who is Lucent ?
89
How does the designed solution work ?
Manufacturing Repair
Before After
■ Service Logistics seen as a ■ A source of competitive
costly necessary evil
advantage (& future revenue
■ Inventory scattered streams)
throughout the countries
■ Centralized & controlled
■ Duplication & lack of
structure in work efforts
inventories
■ Lack of inventory & ■ Professional & dedicated
performance visibility support structure
■ Immediate real time visibility
on performance
91
What are the highlights of the solution ?
92
Delivery Performance Q1 2002
93
What are the 3 driving forces behind
the success ?
Centralized logistics
94
The Power of Centralized Logistics ?
95
The Power of Lean and Flexible
Logistics?
96
The Power of Information Technology?
97
What is the key component ?
Centralized logistics
?
PARTNERSHIP
Information Lean & flexible
Technology logistics
98
After Sales Program
Management enablement
99
DHL GLOBAL
CUSTOMER
LOGISTICS
Thank you for your attention
Questions?