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DHL america case study
Operations at dhl
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1.Introduction As requested, this report is based on an market research on the consumer satisfaction of the services of DHL in China. This report gives an introduction of its services and reveals the benefits and as well the drawbacks of the services of DHL in China, in the increasing logistics market in China, for DHL in China itself and also the customers. 2.Procedures All the information in this report are gathered from: Questionnaire about the consumer satisfaction of services of DHL in China; Http://www.cn.dhl.com. Http://www.cpw.com.cn Http://www.forbes.com/home/commerce Http://www.us8cn.com 3.Findings a. Background and brief introduction Established in U.S.A. 1969, with the concept saying "Customers stood to save a fortune", DHL has decades of history, abundant experience and high level of skills of sending files and goods quickly through the international airflight. During its development, DHL expanded its coverage of services throughout the world, including Middle East, Africa, Asia, Europe and so on. Till 1988, the number of its service for different countries has updated to 179 and over 16,000 employees are within its company. In nowadays, as one of the top 4 express and logistics corpotations worldwide, DHL has become the pioneer of the Worldwide Express, Continental Transportation and Air Freight and also the largest global logistics supplier of Ocean Freight and Contractual Logistics. DHL in China, known as joint venture of DHL-Sinotrans, Danzas Air&Ocean China and Sentaifei was formed in 2003 in the end. b.The Service range The service of DHL in China can be divided into five main aspects as Express Services, Logistics Solutions, Road and Rail Freight, Air and Ocean Freight and Industry Solutions. Its range of services, as you can see, nearly covers all the parts of our daily life and business work. c. The Main Service Items With specialized orients, each aspect of the service has several supporting items of services, which can be seen from the below content: Express Services, as express delivery for express needs, has 4 items: Same Day, Value-added Services, Time Definite, Specialized Services and Direct Service Access(StartDay Express, MidDay Express, Worldwide Document Express and Import Express). Logistics Solutions is customised logistics and IT services for global companies, specializing in: Consultancy, Returns & Parts Management, Value Added Services,Specialist Services,Integrated Supply Chain,Warehousing and IT Solutions. Road and Rail Freight, your road and rail connection to European markets, which has:Trade Fairs and Events and Industrial Projects. Air and Ocean Freight, being the global network for air and ocean freight, has: Air Freight, Ocean Freight, Industrial Projects, Customer Program Management and Domestic Air Freight.
UPS is the largest parcel delivery service in the world. They also help their customers its customers with supply chain management, logistics, and financial services. UPS used to be a trucking company with technology, now it¡¦s a technology company with trucks. One of the UPS¡¦s key success factors is the way they manage their operations. Their carefully designed network of vehicles, sorting facilities, and hubs combined with their IT system, allows them to pick up 13 million packages each day from 2 million addresses for delivery to over 6 million commercial and residential addresses worldwide with highest levels of reliability, efficiency, and speed. Also the integration of its air and ground operations gave UPS the ability to optimize utilization of its assets while still meeting customer service requirements. Other key success factor is UPS¡¦s human resource management. UPS has lowest turnover rates in the industry and succeeds in developing a portion of its workforce for management positions each year. The company¡¦s unique culture emphasized accountability and efficient execution at every level of the organization.
UPS is a cargo company based in the USA that was first founded in 1907. It has since grown into one of the largest delivery company and delivers to more than 220 countries around the world. In 1975, UPS first embarked on its international ventures by moving into Canada and Germany in the following year. As UPS began to engage in more international operations, it became clear to the company that the need for an independent and self-sustainable airline had become a serious concern. By 1988, UPS provided route network to 41 countries, extending to Asia, Europe, and America. UPS Airlines was found not long after to negate the use of commercial flights and minimize legislative requirements (UPS Pressroom, 1975).
During the eighties many air express companies were formed and many were destroyed. However, three companies came out of this highly competitive period on top. They were FedEx, U.P.S. and Airborne Express. Airborne survived this highly competitive period by adapting to the external forces affecting the industry. One of the external forces affecting Airborne was the size of the competition. U.P.S. and FedEx were just swallowing up competitors. So Airborne decided the best way to compete was to be the low-cost provider of air express service. Robert Cline, CEO of Airborne explains their strategy “When you are up against UPS and Federal Express, those guys are so big and so well capitalized that you have to have a tool to fight with them. It wasn’t going to be size; it wasn’t going to be how well-known we were. So, we decided to be the low-cost operator.”(Washington CEO P 33). However, to become the low cost operator Airborne had to make many structural changes.
Federal Express is the world’s largest package delivery company today. They have been successful mainly because of their technological advancements. Technology has allowed them to have superior customer service and quality that was unparalleled by any company. No company was able to offer overnight delivery of packages with the speed and precision that Federal Express did. Although Federal Express remains ahead of its competition today, their advantages over other firms in the industry are slowly diminishing.
A switch from premium overnight services to lower – margin deferred services and ground delivery services is an advantage to Airborne Express. With existing assets including trucks, tracking systems, regional hubs and sorting facilities, they only need minor initial investments to develop fully these kinds of services. They should use these assets wisely and effectively.
FedEx provides shipping services through FedEx Express, Ground, Freight, Custom Critical, Trade Networks, and Supply Chain (FedEx, 2014). Tracking and package management services are available for all services through fedex.com (FedEx, 2014). FedEx also shares knowledge of shipping best practices on its website (FedEx, 2014). FedEx Office is another division of FedEx, where customers have an in-store option for taking care of their shipping, copying, and printing needs (FedEx, 2014). FedEx connects our global economy by linking 99 percent of the world’s GDP (FedEx, 2014). FedEx Express services every US address, as well as 220 other countries (FedEx, 2014). Some of the corporation’s new services include FedEx Delivery Manager and One Rate (FedEx, 2014). FedEx Delivery Manager is a service that is tailored to the needs of the recipient of a package (FedEx, 2014). FedEx One Rate is simply that, flat-rate shipping without the weighing and measuring (FedEx, 2014).
As mentioned in the case, there is a significant market potential (almost 870000 pieces per day) for documents and small package mailing. An analysis shows that in FEC stations, the volume for Courier Pak is 30% more than Priority One. That means Courier Pak market has a growing potential. In addition, it is found that the variable cost of it is the lowest among all other overnight delivery services provided by Federal Express (Table. 2). That means Courier Pak may be a more profitable product.
IT management also prepared UPS for BCP-DR to avoid downtime. UPS’s IT infrastructure allowed customisations to incorporate unique functional requirements of customers. UPS also reduced its application development time by reducing rework. It created reusable modular applications. UPS has been very receptive towards the opportunities created by the IT to boost its core business. Even after this UPS was not able to keep up its pace with every valuable system development request. By 2000, UPS had a major share in domestic integrated package delivery services, but had an insignificant share in international, though the international market was growing at a double-digit rate. Therefore, the UPS management decided to allocate IT resources to the most strategic opportunities and preserve as appropriate via infrastructure
Here in this case, the company has been facing the problem of dissatisfied customers. The company has been facing this problem because of improper handling of their logistics operations. Employees of companies that feel the pressure too much work asalso encouraged because of the inefficiency in their logistics. This issue has been faced by the company due to their inadequate understanding of international logistics. While analyzing the similarities between the local and global logistics are correct but they overlook the fact that there are basic operations the difference between global and domestic logistics operations.
Real Threat of Substitute Products or Services: High customer satisfaction earned through conscientious drivers, high reliability, and Internet-based tools has kept UPS at the top. UPS has created an economic advantage by assembling a dense integrated global shipping network that is unlikely to be matched by any but a few global players.
This rating as well as many others factors have lead to the success of the United Parcel Service. The current status of the company reflects the strength of the their competitive position. The leaders of the current which include James Kelly, Michael L. Eskew, and John A. Duffy have set an example for anyone who is interested in management as a career. Their tactical maneuvers are first rate. This company succeeded because of the drastic communication advances. The customer is ultimately satisfied with the reliability of UPS to deliver on time. This is the marketing factor that sets UPS a step above the competition All decisions were made in the respect that the company would continue to bring the customer more than they expected. In turn United Parcel Service is an extremely profitable corporation. The environment provided by UPS keeps customers, employees, and managers working hard to keep up the high standards set by todays’ customers.
Outbound logistics: They are made up of centralized logistic centers to promote efficiency, global network, reduced emission of CO2 by 22% to ensure ecological sustainability and lastly to improve customer service.
The company also localized its fulfilment platform in India by introducing Easy Ship and Seller Flex. With the former, Amazon couriers pick up packaged goods from a seller’s place of business and deliver them to consumers. With the latter, vendors designate a section of their own warehouses for products to be sold on Amazon.in, and Amazon coordinates the delivery logistics. This “neighbourhood” approach is convenient for sellers and has benefited Amazon by speeding up delivery of some
Water transport is not flexible because it is restrained within water bodies. The use of containers has becomes the best inter-modal option for water transport whereby goods are placed in containers and transported through truck or rail to the port where it is loaded in to a container ship. Upon arrival to the destination port it is offloaded and transported again by track or rail to the consumer of customes.This helps reduce staffing needs, transit time and damages (Haulk, 1998).