Issue: Sep 2008


Competition leads to new alliances - DHL



Competition leads to new alliances - DHL

by Steve Barclay

Internal and External pressure continue to force redesign and change within the Automotive industry forging new alliances and collaboration between competitors in the automotive market.
Environmental factors are also high on the agenda for the logistics service providers, and there is a clear need to measure and address the extent of our carbon footprint. The Automotive Industries have focused on product propulsion innovation, cleaner diesel and hybrid technologies and less on green supply chains - which is where the Automotive and transport industries are behind other sectors such as retail - in recognizing and reducing their carbon output. DHL Express has developed a range of carbon neutral and low carbon products and services. Other focus areas in support of the environment are clean technology vehicles, technology to support route optimization and improve fleet load factors.
Underdeveloped logistics infrastructure can be one of the reasons that a country might be “low cost”, and to be successful and leverage these opportunities the logistics service providers must ensure the same levels of service as other markets and grow into these areas and by doing so will support the realization of the most efficient logistics strategy. At DHL we have expanded our coverage and grown into the new markets in Asia, Central and South America, Africa, the Middle East and the emerging markets and supplier bases bordering the European Union. Historically this is lead by the air express industry for development volumes, followed by road, sea and air freight solutions as volumes increase and infrastructure develops. The DHL air express services lead the way with the fastest possible guaranteed delivery capability for large and small batch volumes with high visibility for all customers. The road based DHL EUROPLUS service now reaches Romania, Bulgaria, Greece, Turkey and Russia with a day certain door to door delivery linking them directly to the Western markets and then onwards to the global economies. This product aligns perfectly in the groupage segment, being able to carry cartons or pallets within the same network and where local service providers ( LSP’s) specializing in customized solutions, full truck and part truck loads are considerably weaker and not competitive in their offering.
It is widely recognized that the automotive industry suffers from an imbalance between the inbound and outbound logistics and aftermarket segments. In inbound logistics there are still opportunities to gain cost reductions and saving by balancing flows, selecting the correct mode for batch size and returnable packaging. In the outbound segment again there is opportunity to reduce finished goods stock levels and continue the move towards build-to-order, eliminating the rush to build only to leave finished vehicles parked in compounds before selling. In the aftermarket segment waste is an issue, with minimum order quantities inflating inventory levels, single daily dealer parts deliveries and availability leading to blocked service bays and high levels of courtesy vehicles to cover repair delays. At DHL we have developed a solution to help reduce stocks and speed up repair times which in turn reduces the vehicles held overnight and the requirement for courtesy vehicles with their associated costs. This solution offers regular deliveries to dealerships and repair centers throughout the working day of service kits or repair parts eliminating almost totally the requirement for local stocking whilst improving the overall value proposition to the end customer. The dealer deliveries can be scheduled up to three times per day allowing for investigation, diagnosis, replacement parts order, receipt and repair on the same day, greatly improving productivity and service bay efficiency and reducing local inventory, stock obsolescence and the requirements for customer courtesy vehicles.

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