A Narrative Report in

Logistics and Supply Chain Management

_______________________________________________

“DHL Supply Chain Solutions, Philippines”

________________________________________________

in partial fulfilment

of the requirements in

Masters of Business Administration

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Submitted to

DR. ANNABELLE BUGHAO

Submitted by:

MARIE FE S ABALOS

MARY VIANNEY ALCAIDE

GABRIEL FLORES

MICHAEL IVAN S MAGLANGUE

JEREMIE MIRAMONTE

ESTELITO PERELLO

SHERWIN VELASCO

MARCH 2018
 INTRODUCTION

The purpose of the field education is to provide students within the MBA

program an opportunity to learn hands-on through an excursion or field trips.

Field education provides the students with an opportunity to gain first-hand

knowledge of operation and management systems in company settings, apply

theoretical knowledge to the different aspects on the business. In addition,

students learn to communicate oral, written, and technological information

reflecting professional business skills. It provides the students an opportunity to

integrate operational theory and knowledge from a generalist perspective. The

excursion to top Logistics and Supply Chain Company, DHL Philippines provides

a well structured environment in an urban-based setting for students to apply

generalist knowledge, values and skills learned in the classroom.

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

performed in real businesses. It helps in building up of the MBA students’

competence and professionalism. The excursion help the students get

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

will run the business.

The students excursion highlights the observation in Business Logistics

Management which includes all activities to move the product and other relevant

information that use to, from and the people behind the supply chain

management operations, such as the raw material suppliers, manufacturers

channels of distribution (the retailers and wholesalers) and to achieved the

integrated goals of supply chain management to the customers.

OBJECTIVE

 To identify the management services and organizational set up of the

supply

 To describe the different distribution process and the key terminologies

that may use in the supply chain management

 To explain the importance of logistics network to the economy

DHL SUPPLY CHAIN PHILS TARGER CUSTOMERS

CONSUMER - Unilever, Procter And Gamble, Universal Robina Corp., Monde

Nissin Corp., Avon, Fonterra, Personal Collection, Johnson, Pepsi

RETAIL - Sm Dept. Store, Ace Hardware, Bench

TECHNOLOGY – Nexperia, Dell, Nokia, Oracle, Cisco, Ericsson

OTHERS – Boston Scientific, Phil. National Red Cross, BMW

DESCRIPTION OF METHODOLOGY

The methods that may use is to conduct a research survey, questionnaire

and interviews that a logistics company knows what is need to accomplish to

become effective and efficient performance of operations in the supply chain

management for the satisfaction of the clients of a company.

DESCRIPTION OF ACTIVITY

The flow of goods or materials from point of origin to point of consumption

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

goods, services and related information from point of origin to point of

consumption for the purpose of conforming to customer requirement.

 ACKNOWLEDGEMENT

With deepest gratitude and appreciation, we humbly give thanks to the

people, with all they can, helped us in making our company excursion a possible

one.

To the institution where we are studying Olivarez College, where we are

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

us to study harder for our better future as Masters in Business Administration.

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

brainstorming and the open discussions on their operations and management.

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

support us and comfort us whenever we have difficulties with the collaboration of

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

Manager, Sir Danny.

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

with any conflict.

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

companies both in manufacturing logistics and finished goods distribution

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

class solutions and value.

DHL Supply Chain Philippines is dedicated to continuously improve our

operations and services to our customers. We seek long-term relationships with

class leading customers where we believe in building a scalable as well as

sustainable operations and network through integrating your businesses into one

that will bring about the best efficiencies, to save cost, improve services and

product quality, and be environmentally conscious.

DHL Supply Chain Philippines have 5 value proposition statements:

1. Demonstrated Experience in Consumer, Retail and Technology

Contract Logistics
 a. The company has a proven track record in implementing and

managing warehousing and transport services, relying on the

locally and regionally based experience teams.

b. The company minimize transitional and operational risks in

transitioning to DHL

c. Access to DHL regional and local solution design resources

(Warehouse Design and Optimization, Network Optimization)

2. Strong and Broad Capabilities Across the DHL Organization

a. One-Stop-Shop for logistics, air and ocean freight and express

b. Able to leverage on the expertise and buying power of each of

the logistics arms to provide an effective combination and

capability to accommodate Customer’s Business Growth

3. Robust and Operationally Efficient Solution

a. Strategically-located that meet the specs and scalability

requirements

b. Skilled, sufficient and flexible manpower provision

c. Advanced WMS system with capabilities of system interface

and RF

d. Ability to leverage World Class Consumer and Retail templates

for IT
 4. Dedicated and Proficient Customer’s Account and Management

Structure

a. Customer is one of the DHL’s top prospective customers. This

means that Customer will receive account management support

for this operation both local team and regional team

b. Provides pro-active monitoring, continuous improvement of

Customer’s business and generate appropriate

recommendations accordingly

5. Compliance

a. Direct Hiring of Labor in compliance with the Contractual Labor

Law enforced by the new administration in the Philippines

COMPANY PROFILE

DHL is the global market leader in international express, overland

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

document shipping to supply chain management.

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

Global Forwarding, DHL Supply Chain and DHL Mail.

 The MBA students’ narrative will focus on the Supply Chain division being

the chosen division and due to DHL’s enormous operation and management

functions.

The supply chain division comprises contract logistics services and

Corporate Information Solutions (Williams Lea). Both business units focus on

tailor made customer solutions.

The business unit Supply Chain provides warehousing and warehouse

transportation services as well as value added solutions along the entire supply

chain for customers from various sectors of industry, including the key

automotive, life sciences, technology, fast-moving consumer goods, retail and

fashion sectors.

The subsidiary Williams Lea is the heart of the business unit Corporate

Information Solutions. The expert for document-based outsourcing solutions

gathers, digitalizes, prints, stores, sorts, addresses, envelops, dispatches and

archives documents of all types. Williams Lea is also the right point of call for

electronic invoicing and marketing services.

 COMPANY HISTORY

DHL are the first letters of the last names of the three company founders,

Adrian Dalsey, Larry Hillblom and Robert Lynn.

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

profound impact on the way the world does business.

The founders began to personally ship papers by airplane from San

Francisco to Honolulu, beginning customs clearance of the ship's cargo before

the actual arrival of the ship and dramatically reducing waiting time in the

harbour. Customers stood to save a fortune.

With this concept, a new industry was born: international air express, the

rapid delivery of documents and shipments by airplane.

The DHL Network continued to grow at an incredible pace. The company

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

countries and had 16,000 employees.

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

and logistics activities into one single brand, DHL.

 COMPANY MISSION, VISION, STRATEGY

The vision is to be The Logistics Company for the World.

The mission – Excellence. Simply Delivered. – is our guiding light.

The Strategy 2020: Focus.Connect.Grow. is our roadmap to the future.

DHL connects people and improve their lives. And they do it by being

uncompromisingly customer-centric and delivering excellence day in and day out.

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

remarkable range of logistics solutions – from mission-critical express deliveries

to economical freight transportation, from taking the complexity out of customs to

managing the complexity of global supply chains and everything in between.

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.

Strategy 2020: Focus.Connect.Grow.

 The vision, mission and goals for the future are laid out in the company’s

“Strategy 2020: Focus.Connect.Grow." It’s a simple strategy without being

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.

Focus on what has made us successful. DHL is a global logistics

company that is well-positioned in the world’s growth markets. DHL remain

focused on logistics as our core business. The company also reconfirm their

commitments made in Strategy 2015 to be Provider, Employer and Investment of

Choice as well as to contribute to a better world, which we call “Living

Responsibility.”

Connect across the organization. Their people around the world

possess an enormous wealth of know-how, expertise and talent. They are

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

was to introduce our worldwide Certified program, which is a specialist training

program for our entire workforce.

Grow in new market segments. The company is expanding the business

in growth markets and segments, especially in emerging markets and the vibrant

e-commerce markets of the world. There is so much potential to build on the

business success and gain market share, and aim to broaden logistics services

and tap into these opportunities as it move towards 2020.

 TERMINOLOGIES EXPLAINED

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

paid or the goods are exported or legally dealt with.

Brokerage

Often refers to customs brokerage, where a third party is used for the

clearance of inbound or outbound shipments.

Cargo Manifest

A Cargo Manifest lists the goods carried in a means of transport or in a

transport-unit.
 The manifest gives the commercial details of the goods, such as:

 transport document numbers

 consignors and consignees

 marks and numbers

 number and kind of packages

 descriptions and quantities of goods

It may be used in place of the Cargo declaration.

Certificate of Origin

This is a specific document that expressly certifies that the goods to which

the certificate relates, originate in a specific country.

This Certificate may also include a declaration by the manufacturer,

producer, supplier, exporter or other competent person.

CIF

An abbreviation used in some international sales contracts, when the

selling price includes all “Costs, Insurance and Freight” for the goods sold.

This means that the seller arranges and pays for all relevant expenses

involved in shipping goods – from their point of export to a given point of

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

Convention on International Trade in Endangered Species

Consular Invoice

This is a detailed statement of goods shipped, certified by the consulate of

a country. It is required by certain foreign governments that want a tighter

control over imports.

Customs Declaration

Any statement or action, in any form prescribed or accepted by Customs,

giving information or particulars required by Customs.

De Minimis

This is a Latin term and is a shortened version of the expression “de

minimis non curat lex” meaning “the law does not care about very small

matters.” It is often considered more efficient to waive very small amounts

of duties and taxes rather than collect them.

EDI - Electronic Data Interchange – the electronic transmission of data.

Free Zone

An area within a country (a seaport, airport, warehouse or any designated

area) regarded as being outside its customs territory. Importers may

therefore bring goods of foreign origin into such areas without paying

customs duties and taxes. This is always pending eventual processing,

trans-shipment or re-exportation. Free zones were once numerous and

prosperous when tariffs were higher many years ago. Some still exist in

capital cities, transport junctions and major seaports, but their number and

prominence have declined as tariffs have fallen in recent years. Free

zones may also be known as "free ports," "free warehouses," "free trade

zones" and "foreign trade zones."

Harmonized System

The international system published by the World Customs Organization

that sets out in a systemized form the goods handled in international

trade.

Goods are grouped in Sections, Chapters and sub-Chapters that are governed

by rules.

Incoterms® Rules and Trade Terms

“Incoterms” is a trademark of the International Chamber of Commerce.

Incoterms® rules and trade terms are recognized and accepted as the
 standard for international trading and are regularly updated as commercial

conditions change. Terms were last amended in 2010.

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 certificate issued by a Government agency (usually Agriculture) to

satisfy import regulations of foreign countries. The certificate indicates that

a shipment has been inspected and found free from harmful pests and

plant diseases.

Preference (or Preferential) Duty

A lower duty rate based on the value of the goods and dependent on the

country of origin.

Pro-forma Invoice

An invoice provided by a supplier prior to the shipment of merchandise,

informing the buyer of the kinds and quantities of goods to be sent, their

value and specifications (weight, size, etc.).

UN/EDIFACT

United Nations EDI For Administration, Commerce and Transport.

EDI (Electronic Data Interchange) Standards are developed and

supported by the UN for electronic message (data) interchange on an

international level.

SOLUTIONS ACROSS THE ENTIRE SUPPLY CHAIN

DHL Supply Chain Philippines services are Warehousing, Transportation,

Value Added Services and Management Services.

As the world's largest logistics specialist, the company offer a

comprehensive suite of services drawing on our global scale and local insight to

deliver value across your supply chain.

From the initial consultancy and design, to final mile delivery and reverse

logistics, it provides customized supply chain solutions across all industry

sectors.
1. PLAN

a. Supply Chain Consulting (SCC). Many customers come to DHL

with a business problem, and not necessarily one in their supply

chain. Through supply chain consulting and network design

studies, DHL help customers with the big picture; what's working

and what can be optimized for improved operational efficiency

and better customer service.

b. Lead Logistics Provider (LLP). At DHL, being Lead Logistics

Provider (LLP) means instigating and managing change across

your entire supply chain, to meet changing business and

customer demands. DHL do this by bringing continuous

 improvement and cost reduction, introducing lean logistics

processes and optimizing logistics networks.

2. SOURCE

a. Integrated Supply. Co-locating services alongside the storage of

your products not only saves money but removes steps in the

supply chain. The elimination of transportation time to a

packaging facility means you can reduce your lead times and

decrease your inventory.

b. Inbound Supply Chain Management.

3. MAKE

a. Manufacturing Logistics. DHL ensures the right components are

delivered to the right manufacturing point at the right time. DHL

solutions provide complete end-to-end logistics management of

inventories, facilities, and labor associated with the inbound flow

of materials

4. DELIVER

a. Distribution Logistics. Nothing makes consumers happier than

getting what they ordered, delivered to their door, right on time,

as promised. By combining distribution centre operations with

 our home and office delivery operations, DHL helps you service

your customers more efficiently and effectively than ever before.

5. RETURN

a. After Market Logistics. Re-work or redress is the customization

or modification of products, often to suit a local market. It covers

the re-packing of finished products to support product launches

and promotions, and can also include re-palletization.

b. Service Logistics. DHL designs and maintains systems that not

only get your customers the parts they need quickly, but also

help you to anticipate and prepare for that demand. DHL gives

you a complete perspective of your supply chain and an

inventory of what you've got in stock and in motion. It’s all

managed by an end-to-end model, integrating transportation,

warehousing, and repair-cycle management.

c. Return Logistics. The key to a successful supply chain is not

only planning how to distribute your product, but how to bring

back both customer returns and obsolete products. Managing

returns effectively lets you recapture value, reduce write-offs

and keep your customers happy.

 DHL SUPPLY CHAIN PHILIPPINES: VALUE ADDED SERVICES

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

chain. From sub-assembly, packaging services, customization, postponement,

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

In DHL Supply Chain Philippines, one of the most important logistical

Functionalities is the IT solution. DHL provides an IT solution based on WMS

(Warehouse Management System), TMS (Transport Management System),

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

the rest of the Asia Pacific Region.

DHL has a vast experience in deploying WMOS (Warehouse Management

Open System in the retail market. The WMOS is based on the leading WMS from

Manhattan Associates. Why did DHL chose Manhattan Associates? The

reasons are 1. They support a zero modification implementation in complex

operations ; 2. The solution fits to variety of WMS environment; from moderately

complex to extremely complex, sophisticated and high volume warehouse

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

operations, it eliminates inventory release error by receiving in proper inventory

status and quantity and storage automization. In inventory management, it

reduces inventory aging by apply in FIFO(First In, First Out) principle and

alphabetical inventory management, recall is available in less than 2 hours and

availability of cycle count. And in outbound operations, it eliminates no value

added activities by process automation, improved picking productivity using

several picking strategies such as wave, cluster and batch.

Also with help of these IT solutions, DHL is able to gather paperless,

accurate and real time information and communication. Accurate order entry.

Master data capturing and accurate order communication is achieved.

Warehouse management, as for my observation, items are managed

alphabetically and depend on what company they are from. Also special

considerations are observed such as in the case of Cisco product. Items are

stored in an air-conditioned room kept in a certain degree of temperature. All in

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

firms to use customer service as a dynamic value-adding competitive tool.

Warehousing is also known to be an integral part in a logistics management

system, especially for fairly large businesses that deal with bulk sales &

purchases. Thus, warehouses play an important role in the process of price

stabilization.

With that being said, warehousing is actually very common in the industry

of logistics in a sense that warehousing can never be omitted nor be replaced by

other means of storing business goods.

DHL Supply Chain offers a wide range of logistics services and

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

services such as warehousing, domestic distribution and manage transport value

added services.

In terms of warehousing service that DHL Supply Chain Philippines offer,

they have 15 locations nationwide which are not owned, but instead are

customer-owned facilities since DHL is a foreign company here in the

Philippines. So with that in mind, those 15 locations may not be actually owned

by DHL Supply Chain Philippines but still they are the ones who are there to

manage the operating warehouse that is again a customer-owned facility.

It is said by General Manager Jeff Lim of DHL Supply Chain Philippines

that everything in logistics in terms of operations can never be done in standard

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

warehouse, again it will be based on the requirement of the client.

So if one would ask, why is it that everything should be client-specific? As

stated by General Manager Jeff Lim, it is client-specific because all operations

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

procedure in the supply chain management called Case-pick in which 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

manner and will not meet the client’s requirement as well.

Situations such as these must be considered that is why the overall lay-

out of the warehouse will depend on the client’s order.

In terms of providing a better service and in order to serve the client

specifically to their requirement, DHL Supply Chain provides a questionnaire for

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

solutions. So as it is emphasized earlier, that the procedure in supply chain to

better serve the clients is not standard but will always depend specifically to the

clients, and as mentioned by General Manager Jeff Lim that it is common in

logistics warehousing the idea or standard procedure of receiving, storing,

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

cheaper price is no longer acceptable in the business and logistics industry. If 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

of the many factors to consider.

As stated earlier that the common sense in logistics industry as a whole is

the idea of receiving, storing, dispatching, and delivering. Hence, there is a risk of

human error in the process, which is why barcodes is a need to accurately

identify or track something especially in handling the client’s bulk and rapid

growth of retail, manufacturing and related industry segments.

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.

A part of the ideals in the logistics industry particularly in warehousing, is

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

receiver will send an E-mail to the Logistics Supply Chain department

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

countries such as Australia and Japan in terms of packaging. Other foreign

clients accepts the package as long as it is well packed and are good to go, but

when in Japan it needs to be in another box to be sealed in and be fully protected

to avoid dents or scratches; situations such as these must be given careful

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

economies of scale through efficient operations, storage capacity and a central

location.

SYSTEMS AND DESIGN

DHL offers a comprehensive suite of capabilities and work with a range of

best-in-class software partners. The state-of-the-art systems monitor and control

all critical warehouse processes. They also provide support for transport and

distribution operations and communicate with customs and other authorities.

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

unrivalled experience and expertise.

Warehouse management systems record all events and activities in the

receipt, handling and storage of products and orders in the warehouse or

distribution center, including the location of inventory.

The Cost-Benefits of DHL in using integrated logistics system:

 Access to, and influence over, leading-edge supply chain technology

  Access to best-in-class applications that are platform and database

independent – facilitating standardized business processes

 Rapid start-up and reduced risk in global deployment - including project

delivery, service management, supplier management, - integration and

hosting

 Scalability and repeatability worldwide

 Unrivalled expertise in interfacing with your stock control, resource

planning and business information systems

 Proven, pre-integration with other supply chain partner systems - including

visibility and control.

DHL Supply Chain Solution:

Before proposing a solution, DHL approach is to understand the

underlying business issues and needs. Many customers come to them with a

business problem, and not necessarily a supply chain problem. They listen and

help them identify growth objectives, key customers, profitability goals,

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

that can create real value for your business.

 From planning, sourcing, production, storage, configuration and delivery to

after-sales, our customers can rely on us to provide robust solutions that work for

any industry, in any environment, no matter how demanding.

DHL Design solutions:

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

backwards through manufacturing and supply to identify the most logical

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,

facilities, vehicles and systems come together to create a best-in-class operation.

From conventional use to fully mechanized operations, from dedicated fleet

operations to shared use and sub-contracted transport, our analysis drives

solutions that, quite simply, work.

DePICT Project Management Methodology

Through our DePICT project management methodology, it ensures that

the design is implemented on time, on budget and becomes an operational

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

outcome. So they do more than delegate responsibilities. DHL defines roles,

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

opportunities before they happen, which is key to keeping a project on track.

Quality Assurance

Based on ISO 9001:2000 principles, DHL quality assurance approach

emphasizes customer focus, associate involvement, and continual improvement.

Each site completes a monthly scorecard. The results are reviewed by senior

management to identify successes and opportunities for improvement.

How DHL quality assurance is different:

They provide structure and mechanisms that establish predictable and

compliant performance. Training tools and documentation provide clear direction

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

customer expectations, performance objectives, and comply with all relevant

statutory and regulatory requirements. They hold active certifications for

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

structure to achieve compliance with most regulatory and standards agency

requirements.

DHL SUPPLY CHAIN PHILIPPINES ADMISNISTRATION

DHL has established a governing council.

DHL has a governing council that manages their global operation with a

revenue of EUR 57.3 BN employing about 510,00 employees worldwide. The

mother organization which is the Deutsche Post DHL has a Board of

Management under the German Stock Corporation. Deutsche Post has a dual

management and supervisory structure wherein the board of management

currently consists of seven members. The supervisory board consists of twenty

members where it advises the board management and oversees its management

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

constant and consistent validation of strategy.

The operational members of the council help address, remove, or steer

the supply chain efforts in such a manner to ensure that the supply chain

organization is given the opportunity to perform.

DHL fosters internal organizational buy-in that is needed to be an effective

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.

DHL align the supply chain organization based on a set of strategies.

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

centralizing strategy to gain consensus, with decentralized execution to improve

their services.

Regardless of the emerging trend in supply chain organizational

effectiveness, DHL is set to roll up under the supply chain leader the functions of

Sourcing, Materials Management, Logistics, Forecasting/Demand planning, and

Contract Management.

DSC Philippine Senior Management

Recruit supply chain professionals.

Since 1984 DHL Philippines has branch 15 locations nationwide

expanding services to various industries in consumer services, retail, technology,

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.

To expand the capability of their team, DHL are recruiting, internally as

well as externally, for two kinds of skills:

 Technical skills. DHL are recruiting for analytical skills to assist sourcing

teams, new procurement skills (such as contract management), and

subject matter expertise in a wide range of product and service categories.

 Project Management skills. In addition, DHL are recruiting experienced

professionals with a partnering and internal marketing mind-set. They are

looking for professionals who can partner with business unit leaders to: (1)

follow their customers’ changing needs, and (2) find key suppliers who can

continually address those changing needs.

 Department Order 174-17: Prohibition against Labor-Only Contracting

The order reiterates the proscription against engagement with a contractor

or subcontractor who: does not have a substantial capital or investment,

merely recruits and places workers to the principal without any formal of

regularization, perform activities which are directly related to the principal

 business of the employer and does not exercise control over performance

of the work of the employee.

 DHL Supply Chain: Systematic Labor Model

DHL hiring and regularization of employees with salary equal to the

minimum wage and benefits slightly above so DHL is compliant and

remains commercially competitive in the market: uphold DHL service

quality standards exercising full control over employees” manner and

method of performing the contracted services, further advance the DHL

Culture respect and result across the organization, simplified

communication channel and expected low attrition rate.

 Benefits to Consumer as DHL’s Principal

DHL offers a fully compliant labor solution eliminating the use of sub

contracted manpower and removes risk of IR or redundancy claims from a

non-regularized workforce

Set the strategic sourcing strategy.

Strategic sourcing is a cornerstone of DHL supply chain management. A

successful collaborative strategic sourcing initiative not only ensures availability

of supplies, but will result in the obtainment of overall lower total cost,

streamlined processes, and increased responsiveness to customers’ changing

needs.
 DHL strategic sourcing is not just a purchasing department initiative. It

requires input from all functional areas such as integrated supply and inbound

supply chain management. These also include services such as warehousing,

transportation, value added service and other management services.

Establish key supplier alliances.

The ultimate success of DHL strategic sourcing depends on the team’s

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

selected suppliers from consumer, retail, technology and other groups.

The primary goal of DHL supply chain organizations is to channel their

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

Integrated Supply Chain Solutions program in place, DHL supply chain

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

activities, primary movement, distribution centers, secondary movement, B2B &

B2C distribution and after sales service.

Corporate Social Responsibility: DHL GoGreen Solutions.

DHL optimized transport routes, vehicles with alternative drive systems

and energy-efficient warehouses: There are many ways to reduce climate-

damaging CO2 emissions and other environmental impacts in the transportation

and storage of goods.

Working with various customers, DHL want to leverage this potential. This

is call the GOGREEN. DHL believe that environmental protection and business

success are not just compatible, they are closely interlinked

With DHL expertise and global presence, DHL can offer business

customers a broad portfolio of green products and services. By providing detailed

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

nitrous oxide. And in accordance to the internationally recognized, cross-sector

standard 'Greenhouse Gas Product Lifecycle Accounting and Reporting' we also

take upstream emissions into account that originate in the production and

transport of fuel and energy.

In DHL, Green Optimization service, DHL work with customers to identify

areas for improvement, and ways to achieve a reduction of greenhouse gas

emissions. DHL analyze our customers’ entire logistics chain, and work with

them to optimize trade routes and transportation modes. Additionally, DHL

suggest ways to improve their overall environmental performance.

And to compensate for unavoidable emissions, DHL offer Climate Neutral

services. Participating in the voluntary emissions trading scheme, we purchase

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.

PERFORMANCE AND QUALITY MANAGEMENT

OPERATIONS EXCELLENCE

DHL has in place a global initiative known as First Choice which is a

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

improvements such as: customer satisfaction review, business metrics,

continuous improvements, project delivery and assurance

 Performance Measure – also can be known as a KPI (Key Performance

Indicator), One of the most important aspects to be considered in relation to

performance measurement process is that the performance measures work

qualitatively to provide the useful information about products, processes and

services that are produced in a business. Hence, implementing performance

measures is a great way to understand and manage and improve what a a

business organization does. The measurement of performance is a continuous

process which involves checking the performance against the standards that

have been fixed to be followed. It leads to compare the actual performance with

the established standards. A manager needs to supervise, observe and control

the activities of his subordinates while he is involved in studying various

summaries or reports, so that he may manage the work in an effective manner

getting the things accomplished in a desirable manner. It requires the manager to

constantly check the performance in order to take corrective actions in case of

deviations ensuring that such deviations do not occur gain. Thus the

Performance measurement is an on-going, continuous improvement operation.

They measure KPI through Inventory Accuracy the accuracy of your

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

in inventories can lead to unexpected backorders, customer dissatisfaction and,

ultimately, higher overall costs., Receiving Accuracy, timeliness The Timeliness

of Issue Resolution metric helps your team gain insight into how effective and

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

ratio of finish goods or shipments delivered on time to customers as a

percentage of total units delivered or shipped. dispatching, and receiving on time.

 CONCLUSION AND ANALYSIS

The DHL Supply Chain Philippines provides us a stimulating atmosphere

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

System all the different solutions to their customers.

The DHL supply chain Philippines has each industry expertise in key

sectors. They have in-depth knowledge and experience in a variety of sectors,

with a strategic focus on Life Sciences & Healthcare, Automotive and

Technology. They grew in the year under review with our acquisition of

Mitsafetrans S. r. l. and a subsidiary. The companies provide logistics services

for the technology, pharmaceutical and high-tech industries.

The Life Sciences & Healthcare sector is increasingly outsourcing parts of

its supply chains to providers who can ensure compliance with stringent

regulatory requirements. Rising demand for packaging services, temperature-

controlled transport, warehousing and direct-to-market solutions, is driving

growth in this sector.

In the Automotive sector, production is shifting increasingly to emerging

markets such as China, India and Mexico. Integrated solutions such as Lead
Logistics Provider (LLP), offer growth opportunities in this highly competitive

outsourcing sector.

Companies in the fast-paced Technology sector require an agile supply

chain to handle fast-moving products with short life-cycles quickly and cost-

effectively. Flexible solutions that allow our customers to respond to market

demand are creating business opportunities in this sector.

DHL is not just a company that commits to their profitability but has their

engagement to their employees and to the local community. Social commitment

is important to their employees. The high rate of participation shows just how

important social commitment is to their employees. By helping solve problems in

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