Operational Strategy: An Overview
Question:
Discuss about the Strategic Reorganization of the Supply Chain in DHL Company.
The supply chain of DHL remains to be the Deutsche Post DHL organization that comprises of different branches in at least two hundred and twenty nations internationally. Besides being with various offices in the global society, the company still experiences operational change. According to Childress (2015, p. 24), the change in operation result due to the rapid advancement in technological usage, improved road networks, as well as the modernized communication channel. The difference makes the society to find the alternative, comfortable, convenient, and cheaper method of communicating and sending their luggage to their peers, customers, or relatives without necessarily relying on services of DHL Company (Angheluta and Costen 2011, p. 64). Despite all these improvements, DHL Company concentrates on ideas that allow them to remain as the global organization that deals with express deliveries, worldwide delivery of freight by road, rail, and air. It also focuses on the strategic reorganization of the supply chain to ensure that their branches remain to provide appropriate warehousing solutions that comprise of storage, repairs, packaging, mail delivery around the globe, as well as involvement in many other services that deals with logistics (Agus 2011, p. 134). Therefore, the primary target of this research paper is to examine operational strategy that include strategic reorganization of the supply chain by DHL Company that experiences operational changes to remain highly competitive among its chief competitors in the global marketplaces.
The focus on the operational strategy through strategic reorganization of the supply chain by the management of the corporation has enabled the company to operate while establishing two significant sections that comprise of delivery of mail together with transport and logistics sector. Cases of globalization, technology, and increased usage of the internet have remained to be the primary contributors to the narrowing the gap that existed between DHL Company and other companies that deals with the same services along the supply chain (Chen 2012, p. 9). All these factors have made DHL Company to experience continuous changes in its operations continuously. Operation strategy on the strategic reorganization of the supply chain by DHL Company remains to be the critical factor that leads to the success of the supply chain of the company to be capable of overseeing the process of integration of every activity during company’s operations.
Active processes of operations within an organization are always characterized by how appropriate the organization can deliver value to its targeted and esteemed clients. The operations strategy of the company relates to the practical plans together with tactics the company designs for the allocation of operational resources. According to arguments by Craighead et al., (2017, p. 7), the procedure of operation matrix comprises of formal and informal assessments of dynamics like capacity, the demand of marketplace, core competencies, and logistics of supply. Besides, the operations strategy matrix remains to be the device applied by the management of strategy to help in assessing these significant factors that impact operations of different companies that are experiencing operational changes like DHL Company.
Supply Chain Reorganization in DHL Company
In operations of DHL Company, operational strategy matrix performs different purposes that help in reorganizations of its supply chain. For instance, operations strategy matrix helps in identification of danger factors that are present in operations of DHL Company. Therefore, the aim of operational strategy matrix remains to aid in the process of classification and assessing real risks and actual failures that make DHL Company experience functional changes. Hutfield and Heap (2012, p. 68) illustrated that the matrix of operational strategy assists in reviewing the core elements of the company. The core elements of operation strategy matrix comprise of performance targets, decision areas, usage of resources, as well as marketplace competitiveness. Therefore, in strategic reorganization of supply chain within DHL Company, operations strategy matrix can be term as the checklist of different operational issues that DHL need to evaluate when concentrating on ideas of developing the comprehensive operational strategy to help in the reorganization of its supply chain.
Every strategy of reorganization of the supply chain, help DHL Company to interrelate as well as connect its operations by the cause along with effect relationship. Therefore, the DHL Company work collaboratively to concentrate on ideas that help to improve its activities of service delivery to its esteemed and targeted clients. The increased changes in operations of DHL Company have made the management to establish the headquarter of the operations in Bonn a city in Germany while employing more than one hundred and thirty thousand workers to support supply management activities of the organization (Hueiner et al., 2014, p. 34). DHL Company has focused on the development of consumer and retail sectors to ensure that every need of consumer are met so that they can remain to use the services offered by the company over its chief rivals. In the sectors of consumers and retails, DHL Company provides several services as well as their supply chain that comprise of ideas of planning, sourcing, production, storage, together with services that adds value to the company (Illyas et al., 2017, p. 62). The focus on improving service deliveries has made it necessary for management to concentrate on ideas that make the company be the international leader in contract logistics with over eight point three percent marketplace share within the very fragmented marketplace (Ojala 2014, p. 72). Besides, the company has concentrated on the development of several branches of its operations across most major cities around the global nations.
The primary purpose of strategic reorganization of the supply chain in the DHL Company aims to improve its operations in the competitive market that make it experience operational changes for the company to grow through excellence. As urged by Egelhoff et al., (2013), the process of strategic reorganization of the supply chain in the DHL Company makes the company to targets to steadily to improve the existing operations of its business that keep on changing and achieving sufficient progress in the key sectors of the economy. According to (White 2017), the sections that deal with supply chain section concentrate on the application of the corporate strategy for reorganization in the changing marketplace. The ideal strategic reorganization of the supply chain in the DHL Company aims at improving the objectives of the company to enhance the profitability of the company by ensuring that every set strategy is attained to reduce cases of operational changes. Besides, department of the supply chain of the DL Company comprises of the focused plan that focuses on improving the expertise in all operational sectors (Ilyas et al., 2017, p. 66). The strategy ensures that the company stays to be capable of developing as well as reproducing logistic outputs that control cases of experience functional changes.
Role of Operations Strategy Matrix in DHL Company
Strategic reorganization of the supply chain of the DHL Company concerns with various series of events that ensure that satisfaction of customers with the services offered remain to benefit from the supply chain. The need to implement the Parcel 2012 Production concept by the DHL Company can help in reorganizing its operations that will effectively help in reducing cases of operational shifts. Hutfield and Heap (2012, p. 68) argue that the use of such theory is vital as it ensures that there exists efficient sorting together with transportation of goods that will lead to improving efficiency while lowering charges for supply series. Strategic reorganization of the supply sequence can concentrate on enhancing innovative approaches and new products within the marketplace (Egelhoff et al., 2013, p. 213). The idea always ensures that DHL Company will be capable of coming up with the ideal number of products aimed at lowering operational changes and costs while improving efficiency. As reported by Ojala (2014), the success of operations of the DHL supply chain business has always resulted in increased services and development of the company. To support this kind of transformation that deals with experiences of operational changes within DHL Company, there is the need for the people responsible for its operations to step up to advanced levels of efficiency and performance. Every individual within the organization needs a quick approach to understanding the part that the can actively play in the process of delivering the overall strategy for the supply chain.
DHL Company can concentrate on commissioning the manufacture of the electronic automotive that will ensure that there exist efficient transportation of emails and goods during transit. The strategic reorganization of supply chain within the DHL Company can help in providing the company stays in the forefront in developing client cantered products for ideal delivery of services together with commodities. According to Hughes (2016), the use of strategic reorganization for the supply chain, the company can become one of the corporations that introduce the device that tracks the footprint of carbon on shipments that tend to improve the security of goods. The idea can be vital in ensuring that efficiency in the delivery of services and products in the operations that are continually changing. Ideal strategies for reorganization can be useful in providing that introducing Flexi tank that allows clients to ship bi quantities of non-hazardous liquids around the entire globe. The use of Flexitank remains to be necessary for cutting costs of transportation while making delivery of commodities such as liquids to be more efficient (Agus 2011, p. 134). Besides, strategic reorganization of the supply chain can enable the DHL that faces operational changes to deliver every good assigned to its operations.
Strategic reorganization of the supply chain of the DHL Company will help the company in utilizing the number of existing strategies in ensuring that they affected operations improves and stays at the top of the logistics companies around the entire globe. One of the strategies they have set in place is to ensure that they put the esteemed and targeted customer as the primary focus and ensure that their customers get quality goods and services. Kumar and Blair (2013, p. 1236) stated that DHL Company has focused on providing that they have the appropriate prices in the industry and have various specialized services offered to dedicated customers. Such specialized services comprise of Flexitank that enables targeted customers to ship large quantities of non-hazardous liquids as well as Thermonet that allows company’s customers to send temperature-sensitive shipments. The company also operates by having has Time Definite International (TDI), that remains to be the on-time delivery service guaranteeing efficient and timely delivery of goods
Consumer and Retail Sectors
Once a supply chain order has been received at DHL Company, the first step is planning on how the delivery will be made. In this phase, the company managers are supposed to identify the assets and resources that will be used to complete the order and ensure that they will be enough for the task. They are then expected to source the benefits and apparatuses that will be supposed to execute the errand efficiently (Haraburda 2016, p. 13). In this progression, they should guarantee that they have the right labor and assets for the fruitful execution of the chore. They are then expected to take part in the make stage which will require that they participate in any creation exercises is necessary for the assignment. After creation, they should do bundling of the item and discharge it for transportation (Hitt 2011, p. 11). While in travel, the request will have conveyed to eliminate that hopes to guarantee that there is the fruitful conveyance of merchandise to the end clients.
DHL Company uses all the seven principles of strategic cost management. These principles include defining clear and consistent objectives, provision of tools and knowledge for success, having excellence as the only performance target, understanding the impact of real costs during decision making, reducing organizational complexity, having rational management decisions, and commitment in business (Gina 2016, p. 29). DHL Company uses these principles to engage in different cost decrease systems to guarantee that they offer the best costs in the business. One of the cost decrease strategies utilized is to deal with all exercises over the whole production network (Chen 2012, p. 24). In doing this, the company uses its warehouses, resources, and transportation thus minimizing contracting and sourcing costs (Craighead et al., 2013, p. 219). Additionally to this, DHL has a simplified organizational structure which ensures that less revenue is used to pay managerial staff. It also reduces the number of required assets and office space thus cutting on costs.
For DHL Company to have adequate strategic cost management, the company is supposed to adopt some tools that will help increase efficiency and accountability. The first tool is value chain management concept. Understanding the new esteem chain of an organization will help chiefs to distinguish centre and sham exercises along the chain in this manner giving them simple time when settling on choices along the esteem chain (Childress 2015, p. 25). Another instrument that can be received is the objective cost bookkeeping. Understanding target expenses will help administrators to set reasonable costs for items while as yet keeping up decent overall revenue. Item life cycle is additionally another apparatus that can be utilized to decide. Understanding the life cycle of an item will help administrators to settle on the correct cost choices of the question. Another device for important essential leadership is action based costing or administration. It allows managers to focus their attention on activities that improve customers’ value and the resulting profits the achieved (Huner et al., 2014, p. 35). The last device meant for the cost of strategic management is the analysis of competitive advantage. Understanding the upper hand of a firm will help directors to utilize this preferred standpoint when setting item costs along these lines improving cost administration.
International Leader in Contract Logistics
In summary, it is clear that DHL Company has established a well operation strategy through the use of strategic reorganization of the supply chain during its operations in the competitive world. It is evident that advancement in technology, improved communication, and improvement in transportation network remains to be the significant factors that make DHL Company experience operational costs. Therefore, the capabilities to control all transactions along with activities as well as operations across the whole supply chain within DHL Company in a highly competitive advantage or market over its chief rivals. Besides, strategic reorganization of the supply chain in DHL Company through operation strategy help in streamlining communication along with the flow of services and products making the company develop efficient processes as well as services during its operations on the competitive marketplace. The development of such efficient services and process by the company enables it to be the most preferred organization for supply chain activities over other companies that offer same services in the same competitive marketplace.
Some of the important suggestions for DHL Company following the strategic reorganization of its supply chain in operation strategy comprised of:
- DHL Company is required to be capable of incorporating different gifts or discounts to their freights along with charges of transportation. Such idea is essential in attracting more clients into the company’s system. It will also help in maintaining esteemed customers to continue seeking services of the organization such as freight transportation and delivery of emails.
- DL Company is needed to be capable of incorporating various usages of technological advancement techniques such as internet together with e-commerce. The company can then use such services in their process of the supply chain to allow for the efficient along with the cost-effective approach of transferring data and payment.
- The company needs to concentrate on how it can introduce the analysis of variance as well as other practical strategies for measuring charges of its operations to help it understand how to make attainable budget for services. The company is also supposed to automate costs along with performance measurement using software for the information system to eliminate cases of operating changes.
- The DHL Company need to incorporate data systems in the whole supply chain to enable its operations to leverage the merit of usage of internet in supporting activities and changes in global marketplaces. The recommendation will also assist in developing the automated system thus increasing efficiency together with the reduction in costs of services. Such decreases can help in ensuring that the company invests its profits on ensuring that operational changes do not decrease its consumer base but attracts more over their chief rivals in the business operations.
- The company is supposed to ensure that they have the ideal approaches and practices in all strategic objectives, activities, and functional departments. This recommendation will help during the reorganization of operations of DHL Company by ensuring that their strategic objectives in the marketplace remained to be aligned with different activities together with goals of departments.
- DHL Company needs to form the activities that concentrate on the use of electronic devices for communication through integrated ERP as well as software management to improve on efficiency along with speed of communication within the supply chain that helps in reorganizing operations of the company within the operational changes.
- DHL Company is needed to utilize integration of system across all the departments that are functional along with divisions of operations to develop the real-time surrounding for efficient flow of data during the operations.
List of References
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Chen, X. (2012). Manufacturer?s pricing strategy for supply chain with warranty period-dependent demand. Strategic Direction, 28(10).
Childress, Vw 2015, ‘supply chain, logistics, and global economics’, Technology & Engineering Teacher, vol. 75, no. 4, pp. 22-27.
Craighead, C., Ketchen, D., Jenkins, M. and Holcomb, M. (2017). A Supply Chain Perspective on Strategic Foothold Moves in Emerging Markets. Journal of Supply Chain Management, 53(4), pp.3-12.
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Gina, C 2016, ‘Identifying the transformational trends of tomorrow’, Industrial Engineer: IE, vol. 48, no. 12, pp. 26-30.
Haraburda, SS 2016, ‘Transforming Military Support Processes From Logistics to Supply Chain Management’, Army Sustainment, vol. 48, no. 2, pp. 12-15.
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Hughes, M 2016, ‘Figuring out the future in the supply chain century’, Industrial Engineer: IE, vol. 48, no. 12, p. 6.
Hüner, D, Larsoon, T, Wagner, Sm, & Christ, A 2014, ‘Costly Supply Chain Disruptions’, Industrial Engineer: IE, vol. 46, no. 3, pp. 32-37.
Hutfield, J, & Heap, S 2012, ‘Working with the NHS Supply Chain to improve procurement’, Equipment Services, pp. 66-69.
Ilyas, R., Banwet, D. and Shankar, R. (2017). Value Chain Relationship – A Strategy Matrix. Supply Chain Forum: An International Journal, 8(1), pp.56-72.
Kumar, S, & Blair, JT 2013, ‘U.S. healthcare fix: Leveraging the lessons from the food supply chain’, Technology & Health Care, vol. 21, no. 2, pp. 125-141.
Ojala, M 2014, ‘Supply Chain Research’, Online Searcher, vol. 38, no. 2, pp. 71-73.
White, RM 2017, ‘DHL and a Romance Was Born review’, New York Amsterdam News, vol. 108, no. 36, p. 21.
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