your reputation is ours - dhl sign onwap.dhl.com/masterclass/download/dhl_corp.pdf · “the web...

DH

LW

orld

wid

eEx

pres

sC

orpo

rate

Rep

ort

2000

Your

repu

tatio

nis

our

s

Belgium

1978

Guernsey

& Jersey

1974

Spain

1979

Faroe

Islands

1992

United

Kingdom

1974

France

1975

Andorra

1979

Luxembourg

1981

The Netherlands

1975

Liechtenstein

1987

Canary

Islands

1979

Ireland

1974

Portugal

1981

Iceland

1982

Anguilla

1982

Antigua

1982

Montserrat

1982

Bermuda

1980

Puerto

Rico

1980

St Kitts

1982

Grenada

1982

Brazil

1978

French

Guiana

1983

Suriname

1983

Guyana

1982

St Vincent

1982

St Lucia

1988

Trinidad

& Tobago

1980

Bahamas

1980

Haiti

1981

Dominican

Republic

1980

Turks & Caicos

Islands

1982

Cuba

1990

Jamaica

1981

Virgin Islands

UK1981

USA1982

Barbados

1981

Greenland

1992

Guadeloupe

1982

Dominica

1982

Martinique

1982

Belize

1983

Honduras

1983

Nicaragua

1982

El Salvador

1982

Guatemala

1982

Guam

1970

Hawaii

1969

American

Samoa

1990

Mexico

1976

Australia

1972

Macao

1984

Myanmar

1982

Papua New

Guinea 1973

Botswana

1983

Djibouti

1985

Eritrea

1986

Mozambique

1985

Swaziland

1985

Tanzania

1989

Ethiopia

1986

Somalia

1985

Seychelles

1983

Madagascar

1986

Comoros

1987

Mauritius

1995

Island of Reunion

1986

Kenya

1980

Malawi

1984

Zimbabwe

1980

Uganda

1986

Egypt

1980

Sudan

1986

Lesotho

1986

Zambia

1986

Central African Republic

1983

New Zealand

1973

Tahiti

1986

Niue

1991

Western

Samoa

1990

New Caledonia

1981

Vanuatu

1984

Angola

1984

South Africa

1978

Namibia

1988

Benin

1984

Mali

1986

Nigeria

1979

Niger

1990

The Gambia

1986

Senegal

1982

Guinea-Bissau

1983

Guinea Republic

1984

Sierra Leone

1987

Morocco

1987

Liberia

1983

Mauritania

1982

Ghana

1984

Burkina

Fasso

1985

Ivory

Coast

1980

Togo

1983

Cape Verde

1982

Säo Tomé & Príncipe

1990

Cameroon

1981

Gabon

1981

Congo

1981

Chad

1987

Equatorial Guinea

1990

Colombia

1978

Venezuela

1978

Peru

1981

Costa Rica

1983

Ecuador

1982

Panama

1981

Chile

1980

Bolivia

1983

Paraguay

1981

Uruguay

1980

Curaçao

1980

Bonaire

1982

Aruba

1982

Cayman

Islands

1980

Canada

1977

USA

1969

Argentina

1979

Algeria

1994

Germany

1977

Monaco

1982

Tunisia

1999

Denmark

1979

Norway

1977

Austria

1980

Italy

1978

Switzerland

1978

Czech Republic

1990

Hungary

1984

Croatia

1983

Bosnia &

Herzegovina

1983

Malta

1983

Albania

1992

Sweden

1978

Poland

1997

Lithuania

1991

Greece

1978

Finland

1982

Yugoslavia

1983

Latvia

1991

Bulgaria

1985

Romania

1991

Turkey

1981

Estonia

1991

Macedonia

1990

Cyprus

1981

Ukraine

1991

Georgia

1984

Jordan

1980 China

1986

Korea

1977

Philippines

1971

India

1980

Nepal

1981

Sri Lanka

1980

Maldives

1983

The Russian

Federation

1984

Pakistan

1982

Iran

1975

Kazakhstan

1991Saudi Arabia

1976

Yemen

1982

Armenia

1984

Rwanda

1987

Burundi

1985

Thailand

1973Bahrain

1981

Kuwait

1980

Azerbaijan

1984

Lebanon

1979

Israel

1997

United Arab

Emirates 1977

Qatar

1984

Oman

1979

Uzbekistan

1984

Turkmenistan

1984

Moldova

1995

Belarus

1993

Slovakia

1993

Slovenia

1983

Japan

1972

Bangladesh

1980

Bhutan

1990

Brunei

1983

Taiwan

1973

Mongolia

1991

Hong Kong

1972

Fiji

1973

Tonga

1982

Cook

Islands

1986

Kiribati

1987

Republic of

Nauru

1985

Solomon

Islands

1984

Vietnam

1988

Cambodia

1990

Singapore

1972

Indonesia

1973

Tuvalu

1991

Malaysia

1973

Map courtesy of Origin Publishing

Co

nte

nts

Page

2O

utpa

cing

cha

nge:

Pat L

upo,

Exe

cutiv

eC

hairm

an o

f DH

Lex

plai

ns h

ow a

nd w

hyD

HL

has

alw

ays

been

ahea

d of

the

rest

.Pa

ge 7

Prov

ing

the

offe

r:Fi

ve re

ason

s w

hy o

urcu

stom

ers

can’

t affo

rdno

t to

use

DH

L.

Page

14

Ow

ning

tim

e: W

e ca

p-tu

re a

nd m

ove

info

rma-

tion,

fast

– a

sou

rce

ofco

mpe

titiv

e ad

vant

age

for o

ur c

usto

mer

s.Pa

ge 1

6Pa

ving

the

way

:In

tegr

ated

Exp

ress

Logi

stic

s So

lutio

ns.

Page

22

Soci

al Im

pact

:M

easu

ring

our s

ucce

ssby

mor

e th

an fi

gure

s.Pa

ge 2

6Ev

olvi

ng a

n e-

busi

ness

:D

HL

shar

es it

s ex

peri-

ence

s.

Page

28

Con

tact

s: W

here

you

can

find

us.

With

39%

of t

he in

ter-

natio

nal e

xpre

ss m

ar-

ket,

64,0

00 e

mpl

oyee

sse

rvin

g m

ore

than

one

milli

on c

usto

mer

sev

ery

day

in m

ore

than

228

coun

tries

, DH

L is

the

pion

eer a

nd in

dus-

try le

ader

. It o

pera

tes

in

635

citie

s, d

eliv

erin

g to

mor

e th

an 8

0,00

0 de

s-tin

atio

ns.T

heC

ompa

ny’s

turn

over

is

in e

xces

s of

�5

billio

nan

d it

has

a ca

pita

lco

mm

itmen

t pro

-gr

amm

e of

�3.

3 bi

llion

over

thre

eye

ars.

To

date

, it o

wns

18,5

76 v

ehic

les

and

252

airc

raft

as w

ell a

sm

anag

ing

one

of th

ew

orld

’s la

rges

t priv

ate

tele

com

s ne

twor

kslin

king

DH

L’s 3

,002

stat

ions

and

35

hubs

.D

HL

is a

ckno

wle

dged

as o

ne o

f the

mos

tgl

obal

cus

tom

er-

focu

sed

com

pani

es.

For e

xam

ple,

it h

asw

on ‘B

est E

xpre

ssSe

rvic

e’ in

Asi

a Pa

cific

for 1

4 co

nsec

utiv

eye

ars.

Whe

reve

r you

are

so

is D

HL

–de

liver

ing

and

able

to tr

ack

your

pack

ages

qui

ckly

and

effi

cien

tly.

“The Web brings consumers, suppliers and manufacturerscloser together than ever before, yet goods still have tobe delivered to the end-user. DHL is naturally of great interestto all ‘dot-com‘ companies.” Patrick Lupo, Executive ChairmanDHL, January 2000.

2 DHL Worldwide ExpressCorporate Report 2000

Adding customer value through applying next generation technology

Add

ing

cust

omer

val

ue th

roug

hap

plyi

ng n

ext g

ener

atio

n te

chno

logy

Discussing business: Pat Lupo talksto Mike Yuille, Managing EditorEuroBusiness magazine at DHL’sInformation Technology Centre,London, England.

Today, international trade is moving at a pace never anticipated when wefirst started this business. The express distribution industry has been ableto meet the corresponding growth in customer demand because of aunique combination of factors.

Firstly, a huge transport infrastructure now exists to move goodsspeedily.

Secondly, there has been a tremendous liberalisation of the barriersto trade, encouraged by economic groupings around the world.

Finally, the explosion in new technology has helped bring eachcomponent of the supply chain together – from order entry, tomanufacturing, assembly and distribution.

We set our mission to build an expedited distribution network around the world, using the best people and technology available. And that we have achieved with more than 64,000 colleagues working in more than 200 countries.

We were the first in our industry to enter virtually every emerging market – for example, having been in Russia and China from the early1980s. Our international reach remains unrivalled, and today we dobusiness in 228 countries. We have a leading 39% share of a marketwhich is growing in shipment terms at 10% a year. We have built anintegrated global infrastructure of aircraft, vehicles, data systems, andmore than 64,000 people working around the clock in DHL hubs, servicecentres, and warehouses.

Our physical infrastructure interfaces completely with our privatetelecommunications network.

Our pioneering technology has revolutionised logistics. Look, for example, at the time saved by using data interchange with customs toallow goods to clear customs electronically while still in the air or to tracka package on its journey to virtually anywhere in the world.

While we’ve seen double-digit growth globally, we’re continuing to investin markets where we expect even higher levels of expansion – in emergingmarkets such as China, OECD countries where economic growth is strongand in certain parts of Latin America.

Also, Asia looks strong, as investors took advantage of the economicdownturn by investing in new plant capacity. So today, new sources ofexpress distribution business are blossoming there.

Since DHL created theinternational expressindustry 30 years ago,it has changedconsiderably. What havebeen the main drivers?



1969

DH

L is

fou

nded

and

begi

ns o

pera

tions

. Its

firs

t co

urie

r ro

ute

is b

etw

een

the

Wes

tC

oast

of

Am

eric

a an

d H

awai

i.

1970

DH

L is

the

firs

tin

tern

atio

nal e

xpre

ssde

liver

y co

mpa

ny t

oin

trod

uce

on-b

oard

cour

iers

mak

ing

cust

oms

clea

ranc

equ

icke

r.

1972

Serv

ice

to J

apan

, Hon

gKo

ng, S

inga

pore

and

Aus

tral

ia is

initi

ated

.

1976

The

Expa

nsio

n of

the

U

SA P

osta

l Mon

opol

yto

Cov

er E

lect

roni

cC

omm

erce

, writ

ten

byD

HL

foun

der

Larr

yH

illbl

om, i

s pu

blis

hed

and

help

s pr

even

t th

eU

S Po

stal

Ser

vice

havi

ng a

mon

opol

yco

verin

g el

ectr

onic

com

mer

ce.

1978

DH

L in

trod

uces

D

HL1

000,

the

firs

tw

ord

proc

esso

r to

hand

le b

oth

Engl

ish

and

Ara

bic

lang

uage

s.

DHL has played amajor role in facilitatinginternational trade. Howhas it done this?

Where does DHL nowexpect to see highestlevels of growth?

Fast, efficient supply chain management is the key to our service. Manycustomers are multinational manufacturers of computer, electronic,automotive or pharmaceutical products, operating in highly competitiveglobal markets. They need to serve their own customers quickly andefficiently and control the cost of inventory.

So, our offer of wide-scale distribution with express delivery for theirorders is essential to them.

Our use of leading-edge technology has always added value – we wereone of the earliest companies to use the Internet for data file transfer, forexample. Today we are pioneering the use of Wireless Application Protocoltechnology to give our customers more flexibility in monitoring theprogress of their shipments.

Such electronic tools allow us to seamlessly integrate our infrastructureinto customers’ supply chains, to ensure expedited delivery of their goods.By storing their spare parts in regional DHL distribution centres, customerscan achieve a close-of-business order with a next morning delivery,anywhere in the world! That’s an awesome promise, which adds valueto our customers’ brands.

Customers can save on working capital by regionalising inventory, usingour technology to precisely manage stock. But business needs are changingfast. Customers now want more information about shipments, the completeend-to-end supply chain and easy paperless billing. They want differentservices, from time-definite overnight express to day-certain grounddistribution. In response to these needs, we continue to develop all theelements of our service: technology, infrastructure, transport and people.

The Web is bringing consumers, suppliers and manufacturers closertogether than ever before. Yet goods still have to be delivered, so logisticsis really the centrepiece of twenty-first century e-commerce. DHL isleveraging the Internet in various ways.

Existing customers with their own order processing and shipmentmanagement systems can be linked to DHL via the many e-commerceapplications we offer, such as EDI or Easyship.

Meanwhile, the new Internet-based trading companies are creatinga whole new sector in our client base. Our logistics services are naturallyof great attraction to the new ‘dot-com’ companies. We do a lot of workwith these businesses, such as Amazon.com, to develop what we call‘click and ship’ programs using our own application interfaces andtelecoms network, DHLNet.

And of course, we’re constantly developing our own new e-commercetools such as DHL Connect, Easyship 2000 and Webship.

Then we have our own private Intranet network, DHL WorldNet, whichhelps us work together within DHL to facilitate shipment movementsmore efficiently.

How do customersbenefit from usingDHL, and how areyou responding totheir future needs?



1979

DH

L su

cces

sful

lych

alle

nges

the

pos

tal

mon

opol

y in

the

US,

allo

win

g it

to s

hip

time-

sens

itive

doc

umen

ts.

1983

DH

L in

trod

uces

Lase

rNet

– t

he fi

rst

trac

k an

d tr

ace

syst

em –

mak

ing

DH

L th

e la

rges

tIB

M S

yste

m 3

6cu

stom

er in

the

wor

ld.

1984

DH

L su

ccee

ds in

get

ting

the

Fren

ch p

osta

lm

onop

oly

on le

tter

sab

olis

hed.

1985

DH

Lop

ens

its fi

rst

Euro

pean

hub

in B

russ

els,

– st

ill t

he la

rges

t ex

pres

sin

dust

ry s

ortin

g ce

ntre

outs

ide

of t

he U

SA.

1986

DH

L si

gns

an h

isto

ricag

reem

ent

with

the

Chi

nese

gov

ernm

ent

toes

tabl

ish

a jo

int

vent

ure

betw

een

DH

L an

dSi

notr

ans.

1987

DH

L ch

alle

nges

the

Italia

n po

stal

mon

opol

yan

d cu

stom

s pr

oced

ures

ensu

ring

that

its

busi

ness

is f

ree

from

pos

tal t

ariff

san

d de

lays

.

How is DHL using theInternet to better serviceits customers?

And as one of the earliest innovators of e-commerce applications usingInternet-standard TCP/IP protocols, we’ve had an e-commerce strategy for several years. A recent survey we did shows that many businesses still do not, so in this report we’ve decided to share our experience of e-commerce. We’re also going to help customers by launching a new DHLwebsite (www.dhlmasterclass.com) which will help them develop theirown e-commerce strategy.

Our next big step will be the completion of a global electronic Hub by theend of 2000.

This e-Hub is in response to our customers’ need for more information.What the e-Hub does is carry packets of data about individual shipments,which customers can access at any time, so allowing them to accuratelytrack their shipments.

We’re also linking DHL electronically with more and more of oursuppliers and customers to create a constant exchange of data between us.

We’re investing in a lot more bandwidth, so the Web-based interfaceswith customers will be even faster. And so, by converging our physicalsupply chain with electronics, we will further improve our customers’supply chain management processes while reducing their costs.

We’re investing in new centres to consolidate existing markets, as wellas open new ones. For example, we have a new express Hub openingin April 2000 at East Midlands airport in the UK. As one of the largest ‘sub-hubs’ in Europe, it will complement our other distribution centres inBergamo, Brussels, Cologne, Copenhagen and Vitoria.

We’re spending over �1 billion on 44 new Boeing 757 aircraft to add to our fleet in Europe. We’ll have around 94 dedicated aircraft in total – giving us a European fleet some six times larger than our nearest competitor.

We’ve invested in Asia, with new Hubs and distribution centres. Weopened a new Gateway in Malaysia recently, and we are also expandingour Hub in Hong Kong with our recently announced partnership withCathay Pacific. We’re about to open new facilities in Indonesia andSingapore too and are also expanding in China, having just openednew facilities in Beijing and Shanghai. We are investing over �125 millionin Japan in new service and distribution centres, vehicles, machinery andIT equipment.

How is DHL developingits technology?



1988

DH

LNet

, a h

igh-

spee

dgl

obal

com

mun

icat

ions

ne

twor

k us

ed f

orsh

ipm

ent

trac

king

,is

est

ablis

hed.

1990

DH

L ex

tend

s its

mar

ket

lead

ersh

ip b

yes

tabl

ishi

ng s

trat

egic

allia

nces

with

Luf

than

saC

argo

, Jap

an A

irlin

esan

dN

issh

o Iw

ai.

1990

DH

L se

ts u

p its

firs

tEx

pres

s Lo

gist

icC

entr

es(E

LCs)

giv

ing

cust

omer

s th

eop

port

unity

to p

rovi

dene

xt m

orni

ng d

eliv

ery

of in

vent

ory

anyw

here

inth

e w

orld

.

1991

DH

L es

tabl

ishe

s a

com

pute

r lin

k w

ith

HM

Cus

tom

s at

Lon

don

Hea

thro

w A

irpor

tcu

ttin

gcl

eara

nce

times

byup

to

50%

. It

beco

mes

the

mod

elfo

r ot

her

coun

trie

s.

What aboutinfrastructure?

They have some remarkable strengths, and we look for them to providecomplementary services to help us offer customers a unique one-stop shop.

The airlines provide world-class logistics services. If customers wantground distribution throughout Europe, that’s where our friends atDeutsche Post come in. They have been busy building a pan-Europeanground distribution service, which will be completed shortly.

We’re also building relationships with a dozen of the world’s postoffices. For the first time, they will be able to offer co-branded expressdocument delivery by using DHL. So, DHL de facto becomes the world’sexpress mail service.

Even with the advances of technology, the power of DHL will alwaysbe the quality of our people and our service culture. We have more than64,000 employees around the world, all with a clear mission statementto fulfil our customers’ requirements. They’re technically skilled in resolvingcomplicated logistics problems for customers, globally.

We also place an emphasis on training, on everything from IT skillsto customer relations, to ensure the consistent quality of our service.

As we continue to build our infrastructure and provide an increasinglysophisticated service, I am confident that we will continue to be the worldleader – and innovator – in fulfilling the express delivery needs of ourcustomers.

The infrastructure is all in place. And there is no doubt that we’re alsoa ‘next generation’ technology business. The really exciting thing is thate-commerce is helping us bring everything together a lot more effectivelythan ever before.

DHL continuously winscustomer performanceawards, how do DHL’semployees make sucha difference to yourcustomers?



1991

DH

Lis

the

firs

t ai

rex

pres

sne

twor

k to

re-e

stab

lish

serv

ice

toKu

wai

taft

er th

e G

ulf W

ar.

1993

Spec

ial s

ervi

ce ‘E

CX’

isla

unch

ed f

or t

he n

ewly

form

ed E

urop

ean

Sing

leM

arke

t.

1995

DH

L la

unch

es it

sco

rpor

ate

web

site

ww

w.d

hl.c

om

1996

DH

L be

com

es t

he fi

rst

air

expr

ess

com

pany

to r

ecei

ve IS

O 9

002

for

its H

ub a

nd a

irlin

eop

erat

ions

at

the

US

Hub

in C

inci

nnat

i, O

hio.

1996

A s

tate

-of-t

he-a

rtau

tom

atic

sor

t sy

stem

is in

trod

uced

at

DH

L’s

Bru

ssel

s H

ub.

1998

Deu

tsch

e Po

stbe

com

esa

shar

ehol

der

inD

HL.

1999

An

inve

stm

ent

of�

1.3

billi

on t

o pu

rcha

sea

new

flee

t of

Boe

ing

757s

, mea

ns D

HL

now

oper

ates

the

qui

etes

tan

d m

ost

adva

nced

air

expr

ess

netw

ork

in t

he w

orld

.

How well is DHL placedfor the future as theworld’s leading airexpress business?

How does DHL’s strategicpartnerships with itsshareholders DeutschePost, Lufthansa andJapan Airlines help buildcustomer value?


Making your lives easier

The strength of DHL lies in its global reach, innovative use oftechnology and the dedication of its people. Our ability to delivera consistently high quality service is sustained by a globalprogramme of investments in infrastructure and strategicalliances with world-class partners.

Com

pani

es u

se D

HL

beca

use

we

mak

e th

eir l

ives

eas

ier t

hrou

gh…

Wo

rld

wid

eD

ocu

men

t E

xp

ress

For

urge

nt in

tern

atio

nal

docu

men

ts t

hat

mus

tbe

the

re o

n tim

e.

Wo

rld

wid

e P

arc

el

Exp

ress

The

sure

and

sim

ple

way

to

ship

dut

iabl

ein

tern

atio

nal g

oods

and

know

the

y’ll

arriv

esa

fely

and

on

time.

Eu

rop

ean

Un

ion

Exp

ress

Ove

rnig

ht d

eliv

ery

of a

lldo

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ents

and

par

cels

trav

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g fr

om o

neEU

cou

ntry

to

anot

her.

Imp

ort

Exp

ress

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rt E

xpre

ss is

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st-e

ffec

tive

and

sim

ple

way

to

give

cust

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s m

ore

cont

rol

over

del

iver

ies

from

thei

r su

pplie

rs.

Insu

ran

ce

DH

L ca

n pr

ovid

e yo

uw

ith in

sura

nce

cove

rfo

r sh

ippi

ng v

alua

ble

good

s.

24

-ho

ur

Cu

sto

mer

Serv

ice

DH

L m

aint

ains

24

hour

sa

day,

sev

en d

ays

aw

eek,

365

day

s a

year

cust

omer

ser

vice

in m

any

coun

trie

s.

Serv

ices

prov

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DHLNetDHL manages one of the largest private telecoms networks in the world – using Frame Relay technology, it's the backbone that interconnects all our operation centres worldwide and provides the information that helps us to move and manage your shipments on a global basis.

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DHLNetDHL manages one of the largest private telecoms networks in the world – using Frame Relay technology, it's the backbone that interconnects all our operation centres worldwide and provides the information that helps us to move and manage your shipments on a global basis.

“Many of our clients have after-sales service commitmentsto their customers where having a spare part with their localengineer in time for him to meet his service commitment,is a source of real value added. By combining our ExpressLogistics and Strategic Parts Centres, our global transportationinfrastructure and telecommunications network, and state-of-the-art software and systems we can provide integratedexpress logistics solutions which give these clients a competitiveadvantage and save them time and money.” Rob Kuijpers,Chief Executive Officer DHL, January 2000.


The new agenda: advantages of integrated express logistics

The

new

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f int

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s

Rob Kuijpers visits DHL facilities inTurkey and Portugal



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Above DHL’s Network of StrategicParts and Express Logistics Centresaround the world enables us to helpour customers meet their servicecommitments.

Below DHL Call Centres forman integral part of many of ourIntegrated Express Logisticssolutions.

In any market-driven economy, supplying customers with whatthey want, when they want it, is the bare minimum required ofany serious business. But as product development, diversity andaccessibility has accelerated beyond all predictions, and as thebusiness world has become increasingly competitive, deliveringthat promise has taken on a more challenging reality.

In today’s global market, competitive advantage is gained by offeringcustomers flexibility: supplying products and services 24 hours aday, 365 days a year; cutting production lead times and call responsetimes to a minimum; offering customised solutions; securing globalstandards of consistency. Yet profitability has to be bolstered by costmanagement: minimising capital held in warehouses; eliminatingwastage through obsolete stock; maximising economies of scalethrough global sourcing and supply.

For the world’s highest performing and successful companies,managing the supply chain has become a critical success factor.The innovative, the pioneers of new industries, as well asestablished market leaders are all focusing on this factor in theirpath to success. It is a management challenge that has come outof the back room and into the boardroom: how to achieve increasedflexibility on the one hand, and to maintain and build on profitabilityon the other.

Many of these high achievers have found that this challenge can be met in partnership with another industry pioneer, another marketleader; in partnership with a company that understands innovationand has the will to beat the competition. Many have establishedIntegrated Express Logistics solutions with DHL Worldwide Express.

Proactive logistics strategy

The international air express industry is reported to be one of themajor beneficiaries and enablers of today’s global economy. But asmarket leader DHL has proven it’s more than just global reach thatcounts. Over the past decade, DHL has developed an entireIntegrated Express Logistics Strategy, to sustain its customers’competitive edge through smart supply chain management.Seeking to sustain its own market leadership, DHL has set itself achallenging task; its aim is to set the worldwide standard on whatthird- and fourth-party logistics partners can achieve.

Since the early 1990s, DHL has invested in building an extensivenetwork of Express Logistics Centres (ELCs), Strategic Parts Centres(SPCs) and Call Response Centres (CRCs). It stretches across Europe,Africa, the Middle East, the Americas, and Asia-Pacific, keepinga global supply chain in continuous motion. Our facilities provideoff-site warehousing, product customisation and configuration,distribution and after-sales services, including product repair.Underpinning the physical infrastructure is the invisible networkof data management systems, which connects suppliers to themarketplace, right through their production and distribution chain.

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Inventory management software and Internet-basedcommunication mean that customers can connect to these so-called ‘virtual warehouses’ at any time to check their stock positionand place orders.

Having recognised these capabilities DHL customers have set usnew challenges, to eliminate stock wastage and to achieve globalconsistency on logistics performance. Across the globe, we haverisen to the challenge. DHL express logistics solutions are nowsynchronised into customers’ production locations and schedules.Once a vision, now a reality, DHL customers gain time withoutincreasing costs.

From precision instruments to trucks, from diagnostic medicalequipment to telecommunications, from retail fashion to banking,DHL is the invisible factor, delivering integrated express logisticssolutions. For companies such as American Express, BostonScientific, Ericsson, Honeywell, Lucent, Nokia, Philips, Siemens,Sony, Sun Microsystems, Visa and Volvo, DHL provides theinfrastructure, technology and resource to enable them to meettheir service commitment, be it for samples, spare parts or importantdocuments. Working with DHL can optimise stock levels anddelivery, regardless of origin or destination. A rapidly increasingnumber of customers from DHL’s Global Account Programme andother major international customers are already exploiting DHL’sproven expertise in supply chain management.

In Brussels ELC alone, DHL handles the upgrading, repair and finalconfiguration of Stratus and Fujitsu computers, InFocus projectorsand Johnson & Johnson medical equipment. Spare parts and productreplacement contracts have been in place for some years withEMC2 and HP. In Singapore, DHL offers emergency replacementvisa cards for Asia-market clients. And across the USA, DHL hasdeveloped seamless information and communication interfaceswith American Express, which expedites card production andsecure delivery to clients.

Reduced lead times and costs of distribution

Companies in hi-tech, high-value sectors of telecommunications,computer networks and components, precision instruments andthe semi-conductor industry, have been some of the first to exploitthe potential of DHL’s logistics capabilities. The highly competitivenature of these industries require them to offer fast time to market,global accessibility and consistency, and after-sales serviceperformance. At the same time, companies seek to mitigate therisks of holding large inventories and obsolete stocks. And, withsales exploding, they need a partnership which can cope with thedemands of expansion.

In 1999, telecommunications giant, Ericsson, was experiencingdifficulties in stabilising turnaround times and costs for its hardwareservices distribution in the Americas. Although well established inthe marketplace, the company had identified three major problemareas – transport, administration and customs handling – allof which caused unacceptable delays to product movement.Ericsson sought a new solution and came to DHL.

In a ten-week pilot in Chile and Argentina, directed by Ericsson’sBusiness Unit, Ericsson Services , a mini-logistics network wasestablished around two Regional Repair Centres in the US andMexico. Standard operations procedures were established andeach part of the process was carefully timed and measured from



Above DHL’s Express LogisticsCentres are large warehousesequipped with state-of-the-arttechnology and racking systems.

Below Data capture is critical tomonitoring the progress ofshipments.

SGI RepairSGI MainDepot USA

SPC

Customers (Engineers)

Overnightdeliveriesandreturns

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Same day deliveries

the moment the shipment left the customer in the local market,through customs, to the Regional Service Centre and back. Theresults were immediate and positive, with lead times reduced by up to 50% and cost of transportation reduced by 30%.

Tougher service contracts for mission-critical providers

Computer hardware and systems providers are facing the problemof market differentiation. Their product has become such acommodity that more and more business-critical systems areoperated on desktops or even laptops.

Silicon Graphics Inc (SGI) is the world’s leader in high-performancecomputing technology, providing systems that deliver advancedcomputing and 3-D visualisation capabilities to scientific,engineering and creative professionals and enterprises. After aperiod of rapid expansion in individual markets, SGI faced the needto develop global management information on essential data suchas inventory levels, parts performance, and stock levels required tomeet after-sales service agreements. In addition, SGI customershad individually tailored service contracts, which led toinconsistency across the markets. Utilising its existing network ofELCs and SPCs, DHL offered SGI a new vision of total supply chainmanagement and information visibility through a structured serviceoffering. The Brussels ELC secured Next Day Pan-Europeanfulfilment, with a network of SPCs providing a four-hour responseto meet SGI mission-critical spares requirements. The total solutionrelies on DHL’s Track & Trace system, inventory and call data fromthe Logistics Systems, made accessible through the latestmethods of web-enabled technology.

The success of the Pan European contract has inspired SGI tofurther extend the scope of the programme to Central and LatinAmerica, Asia-Pacific and the Middle East.

Pan-regional markets raise logistics stakes

Globalisation has also been a major contributor to the growing trendof outsourcing supply chain management, as global fulfilment isnow considered a task too complex to be handled in-house. In theentertainment industry, global companies are recognising theopportunities afforded by express logistics companies to delivergoods quickly and cost-effectively on a pan-regional scale.

Market leader Sony Music supplies entertainment in the form ofCDs and cassettes to meet the ever-changing tastes of musiclovers. Since1993, Sony has realised considerable serviceenhancement and cost benefits in its Central America region, bycontracting the logistics of international distribution to DHL. DHLnow handles all shipments between Sony’s regional office in CostaRica and subsidiary companies in Panama, Nicaragua, El Salvador,Honduras and Guatemala.

Sony Music focuses 90% of its resources on attracting top artists toits labels and then launching them. The company requires a logisticspartner that can operate to specific arrival times so that goods meetcustomer demand in different markets simultaneously in order tomaximise that pan-regional marketing investment. At the sametime, DHL can offer expertise in customs processes, solid securityperformance of goods in transit, and a package of inventory controlsthat caters for fast turnaround of product.



Above Many leading companies relyon DHL to deliver their time-criticalshipments.

Below Diagram showing how DHLmanages SGI’s shipment and dataflows.

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Establishing the benchmarks for the future

The rapid development of computing, telecommunications, andaudio-visual technologies has stimulated tremendous growth inthe semi-conductor industry. Already valued at over �200 billion,and projecting 15% annual sales growth, it is an industry that bestdemonstrates in practice the major trends in global logistics.

Companies are increasingly global – in terms of sourcing,purchasing and sales achievements. Their supply chain generallyrelies on independent providers, which have been chosen on theirability to provide totally customised and integrated solutions.Information technology has emerged in every process and practice,controlling and tracking supply and demand, reporting andprojecting performance and trends. The manufacturing cycle forsemi-conductors is complex, with several processes of productionand assembly taking place in different locations. Once made,semi-conductor components are required to fit into specificproduction chains for countless hi-tech customers. Thus, on-timedelivery influences complete manufacturing processes at bothends of the supply chain. Suppliers need to know where everycomponent of every product is, every hour of the day.

There are economic advantages to be gained from global sourcingand supply, but they can only be realised if there is a tried andtested distribution and logistics system in place. High-qualityproduct performance is not enough – it has to be matched withutterly reliable supply chain management.

Lucent Technologies Microelectronics Group supplies high-specification semiconductor components to top electronic andcommunications manufacturers around the world. Lucent believesthat logistics and service are the competitive differentiators of thenext decade and it seeks to eliminate inventory entirely from thelogistics pipeline. When Lucent appointed DHL in 1996 to handleglobal logistics, it embarked on a collaboration in which DHL acts asan extension of Lucent’s own logistics organisation. As a globalsupplier, DHL has replaced the 40 separate logistics processes and51 independent suppliers of the past. In the four years since, thecollaboration has produced a solution whereby Lucent componentscan be delivered anywhere in the world within 48 hours.

For a company such as Lucent, collaboration with DHL maximisesthe benefits that air express can offer to solve global logistics



Above DHL works through the nightto ensure that shipments are sortedand processed ready for next-daydelivery.

Below DHL can supply an on-sitecourier to manage the despatch oftime-critical shipments forcustomers.

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issues. Yet realising the vision, demands exceptional transparencybetween the two teams. Shipments are tracked by integratingDHL’s global track and trace service with Lucent’s own logisticsinformation system.

When time isn’t only money

While high value, hi-tech and telecommunications industries are at the forefront of supply chain management solutions, they are not alone in facing the challenges of time-sensitive logistics. When companies are dealing with medical supplies and diagnostictest equipment the risks of failure have implications that go beyond commercial interest. Managing the supply and distributionin this industry can make a difference to the health and well-being of patients.

Quest Diagnostics, the former Clinical Trials Centre of SmithKlineBeecham, is a driving force in clinical research, as it develops andmoves new drugs from research into hospitals and pharmacies allover the world. The company co-ordinates drugs testing amongst6,000 doctors in Europe, using Diagnostic Specimen Collection Kits,and generates in excess of 100,000 time-sensitive consignmentsper year of human samples, such as blood or tissue specimen.

Dealing with several local carriers and a complex set of customsregulations, Quest was experiencing problems and inconsistenciesin its delivery process, which cost time and money in lost or delayed test specimens. Also, once a Collection Kit had been sentout, there was no control system for its return for analysis andQuest had no pre-alert of its arrival back at the laboratory. In 1996,Quest decided to rationalise its entire distribution strategy andconducted a trial with DHL to achieve improvements in timings,reliability and data quality. DHL created a Test Services solution,which included all outbound and inbound distribution processes,special customs requirements, pre-prepared paperwork andhandling instructions. DHL also designed an in-house track andtrace system for Quest called Shipment Process System. After adramatic improvement in reliability, process times and informationprovision, as well as significant cost saving, Quest appointed DHLas its sole express partner.

Your reputation is ours

DHL has built a business against a backdrop of globalcommercialisation and technological innovation. Today, in additionto logistics, the pervasiveness of the Internet and the emergence of e-commerce have given rise to a new type of DHL partner. Insuch a pioneering industry, just as every failure is noted, every singleon-time delivery contributes to the uptake of this new way of doingbusiness. Leaders in online business, such as Amazon.com, rely onDHL to deliver their orders across the globe, and in so doing, arenominating their partners in the future of this dynamic business.

Totally integrated customer-supplier relationships are surelydependent upon high performance, with fixed targets, clearaccountability and strict reporting. Advanced informationtechnology systems force transparency between the two parties.Yet working together with our customers to find groundbreakingsolutions, DHL has achieved a shared sense of mission and opencommunications. The most successful partnerships, as withLucent, with Quest, with Amazon.com, with GE Plastics, are based on mutual respect, common cultures, and display a large element of trust.



Clinical Trials Centre

Results sent to host’s company

Single/bulk samplecollection kits

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DHL sample transport

6,000 independent researchers or doctors, across Europe and Africa, who have signed up for the trial

Above Delivering that all-importantpackage on time.

Below DHL provides the vital linkfor Quest in ensuring that samplesare delivered and returned on time.

DHL values its employees, acknowledging their effortsand investing in their future. We also take our environmentaland social responsibilities seriously and are committed tosupporting humanitarian projects around the world.

“Médecins sans Frontières (MSF) operates in difficult situationsat the centre of the world’s trouble zones. We rely on DHLto transport vital supplies to support our humanitarian effortswherever we are working around the world.” Mr. Bruno Corbé,Director of Logistics, MSF.


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Right DHL helping distributeaid during the Kosovo crisis.Photo courtesy of CNN.

Right Guy Collette, DHL’sDirector of Corporate Affairs,presenting a cheque for theUnited Fund of Belgium to the Honourable Paul Cejas,Ambassador of the United Statesof America in Belgium.

Right Médecins sans Frontièresrelies on DHL to get vital reliefaid to its front line volunteers.Photo courtesy of MSF.

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Internet technologies – full back office integration

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Evolving from traditional to e-commerce to an

e-business organisation

DHL has close to two million customers globally and 250,000 hitsper week on its corporate website. The business opportunitiesof the Internet are being adopted at different speeds by differentcustomers and regions worldwide. Establishing a balancedapproach to the transition from a traditional (non-Internet ) businessto being an e-business is more than an issue of what is the besttype of website to offer to the customer. DHL believes that thesolution is the education and managed transition of all functionsof a business to integrate new technology and processes ina manner appropriate to the business’s strategic objectives. www.dhlmasterclass.com/?evolution.html

Customer relationship management

In any rapidly changing business environment it is essential tomanage the expectations and quality of service and support to themarket. Serious flaws in this area have emerged in relation to themanagement of service consistency and customer care. This sectionprovides interesting research and guidance from DHL and othersources that will assist in avoiding problems in this critical area. www.dhlmasterclass.com/?crm.html

The Internet has accelerated theability of businesses to service existingand emerging markets more effectivelyand more responsively. DHL sharesits experiences in addressingthese challenges.

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Selling chain management

Where businesses can effectively manage the relationship with theircustomers in a changing business environment, the role of the salesforce, sales efficiency and management becomes a key competitivedifferentiator. This is especially true when your competitors are onlya mouse click away. In this section suggestions are provided, fromDHL experience, as to how sales chain management can be efficientlyand effectively developed in support of your e-business strategy. www.dhlmasterclass.com/?sales.html

Logistics and fulfilment

Once the sale is made, the fulfilment is the next challenge for abusiness. Customer satisfaction with the fulfilment of their e-ordershas proven to be a constant source of e-business concern. In thissection DHL suggests a programme of planning and implementationthat allows an existing or emerging e-business to plan for flexible,consistent fulfilment of their customer orders. www.dhlmasterclass.com/?logistics.html

Supply chain management

Any business is dependent on the reliability of its suppliers for theprovision of goods and services to its customer base. These suppliersprovide the product that is represented and sold to the customer.Ensuring that supply matches demand at all times in a cost- effectivemanner, is essential to e-businesses. In this section we look at theeffective management of the supply chain in support of e-businesses.www.dhlmasterclass.com/?supply.html

Translating e-strategy to e-business

Most companies are in some way preparing or operating ane-strategy in support of their drive to exploit the opportunities of theonline market. This section looks at the challenges in implementing an e-strategy in a manner that results in the evolution of a businessto an e-business in a business-driven and managed way. www.dhlmasterclass.com/?strategy.html

Major reasons for failure

In this section we look at failure. The successful transition froma traditional to an e-business is not guaranteed. Here we illustrate some examples and provide guidance as to positioning youre-strategy to successfully develop an e-business. www.dhlmasterclass.com/?failure.html


www.dhlmasterclass.com


Addresses

Global Co-ordination Centre DHL Worldwide Network NV/SADe Kleetlaan 1, Diegem-Machelen 1831BelgiumPhone 32 2 713 40 00Fax 32 2 713 50 00

DHL International Limited

Asia-Pacific Far EastDHL Worldwide Express23F Shui On Centre, 6-8 Harbour RoadWanchai, Hong KongPhone 852 2582 2626Fax 852 2802 0303

South EastDHL International (Singapore) Pte LtdNo 1 Tai Seng DriveSingapore 535215Phone 65 288 9422Fax 65 288 9733

Middle EastDHL InternationalBahrain International AirportPO Box 5741Muharraq, BahrainPhone 973 335005Fax 973 323301

International Americas CanadaDHL International Express6205 Airport Road, Bldg. B, Suite 400Mississauga L4V 1E1Ontario, CanadaPhone 1 905 673 2230Fax 1 905 673 7888

Latin AmericaDHL Regional Services Ltd6360 NW 5th Way, Suite 103Fort Lauderdale, FL 33309USAPhone 1 954 493 9404Fax 1 954 493 7349

MexicoDHL Int’l de Mexico, S.A. de C.V.Av. Hangares No. 540, Col. FederalMexico, D.F. 15700MexicoPhone 52 5 345 2000Fax 52 5 345 2285

Europe/Africa DHL Worldwide Network NV/SADe Kleetlaan 1, Diegem-Machelen 1831BelgiumPhone 32 2 713 40 00Fax 32 2 713 50 00

DHL Worldwide Express, Inc.

USA DHL Airways Inc.333 Twin Dolphin Drive, Redwood CityCA 94065USAPhone 1 650 593 7474Fax 1 650 593 1689

Addresses

www.dhl.comwww.dhlmasterclass.com

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‘DHL Worldwide Express’(abbreviated in this report to DHL) is composed of (1) DHL InternationalLimited (also referred to in this report as ‘the Company’), its principaloperating subsidiary DHL WorldwideExpress BV and other DHLInternational Limited groupsubsidiaries, affiliates and agentswhich serve only locations outside theUnited States of America, itsterritories and possessions; and (2) DHL Worldwide Express, Inc.(abbreviated in this report to DHLD),its principal operating subsidiaryDHL Airways, Inc. and other DHLWorldwide Express, Inc. groupsubsidiaries, affiliates and agentswhich serve all locations within theUnited States of America and itsterritories and possessions.

© DHL International Limited 2000.

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