DHL Supply Chain

DHL Supply Chain
Division
Industry Logistics
Headquarters Bonn, Germany
Key people
 John Gilbert, CEO[1]
Revenue Increase €14 billion (2016)[2]
Owner Deutsche Post DHL
Number of employees
 130,000
Subsidiaries Williams Lea Tag
Website www.dhl.com

DHL Supply Chain is a division of Deutsche Post DHL and is affiliated with DHL Express. Headquartered in Bonn, Deutsche Post has 510,000 employees.[3] The Supply Chain division comprises two business units – Supply Chain and Williams Lea Tag. In the Supply Chain business, DHL provides contract logistics solutions along the entire supply chain for customers from a wide variety of sectors. Williams Lea Tag, with headquarters in London, UK,[4] is a global provider of business process outsourcing and a specialist in corporate information solutions, the management of companies’ information and communication processes.[5]

In 2016, DHL Supply Chain was primarily competing in strategic Life Sciences & Healthcare, Automotive and Technology sectors of the market. The Automotive sector, with its Lead Logistics Provider (LLP) service, has been shifting to China, India and Mexico as those countries become significant vehicle and parts manufacturers.[6] In Canadian and USA markets DHL Supply Chain operated under the name Exel until January 2016.

DHL Supply Chain is the largest contract logistics company worldwide, operating in 50 countries, with a market share of 7.6% in 2015. This division claims "47,000 associates at more than 500 sites" throughout the U.S., Canada, and Latin America.[7] In 2016, the DHL Supply Chain division's revenue decreased by 11.6% to €14.0 billion versus 2015, but operating profit improved by 27.4% to €572 million.[8]

History

Headquarters

Post Tower in Bonn, Germany

DHL Supply Chain is incorporated in Bonn, Germany as a part of Deutsche Post DHL global headquarters. The main building is Post Tower. Located in the former government quarter and built using large quantities of glass, it is impressive because of its modern architecture. The tower is 162 meters (531.5 feet) high, 82 meters (269 feet) long and 41 meters (134.5 feet) wide.[11]

Mergers and acquisitions

The acquisition of the Swiss logistics provider Danzas and the largest American service provider in the field of international airfreight, Air Express International (AEI), by Deutsche Post, happened in 1999. Founded in 1815, the prestigious Danzas group was regarded as one of the world’s leading logistics companies. With approximately 29,000 employees at the time of acquisition, Danzas had a strong logistics network on all continents.[11]

The acquisition of AEI was similar. AEI had a network of branches in 135 countries. In addition to integrated logistics and multi-modal transport, it was offering warehousing, distribution, customs processing and IT-based logistics services. AEI was integrated into the Intercontinental division of Danzas. As a full-service provider, the merged companies provided Deutsche Post with a dense transport network as well as an impressive portfolio of value-added services.[11]

The partnership with DHL International, which began with the acquisition of a minority interest in 1998, was expanded and intensified in 2000. Negotiations were then concluded, allowing Deutsche Post to establish a majority interest from 1 January 2002. In July 2002, Deutsche Post acquired a 25-percent share in DHL from Lufthansa Cargo and increased its majority stake to 75 percent.[11]

At the time, DHL Worldwide Express had more than 71,000 employees worldwide. A pioneer in global express shipping, DHL's international network linked over 220 countries and territories. DHL became a wholly owned subsidiary of the Group in December 2002 after Deutsche Post acquired the remaining shares from two investment funds and Japan Airlines.[11]

In December 2005, Deutsche Post acquired the British logistics company Exel for 5.5 billion euros. At that time, approximately 111,000 employees worked for Exel in 135 countries.[11] Exel specialized in providing transport and logistics solutions for key customers. The company concluded the first half of 2005 with a 55 percent leap in profits to 172 million pounds (251 million euros).[11]

In 2006 Deutsche Post took a majority stake in Williams Lea, a business process outsourcing (BPO) provider specializing in document management and mail services.[12]

The latest acquisition happened in July 2011, when DHL acquired Tag Worldwide, an international provider of marketing execution and production services.[13]

Regions and sectors

DHL Supply Chain is organized into six regions: North America, South America, APAC (Asia Pacific), Greater China, MLEMEA (Mainland Europe, Middle East, and Africa), and UK&I (United Kingdom and Ireland). The Exel brand was retained for North America (USA and Canada), with the headquarters for the region in Westerville, Ohio. In 2016, the Exel brand transitioned DHL Supply Chain for the North America region. DHL Supply Chain provides solutions in six focus sectors: AEMCE (Automotive, Engineering, and Manufacturing and Chemical and Energy), Consumer, Retail, Technology, Service Logistics, Life Sciences and Healthcare. In 2011, DHL Supply Chain aligned their global management structure to enable the development and implementation of sector-specific supply chain solutions at a cross-regional level. In addition, each sector head is supported by a team of specialists who handles the customer projects and ensures the implementation of global sector solutions on a regional level.

Consumer and retail

Consumer and Retail are two of DHL Supply Chain’s largest sectors. Both of these offer major growth potential for the division, since DHL manages the supply chains all the way from the source of supply to the end customer. Services in these sectors range from international inbound logistics and warehouse and transport services, to packaging and other value-added services.

Technology

In the Technology sector, DHL Supply Chain’s portfolio of offerings ranges from inbound-to-manufacturing services and warehouse and transport services to integrated packaging, returns management and technical services. This is one of the sectors in which customers are increasingly requesting integrated solutions, which are being developed across all DHL divisions.

Life sciences & healthcare

DHL Supply Chain is also increasingly providing integrated solutions in the Life Sciences & Healthcare industry, where supply chains and logistics processes are still evolving in many parts of the world. In 2011, DHL Supply Chain acquired Eurodifarm, a specialist in the controlled-temperature distribution of pharmaceutical and diagnostic products. The purchase was made to strengthen DHL Supply Chain’s market leadership in Italy in this sector.

In England, DHL Supply Chain operates NHS Supply Chain for the National Health Service.

Automotive

The Automotive industry is one of DHL Supply Chain’s global sectors. The company has a strong presence in emerging markets such as China, India and Brazil. In this sector, DHL offers inbound-to-manufacturing, aftermarket logistics and lead logistics provider solutions.

Energy

The fast-growing Energy sector is another market in which the DHL divisions provide integrated logistics solutions for both the build and run phases of major projects. With DHL Supply Chain’s Maintenance, Repair & Operation services, they offer streamlined supply chain solutions.

Williams Lea

Williams Lea specializes in outsourced corporate communication and information management, ranging from office document and marketing solutions to customer correspondence management. They offer these solutions to customers in the financial, retail, consumer goods, pharmaceutical, publishing, public as well as legal sectors.

In July 2011, DHL acquired Tag Group, an international provider of marketing execution and production services. The acquisition expands DHL’s marketing solutions business.

Solutions and products

In the Supply Chain business, DHL Supply Chain provides customers in many industry sectors with logistics services along the entire supply chain – from planning, sourcing, production, storage and delivery to returns logistics and value-added services – in order to ensure logistics flow.[5]

DHL Supply Chain offers warehousing, distribution, managed transport and value-added services as well as business process outsourcing, supply chain management and consulting solutions. DHL Supply Chain's goal is to ensure that their customers’ products and information reach their markets quickly and efficiently, thus securing them competitive advantages.[5]

Some of the key DHL Supply Chain products include: Lead Logistics Provider, Packaging Services, Integrated Logistics Procurement, Technical Services, Service Parts Logistics, e-Fulfillment, Airline Business Solutions.[5]

The main services provided by Williams Lea include marketing solutions, office document solutions and customer correspondence management.[5]

Market position

DHL Supply Chain is the global market leader in contract logistics with a market share of 8.3% (2010). In this highly fragmented market, the top ten players account for only about 23% of the overall market, the size of which is estimated to be €147 billion. DHL Supply Chain is the regional market leader in the regions of North America, Europe and Asia Pacific and also has a very strong position in rapidly growing markets such as Brazil, India, China and Mexico.

Financial results

DHL Supply Chain, as the contract logistics business of Deutsche Post DHL, generated profitable growth in year 2011. Revenues and earnings were well above the previous year's level. The division reported a revenue increase of 1.2 percent to EUR 13.2 billion (2010: EUR 13.1 billion). As a result of portfolio adjustments made during 2011 – such as the divestment of a subsidiary in the United States that was not part of the division's core business – this result only partially reflects the division's operating performance. Adjusted for these consolidation and exchange-rate effects, SUPPLY CHAIN's revenues rose by nearly 6 percent, or more than EUR 700 million, in 2011.[14]

This increase was fueled in particular by strong growth in the Asia-Pacific region as well as in the Life Sciences & Healthcare and Automotive sectors. Additional contracts worth EUR 1.3 billion were concluded in 2011, an increase of around EUR 200 million versus the previous year. Combined with additional operating improvements and strict cost management, increased business activity drove up the division's earnings in 2011. At EUR 362 million, the operating earnings were 56.7 percent above the previous year's level of EUR 231 million.

Corporate responsibility

Corporate responsibility is an integral part of Deutsche Post DHL’s Strategy 2015. “Living responsibility” is the motto for the Group’s corporate responsibility initiatives. With different programs, Deutsche Post DHL focuses on protecting the environment (GoGreen), helping to manage disasters (GoHelp) and promoting education (GoTeach). They are also supporting the voluntary work of their employees. In 2011, for the first time, the Group called on their workforce around the world to take part in Global Volunteer Day. More than 50,000 staff members in over 160 countries volunteered their time to help children, young people and senior citizens. Deutsche Post DHL’s Living Responsibility Fund is used to financially support the local community projects for which their employees volunteer.[15]

References

  1. ↑
  2. ↑
  3. ↑
  4. ↑
  5. 1 2 3 4 5 "DPDHL Annual Report 2011" (PDF).
  6. ↑ "SUPPLY CHAIN Division 2016".
  7. ↑ "ABOUT DHL SUPPLY CHAIN 2015".
  8. ↑
  9. ↑
  10. ↑ , DHL Website-Company Portrait
  11. 1 2 3 4 5 6 7 , DPDHL Website – History
  12. ↑ , DPDHL Website – Press Release 2006
  13. ↑ Nias, Simon (12 July 2011). "Williams Lea to acquire Tag Worldwide". Print Week. Retrieved 2 January 2017.
  14. ↑ , DPDHL Annual Earnings 2011 Press Release
  15. ↑ , DPDHL Web Site – Sustainability
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