DHL supply chain risk management

Topics: Risk management, Supply chain, Supply chain management Pages: 17 (2743 words) Published: December 6, 2014

HOW DOES DHL MANAGE GLOBAL SUPPLY CHAIN RISK

MGT 628 OPERATIONS MGT & MGT SYSTEMS

Tuan Zhang

Content
Overview3
What is Global Supply Chain Risk?3
Risk: A Daily Fact of Life in DHL5
What is the DHL supply chain analysis ?7
How can we reduce the supply chain risk?8
DHL Managing Risks in Supply Chains.10
DHL Resilience360 Risk Assessment12
Supply Chain Visualization12
Risk Exposure Mapping13
Risk & Resiliency Assessment13
Risk Mitigation Plans14
DHL Resilience360 Incident Monitoring15
Supply Chain Visualization15
Risk Incident Monitoring16
Conclusion17
Reference18
Overview
DHL Express is a division of the German logistics company Deutsche Post DHL providing international express mail services. Deutsche Post is the world's largest logistics company operating around the world. DHL is a world market leader in sea and air mail. Over the last decade, many companies faced extreme supply chain challenges that stretched their capabilities to the breaking point. Both the preponderance of natural disasters and huge economic swings caused extreme challenges across the supply chain. These challenges have not diminished. Supply chains, which once functioned almost on autopilot, face many dangers today in both the global and the domestic market. What is Global Supply Chain Risk?

Risks in a supply chain occur when unexpected events might disrupt the flow of materials on their journey from initial suppliers through to final customers. Internal risks appear in normal operations such as late deliveries, excess stock, poor forecasts, minor accidents, human error, faults in information technology. External risks appear from outside the chain such as earthquakes, hurricanes, wars, disease outbreaks, crime, terrorist attacks. Effectively managing supply chain risk, while always important, is becoming increasingly critical. Companies are sourcing materials from an ever-expanding universe of suppliers, boosting the complexity of their supply chains. Chasing lower-cost suppliers, they look increasingly to emerging markets. Due to its global nature and systemic impact on the firm’s financial performance, the supply chain arguably faces more risk than other areas of the company. Risk is a fact of life for any supply chain, whether it’s dealing with quality and safety challenges, supply shortages, legal issues, security problems, regulatory and environmental compliance, weather and natural disasters, or terrorism. There’s always some element of risk. Companies with global supply chains face additional risks, including, but not limited to, longer lead times, supply disruptions caused by global customs, foreign regulations and port congestion, political and/or economic instability in a source country, and changes in economics such as exchange rates. The scope and reach of the supply chain cries out for a formal, documented process to manage risk. But without a crisis to motivate action, risk planning often falls to the bottom of the priority list. The low priority for managing risk in companies is puzzling. After all, supply chain risk management is a very popular topic at conferences and is written about extensively in books and articles. However, in spite of all of the discussion, we still see the vast majority of companies giving this topic much less attention than it deserves. This risk is driven by supply chain executives, who often find themselves at the center of the daily storm, striving to balance very demanding operational objectives while satisfying customers, cutting costs, and helping grow revenue. They must deliver results today while working on capabilities that will make their companies competitive in the future. They operate in the same maelstrom of competing priorities and limited time as their executive peers—but their scope of activities is broader, and they have less direct control over all the moving parts. In this environment, risk management receives a much lower...
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