Logistics Assignment: Supply Chain Management of Kuehne+Nagel& Deutsche Post DHL Group

Question

Task: Logistics Assignment Background
Kuehne+Nagel& Deutsche Post DHL Group
Assignment highlights the important of world’s leading logistics services provider – Kuehne+Nagel and Deutsche Post DHL Group that had positive presence in global markets.

The following questions raise global transportation issues that are central to both Logistics Service provider’s strategy and success:

Please make sure while responding to each question, you should prefer one’s integrated logistics network over other with strong reasons for the preference.

1. Highlight each integrated Logistics Services provider global market dominance by identifying each networks top 5 markets and top 5 services. Highlight each network’s reach based on economic of scale and distance covered. Select your preference with reasons to support
2. Differentiate each logistics network based on two important functionalities- Product Movement and Product Storage. Select your preference with reasons to support
3. Differentiate each logistics network on Fleet sizing and Configuration. Select your preference with reasons to support
4. Differentiate each logistics network on Routing and Scheduling. Select your preference with reasons to support 5. Highlight Hub and Spoke operational model of each logistics network along with the various transportation modes provided- air, land and water. Select your preference with reasons to support 6. Highlight each logistics network’s transportation technological integration bringing efficiency and effectiveness to overall network. Select your preference with reasons to support 7. Highlight each logistics network’s transportation challenges and issues and clearly select the logistics network that has the capabilities to overcome them.

Answer

Introduction
As evident in this logistics assignment, logistics and supply chain enablers allow ease of transportation and carrying of goods and conducting businesses globally. One of the world's leading logistics providersareKuehne + Nagel and Deutsche Post DHL Group. Logistics suppliers while operating faces a large number of diversified issues and challenges in establishing their network and conducting their functionalities. Region catered to by Deutsche Post DHL Group is greater when compared to Keuhne + Nagel. The current scope of discussion includes analysis of such issues and providing some recommendations to the same.

While Deutsche Post DHL Group caters globally, the locations catered to by Keuhne + Nagel are depicted below.

Figure 1: Seven strategic Integrated Logistics location of Keuhne + Nagel network
Source: (KEUHNE + NAGEL, 2020)

1. Highlighting each of the Integrated Logistics Services providers in global market dominance
There are a large number of Integrated Logistics Service providers that are dominating the global markets currently (Market Watch, 2020). Amongst them, the top 5 markets and top 5 services include some of the major world markets where these companies dominate. Some of the top services offered by these companies are;

• Sea Logistics, Air Logistics, Road Logistics, Project Logistics
• Custom Clearance Insurance
• Warehousing
• Storage and Distribution Supply Chain Consulting
• 4PL Order Management Expo

The figure below depicts the total service portfolio of Deutsche Post DHL Group. Deutsche Post DHL Group has greater spread in each of the world markets and detailed network reach out as compared to Kuehne + Nagel as analysed below.

Figure 2: Service Portfolio of Deutsche Post DHL Group
Source: (Deutsche Post AG, 2020)

The top 5 world markets, where these companies dominate are;

• North America covering the United States and Canada and the rest of North America: The reach out of these networks on the basis of distance covered is huge along with economies of scale with which such distances are being covered. The area encompassing land in this region being large, the companies operate with significant economies of scale due to the large number of orders placed and deliveries to be made in single regions.
• Europe which includes France, Germany, Italy, and the rest of Europe: The reach out of these networks on the basis of distance covered is huge is large particularly considering the size of Europe. The companies operate economies of scale due to the large number of orders placed and deliveries to be made in this region.
• Asia-Pacific region which includes Japan, China, South Korea, India: The reach out of their network on the basis of distance covered is large with tremendous volumes of orders being placed from this region. The area encompassing land in this region being large, the integrated companies operate with significant economies of scale as they receive a large influx of orders. Due to the high population in this region, this remains one of the key markets in the world for integrated companies.
• Middle-east covering Saudi Arab: The reach out in these countries is large considering the Middle -east being a bridging nation connecting the east with the western world. The companies need to operate with economies of scale in these regions as there are large volumes of cargo that are handled.
• African nation including South Africa and the rest of LAMEA: There is tremendous reach out of these network in the African continent with large distances are being covered. However, business in this region is considerably lower as compared to the Asia-Pacific region (Market Watch, 2020).

2. Differentiating each logistics network on the basis of their functionalities
The logistics network in the varied world regions discussed above is based upon the important functionalities of Product Movement and Product Storage (Shamsuzzoha, and Helo, 2011, p 2). Where the reach out of products is covered across vast land areas, there needs to be supporting various product storage (warehousing centers) whereas in others there can be relatively fewer warehouses. For both the companies the logistics network have been analysed as per their functionalities.

• Logistics movement in North America and Canada is characterized by high movement in products across one place to another. This is a highly developed market and there are large volumes of trade and commerce going on in the region hence the Integrated Logistics companies have large number of Product Storage as well as warehouses to support transitioning of goods from one location to another. There is product storage hubs located not only in airports, sea, and railways but also across other locations.
• Logistics movement in Europe: Due to less vastness of Europe as considered to North America and considering less population, there isrelatively less product movement and storage facilities. Though this Integrated Logistics provider has some major storage facilities set up at airports, seaports and railways yet they are fewer in number as against those of North America. Deutsche PostDHL Group and Kuehne + Nagel are present in this market with tremendous presence.
• Logistics movement in Asia-Pacific: Logistics network and movement or product is highest in the Asia-Pacific regions supported by a large number of Product Storage centers for both the Integrated companies. They have spread out of Product Storage (warehouse) across the Asia-Pacific region with high movement in products from one location to another.
• Logistics movement in Saudi Arab: Due to the high population and the location serving as a key connection between the west and the eastern world, there is high product movement. However, product storage facilities are mainly at seaports, with less number of small product storage facilities across the country. From seaports, products are communicated to rest parts of the nation.
• Logistics movement in Africa is supported by mainly seaports with relatively less number of product storage facilities supported by high product movement. This market is gradually emerging given the high capability to flourish.

3. Differentiating between logistics network in Fleet Sizing and Configuration
Each of the logistics networks is supported by way of fleet sizes and configuration. In markets where there is a high demand for product movement, it is supported by high fleet sizes as against those markets with fewer product movement demands. Both Deutsche Post DHL Group and Kuehne + Nagel are supported by an extensive range of fleet sizes and configurations to serve across these varied world markets (Sheu,and Lin, 2012, p 3060). Though there has been some impact on the fleet size of each of the companies due to the current Covid-19 situation.Both the companies to support their global transport and logistics business is well equipped with a large number of fleet vehicles to cater to the markets. These fleet sizes are further configured such that products can reach their destination within the shortest time frame, inappropriate quality, and with nil damage.

4. Differentiating logistics network on Routine and Scheduling
Each of the logistic networks operates on Routing and Scheduling of its production network. Both companies follow the dynamic routine and schedule of their products to deliver across multiple world locations and global facilities. Keuhne+ Nagel operates on the Vehicle Routing Software for scheduling of its sea freight along with other logistics and shipping solutions. The software prepares routes through planning mechanisms which in turn offers transparency and reliability in their businesses. Deutsche Post DHL Group on the other hand bases its routine and scheduling of operations by optimization of complex systems (Nurre,andSharkey, 2014, p 310). The strategies the best possible routes and schedules for their deliveries which in turn enhances the efficiency and effectiveness of their deliveries.

5. Highlighting Hub and Spoke operational model of each logistics network with their transportation modes
Both the integrated logistics companies apply the Hub and Spoke Model for the operation of their logistics network and transportation modes. The companies have a centralized hub located at seaports and airports from where they distribute the products to various product storage facilities for distribution (Liu et al, 2012, p582). They have an underlying operational model for product distribution systems for the location of production facilities and locating of transportation modes to transfer products with the least possible hassles to their end customers.

6. Highlighting of each logistics network’s transportation technological Integration bringing efficiency and effectiveness
Both the Integrated Supply chain companies being a global leader in the distribution system have an optimized transportation technology model functioning (Barreto et al, 2017, p1250). Along with integrated software systems and mechanisms such software allows to bring about effectiveness and efficiency in each of the logistics network transportation framework for both the companies.

7. Highlighting logistics network’s transportation challenges and issues and ways to overcome them
The key issues faced by these integrated logistics networks provide in transportation is the absence of local providers in regional markets. Especially with the current Covid-19 situation, these transportation providers are facing tremendous challenges from connecting and making on-time deliveries at varied locations (Dekker et al, 2012, p675). There are also challenges associated with traffic congestion, long commuting time due to distances, sprawling cities, difficulties with parking, absence of secondary infrastructure, large fleet sizes, and large operating costs. These difficulties can easily be overcome by undertaking tie-up with local transportation and providers of logistics facilities.

Conclusion
Integrated logistics companies dominate the global supply of products across networks. They ease the communicating of products across varied locations in time and within appropriate scheduled costs. They aim at attaining efficiencies and economies of scale such that they can excel in their transportation models.

References
Barreto, L., Amaral, A. and Pereira, T., 2017. Industry 4.0 implications in logistics: an overview. Procedia Manufacturing, 13, pp.1245-1252.

Dekker, R., Bloemhof, J. and Mallidis, I., 2012. Operations Research for green logistics–An overview of aspects, issues, contributions and challenges. European journal of operational research, 219(3), pp.671-679.

Deutsche Post AG, 2020. Deutsche Post DHL Group – at a glance. Retrieved from [https://www.dpdhl.com/en/about-us/at-a-glance.html]

KEUHNE + NAGEL, 2020.Integrated Logistics.Keuhne + Nagel. Retrieved from [https://ru.kuehne-nagel.com/en_gb/integrated-logistics/overview/]

Liu, S., Kasturiratne, D. and Moizer, J., 2012.A hub-and-spoke model for multi-dimensional integration of green marketing and sustainable supply chain management. Industrial Marketing Management, 41(4), pp.581-588.

Market Watch, 2020. Impact of Covid-19 on Shipping and Logistics market is to Witness Significant Growth between 2020-2026 with leading players - Deutsche Post DHL Group, Kuehne + Nagel, DSV, C.H. Robinson. Market Watch.Retrieved from [https://www.marketwatch.com/press-release/impact-of-covid-19-on-shipping-and-logistics-market-is-to-witness-significant-growth-between-2020-2026-with-leading-players---deutsche-post-dhl-group-kuehne-nagel-dsv-ch-robinson-2020-06-08tesla=y]

Nurre, S.G. and Sharkey, T.C., 2014. Integrated network design and scheduling problems with parallel identical machines: Complexity results and dispatching rules.Logistics assignment Networks, 63(4), pp.306-326.

Shamsuzzoha, A.H.M. and Helo, P.T., 2011, January. Real-time tracking and tracing system: Potentials for the logistics network. In Proceedings of the 2011 international conference on industrial engineering and operations management (pp. 22-24).

Sheu, J.B. and Lin, A.Y.S., 2012. Hierarchical facility network planning model for global logistics network configurations. Applied Mathematical Modelling, 36(7), pp.3053-3066.