DCHS Case Study: Third-party Logistics

601 words | 3 page(s)

1a) The strengths of DCHS include the knowledge of customs, import and export regulations and processes which comply with them, and streamlining processes in transportation and storage to maximize efficiency. The weaknesses include challenges in new markets, and pressure on price from new entrants to the market. The increased competition and rivalry is distracting attention and resources that might otherwise be spent on improving products and customer logistics planning.

1b) The valued-added services provided by DCHS include the focus on professional logistics, rather than branding, product, inventory or customer experience beyond delivery, labelling and packaging services and modifications that might be needed, sorting and consolidating for shipping, and specialized services for perishables such as refrigeration.

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1c) A third-party logistics (TPL) provider can supply customer-adapted services by having various options for each decision point, and letting the customer decide which option they want. In this way the customer can choose whether to focus on faster delivery or better price, for example. The TPL provider then needs to ensure innovation in the determination of what decision points and options should be offered, and ensuring that options are attractive.

1d) The key success factors for a third-party logistics provider in the future, includes ensuring a very low error rate, specialized services for perishable items, and the use of automated delivery that is not dependent on traffic, roads or work schedules. This will likely mean the use of drones that drop off goods on doorsteps or even balconies, as they would be able to use automated dispatch and traffic management, and they would be lower cost over the long-term in comparison to human delivery agents.

2a) Based on the DCHS case study, DCHS can improve its logistics information system by introducing automatic processes that guide and provide options in relation to customs, import and export. It is easy to see why such services are needed and why integrating them with logistics will reduce time spent in transit. This is important the China’s manufacturing companies that received outsourcing contracts that requiring receiving raw goods and sending back the finished product. It also builds on DCHS’s strength to manage an industry wide need.

3a) The new challenges of modern logistics management are storage (or avoiding the need for it), scope and speed. In the early industrial age, a manufacturer could make a product, and it might take years to move through the trade networks and on ships before anyone ever knew it existed. Today demand is instantaneous, and there is also an expectation that the demand will be met rapidly. In addition to transportation, another component of modern logistics management is the determination of optimization for storage and delivery. The just-in-time philosophy is an example of this. By determining optimal network situations, the resulting reduction in warehouse time, or even reducing unloading and loading by streamlining nodes are all examples of logistics. The complexity of modern logistics and contemporary demand patterns can be seen with the idea of ordering a pizza. Whatever the product, there is the idea that the TPL infrastructure should be in place to deliver it like a pizza. The complexity is in this idea: special needs of products, greater distances of globalization and other forces converge, and someone in Montevideo, a city in Uruguay, South America wants to order a pizza from Sydney, Australia. There is no question that it could be done as rapidly as possible by chartering an airplane, but the modern professional TPL determines the fastest way to get the pizza there so that it arrives hot, for the lowest possible price. This is far more than transportation.

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