Production Operation Processes And Facility

Published Date: 02 Nov 2017

1.0 Introduction

DHL express was founded in San Francisco more than 40 years ago at 1969 by 3 budding entrepreneurs including Adrian Dalsey, Larry Hillblom and Robert Lynn. At first DHL was just a paper document shipping company which only provide paper document shipping service by airplane from San Francisco to Honolulu but over years and years expansion DHL network grew ever larger and gradually reaching out to new customers in every corner of the world and now became the top market leader in courier industries in the world. Now DHL had provided many express services including unparalleled expertise in express, air and ocean freight, overland transport, contract logistics solutions as well as international mail services. ("Company Portrait", 2013)

In March 2009 DHL had introduced its corporate strategy "Strategy 2015" this strategy laid out the company vision to become the Logistics Company for the World, and the mission statement to how DHL plan to achieve this vision consist of four main aspects which is, make our customers, employees and investors more successful, always demonstrate respect without compromising on results, simplify our customers need and want to make a positive contribution to our world. ("Corporate Strategy,"2013)

DHL is focusing on four division including express division, global forwarding freight division, supply chain division and global mall division. Each division had a different CEO with specialize knowledge in particular industry to running each division to make sure them providing the world class services. Currently the main competitors for DHL including FedEx, UPS, and TNT, by providing better services and quality control of using better supply chain management, inventory management system and most updated information technology tools such as Electronic Data Interchange System (EDI) to gain a better control on outbound and inbound logistic activity allow them to beat their competitors and became the market leader in the world. ("Four Division,"2013)

2.0 Company’s Production/Operation Processes and Facility Layout

2.1 Company’s Production/Operation Process

a) (i) Operation Process Flow and Description

Planning

1st of all, DHL Express will receive order from the customers. Then they will try to reach the demand of the customer since there are different customers come to DHL with different problems and maybe not necessarily one in their supply chain. Then they will analyze and design the supply chain which meets the demand of the customers.

Sources

DHL looks for sources they need to meet customer demand. DHL has a raw materials warehousing, so whatever the customer industry sector, DHL provides raw material warehousing services to streamline materials flow into customer production facility.

Make

Then the DHL Express will start manufacturing the product. DHL will ensure that right components are delivered to the right manufacturing point at the right time. After that, DHL Express will provide complete end-to-end logistics management of inventories, facilities and labor associated with the inbound flow of materials.

Store and Customize

Next, DHL is getting it ready to sell. DHL design and operating a customize warehouse that delivers bottom-line benefits. DHL also provide some finished goods warehouse services included warehouse design and consultancy, cross-docking, inventory management and optimization, bar-coding, RFID tagging and labeling, storage and other things else. All this services are requested by the customers.

Deliver

Getting it where it needs to be.DHL Express focus deliver product from country to country, so DHL have it own transportation and distribution management. DHL will differentiate products they need to deliver into few categories 1st. There are by air, ocean, and rail and road freight forwarding services. After that there will only start deliver to where the customer ask them for. When customer need critical spare parts deliver to customer’s customer with an agreed timescale. DHL’s Service Parts Logistics (SPL) solution can meet the demand. Home service also provided.

Return

At this phrases, DHL Express will bring back when the customer need no the service, also known as reverse logistics. Services include de-installation of finished goods at the customer’s site, returns management, receiving, sorting, verifying and managing returned products and at last express delivery, exchange of "dead on arrival" products, which mean the products were spoiled when on the way destination.

a)(ii) Strength and Weakness

Strength

Increase Job Efficiency

For the DHL’s employee in this operation, they are adopting job specialization. In short, job specialization means the company assigns particular task to the employee at particular department. For example, the employee in McDonald will not fully responsible in assembly a burger from fried the meat until packaging it. It may take a longer time to finish a burger. Each employee is specializing in particular task like packaging, frying the meat and serve to counter. It will make the job conducted in more efficiency way which will not cause a mess during the operation process. DHL is service provider instead of product manufacturer. However, the concept is still the same. If each employee is specialized on own department, it increase the job efficiency.

Easy to Monitor

In DHL operation process, we can see that their tasks are relatively easy and each employee is specialized with particular job knowledge or skill. Thus, it is relatively easy for the supervisor to monitor whole process flow. What the supervisor need to do is make sure every employee is perform the right task at the right department so that the whole process flow will be at high productivity.

Better Accuracy

By using technologies RFID all data are sending between all departments it means all department are receive the information or document at the same times. Furthermore, it decreases the time delays and each department using less than 1 minute to process per document from department packing to processing department.

Weakness

Cause the Employee Injury

Employee injury may occur. The reason is the employee at the particular department performing the task repeat, they are using the same muscle. For example, the employee in reweighting department needs to handle those heavy parcels and put it on the weighting machine. Time by time, the muscle will be overuse and cause the employee injury.

Create Job Boredom

Job specialization in DHL may cause work efficiency but it may not cause interest and challenge. The employee that performs the same task everyday will feel boring and tiring. For example, an employee in reweighting department keep on reweight the item will feel boring. It will eventually cause less motivated and lower the quality of the DHL service. In the research, we find that a task that cannot deliver the challenge or interest of employee will increase the unemployment and turnover rate.

2.2 Facility Layout

a) (i)Diagram of Facility Layout and Description

Diagram 1.1

B

C

D

E

A

F

Diagram 1.2

Diagram 1.2 and 1.3 shows the facility layout of DHL.

In department A, its main task is receiving. DHL will receive the online order and calling order from the customer. DHL installs the Network Management System (NMS) to strengthen the internal network for data transfer and e-mail movement around the world. The installation of the system is expected to decrease the down time and delays in the transfer of shipment details to its various offices in the world, on account of the network failure. The NMS has been designed to enable the IT support staff of the company to continuously monitor the failures in the network and attend to it immediately. The NMS alerts the maintain staff by instantly flagging the network failures on the screen, at the company’s control room. It also has a facility to dispatch e-mail or page a message to the concerned staff, informing him or her of the location of a failure in the network. Its main activity is receiving the parcel and document.

In department B, it is a reweight department. Its main activity is to reweight the document and parcel using a reweight machine. This department is needed because sometimes the customer will try to cheat the employee on the weight to save the cost. The employee has to ensure the weight is correct and charge at the right price.

In department C, it is a packing department. Its main activity is packaging the document and certain document using RFID technology. Sometimes, the customers send their document or parcel without additional packaging. The employees have to take care of it to prevent it from damage or prevent thief case happen.

In department D, it is classification department. The employee classifies document that need to send to particular service centre. This department is important to ensure the delivery items of same destination are classified together to achieve work efficiency. Data Warehouse is used and it is an electronic repository for historical data relating to products, orders and shipments. Data Warehouse feed all reporting and management tools.

Next is department E which is shipping department. it is where the logistic department where the product is ready to be shipped. It is a logistic process that uploads the logistic date to the customer hosted system. Transport Management System (TMS) sis used. It starts with planning the optimal transport modes and schedules, manages the execution and tracks shipments throughout the supply chain. Exception management is used and identifies where and when deviations to schedule take place in the Supply Chain, reporting alerts to our customers. Track and trace checks and records each in the route of an order or shipment through the Supply Chain.

Lastly is department F which is inventory or store department. Sometimes, there is an error in order filling. Its main activity is to store the parcel or document that are failed to deliver. Warehouse management system is used. The Warehouse Management System (WMS) records all events and actions in the receipt, handling and storage of products and orders in a warehouse environment. The WMS also records the location of inventory whilst stored in the warehouse. DHL's Prologs WMS manages all critical processes in the warehouse, and is also an important support for varied transport and distribution concepts (planning, time controlling, booking of transport capacity, communication with customs and other authorities).It creates synergies by large-scale operation to drive operational efficiency and effectiveness. Resources for storing, handling and distribution can be co-ordinate in different ways and for different types of flows, e.g. by a large variety of multi-client/multi-order picking and consolidation of shipments.

b) (ii) Strength and Weakness

Strength

Low involving between adjustments costs

The department are between each other, receiving department is near the reweight department and packaging department. Besides that, classification department are near the shipping department and inventory department.

Easier Training

In this layout, what the employees need to take care of own department. Thus, it is relatively low skill needed and of course training is become easier. In other layout like process layout, they need to learn a lot of technical skill like the skill to operate complex software. However, in DHL’s layout, the employees only need to perform their own task. For example, in reweighting department, the employee is responsible to reweight the parcel and document. In classification, the employee will classify the particular parcel to particular container which will deliver to particular place.

Rapid Production

DHL is using job specialization in this layout. Thus, every employee is solely doing their own task in particular department. When a large volume of parcel is reaching, the employee will work for task at own department. For example, the employee in reweighting department will responsible for reweight the parcel and the employee in classification department will responsible for classifying the product.

Lower cost to build up layout

DHL is a service provide instead of a product manufacturer. In the product manufacturer like Toyota, they need a lot of machine during manufacture the engine or other part of the cars. Thus, they need to invest millions of dollar to purchase all those machines and build up a plant. However, in the layout of DHL, we can see that only the reweight machine used up most of the cost which is around RM20, 000.00. The main reason is because they are service provider, so they no need those big machines to help for production.

Weakness

Work Delay

In the product focus strategy, everything is done step by step from department to department. So, if one of the departments is break down, the process will be stopped and hold at that point. For example, if DHL van is break down, so the receiving department will be breakdown. Then, the parcel cannot proceed to other department until deliver out. Finally, it will delay the overall work.

Unsafe environment

Base on floor plan and layout diagram can see that the storage room or inventory department are all nearby. If the store department is fired or any other accident is happen, it will probably burn up and cause a loss to happen at other department.

3.0 Study Area’s Literature Review and Contribution

Inbound and Outbound Logistics Management Control

Became the world number one courier service provider is not easy, to ensure their customers enjoy the fastest and best services DHL have to make sure their employees is skilled, educated, committed and specialist in their operation management. Besides that DHL had aware that modern technology is core for every logistic companies, it is a heart of the whole system that helps to work more effectively and efficiently. That’s why DHL is constantly involve in updating their information technology and most updated technology tools to ensure their got the best control in inbound and outbound logistic management control, for an example Electronic Data Interchange System (EDI) enabling DHL planning, monitoring, operating, checking their daily operation process. Not only that DHL had an internal IT organization for supply and maintains the applications 24 hours a day, 7 days per week to provide full support to their customers. Information Technology helps reduce time and consequently cost of the service which is what customer values.

DHL offers wide range of portfolio products, customers can either use internet or service number to order any logistic service, besides that DHL also maintain service points where can let any customers drop off or pick up shipments and have them packed at no extra charge, this innovative ideas is provided to offer climate-neutral shopping product within their Go Green program. This program represents the commitment to environment and social issues, not only that this also allow DHL to achieve a better quality management. By maintain all the service point there will be less misunderstanding cases like customers go to the wrong service point that don’t offer pick up or drop off service and customers send their package to unrelated unit and cause the package cant successfully send to the target clients or even worse the package got missing.

DHL have several warehouses in every country and there is one international hub that serves for all international deliveries in Europe and globally. DHL has offer uniform range of international time-definite and domestic day-definite express services in European region and now it continuously expands its services to other developing countries. DHL now had offer overnight delivery that allow the customers from different regions or country can send their package to the target client or company with zero time difference which allow customers not to worry whether their package got delay sending due to the time difference problem.

Logistics Service Quality Bring Customer Satisfaction in DHL Express

DHL Express is concentrate on the logistics quality management. According to the Jessica Sze Yin Ho, Derek Ong Lai Teik, Felica Tiffany, Loong Fatt Kok, and Tat Yang The ( August 2012 ), the quality management is among the most crucial factors for customer satisfaction in the courier services industry. In the Logistic Service Quality (LSQ) model, the most effective way for providing sound service quality to achieve the success of the DHL express under the market conditions include ‘timeliness’ , ‘condition or accuracy of order’, ‘quality of information’ and ‘ availability or quality of personnel’.

In the DHL Express, quality management is a vital element which contributes heavily to customer loyalty According to Xu and Cao (2008), DHL Express use timeliness to measure the average effectiveness and success of a courier provider once they have received a customer order. Timeliness also used by DHL Express as the accuracy of billing and record keeping as well as the completion of the service at the designated time. DHL Express uses it to meet the demands stated in a particular order in terms of quantity and quality upon arrival, in terms of whether or not the package sustained any damage.

Furthermore, DHL Express also has the ability of courier providers to provide relevant product information to attract customers’ attention to their specific service and promotion that meets their needs. DHL Express can help the customers make better decisions in terms of trustworthiness and quality of information.

Besides that, DHL Express has quality of information, which can be contributes to customer satisfaction by having sound interaction between personnel and customers. Having the ability of personnel to distinguish regular clients, learning individual preferences, problem solving and improving knowledge of product, the quality management clearly shows that the DHL Express are successfully to customized attention that will increase satisfaction and in return encourage future purchases.

Last but not least, the availability and quality of personnel also contribute to the success of DHL Express. An instrument that is applicable for the DHL Express to measure service quality is the SERVQUAL model. According to Mentzer, Flint, and Hult (2001), SERVQUAL can be considered an effecting "analytic instrument in evaluating and monitoring service quality". This model also includes the difference between perceived and expected quality.

Logistic Operational Management

DHL express is focus on flexibility in their logistic operation management, DHL had bought capacity from many difference country major airlines to put Express cargo into the belly of scheduled passenger. This combination had give DHL express a great flexibility. For an example, if there is an unexpected increase in demand that cant met with the regular fleet capacity, then DHL will try to negotiating with an airline partner to get an extra space. That’s why maintaining a close relationship with its hub airports is crucial.

To ensure every staffs had an equal knowledge and operating knowledge DHL had provide constant training program to their employees in order to help them practice all the necessary skills and tool to perform well and do justice on the DHL brand. The training including focuses more closely on the details of the operational role, specific processes and applicable aspects of management. After complete certain training, those employees is qualifying as a Certified International Specialist.

Besides that, DHL do emphasize many of the logistics operation system by computer technology such as using IT system. The IT system will automates all transactions that take place worldwide, monitors performance not only that it also tracks every package in transit and enforces standard business rules. It delivers accurate and essential data to the DHL system, it record down the details exactly where a container is loaded into the hold of an aircraft and identity the content. This system assists with the planning for forward movements of the express products and keeps the customers informed where their package located.

DHL has four global quality control centers which located in Bonn, Leipzig, Cincinnati and Singapore, those centers monitoring the shipments for their express products in real time from pick up to final delivery to the customers. Within each of these four regions, there is a network for further quality control centers manned 24/7 by a service quality team. Their main task is monitors the real time shipment movements, identify delays or breakdowns in the supply chain, and solutions to the problem and then offer the solutions to the customers.

DHL also runs a crisis command centre at its head office in Bonn, this crisis command centre main task is to monitors some crucial and critical world events and estimate how they may impact on their global operations, shipments and employees. When time of crisis, those quality control centers also take some of the crisis management role. When disaster strikes although it not only the business of DHL takes care of, the operational management will also marshal its logistics capabilities to bring in essential first aid and disaster relief supplies. Like in the Japan Tsunami case DHL did put on extra charter flights to bring water and food into the region.

Exel Share

DHL organization know that by using expertise power can get a better performance on their operation and logistics management, that’s why by acquiring 100% of Exel share is crucial to DHL. Exel is a leading logistic company in worldwide. By acquiring Exel became part of the company lead DHL become the global No.1 in air freight, ocean freight and contract logistics head. DHL Exel supply chain had provide number of tailor-made contract and industry specific logistic solutions including inbound logistics, distribution and aftermarket services, improving inventory management, reducing total operating costs and so on. By acquiring world expertise it allow DHL to achieve less waste in their daily operation process and more precisely in their quality management control.

DHL is offering domestic and international transportation services to world wide destinations, for some of the transport like chilled and frozen goods, hazardous chemicals and temperature sensitive pharmaceutical products, DHL will offer a industry specific and specialist transport services that specialize in taking care those products to prevent explosive or dangerous accident happen and spoilers of the products. Besides that DHL also provide a logistic eServices that provide access of the system to ensure that customers have fully control power and visibility of their supply chain all the time. This system can tracked, queried and ordered product through online services, this system design to make their customers more comfortable and let the customers be at ease with their products shipment since they can update their products current status all the time.

Not only that DHL had a complete warehouse management system that fully integrated into wide supply chain, state of the art equipment to monitor and control the complex warehouse processes with the best in class technological partners. The integrated warehousing solution including ambient warehousing, automated warehousing, specialized storage and others, all this solution are aim for better warehouse management and thus better quality management. DHL warehouse management system will records down all the event and actions in receipt for future correction or data rechecking. DHL also provides transportation facilities and distribution operation which including time and space allocations with the relevant authorities and customers.

Total quality management

Total quality management (TQM) is a management system that engaged all employees in continual improvement to achieve customer satisfaction. DHL uses strategy, data, and effective communications to integrate the quality discipline into its own culture and activities of the organization.

Many companies do not implement Total Quality Management (TQM) because they believe the cost to implement the TQM is greater than the benefit. However, DHL believe it is worth. A research prove that DHL is right because it found that direct and indirect cost of quality problems are greatly more than cost to implement TQM. TQM is prevention and it is planned before actual operation like product requirement, quality planning, quality assurance and training.

Total quality management (TQM) and technology have quickly becoming critical features of business strategy for most of the successful organization. TQM works well for internal integration of logistics companies and they can take advantage from using information technology to gain further internal and external integration.

In findings, TQM and technology is important in improving the quality and performance. The analysis shows that the company that adopted high technology and high TQM’s company perform significantly better than their low technology and low TQM’s company. That’s one of the reasons that make DHL perform better than FedEx and UPS store in logistic industry.

Master Data Management contribute for success

In the competitive logistics industry, DHL Express, a focus on "doing things right the first, all the time" is vital for improving customer satisfaction and driving revenues. To achieve this, Logistics Service Providers (LSPs) require high- quality data across the enterprise. Therefore, quality management is a crucial factor that can contribute to the success of DHL Express.

It was mentioned in the Infosys (April 2010) by Alex Farcasiu, manufacturers, retailers, and other customers are looking to Logistics Service Providers (LSPs) for breakthrough solutions to meet their outsourcing needs as the pace and complexity of business increases. High- quality data allows more effective logistics solutions, so DHL Express are using high- quality data to success in the international market. Several strategies have been devised by LSPs such as optimized warehouse activities, transportation management, and yard management, which is to adapt to rapidly changing and evolving supply chains, incomplete and inaccurate information from customers and vendors limit the LSP’s ability to deliver an optimal logistics solution.

DHL Express is putting efforts to improve data quality. This is because data quality issues can impact their company’s ability to do business. Therefore, the ability to acquire and manage high- quality data in the DHL Express can be a key factor to bring to the success of DHL Express. Besides that, information quality should also be primarily considered. DHL Express integrates data hygiene such as address validation, duplicate identification and so on for customer records and product classification based on descriptions for product data and supports the concept of ‘levels of trust’ for each master attribute coming from different source systems. GHL Express also supports the concept of data stewards.

Build-to-order Supply Chain Management

Build-to-order Supply Chain Management (BOSC) strategy is an importance strategy that improving the competitiveness of an organization. Recently, companies have to compete based on multiple competitive performance objectives such as quality, price, responsiveness, flexibility, and dependability. BOSC as a strategy can be defined as ‘‘the value chain that manufactures quality products or services based on the requirements of an individual customer or a group of customers at competitive prices, within a short span of time by leveraging the core competencies of partnering firms or suppliers and information technologies such the Internet and WWW to integrate such a value chain.’’

Nowadays, mass customization has become the focus of the company. The Build-to-order supply chain management is developed to be flexible and responsive. One of the successful build-to-order (BTO) companies was Dell computers, which gained market share by building customized computers using the Internet as an order fulfillment vehicle. (A. Gunasekaran & EWT Ngai, 2004) .Other than that, BMW also allows its customers to make changes to their vehicle within 6 days of final assembly (including changing in colours, etc). This allows BMW to build up to 550,000 permutations of the Z3 vehicles. By using the strategy, DHL has special logistic offers particular logistics services for certain circumstances. These services include fresh-food, harzadous cargo and event logistics.

Performance Prism

Performance Prism is a tool and framework used to influence the thinking of manager about which is the key question are that they want to address when seeking to manage their business. Board of DHL has used this framework to re-engineer their commercial dimension and reporting system. Board of DHL uses Performance Prism because it addresses the disadvantages of many traditional measurement frameworks. It encourages the managers to think through the connections between the measures which other frameworks do not suggest by instinct. It has even find out some very little mistake and is solved. By doing this, DHL has successfully improved their quality dramatically. When DHL start use Performance Prism, a series of workshops were conducted. DHL has three broad stands which are revenue volume, quality and cost efficiency and ensuring that its assets are being utilized as efficiency as possible. Take, for example, quality. It has been decided in DHL that to manage the quality of logistic, the team ensure the parcel and document must go through all the 17 stages before reach to final customer. Such detailed process is not offered by any other courier company even FedEx and UPS store. The employee ensure the product go through stage by stage by using technology system like RFID technology and Parcel Tracking.

Six Sigma

Quality management also includes quality assurance or so call sustainability. Six Sigma is a model that provides different types of sustainability to companies in terms of quality enhancement. Six Sigma is a quality management program using the methodological approach based on data trying to reduce the defect to minimize standard deviation to optimum level of quality. In short, it helps to attain zero error level.

Although implementation of Six Sigma is costly and require considerable human resource training but DHL had adopted this model. It is because they believe this approach can help them achieve virtually error free business performance. Six Sigma conducts the measurement through its multi dimensional statistic model.

The model is primarily focuses on sigma statistics, sigma measure and performance benchmark. According to Coronado and Anthony (2002), Six Sigma enables DHL to achieve continuous improvement by defining the goals of improvement activity. For example, DHL benchmarks quality services and leads to measurement of existing system. Secondly, it identifies the method to remove the gap and improving the present system (Thareja, 2006). If it stops at continuous improvement, it will more likely consider as total quality improvement (Khan, 2003).

The study is trying to understand better on the concept of Six Sigma because it is crucial to find out how the quality management and advanced quality approaches are helping the organizations to become more efficient and provide superior service. The findings recommend other multinational companies which haven’t use Six Sigma model can adopt it.

Gaining Competitive Advantage in Logistics

To determine international competitiveness in DHL Express, the cost of production, in which wage costs constitute an important component particularly in quality management that set the company ahead of its competitors.

In the book of Michael Porter, The Competitive Advantage of Nations, has identified that the quality management as a key to the success of DHL Express Industry. According to Porter, the success of DHL Express in the international market depends on the major factors, that includes cost- based advantage in the production of relatively standardized products and product- based advantage in the development of differentiated product.

DHL Express can break into new markets or increase its shares within its existing markets based on its cost advantages. These cost advantages are typically relevant in a price- conscious consumer market. But, quality also play a significant role in consumer’ buying decision. Some consumers can sacrifice quality for a lower price, but this preference for a lower price, at the expense of quality, has certain limits. Consumers who have a minimum level of quality, below poor, poor quality cannot be accepted even at lower price. This imposes a minimum benchmark on the quality variable.

Besides that, in the most recent article (Porter, 1990), he stressed that the only meaningful concept of competitiveness to the success of DHL Express is the productivity. Productivity relies on both the quality and the features of products, which is product quality. He comments that a nation’s standard of living depends on the capacity of its firms to accomplish high productivity level and sustainable productivity growth that an economy continuously upgrades itself. It should also be pointed out that the government plays an important role by promoting a competitive environment conducive for improving quality so as to bring successfulness to the DHL Express.

Kano’s Theory

In the article, the authors believe that an operational theory of attractive quality in the area of packaging can help develop more knowledge of the role of packaging in attractive quality creation. (Martin Lofgren and Lars Witell, 2005). This knowledge is needed since within quality management and marketing there is relatively little research on packaging and customer satisfaction. (Underwood, Klein, and Burke 2001). Packaging is often important to the customer’s first impression of a brand, its quality, or its value ( Harckhan 1989).

To understand the role of quality attributes, Kano et al. present a model that evaluates patterns of quality, based on customers’ satisfaction with specific quality attributes and their degree of sufficiency. The theory explains how the relationship between the degree of sufficiency and customer satisfaction with a quality attribute can be classified into five categories of perceived quality. (Kano, 2005). These are attractive quality; one dimensional quality; must be quality; reverse quality; and indifferent quality.

According to these five theories, a product can be divided into three entities. These include ergonomic; technical; and communicative. Ergonomic includes everything that has to do with adaption to the human physique and behavior when using the product. For example, DHL offer different type of packaging according to the material either for flammable product; medical, high cost product, plastic, or glass that fit the customer shipment. Technical is the product technical function, construction, and production. For example, with sample and literature fulfillment, DHL design a sample kit that delivers the entire components single, low cost package.

4.0 Discussion and Conclusion

4.1 Importance of production process and facility layout

Production process is a conversion function by which goods and services are produced. A typical production process comprises inputs, transformation process and output.

First of all is had to fully utilize the employee. It is important that the company have to fully utilize the employee. The employee who has carry out the same task after certain period, he can perform better and faster. Practice make perfect. In a research by global production team, it says that job specialization can decrease the total production time by 50 percent compared to every employee responsible to assembly a whole product. If the company didn’t fully utilize the employee, it will only cost lost to the company, and reduce the profit of the company.

Secondly is the production of the company more efficiency. Because when there is a production process, every people will know what job should they do and the production will getting smooth. Furthermore when there is a systematic production process, it can reduce cost of unnecessary waste. That means it can fully utilize the raw material without wasting any of it. Every profitable based company would like to use the lowest cost to earn the maximum profit. So, when there is systematic production process, the raw material can be fully utilize and the production of the company more efficiency and at last DHL earn more profit.

4.2 Importance of quality management

The quality management is important because quality management ensures superior quality products and services. When the company having quality management like DHL, it will ensure that the quality of their product and services are qualified to serve their customers. So, the quality of the products and services DHL Express are in the superior form.

Besides that, quality management is essential for customer satisfaction which eventually leads to customer loyalty. When a customer found that the quality of services that DHL Express provided are good, then they will feel satisfy, then they will come back and do business with DHL again. In other way, if the customer feels that the services they get didn’t reach their expectation and they will not do business with DHL again.

Quality management ensures increased revenues and higher productivity for the organization. When customer satisfy with the services that DHL provide, it will increase profit for DHL, in a result, the employees in DHL also will earn bonus if the company making profit, and when employees feel happy their production is getting higher.

Last but not least, quality management helps organizations to reduce waste and inventory. DHL have a systematic approach to keeping inventories at an orderliness or can be say fully utilize the warehouse without incurring waste. Work closely with suppliers to manage inventory using Just-in-Time (JIT) philosophy.

4.3 Recommendation

Firstly, DHL can apply job rotation. Job rotation is a management or technique that used to overcome job boredom and also job injury. It is a technique where the employee shifts between two or more jobs in a specific time interval. For example, employee at DHL can shift from packing department to classification department after a period of time. It can reduce the job boredom since the employee can perform different jobs.

Besides that, it can also increase job mobility. The employee is equipped with other different skill, thus it can make the work force more flexible. For example, if the employees of department A are injured or insufficient, the employees of department B can backup and provide extra help on that.

Secondly, DHL can outsource and maintain a good relationship with other courier companies. DHL has a few strong competitors like FedEx and UPS. For example, sometimes there is some unforeseen problem like thunder storm that will delay the flight and the machine problem. In this case, DHL can ask the help from FedEx to help them deliver the parcel. DHL can provide them all the profit but what DHL has earned is customer satisfaction and good reputation.

4.4 Conclusion

We choose DHL as our company of quality management. Firstly, it is because we want to learn and get more information on how DHL can manage the quality management and make it becomes the global leading courier company which has over 50% market share. Although quality management is sub part of operational management, but it really plays a critical and important role in an organization. In short, quality management consists of quality planning, quality control, quality assurance and quality improvement.

DHL has choose product focus strategy and product oriented layout. Job specialization is used by DHL. DHL adopted the strategy and layout because they want to improve the overall productivity, easier monitoring and supervision and the cost of layout is relatively low. However, there are also some weakness which are it can create job boredom, cause injury and it may delay the overall process. Thus, we have recommended that DHL can use job rotation and outsource other courier company. We are strongly believed job rotation is more flexible without reduce the productivity and outsource other courier company can help DHL to deliver the parcel when unforeseen problem like thunder storm occurs.

This is our first time to carry out literature review. Although it is not an easy task but we really find that it is very useful. The journal articles provide more detailed and reliable information rather than the internet article that we normal search.