DHL: Benchmarking resiliency with Dell
When the world changes, supply chains must change with it. But pivoting on a dime to adapt to a changing market and creating a more resilient and reliable supply chain isn’t easy. We take a look at the things DHL and Dell did right.
For Dell demand in 2020 soared. As almost every industry quickly shifted to remote work, Dell Technologies needed to quickly adapt. DHL shares how they delivered.
The sudden and mass increase in demand put pressure on Dell’s distribution centres and triggered the company’s risk management plan. Dell reacted quickly, gathering its partners to help in the creation of a more robust end-to-end solution that would meet the challenges they now faced.
“This project had many moving parts, but we were able to piece them all together in just three months. We now have an agile, end-to-end solution for Dell Technologies that meets the increasing demand while maintaining the customer experience.”— John Flood, Global Customer Manager Dell Technologies at DHL Customer Solutions and Innovation
Direct shipping solutions
Together DHL and Dell Technologies identified bottlenecks and sticking points in their supply chains that caused inflexibilities and looked for improvement solutions. Together they developed a direct shipping model that maintained the companies lead times while increasing agility.
By eliminating some touchpoints and bypassing Dell’s distribution centre, the new direct shipping solution now ships products directly from China to distribution hubs located within the destination markets. DHL leverages their Global Forwarding Control Tower for end-to-end management, combining visibility, reporting, and billing.
DHL’s Amsterdam base now serves as the inbound hub in Europe where goods are received, sorted and further distributed. Working collaboratively, in just three months, from design to implementation, the companies were able to redesign the supply chain and achieve a 99% on-time performance and 4-5 day lead times.
As DHLS says, “At the height of a global crisis, this customer-centric solution was designed and implemented in just three months. It’s achieved an average of 99% on-time performance to the final-mile carrier hubs, increasing reliability while reducing lead times.”
It’s an impressive feat.
Dell Technologies has since made supply chain resiliency a strategic global initiative. Let’s hope most follow.
Biden establishes Supply Chain Disruptions Task Force
The US government is to establish a new body with the express purpose of addressing imbalances and other supply chain concerns highlighted in a review of the sector, ordered by President Joe Biden shortly after his inauguration.
The Supply Chain Disruptions Task Force will “focus on areas where a mismatch between supply and demand has been evident,” the White House said. The division will be headed up by the Secretaries of Commerce, Transportation, and Agriculture, and will focus on housing construction, transportation, agriculture and food, and semiconductors - a drastic shortage of which has hit some of the US economy’s biggest industries in consumer technology and vehicle manufacturing.
“The Task Force will bring the full capacity of the federal government to address near-term supply/demand mismatches. It will convene stakeholders to diagnose problems and surface solutions - large and small, public or private - that could help alleviate bottlenecks and supply constraints,” the White House said.
In late February, President Biden ordered a 100 day review of the supply chain across the key areas of medicine, raw materials and agriculture, the findings of which were released this week. While the COVID-19 health crisis had a deleterious effect on the nation’s supply chain, the published assessment of findings says the root cause runs much deeper. The review concludes that “decades of underinvestment”, alongside public policy choices that favour quarterly results and short-term solutions, have left the system “fragile”.
In response, the administration aims to address four key issues head on, strengthening its position in health and medicine, sustainable and alternative energy, critical mineral mining and processing, and computer chips.
Support domestic production of critical medicines
- A syndicate of public and private entities will jointly work towards manufacturing and onshoring of essential medical suppliers, beginning with a list of 50-100 “critical drugs” defined by the Food and Drug Administration.
- The consortium will be led by the Department of Health and Human Services, which will commit an initial $60m towards the development of a “novel platform technologies to increase domestic manufacturing capacity for API”.
- The aim is to increase domestic production and reduce the reliance upon global supply chains, particularly with regards to medications in short supply.
Secure an end-to-end domestic supply chain for advanced batteries
- The Department of Energy will publish a ‘National Blueprint for Lithium Batteries’, beginning a 10 year plan to "develop a domestic lithium battery supply chain that combats the climate crisis by creating good-paying clean energy jobs across America”.
- The effort will leverage billions in funding “to finance key strategic areas of development and fill deficits in the domestic supply chain capacity”.
Invest in sustainable domestic and international production and processing of critical minerals
- An interdepartmental group will be established by the Department of Interior to identify sites where critical minerals can be produced and processed within US borders. It will collaborate with businesses, states, tribal nations and stockholders to “expand sustainable, responsible critical minerals production and processing in the United States”.
- The group will also identify where regulations may need to be updated to ensure new mining and processing “meets strong standards”.
Partner with industry, allies, and partners to address semiconductor shortages
- The Department of Commerce will increase its partnership with industry to support further investment in R&D and production of semiconductor chips. The White House says its aim will be to “facilitate information flow between semiconductor producers and suppliers and end-users”, improving transparency and data sharing.
- Enhanced relationships with foreign allies, including Japan and South Korea will also be strengthened with the express proposed of increasing chip output, promoting further investment in the sector and “to promote fair semiconductor chip allocations”.