DHL Supply Chain Harvard Case Solution & Analysis

DHL Supply Chain Case Solution

  1. Please identify the trade-offs that Yee Hwai is facing within his supply chain.

As the world is moving towards globalization, more hazards are reflecting to influence the ozone layer. According to a research by the world Economic Forum, the 2,800 mega tonnes of Carbon Dioxide emission is due to the transportation and logistics.Also, the Government is increasing pressure on the Logistics companies to follow green Logistics Principals to reduce Carbon Dioxide Emission by the Transportation.

The Minimum Carbon Dioxide emission is generated by the mode of water that refines as using the transport by ships. The transport by water is both less expensive and less Carbon Dioxide Emission is generated by using this mode of transport. However, the water transportation takes many days in order to complete the urgent shipments.

Yee Hwai has recognized the minimum or optimal budget by the CEC to continue the distribution and production of the LCDs. The budget includes a maximum of CNY 3 billion which avoids the consideration of the Carbon Dioxide Emissions. Apart from that, there was also has a minimum transportation done by the various modes other than water to maintain the high customer demand and the minimum inventory level.

The identification of the trade-offs is the major component in the Supply Chain to formulate efficient and effective Supply Chain Strategy. In order to achieve the targeted reduction in the Carbon Dioxide Reduction, Hwai should compromise the quality of the services by using the Water mode as whole transport.

Other than that, the choice is limited in order to achieve the synergies of economy of scale as the maximum production of the LCDs is restricted to 600,000 units in total. Furthermore, the choice of the nearest original design manufacturer that has the capability to reduce the maximum Carbon Dioxide has highest production cost per unit and the mode of transport is also restricted to the usage of Road transport.

  1. Complete the provided Excel template to demonstrate how the original supply chain was optimized on a budget of CN¥ 3 billion.

The budget below has been made by clearly considering all the assumptions and restrictions provided in the Case.The Carbon Dioxide emission from the transportation will reach 7,401,973 kg by carrying the budget of CNY 3 billion.

Budget ¥3,000,000,000
Deficit or Surplus   ¥14,403
Total Units Transported to DC by each Mode from different ODMs
Air Road Rail Water
LCD 32 ODM1 53000 79500 79500 318000 530000
ODM2
LCD 42 ODM1 92000 228000 320000
ODM2
ODM3
ODM4 46000 138000 416000 600000
ODM5
ODM6
ODM7
Total cost
LCD 32 ODM1 ¥152,671,800 ¥150,866,753 ¥150,106,462 ¥594,343,526
ODM2 ¥0 ¥0 ¥0 ¥0 ¥1,047,988,541
LCD 42 ODM1 ¥0 ¥192,248,720 ¥0 ¥467,720,659
ODM2 ¥0 ¥0 ¥0 ¥0
ODM3 ¥0 ¥0 ¥0 ¥0
ODM4 ¥156,073,400 ¥0 ¥285,606,014 ¥850,348,262
ODM5 ¥0 ¥0 ¥0 ¥0
ODM6 ¥0 ¥0 ¥0 ¥0
ODM7 ¥0 ¥0 ¥0 ¥0
¥308,745,200 ¥343,115,473 ¥435,712,477 ¥1,912,412,448 ¥2,999,985,597
Total CO2 emission
LCD 32 ODM1 3158274 201669 93761 92116
ODM2 0 0 0 0
LCD 42 ODM1 0 311171 0 88061
ODM2 0 0 0 0
ODM3 0 0 0 0
ODM4 3133152 0 186031 137738
ODM5 0 0 0 0
ODM6 0 0 0 0
ODM7 0 0 0 0
6291426 512840 279792 317915 7401973

Evaluate the extent of the reduction in CO2 emission if the budget were increased by 10 % to CN¥ 3.3 billion.

The increase in the Budget from CNY 3 billion to CNY 3.3 billion (10% increase) will reduce the Carbon dioxide reduction to 3,479,982 kg that is 53 percent reduction in the CO2 emissions from the transport.Moreover, there will still be a surplus of CNY 29 million...........

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