By: Craig W. Roggow
Best Practice Companies in Logistics
Different companies are characterized by different approaches to business logistics. The prevailing frameworks for business logistics within an organization can streamline or derail the company’s efficiency. While there are numerous companies in the field of business logistics, DHL Express and FedEx are outstanding. Both firms are globally reputed for the provision of credible logistics services. Their dominance in the field of business logistics is almost unrivaled. In line with such attributes, this analysis focuses on DHL Express and FedEx as best practice firms in business logistics. The provision of exemplary services has positioned DHL and FedEx as market leaders in business logistics. The analysis also involves an assessment of the various similarities and differences of both firms as best practice companies.
Objectives of the post
- Identify and explain what these best-practice companies do within logistics.
- Define the similarities between DHLand FedEx.
- Describe major differences between DHL and FedEx.
- Critique DHL and FedEx best practices.
- Implementing best practices.
DHL and FedEx are characterized by outstanding attributes for business logistics. Both have been in the field of business logistics for decades. Consequently, they have built an excellent reputation of reliable services across the globe. Starting first with FedEx which is headquartered in Memphis, TN, this firm has a global network of logistics and cargo operations. The company has positioned itself excellently in terms of the delivery of goods within the stipulated timeline. Although FedEx is an American firm, it offers services to thousands of clients from almost all nationalities (Ferrell & Hartline, 2010). This is largely down to its credibility and reliability. The company uses modern technological systems to develop elaborate logistics plans for clients. Through such approaches, the company is credited by most clients for streamlining their respective supply chain systems.
In addition to the integration of technology in supply chain systems, the company also uses exemplary frameworks to ensure the security of cargo. In the field of logistics and supply chain systems, security is an essential attribute that affects operational efficiency. This illustrates why FedEx is an outstanding firm in the logistics sector. It is also crucial to pinpoint the efficiency of the company’s human resource systems. The company recruits professionals in logistics in order to cater adequately for the expectations of different clients. This has also boosted the company’s standing as a best practice firm in business logistics.
Various attributes can also be used to accentuate the categorization of DHL Express as a best practice firm in business logistics (Birla, 2012). The firm has its head office in Bonn, Germany. However, it has positioned itself as among the most reputable global brands. In addition to freight, the company also offers courier services for numerous kinds of goods including parcel delivery. The company has excellent facilities which facilitate for the delivery of quality services. In addition to multiple containers and giant trucks, DHL Express has a fleet of airplanes. This caters for the swift delivery of cargo and other kinds of goods across the globe.
Despite facing extensive competition from other business logistics firms like FedEx, DHL Express remains a market leader. It combines exemplary logistics methods to streamline the efficiency of supply chain networks. This includes harnessing technological systems while also maintaining efficiency within the entire human resource framework. Like other logistics firms, DHL focuses on the attainment of time efficiency within the supply chain. Consequently, DHL Express has the credibility and operational efficiency needed for categorization as a best-practice corporate entity in logistics.
Both DHL Express and FedEx have numerous similarities. Firstly, both firms offer an excellent variety of logistics services. The services in both firms include freight, courier services, and mail delivery among others. In essence the similarity in the nature of logistics services offered by DHL Express and FedEx has contributed to the high level of competition among them. In line with this aspect, both firms have more or less similar target market in the logistics sector (Walker, 2007). The second outstanding similarity in both firms pertains to their focus on technological platforms for logistics.
Technology is an essential pillar in the operational framework for both firms. For instance, both firms employ modern technological platforms to streamline the accuracy and efficiency of their respective inventory systems. Additionally, the integration of these technological systems facilitates for the alleviation of delays among the different customers. Through such attributes, the reputation of both firms has grown tremendously across the globe. It is also pertained to highlight that both firms have an expansive target market for their logistics services. Although DHL Express is a German firm, it has establishments across the globe. In line with this attribute, the company has high revenue collection rates. This also applies to FedEx. The company has establishments across the globe although it is headquartered in the United States. Another similarity of both best practice firms pertains to competition. Both firms have more or less similar competitors especially at the international stage (Birla, 2012). Consequently, they try to outdo each other in numerous ways such as rigorous marketing and the reduction of charges for logistics services.
Despite the numerous similarities between FedEx and DHL, the two best practice companies also have various differences. Firstly, DHL Express is the most dominant logistics firm in the European zone and Asia. The company has extensive establishments in these regions. This gives DHL a competitive advantage in Asia and Europe compared to FedEx. On the other hand, FedEx is the most dominant business logistics firm in the Americas. The company has a huge market share in this region, as compared to other companies in the business logistics sector (Ferrell & Hartline, 2010).
In addition to geographical positioning, another crucial attribute that highlights the difference between both companies is third-party logistics. While FedEx offers services for third-party logistics, this is not the case with DHL Express. The German logistics services company mainly specializes in parcel and freight delivery. The nature of equipment employed in both logistics firm is also characterized by some differences. For instance, DHL mainly transports cargo through its fleet of airplanes. In contrast, FedEx mainly uses trucks and ship vessels.
As exemplary dominant firms in the business logistics sector, it is essential to critically assess the various attributes of FedEx and DHL Express as best practice firms. The levels of operational efficiency in both logistics firms are tremendous (Butcher, 2008). This is among the most essential attributes of the logistics services sector. Operational efficiency facilitates for timeliness and thus averts any kind of delay. The timely delivery of goods is essential towards streamlining business performance. Consequently, business logistics operations must be effective. Both companies have exemplary frameworks for operational efficiency. This has boosted the growth of both brands as market leaders in the business logistics sector.
Another crucial element of analysis concerns the companies’ frameworks for cost alleviation. Both firms employ economies of large scale as an essential platform for alleviation of costs. In business logistics, it is extremely essential for companies to minimize costs in all aspects of the supply chain system (Walker, 2007). Both firms have attained this attribute, hence their position as market leaders in logistics. Economies of large scale also help the best practice firms in the alleviation of charges for all clients.
In order to implement the best practices for business logistics, it is critical to institute an outline that facilitates for risk mitigation while also minimizing costs (Murphy & Wood, 2010). These are two outstanding attributes of business logistics. In terms of risk mitigation, it is essential to have an elaborate analytical framework that assesses the contingencies associated with any deal. Through this approach, the implementation of risk mitigation measures would be effective.
Another crucial aspect pertains to the evaluation of the sustainability of some investments in the logistics equipment. While some facilities are costly, they have an excellent framework for endurance (Butcher, 2008). Consequently, sustainability of investments is an essential aspect for best practice in the logistics sector. Additionally, the recruitment of competent personnel is essential. This contributes massively towards the efficiency of supply chain systems.
The provision of exemplary services has positioned DHL and FedEx as market leaders in business logistics. These are best-practice companies which serve as models for other organizations in business logistics. Technology is an essential pillar in the operational framework for both firms. For instance, both firms employ modern technological platforms to streamline the accuracy and efficiency of their respective inventory systems. Additionally, the integration of these technological systems facilitates for the alleviation of delays among the different customers. Another similarity of both best practice firms pertains to competition. Both firms have more or less similar competitors especially at the international stage.
- Birla, M. (2012).FedEx delivers: The world’s leading shipping company, John Wiley & sons: Hoboken, NJ
- Butcher, T. (2008). Global logistics and supply chain management, John Wiley & sons: Hoboken, NJ
- Ferrell, O. C. and Hartline, M. D. (2010). Marketingstrategy, Cengage Learning: Mason, OH
- Murphy, P. R. and Wood, D. P. (2010). Contemporary logistics, 10th Edition.Prentice Hall.
- Roggow, C. (2013). Best Practice Companies in Logistics. Retrieved from: http://mergerandacquisitionstrategies.org/best-practice-companies-in-logistics/
- Walker, S. (2007). International logistics, Kogan Page:London.