Inventory Management



The company chosen for this assignment is the DHL Company; the company is a globally recognized logistics company with its roots in Germany. The company provides international express mail services with a specific inclination towards sea and air mail. The company operates an intricate web of demand and supply which spans several countries all over the world which consequently make it undoubtedly the largest operating logistic company all over the world. The company has to have a stable and equally flexible inventory management system in order to achieve the market domination that it has accrued over the years (Ammon et al, 2008).

This is the major reason behind the choice to scrutinize this company from a logistics point of view in order to determine what makes it so efficient and effective in an increasingly competitive market. Consequently, it would be prudent to ascertain if the company uses certain proved methods of inventory management or if it has an optimal approach which endears it to the market and its consumers.


The company also faces several challenges in its efforts towards maintaining its market share for both the short term and the long term sustainability of the company. finally, drawing on the findings made in this essay, a retrospective view of the company could be generated in order to better inform any interested party over the run ins of managing such a company through certain means. Suggestions could also be made on the same subject matter, which would either seek to improve upon the current approach to inventory management at DHL or critique the faults that are already present in the system which threaten to derail it and the success of the company (Ammon et al, 2008).


The company’s inventory management typically involves supplying the products on customer request; this facet makes it very unique and highly flexible to the customer’s preferences. The company is not a manufacturing company which in essence makes it ineligible for using the VMI logistics system. The VMI is ideal for use in manufacturing companies which would implement it in their storage facilities. The advantages possessed by this system enable the company to effectively absorb the pressures involving handling the demands of the target consumer market. DHL as a company acts as an intermediary entity between its service market where it licks either side of the transactions that it undertakes. Its revenue generations stems largely from the shipping fees imposed on the cost of moving the items it takes under its possession from one geographical location to another (Stock & Lambert, 2001).


Essentially the company operates a system where the customer places a request for transfer of personal effects either by sea or air. The customer provides all the shipping details and promptly pays the company for the services to be rendered; the company then assumes responsibility for the goods and services in the sense that it guarantees the safe and timely delivery of the personal effects as indicated on the order sheet. The company, according to trends, uses up-to-date technological platforms which help it to remain efficient in keeping track of the inventory in its possession. This ensures that the right shipment is sent to the right destination on time without causing unnecessary delays and unplanned overhead costs for the company as it pursues profit generation. The movement of the inventory is strictly reliant on the technology in use thus making it less desirable to use the VMI system. The VMI system requires the DHL Company to be able to adhere to certain logistical requirements at the whims of its consumers who might demand it at a later date (Gunasekaran & Ngai, 2004).


The company, as it might be read on the writing platform  has several mechanisms in place that ensure that it has the right inventory at all times. One of the most notable mechanisms in place is the compartmentalization of the company into different departments which different aspects of the company operations. This ensures that the company allows for optimal resource allocation with regards to company operation and consumer satisfaction. Different regions of the globe have different company executives who handle specific operations of the company which enable it to handle inventory management as effectively as possible. Another mechanism in place for the company is through the use of a decentralized system of managing shipping of personal details for the company’s esteemed customers. The company’s policy on technological nuance and flexibility on the same allows it to remain abreast of the rest of its consumers. The operating systems in use by the company allow only authorized personnel to access the transaction data which would aid in improving consumer satisfaction and eventually profit generation (Browne, Allen & Woodburn, 2006).


In conclusion, the company is a unique feature of the modern day logistics company in the sense of its continued dominance. The company relies on management and technological know-how to remain atop the industry which consequently carves it out as a market leader. The company uses compartmentalization perfectly which allows it to manage its affairs in equal measure which enable it to perform as expected of a market leader. The company’s inventory management focuses on a flexible approach which employs certain features of the VMI system but inadvertently discards the rest of the features.


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