DHL Supply Chain, the world’s leading contract logistics provider, is broadening its servicesand solutions in response to the changing needs of multi-channel customers and more demanding
consumers, senior executives said.“The supply chain is the engine to drive e-commerce,” David Bruce, vice president strategicdevelopment for DHL Supply Chain UK & Ireland, told a DHL e-commerce media workshop near Londonlast week.
But the e-commerce supply chain is very different to traditional B2B-based ‘one-way’ logisticsservices for retailers, he stressed. Key differences include more diverse and interactive ‘two-way’customer relationships, new physical goods flows and more added-value services. The e-commercesupply chain required the option of integrated warehousing, flexible and scalable services,integrated IT systems and “much more customer service for end-consumers”, he pointed out.
In delivery terms, DHL needed to be able to offer next-day, same-day or named-day deliveries. Atthe same time, e-commerce orders often came much later in the day than traditional retail orders,meaning later cut-off times. Seasonal variances and product promotion campaigns meant more volumepeaks.
“In the past we were a commodity provider. Now we have to become a value partner,” Brucestressed.
In the UK, DHL Supply Chain has successfully developed an e-commerce supply chain for one of itslargest customers, retailer House of Fraser, at the National Distribution Centre in Milton Keynes.Parallel to its long-standing B2B distribution to 62 House of Fraser stores across the UK, DHL hasset up a dedicated e-commerce area for B2C deliveries. About two million of the 40 million unitsnow being stored and distributed through the facility are e-commerce items.
Under this process, orders are picked and packed, including with special wrapping for someproducts, by dedicated staff. Goods are then allocated to parcel carrier networks using theMetapack IT system and delivered by the respective carrier directly to the consumer. There is nolarge-scale use of home delivery specialist Yodel, formerly HDN, the company that bought DHL’s UKdomestic parcel business last year.
For returns, DHL Supply Chain is working with the Collect + network of alternative parceldrop-off and collection locations.
There is currently a boom in the recently-launched House of Fraser ‘Buy & Collect’ serviceunder which consumers can order goods online and collect the parcels themselves from a nearby Houseof Fraser store. This guaranteed and free next-day delivery service, including pro-activenotification, is primarily designed to drive more consumers into the stores to encourage additionalsales. DHL Supply Chain normally uses its parcel carriers for next-day deliveries to storesbut can also call on the 50-strong fleet of House of Fraser delivery vehicles.
‘Buy & Collect’ orders have quickly grown to as much as 25% of House of Fraser online sales,Mark Mearns, head of multi-channel retailing with DSC UKI, pointed out. This type of ‘click &collect’ service could spread to other British retailers in future, he predicted. Logisticspartners thus had to be able to provide guaranteed and timed next-day delivery across the UK, hestressed.
Another future trend in the e-commerce supply chain would be more international distribution,raising issues such as how to structure warehousing and organise returns. Moreover, mobileconsumers ordering goods for delivery to diverse addresses would also make deliveries more complexin future, Mearns pointed out.
