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In the field of purchasing and supplies, the adoption of best practices is key towards fostering the effectiveness of a company. In this regard, a business enterprise needs to focus on the development of key aspects including purchasing, materials flow, acquisitions, materials flows, sourcing strategies, and movement and control of intellectual property. Particularly, in the area of maintenance, repair, and purchasing (MRO) focuses on making purchases that facilitate a streamlined running of a business organization, especially in the manufacturing sector (Avery, 2009). DHL is one of the companies observing the best practices in purchasing and supplies to the extent of offering MRO services to other companies. Therefore, this paper identifies the best practices embraced by DHL in the identification of spend types, supplies with global business capabilities, its integrated approach with distributors, as well as the processes of tracking suppliers’ performance.
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DHL incorporates both indirect and direct spend types to facilitate the MRO management of its clients owing to the diversity of their industries. In this regard, the indirect spend type focus on the purchase of good and services that are not integrated directly into the manufactured product (DHL 2017). For example, DHL facilitates the delivery of office supplies to its clients. On the other, hand, the direct spending type prompts DHL to purchase goods and services integrated directly into the manufactured product.
Identification of Suppliers with Global Business Capabilities
Particularly, DHL concentrates on the coordination of international supplies to foster the efficiency of its MRO services at the global scale. In this regard, DHL partners with international companies to bolster international trade from the worldwide collection areas to local consumption points. Furthermore, DHL identifies suppliers with adequate expertise in import/export customs clearance (DHL 2017). The logistics company also concentrates on supplier training and familiarization to boost their international capacities for global business. Moreover, DHL picks suppliers with a good track record in the area of customer service as well as call center management.
Strategy of Integrated Supply Approach with Distributors
DHL Global Forwarding and DHL Supply Chain comprise of the two departments of the company facilitating its integrated supply approach with distributors. As such, DHL’s integrated approach comprises of global sourcing, origin management, in-country resource management, supply chain visibility, and management, optimization of data and information flow, and destination management. The integrated strategy enhances the collaboration of DHL with its distributors situated globally (Mangan & Lalwani, 2016). In so doing, the company meets the expectation of its clients satisfactorily.
Processes of Tracking the Performance of Suppliers
DHL considers the costs of outsourcing and ownership as crucial in tracking the performance record of suppliers over time. Mainly, the company applies the suppliers’ performance index (SPI) to gauge the outsourcing and ownership costs (DHL 2017). The cost-based approach allows DHL to compute the surplus costs incurred in the event the supplier fails to perform as anticipated. The cost-based system is integral in facilitating the move towards sourcing the requirements founded on the total cost considerations. The cost-based approach is also relevant in raising the accountability and control of the suppliers.
Effective MRO management is important in fostering the competitiveness of a company globally. DHL applies the best practices in MRO to foster its operations besides streamlining the performance of the customers seeking its MRO services. Notably, the company applies both direct and indirect spend types to fulfill the expectations of its consumers. The collaborative approach of MRO management fosters DHL’s identification of suppliers with global business capacities. Moreover, the integration of an SPI is crucial for DHL’s efforts in tracking the performance of suppliers.
- Avery, S. (2009, February). MRO sourcing goes global. Purchasing, 138(2), 48-52.
- DHL: Keeping Manufacturing Running (MRO). (2017).
- Mangan, J., & Lalwani, C. (2016). Global logistics and supply chain management. Hoboken, New Jersey: John Wiley & Sons.