DHL supply chain

SYNOPSIS

The degradation of the environment has led many governments and customers to pressure businesses to make their operations more environmentally friendly. The case illustrates how a small budget increase can drastically reduce carbon dioxide (CO2) emission in the transportation of LCD TVs from their manufacturing bases to a distribution centre (DC).

TECHNIQUES, CONCEPTS AND TAKE-AWAY

The case requires the construction of an Excel template. Together with the usage of the SOLVER optimization tool, this template will inform management on the optimal supply chain. Specially, it will determine which ODMs will manufacture the TVs and what modes of transportation (regular air, air express, road, road LTL (less than truck load), road network, rail or water) will be used to ship them to the DC within the allocated budget.

The point of this case is to realize a significant reduction in CO2 emission about 50 per cent can be achieved with a small increase in a supply chain budget. The case assumes a 10 per cent increase in the supply chain budget being made possible by a combination of tax incentives and intangibles such as brand value appreciation engendered by customer goodwill and appreciation. However, sensitivity analysis indicates that the bulk of the reduction in CO2 emission already occurs when the budget increase by six per cent.

ASSIGNMENT QUESTIONS

Please choose either Option A or B and submit your answers by group.

Option A

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

2. Evaluate, within one to two pages, the extent of the reduction in CO2 emission if the budget were increased by 10 per cent to CN 3.3 billion.

Option B

The solutions team of DHL Supply Chain are analysing the emission reduction results with the budget increasing from current CN 3 billion to CN 3.54 billion (i.e. 18% increase in budget). It is found that the total emission has been reduced when the budget increases from CN 3 billion, and then the emission reduction has been flattened after about 6% increase. The total carbon emission will be at about 3.3 million kgCO2 when it is flattened along 6% to 20%. The solution teams seek to look into the situation within the Page of budget of CN 3.54 billion (i.e. 18% increase in budget). They planned using LCD 42 ODM5, LCD 42 ODM7, LCD 32 ODM1, and LCD 32 ODM2 as in the following table. With the following table and the tables provided in the question document file and excel file, please show and work out the steps to calculate the total carbon emission within the CN 3.54 billion budget. Comment how much you prefer for the percentage increase for the budget in minimising the carbon emission for the delivery of LCD TV with the budget considered.

Air Express Road Road LTL 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 LCD 42" ODMI LCD 42" ODM2 LCD 42" ODM3 LCD 42" ODM4 LCD 42" ODM5 LCD 42" ODMO LCD 42" ODM7 LCD 32" ODMI LCD 32" ODM2 Road- Rail Water Network 0 0 0 0 0 0 0 0 0 0 0 367,891 0 0 0 0 0 138,000 368,045 0 0 200,000 79,495 79,500 118,000 0 11 0 53 0 0 0 0 46,000 0 53,000 0 0 0 0 0 0 5 0 0 5 Air Express Road Road LTL 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 LCD 42" ODMI LCD 42" ODM2 LCD 42" ODM3 LCD 42" ODM4 LCD 42" ODM5 LCD 42" ODMO LCD 42" ODM7 LCD 32" ODMI LCD 32" ODM2 Road- Rail Water Network 0 0 0 0 0 0 0 0 0 0 0 367,891 0 0 0 0 0 138,000 368,045 0 0 200,000 79,495 79,500 118,000 0 11 0 53 0 0 0 0 46,000 0 53,000 0 0 0 0 0 0 5 0 0 5