DHL 2015 Annual Report Download - page 102

Deutsche Post  Group —  Annual Report
In the Global Forwarding, Freight division we purchase transport services from
airlines, shipping companies and freight carriers rather than providing them ourselves.
In the best-case scenario, we succeed in sourcing transport services on a cost-eective
basis. We thus have the opportunity of generating higher margins. In the worst-case
scenario, we bear the risk of not being able to pass on all price increases to our custom-
ers. e extent of the opportunities and risks essentially depends on trends in the supply,
demand and price of transport services as well as the duration of our contracts. Com-
prehensive knowledge in the area of brokering transport services helps us to capitalise
on opportunities and minimise risk.
In the Supply Chain division, we provide customers in a variety of industries with
solutions along the entire logistics chain. Our success is highly dependent on our cus-
tomers’ business success. Since we oer customers a widely diversied range of products
in dierent sectors all over the world, we can diversify our risk portfolio and thus coun-
teract the incumbent risks. Moreover, our future success also depends on our ability to
continuously improve our existing business and to grow in our most important markets
and customer segments. We do not see any signicant strategic opportunities or risks
for the Supply Chain division beyond those reported in the section entitled “Oppor-
tunities and risks arising from macroeconomic and industry-specic conditions”.
Opportunities and risks arising from internal processes
For us to render our services, a number of internal processes must be aligned. ese
include – in addition to the fundamental operating processes – supporting functions
such as sales and purchasing as well as the corresponding management processes. e
extent to which we succeed in aligning our internal processes to meet customer needs
whilst simultaneously lowering costs correlates with potential positive deviations from
the current projections. We are steadily improving internal processes with the help of
our First Choice initiatives. is improves customer satisfaction whilst reducing our
costs. Our earnings projection already incorporates expected cost savings.
Logistics services are generally provided in bulk and require a complex operational
infrastructure with high quality standards. To consistently guarantee reliability and
punctual delivery, processes must be organised so as to proceed smoothly with no tech-
nical or personnel-related glitches. Any weaknesses with regard to the tendering, sorting,
transport, warehousing or delivery of shipments could seriously compromise our com-
petitive position. To enable us to identify possible disruptions in our workows and take
the necessary measures at an early stage, we have developed a global  platform that
depicts and integrates our global supply chains and locations. Near real-time informa-
tion on incidents relevant to security ows into the system, which in cases of disruption
also serves as a central communications platform. is poses a competitive advantage
that has already met with a high degree of interest from both security agencies and
customers.
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