The efulfillment challenge
DHL:
Founded in 1969 by Dalsey, Hilblom and Lynn
Presence in 227 countries
69,000 employees (end of 1999)
3,000 service centres (end of 1999)
222 DHL aircrafts (end of 1999)
33 hubs (end of 1999)
International Air Express
Market Share, 1999 Shipments
DHL – 38%
FedEx – 21%
UPS – 13%
TNT – 12%
Others – 17%
Source: ACGM
How is eCommerce doing today?
Bottom line is : None too Well: 28% of total purchase attempts fail
Source: Boston Consulting
Top 10 reasons
Item not in stock 64%
Late Delivery 40%
Delivery price high 38%
Communication Problems 36%
No purchase confirmation 28%
Limited Selection 27%
Site hard to use 26%
Unable to complete purchase 25%
Price non competitive 22%
Not enough gift options 16%
Source: Andersen Consulting
Cost of inefficiency
It is estimated that 25% of online purchases are returned
Costs of Inaccuracies
Value of Incorrect product shipped $6.7 Billion
Incorrect Address costs $2.2 Billion
Additional Fulfillment costs $2.5 Billion
Source: Mckinsey and Co
eCommerce servicing the World?
Only 10% of sites offer service globally
Servicing the World?
US destinations only 65%
US to 1 or 2 Non US destinations 15%
All origins / All destinations 10%
Some origins to Some destinations 5%
US origins to military or Govt addresses 5%
Source: Forrester Research
The key ingredients for success:
Global Multi-modal virtually integrated transportation capability
Trade compliance and landed costs solutions
Global reverse logistic solution
full visibility
Consulting services
Do not try to DIY but find the right partners
Integration, Integration, Integration
Keep it simple: Complexity is just simplicity misunderstood
