DHL Global Forwarding: Consolidation Program

Description

On October 13, 2015, the regional director of DHL Global Forwarding (DGF) was reviewing reports in preparation for a team meeting in Bengaluru, India. DGF provided air and ocean freight forwarding services. In September, the regional director’s team had successfully rolled out a new consolidation program in three Indian cities: Hyderabad, Bengaluru, and Chennai. While glancing through the respective consolidation teams’ reports, however, several questions occurred to the director: Was DGF paying more to airlines on specific days of the week in these three cities? Should the company continue to run the consolidation program in these locations? How could DGF consolidate its clients’ requirements across these cities? Would such consolidation benefit the company? The director had just one day to come up with a new plan for presentation at the next team meeting.

Learning Objective

This case can be used to teach students about integer linear programming (ILP) or transhipment models in an operations research course; it can also be used to address consolidation problems in post-graduate courses on supply chain or logistics management. After completing the case, students should be able to do the following: ·Understand the benefits and challenges of consolidating shipments in the global freight forwarding environment. ·Build a mathematical ILP model for a consolidation program. ·Develop a cost-effective consolidation program by comparing different possibilities.

Keywords

Consolidation forwarding freight ILP integer linear programming