A system study on the clearance processing of DHL Express Philippines

• Main Authors: Latorre, Romeo Paolo D., Mendoza, Enrico Carlo M., Velasco, Anton Josiah L.
• Format: text
• Language: English
• Published: Animo Repository 2012
• Subjects: Business logistics > Contracting out; Shipment of goods > Management; Express service > Contracting out; Industrial Engineering
• Online Access: https://animorepository.dlsu.edu.ph/etd_bachelors/10539
• Institution: De La Salle University

The study focused on the inbound clearance processing for formal and informal shipments of DHL Express Philippines. The local business unit provides airfreight and door-to-door courier services. The shipments of the consignments of the consignees coming from the origin country will be assessed and released by the Customs Clearance Group (CCG). After applying WOT-SURG situation appraisal, the problem statement was determined to be as follows: The average Clear-on-Air (COA) of DHL Express is below by 2.7% from the target of 65.7% for January to May 2012.3 This leads to an opportunity loss amounting to PHP 583,384 and 14.99% negative issues and concerns based on the Net Promoters Approach. From an analysis of the series of causes, the root cause were identified namely: inability of Clearance support Agents to notify all consignees, redundant information flow in the computer systems, incomplete requirements of shipments, and unspecific production of shipments. Alternative solutions were generated in solving the root cause of the problem. These were evaluated using KTDA to formulate the proposed solutions. For the inability of CSAs to notify all consignees, the following solutions were identified, namely: Layout improvement, even allocation of workload, and proper prioritization of shipments. For the incomplete requirements of shipments, an express clearance lane was established to help consignees get along term permit validity from government agencies. For the unspecific product description of shipments, a data administration officer will be given additional assignment to review the product descriptions of shipments. Lastly, for the redundant information flow in the system, maintaining the current computer system was deemed less costly than developing and acquiring a new one. The notification process of CSAs is critical in the release of shipments. Harnessing even allocation of workload for the CSAs provide an average increase in the number of informal and formal shipments being notified by 23.25% and 58.22%, respectively. The prioritization of shipments according to shortest processing time also increases the notification of shipments by 25.45%. The layout improvement affects the entire clearance process by decreasing the total man distance by 88% and 79% for the processing of informal and formal shipments, respectively. The percentage of shipments having incomplete requirements is 13.38%. Establishing an express clearance lane will help consignees acquire the required permits will lead them to get prioritized in the clearance process. This will entail a decrease in the number of held shipments due to incomplete requirements by 206 shipments every month. Lastly, the percentage of shipments that are held due to having unspecific product description is 12.63%. Trace closure performance is projected to increase by 13.75% and 48% for informal and formal shipment, respectively, through assigning a data administrator to filter shipments having unspecific product description. The full implementation of the proposed solution will allow the CCG to be able to exceed the COA target of 65.7%. The investment needed to implement the proposed solution amounts to PHP 203,932. The computed net present value (NPV) is PHP 77.873,489. Given these values, the proposed solution is feasible. The solutions can be applied within a span of two (2) months maintaining the current computer system was deemed less costly than developing and acquiring a new one. The notification process of CSAs is critical in the release of shipments. Harnessing even allocation of workload for the CSAs provide an average increase in the number of informal and formal shipments being notified by 23.25% and 58.22%, respectively. The prioritization of shipments according to shortest processing time also increases the notification of shipments by 25.45%. The layout improvement affects the entire clearance process by decreasing the total man distance by 88% and 79% for the processing of informal and formal shipments, respectively. The percentage of shipments having incomplete requirements is 13.38%. Establishing an express clearance lane will help consignees acquire the required permits which will lead them to get prioritized in the clearance process. This will entail a decrease in the number of held shipments due to incomplete requirements by 206 shipments every month. Lastly, the percentage of shipments that are held due to having unspecific product description is 12.63%. Trace closure performance is projected to increase by 13.75% and 48% for informal and formal shipments, respectively, through assigning a data administrator to filter shipments having unspecific product description. The full implementation of the proposed solution will allow the CCG to be able to exceed the COA target of 65.7%. The investment needed to implement the proposed solution amounts to PHP 203, 932. The computed net present value (NPV) is PHP 77,873.489. Given these values, the proposed solution is feasible. The solutions can be applied within a span of two (2) months.