Managing information SystemA Case study of: DHL®

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KCB ID: 11305Course: MBA in Marketing

KCB ID: 11305

Contents

MIS (Management information system) 03Decision making and its value 06Basic components of the information system 06A Case study: DHL® 07IIS (Integrated information system) at DHL® 07IT Solution at DHL® 08MIS (Management information system) at DHL® 09

1. Operational level management 092. Tactical/Managerial level management 103. Strategic level management 12

Conclusion 14Recommendation 15References 16

Figure 1: Interrelation among information technology 04Figure 2: Functional area of MIS 05

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MIS (Managing information system)

Managing information is the process of the strategic management of all the information from

the various parts of the organization. An organization needs the information from its various

parts and need to clarify them in supporting the decision making for that company.

Laudon, K. and Laudon, J. (2007) in their book of, Management information system, has

elaborated the definition of MIS as, “Management information system works at the levels of

management of any strategic organization and serve it with the functions of planning,

controlling as well as decision making with the providing of the routine summary and also

the exception reports”

Managing information is therefore, the management system of the existing information from

the various parts of the company and their strategic management for the purpose of strategic

decision making for it in aiming of the future strategy and

Core components of information system are,

1. Data – Raw and basic unit of the organizational information

2. Information – when the raw data expresses a meaningful information

a. Input – entry of the raw information in the system

b. Processing – Strategic meaning that are processed by the set

c. Output – To get the handy of information that are presented in printed graph,

chart etc.

An organizational management level may be classified in the following three tiers and the

involved information system is,

1. Operation level: keep track the core operations of the company and deals with various

departments like, customer service, cashier, production, order processing etc.

Information system:

TSS – Transaction processing system

It automates the routine and the repetitive tasks, critical in the operation of

organization, e.g. point of sales, payroll preparation, customer billing, warehouse

operation etc.

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2. Managerial level: Company’s various levels of information are managed in this level,

e.g., sales management, sales analysis, inventory control, relocation of cost control,

budgeting for the company etc.

Information system:

DSS – Decision support system

This information supports in the complex types of information and provides analytical

tools to the employee.

MIS – Managing information system

3. Executive level: the top level management resides here and they are to take the

strategic decision, long term plan, sales trend forecasting, personnel planning etc.

Information system:

ESS – Executive support system.

Figure 1: Interrelations among Information technologies.

(O’Brien, J (1999). Management Information Systems – Managing Information

Technology)

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Figure 2: Functional areas of MIS

(Laudon, K. & Laudon, J. (2007) Management information system)

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DECISION MAKING AND ITS VALUE

A functional organization have to consider the decision making process for its strategic

needs. The decision making have some strategic values in company’s background and for its

success. According to the structure of decision taken in the organization, they may be of two

types.

a. Structured decision:

It follows the strategic structure and in repetitive, follows the routine and also

involves in the structured definite handling processes. The operational level in the

company or organization are the core department where it is seen to be considered.

a. Unstructured decision:

This sort of decision process doesn’t follow any strategic structure and they are not in

a routing and beyond the judgement evaluation are categorized as the unstructured

decision process.

Basic components of the Information System

i. Hardware: This is the set of devices that runs the software in the chain of

information technology. They are composed of processor, monitor, keyboard and

printer etc.

ii. Software: This is the set of programs that run in the hardware environment and

process the data in a strategic way.

iii. Network: This is a connecting system and permits the resource sharing in

different computers

iv. Procedures: set of strategic information that elaborates the way of processing

information.

v. People: Are individuals who work in the system and take decisions how to use the

information technology and system.

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A Case Study: DHL®

(An express logistics company)

DHL express is a subdivision of the Deutsche Post that provides the international services. It

was founded in the early 1969 in the aim of delivering documents from San Francisco to

Honolulu. The company later has expanded its services throughout the world in later 1970s.

The prior interest of the company was in offshore and the inter continental package

deliveries. But the success of the FedEx has prompted them in its expansion in the US that

had started in the 1983. In the current times, DHL aggressively expanding to the different

countries where it could not be served by the other delivery or courier services. This region

includes the Eastern bloc, PRC (People republic of china) and Vietnam. In the year of 1998,

Deutsche post had begun the acquiring the shares of DHL and finally in the year of 2001 it

had reached its ownership status of DHL. In the 2002 it has committed the full purchase of

the company. After that, Deutsche post was effectively absorbed DHL in its express division

but expanding through the using of DHL brand in other Deutsche post division, subsidiaries,

businesses etc. At present, DHL express is sharing the well known DHL brand in conjunction

with DHL global forwarding and freight and the DHL supply chain.

IIS (Integrated Information System) at DHL

DHL is highly known as it uses the technology innovatively and for its fast and reliable

services. As DHL is mainly a service based company for the shipments and transport of

various goods worldwide, it needs information from the entire sector of the company,

specially form its operational sector. These information helps the company mainly in track

and trace types. So the ultimate goal is better strategic customer services and support in

logistics support.

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IT Solutions at DHL®

To adopt and implement better services, DHL has enabled the Cisco solutions to improve

better communications and for better operations e.g., telephone system management,

maintenance etc. Through the creation of single network and the communication

infrastructure, DHL has been helped by Cisco to improve communications over various sites

and manage them in a very strategic way. For example the employee of the DHL are able to

call any locations worldwide and the other staff’s simply use the extension and outbound

calls. Through this Cisco solution, corporate directory are easily accessible ever from the

handset.

Structure of the solutions:

For Routing and the switching

i) Cisco 2800 series server routers

ii) Cisco catalyst 4500 series switch

iii) Cisco catalyst 3560 series switch

Voice and IP Communication

i) Cisco unified call manager

ii) Cisco unified IP Phone

Security

i) Cisco network access control (NAC)

ii) IDS

DHL currently planning in leveraging the Cisco SONA framework through the using of

the network in deploying the additional business applications. Additionally DHL is also

setting up RFID (Radio frequency Identification) over the existing Cisco network for

further and improving its operations.

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MIS (Managing Information System) at DHL®

At present information technology are crucial for any company background to fulfil the

business role effectively. In respect to the DHL they are highly information intensive

company where in every aspects they have to practice information most effectively.

Organization information backbone can be categorized in three tiers of management

according to the information provided for the strategic decisions to be made.

a. Operational information management

b. Managerial information management

c. Strategic information management

(Laudon, K. and Laudon, J., Management information system)

We will now find out the relevance information provided and managed by DHL in

every segment for its DSS (Decision support system) strategy.

1. Operational information management.

DHL’s operational information mainly in relation with the freight and logistics. They

need the current and updated information about the goods, customer, location,

condition etc. To achieve this target it has developed and implemented a number of

solutions in its operational level of management.

i. Kofax (Scanning software): One of the main duty of the staff at DHL is to

scan the tag of goods to track the information and process them through

IBM® DB2 content manger. But this system has proven to be unstable and

was found to be hit by number of viruses.

Later through the establishment of Kofax, they have got remedy from this

unstable and bizarre situation. Now they are able in managing the information

and getting approval of more than 5,000 invoices every week.

Architecture:

Kofax ascent capture (ACIS)

IBM® DB2® content manager

IBM Series hardware.

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ii. Siebel solution: A software solution developed by Oracle® for DHL to unify

the customer information and in creating a single, global and also a

multichannel view of every customer relationship. Siebel system also assists

DHL in the execution of compelling, multichannel marketing programs that

are aimed at the maximization of the demand for the domestic and in

international express services.

This CRM application plays the vital in collecting the information about the

customer about their choice. Through providing a clear and transparent view,

DHL had achieved approximately 1% increase in its revenue in the year 2005.

This Oracle® solution has reduced the sale time, administrative time etc. too.

iii. Forwarding and Freight: This department of the operational level are

responsible in carrying goods through railway, road transport, air and sea. The

two main business units are,

a. DHL Global forwarding: It handles the global ocean and air freight.

b. DHL Freight: It runs the ground based and freight network that covers the

whole Europe, Russia and in the middle-east.

c. DHL Supply chain: Provides service in warehousing and the warehouse

transport and the value added solutions and also for the customers in wide

variety of sectors.

2. Tactical / Managerial information management

In this managerial level of information management, DHL gathers information from

its lower, operational level system to facilitate its decision support system (DSS). In

the past the company were managing the logistics through off-the-shelf warehouse

applications that were run on the legacy microcomputer platform.

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i. Progress® Open hedge: In 1998 it has realized and the management level has

decided to use the Progress® Open hedge legacy software platform to build

the custom applications in house. It has facilitated DHL in managing economy

and provide the ability to build both the applications and in selecting best-of-

breed applications.

ii. WMS (Warehouse management system): DHL’s Management have selected

the WMS system provided by WICS, a partner of Progress®. This warehouse

management system are featured with the vast flexibilities. It offers DHL,

fully featured support in bar coding and the RF technologies. It also support

DHL in the centralized tracking of its inventory from the receipt through the

distribution and the delivery. The WMS program runs on Open Hedge

business environment.

Now a day, when any goods are received in purpose of storage, the WMS are

able to generate labels and this is used in uniquely identifying pallets and then

the system allocate the available storage.

(http://www.progress.com/worldwide)

iii. Citrix®: Improved architectural frameworks that are used and set up by the

managerial level in improving the stability and the scalability as well as

increasing IT support efficiency.

(www.citrix.com)

iv. Telecommunication network: DHL has managed two of the independent

Metropolitan area networks (MANs) to provide itself with higher available

and the resilient IP. Its telecommunication network has connected its IT

service centre to the domestic and international telecommunication partners.

Network features:

In consists of 56km of the 48strand optical fibre, 1000km of the copper

cabling and it supports 60 million transactions.

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v. Inventory management

Almost 80% of the inventories at the are in supplies. Most of them are not in a

directly tied in finished product of the overnight shipping but helping to

maintain the smooth system. More than hundreds of the supplies are kept on

hand if there is any unforeseen problem happens. Another more important type

of the inventory would be in spare of the aircraft in the fleet. In this event

there are the mechanical issue or the required maintenance with the outgoing

or the inbound aircraft that can be easily swap them at DHL’s hub as here the

hub or the quick turn that is needed destination in recovery the material.

(www.DHL.co.uk/press)

3. Strategic information management

The strategic level of the DHL require strategic information in setting up the

company’s aim and target, long term planning strategy, marketing solution etc.

i. Merger & Acquisition: In 2005 Deutsche post that have acquired DHL

before, acquired Excel in December. Following the merger the company were

became the world’s largest logistic company. But however, the business was

divided in between them, e.g., DHL for air and ocean and Excel for freight

management. They then combined to form DHL logistics.

In 2006 DHL gloabal mail UK was merged with Mercury international.

(http://www.deutschepost.de/dpag?lang=de_EN)

ii. Human resource: DHL have a very strategic and efficient and highly skilled

manpower. In the year of 2005 it has employed more that 600 skilled IT

professionals. Major employee was taken from the Czech nationals. In this

year, they have set up more than 500 servers and configured in enabling the

migration of processing of the business transactions from its data centre in

UK, Basel, Switzerland etc.

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iii. EDS: Over the times, as the current businesses of DHL has expanded and in

therefore, the planning, air execution, road transportation etc. became

increasingly complex. Different functions of DHL e.g. dispatch, movement

control, planning for load were supported by the aged technologies and the

information exchange, data visibility were affected. In this situation, DHL has

set up the Business area review (BAR) programme in aiming reducing cost

etc. And in this condition DHL were in need support from the EDS who

provided overall program management, have worked jointly with DHL in

setting up the highly, scalable and strategic technical atmosphere.

(EDS: an HP company, http://h10134.www1.hp.com/news/features/5855/)

iv. Human resource

At the DHL teamwork is considered as the key success for the company.

though the employee work individually but their works are toward a goal for

success for the company. At the DHL hub, the work strategy are designed

such a way to help maintaining the efficient work environment that supports

the business strategy. DHL are always fond to keep its employer happy in

accordance with the human resource management.

v. Planning and Scheduling

At the DHL, operations in its managerial level are planned through the chase

and demand approach. Key resource should be planned in staffing properly.

In the peak time of year, staffing is the main concern for the management

level. If the system is understaffed, there may be the chance for the system to

run in late that acts as the delay in delivery of the shipments to its customer.

The other key factor which should be scheduled in every night and day is the

operation of aircrafts in inbound and outbound. Having such a large fleet,

they are scheduled for the maintenance at the routine basis. These aircrafts are

then need to be replaced with the backup aircraft to continue the process as

normal. Other element should have to plan that is the requirement of glycol a

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substance are used in on the aircraft in time of winter operations that prevents

the ice forming in its wings and body.

vi. Quality management

In the back 1997, DHL became and ISO9002 certified signalling to their

customers that are pledged to deliver the packages in accordance o the

worldwide standard of generic handling and the methods of delivery. In the

past years a newer management were placed in controlling the hub and the

total quality management were introduced from then. In that time trackin of

the shipment was not a easy task in comparing to the present and it is scanned

in the DHL’s information system at time of pickup and it was not again

scanned before it is delivered to the customer.

Conclusion

DHL and the information technology are highly integrated in its core business framework.

All critical and complex information are efficiently and effectively are managing through the

adoption and implementation of modern information technology. In review of the company

DHL we have found that greatest success rate are achieved through the information

technology and its strategic management. The company are found in implementing the

purposes of strategic decision making in the aim of budgeting, forecasting, financial review

etc. and all the other information management are exercising in the managerial and in its

operational level for better strategic development and success.

Thus the implementation of MIS and proper exercise of it will lead to more success of DHL

as well as for other companies.

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Recommendations

In DHL I have found that it is properly exercising the practice of Managing information

system through the implementation of modern technologies and getting more success rate

worldwide. But however, it seems to me that the company have some lacking in information

sector that need to be rectify and develop the new strategy to be in more success in

comparing to other companies.

In its operational level to deliver a parcel, it is found to use a connecting hub and all the

regional goods or parcels have to arrive there before further sorting. This process though have

no bad effect in timings but it sometimes very misguiding and sometimes it cost more time

too. DHL therefore, should have to setup regional sorting centre where the parcels will stay

shortly in their nearest hubs. Thus the package needs not to run a pace and arrive the

destination in short time.

Siebel® solution was implemented in aiming of Customer relation management (CRM) and

strategic development. Though the system is a very useful in this sector and an advanced

technology but however it’s not suitable for all the professions. Operating the software are

harder than any other database management system and the Oracle DB are integrated with

this which are need to be operated by the skilled professionals

WMC or the warehouse management system adopted by DHL though have brought a number

of good values to the company, its now worthy of this company in all aspect. The legacy

software has a number of bugs, recently explored in managing the legacy solutions.

Motivation as well as the commitment of the employees acts as the key to success of DHL

Company and also in customer satisfaction. Strategic level management ensures the people in

DHL and they need be properly managed in light of the strategic human resource

management theories. In this regard the strategic management at the human resource

management should take proper steps in satisfy them while following all the rules of human

resource management.

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References

Elliott, G. (2004). Global business information technology: an integrated systems approach.

Harlow: Addison Wesley

Fattahi. R and Ebrahim Afshar (2006), ‘Added value of information and information

systems: a conceptual approach’, Library review Vol. 55 No. 2, 2006 pp. 132-147

Laudon, K. & Laudon, J. (2007) Management information system, 10th Edition, Prentice

Hall.

O’Brien, J (1999). Management Information Systems – Managing Information Technology

in the Internetworked Enterprise. Boston: Irwin McGraw-Hill. ISBN 0071123733.

Online links,

(http://www.progress.com/worldwide)

(www.citrix.com)

(http://www.deutschepost.de/dpag?lang=de_EN)

(EDS: an HP company, http://h10134.www1.hp.com/news/features/5855/)

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