ALS4083

CURRENT ISSUES IN LOGISTICS

SEMESTER FEB
SESSION 2022/2023

ASSIGNMENT – ARTICLE REVIEW

NAME OF LECTURER : DR. ROSMAIZURA BT MOHD ZAIN
LECTURE GROUP: L1
GROUP NO:

No. Group Members Matric No.

1 BEN GAN RUI YANG A20A1287

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TABLE OF CONTENTS
SUMMARIZE THE ARTICLE (ISSUES AND CHALLENGES OF LOGISTICS IN
MALAYSIA: A PERSPECTIVE) ....................................................................................... 3
CASES STUDY ISSUES AND CHALLENGES OF LOGISTICS .................................... 5
ISSUES AND CHALLENGES OF LOGISTICS DHL ....................................................... 9
SOLUTION TO SOLVE THE DHL PROBLEM .............................................................. 10
CONCLUSION ................................................................................................................... 12
REFERENCE ...................................................................................................................... 14

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Summarize the article (Issues and Challenges of Logistics in Malaysia:
A Perspective)
In the Asia Pacific region, the potential for growth in logistics is very promising.Although
Malaysia’s economic growth rate is increasing, but advances in logistical in this country is still on
modest level.Under the Third Industrial Master Plan (IMP3), which was launched in 2006,
Malaysia’s logistics development were charted carefully and diligently as to keep on pace with other
countries in South East Asia.

However, Malaysia still lags behind its neighbors such as Singapore, Thailand and Vietnam
on transportation, bureaucratic and logistical issues. These issues need to be solve it so that Malaysia
can emulation with these three countaries. In this issues, logistics development are the production and
the problem are poor transport infrastructure, underdeveloped transport and logistics services and
slow and costly bureaucratic procedures are the big issues that gives high logistics cost in Malaysia.
Furthermore, the use of technology also needed in order to make some improvements to make
logistics more efficient. Almost 20 years, Malaysia still trying to reduce transport and logistics cost.
However, increasing in imports and exports but storage capasity in Malaysia are not well improve
gives big impact to economics growth in Malaysia. This causes demand and supply are cannot be
fulfil.

Eventhough Malaysia adding new generation but Malaysia still cannot work with increasing
amount of space available. In these issues, we must build as many as the new generation in order to
maintain high capasity. For multimodal transport issues, Malaysia uses containers for the maritime
part of trips, loading and unloading them in the ports rather at the origin and destination of their
cargo. This eliminates the main cost-saving advantages of container use.

However, inadequate transportation infrastructure makes it difficult to unload. This is on the

grounds that street and rail framework are not very great particularly in East Malaysia. In addition,
trade documentation must be simplified during customs clearances to reduce port congestion. In
addition, only 10% of trade-related transportation services make use of freight forwarding, indicating
that the industry is still in its infancy. Because of this, supply and demand do not meet in a positive
way. The effects of production agglomeration and the high costs of land access to ports have
increased the concentration of export-related activities in port cities, limiting the benefits of trade
growth to the areas immediately surrounding ports. However, the consequences of inaccessibility
must be addressed if trade benefits are to be distributed more widely. Such activity couldn't animate

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exchange actuated development right now unavailable regions, however in the event that effective,
this could lessen and more slow the development of exchange prompted metropolitan clog and
contamination port urban areas.

For example through postharvest services, cargo consolidation through farmer or business
associations, information on prices and market demand, access to credits and human skills. In the
other hand, the needs of quality logistics for high-value products needs to improve. Such as freight
forwarding, 3PL, warehousing, storage, packaging, e-business use and tracking services. Private
sector are tend to more competetive than public sector. To encourage private sector collaboration, the
Government has established the Malaysia Logistics Council (MLC) in January 2007 which is to
provide leadership and serve as a focal point to address all issues relating to the development of the
industry, monitor and coordinate implementation of programs and activities of the respective
Agencies/Authorities at both Federal and State levels involved in the development of the industry,
Steer research and training activities of the Center of Excellence for Logistics and Supply Chain and
streamline strategies and policies governing the logistics industry which cuts across several
implementing authorities.

Conclusions the needs of major improvement need to be done in order to improve logistics
arrangements such as ports and infrastructure, freight management, connectivity and usage of
technology. Malaysia will continue to review and undertake progressive liberalisation of its services
industry taking into account domestic capability as well as to enhance competitiveness at the global
and regional levels.

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Cases Study Issues and Challenges of Logistics

The purpose of this case study is about the issue and challenges of logistics and supply chain
management and DHL express. DHL is a German logistics corporation that offers services such as
courier, parcel delivery, and express mail. Meanwhile, there are many issues and challenges face by
DHL express where it might affect the overall operation and management. Therefore, this case study
hopes to understand and provide some ideas on how logistics and supply chains can start and expand
in developmental models. By learning from the experiences of others, the logistics and supply chain
industry will grow faster and various strategies can be established in the process of achieving
industry goals.

Nowadays, logistics and supply chain management are really popular and common things
used by difference kind of businesses or organizations in order to extend the business or to increase
business profits. Logistics and supply chain management actually are two aspects of process in
businesses or organization and both of it plays difference kind of role and responsibilities. Logistics
is to apply the activities in one businesses or organization while the supply chain management is to
encompass suppliers and consumers means the focus of supply chain management is wider than
logistics. However, logistics and supply chain management shouldn’t be confused as both of it need
to work together to achieve higher possibly success and make the business or the organization run
smoothly.

Logistics is a kind of process which included the planning, the implementing and controlling
the efficient, effective the flow and the storage of the goods and services and some related
information which is from one point of origin to another point of consumption in order to satisfy
customer demands or requirements. Originally, the logistics was a very important role played in
shifting or transferring in military use. As the changes of human era, logistics started to play an
important role in businesses or organization for their goods and services. Logistics are usually widely
in the process of the moving and the coordinating inventories, resources or equipment. Businesses or
organizations using logistics to moving all of this form origin location and another destination.
Logistics are very important in businesses and organization. Many of the businesses or organization
need logistics because all of their production of goods and services can reach to customer. Logistics
allow the businesses and organization production can be stored in specific places, shipped or
transported in great delivery timing and helps businesses and organization has a great way to increase
theirs profit and extend their businesses and organization. It also creates value to customer in quality

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and quantity by improving the production process in businesses or organization like using good
merchandise and hire professional employees to management logistics.

Supply chain management has important roles to play with logistics. Supply chain
management is a function which integrates most of the function, processes, activities or relationships
in businesses or organization to get good performing in producing goods, services or information.
Supply chain management include all of the logistics activities because it is integrating the business
from beginning to the end. Supply chain management also one of the methods which can help
businesses or organization to optimize the budget which avoid some unnecessary waste of the
resources in businesses or organization. Supply chain management has important roles to play in
businesses or organization. It is important because a good supply chain management help to in
reducing the cost, the time and avoid waste in production process. A good supply chain management
can lower the cost. Most of the businesses and organization aim are to get high profit. A good supply
chain management can avoid the waste in businesses and organization. It not only can avoid the
waste in businesses or organization but also can control the price of the raw material, the cost of
delivery, avoid over number of labour and so on. Next, businesses or organization need a good
supply chain management because it can improve the overall production which is will reduce the
poor qualities problem, delays in delivering or complains from consumer. When consumers are
ordering and buying product from any businesses or organization, the consumer will hope to have a
good delivery service which all of the product can safely delivery until the hand of consumer and also
the quicker the better. A good supply chain management in businesses or organization will have good
qualities in all situations which can make consumer satisfy and earn their trust.

People employed racing horses and doves of hope to convey timely information in ancient
times. Before the introduction of mechanical messenger services, couriers quickly adopted the usage
of horses when horses were domesticated. A courier is an individual or business that transports
messages, parcels, and mail. Courier service companies deliver the documents, special goods, and
bigger shipments of merchandise. However, Courier service companies used to be known for
delivering items like legal documentation that needed signatures quickly. They serve businesses and
individuals that want quick service, specialized accountability, and tracking that conventional mail
cannot deliver. In the early 2000s, industrial delivery services fulfilled these duties with bike
messengers and the postal service. Couriers are normally more expensive than standard postal
services as a quality service, and their usage is often restricted to shipments with one or more of these
attributes that are deemed vital enough to justify the expense. Couriers work on a variety of sizes,

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from localized services to regional, national, and worldwide services and one of the largest courier
companies in the world today is DHL express.

The worldwide company DHL now connects with over than 200 countries and regions and it
has employs more than 300 thousand people throughout the world. DHL also specializes in express,
air and sea freight, land transportation, contract logistics services, and international courier services.
DHL is the world’s leading provider of global express, land and overland transportation and air
freight services where make it a one of the largest express and logistics service. DHL provides a
comprehensive variety of specialized services, ranging from quick document transportation to supply
chain management. DHL was founded to serve the local market first and after that extended to serve
the worldwide market. As the DHL was extended to serve worldwide market, they might meet some
difficulty or problem to build a cargo and use air transportation to reach out more clients around the
world and DHL putting large amounts of money into additional hubs proved challenging. As a result,
DHL was implementing excellent in their transportation management systems, storage, inventory and
so on and it was acknowledged as one of the most major distribution and logistics companies in the
world. However, difference kind of issues and challenges will be face after all the success
implementing in DHL which make it become stronger and even better in future. DHL is one of the
few firms that has its own road networks and terminals and allowing it to direct and optimize
deliveries from its warehouses. DHL capacity to provide personalized solutions for its clients even in
remote locations and has allowed it to become a leader in terms of quality service and sustainability.

Today's world is continuously changing, and there are a variety of environmental elements
that impact every company and organization operating in the globalized economy. The business
environment is a collection of governmental, economic, cultural, technology, environmental, and
legal variables that are essentially beyond the influence and control of any single company, and that
may have both a good and bad consequence. As a result, a company's performance is largely
determined by its operating environment. Even after a company is established, managers must
continue to analyse the environment in order to predict how demand for its products or production
costs will change. A company's productivity is also influenced by its internal environment of the
company such as the issues such as employers and employees’ relations. According to Madura
(2007), all companies must understand their duties to their clients and employees. These duties must
be reflected in the decisions made by the employer. International courier services are no different. As
a result, the purpose of this study is to investigate the aspects in the external and internal business
environment that provide obstacles to the operations of courier organizations. Knowledge is the

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primary engine of greater productivity and global competition and the technological advancements
have enabled organizations to function on a worldwide scale. The information technology refers to
the technologies that are used to gather, process, store, distribute and transfer data. Finding and
winning new business takes a lot of time and effort. DHL sought to develop its worldwide company
by identifying new eCommerce opportunities and increasing the value of its existing client base.

It’s hard for businesses to be competitive in today’s fast-paced global market without
effective logistics. The world is getting more complicated and interconnected where it allowing for
more economic progress while also creates new and unanticipated market disruptions. Two years
ago, a virus outbreak caused a significant impact on many companies in the world. The lockdowns
around the world mean supply chain disruptions and many companies are aware of the insufficiency
of their logistics. In future, many will bring opportunities and challenges to the logistics industry and
companies must improve their logistics systems to remain competitive when facing issues and
challenges of logistics and supply chain management. The coronavirus pandemic has demonstrated
that we live in an unpredictable environment more than any other recent incident. The companies
must come into consideration unforeseen risks and boots supply chain flexibility to be competitive
because a dependable and trustworthy shipping business is important in order to avoid supply chain
disruptions during difficult times. Supply chains have gotten incredibly wide in today's globalized
economy. The wider the supply chain, the more likely it is to be disrupted. Companies should
evaluate and identify possible supply chain risks, as well as build a mitigation strategy.

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Issues and Challenges of Logistics DHL

One of the problems in logistics and supply chain at DHL Express is increment in fuel
costs. On 14th March 2022, DHL official announced that fuel prices will be risen exponentially
due to the current situation in Ukraine. The recent increase in fuel prices such as soaring prices
of oil and gas, gasoline, and diesel, as well as the deployment of emergency reaction plans by
DHL shippers and carriers, have caused great discomfort and significant impacts on logistics
and distribution operations in the moments after Russia’s intervention in Ukraine (Official,
2022).

When fuel prices rise, DHL have to increase their prices to compensate. This flows
through each step of their supply chain, from their shipper to the carrier to the receiver. It also
means that delivery of goods costs more overall. The dramatic increase in fuel costs will
increase transportation costs which caused DHL Freight to implement fuel surcharge. The
margin revenue of DHL decreases. The rising cost of fuel especially diesel affected DHL
transportation including truck, van, air freight and rail freight. DHL Express is required to raise
their delivery price to transport goods and might face some losses. Additional cost is charged
for customers due to this issue.

The second problem is customer service issue. Customer service is the most crucial part
in running a logistics company. Most of the customers want their things to be reached on
expected time when they purchase things online. Problem like DHL has a surge volume of
goods or parcels need to be delivered, they have to be cautious and make sure that the goods
are sent to the right location and at the right time to avoid complaint from customers. Customers
always immediately want to know their status of their order during the shipping journey.

When the goods are not delivered to customers, this means DHL’s supply chain is not
complete. DHL has to develop reliable logistics service and supply chain in order to meet
customers’ expectations. Problems like delayed shipment must be informed to customers for
justifying the reasons, rather than just remain silent. For example, DHL customer service
department must attach a message revealing that DHL is experiencing delays in deliveries at
the main page of their order tracking website. This efficient and responsive action will enhance
customer’s understanding and patience.

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Solution of Solve The DHL Problem

In our recommendation, there are several solutions to overcome challenges logistics

and supply chain management at DHL express including enhance the Smart-Truck Project,
digitalization, inventory management automation, improving layout optimization and reduce
the goods damage.

Firstly, we recommended that DHL express should enhance the Smart-Truck Project.
Fuel cost is one of the issues that faced by DHL express, higher fuel prices are estimated to
drive up fuel surcharges, increasing transportation expenses for US exporters this year. As we
know, Smart truck project can decrease the operational cost of logistics because smart truck
can simply evaluate how fleet size and operations can be optimised to decrease the operational
costs by tracking vehicle utilisation. Besides that, monitoring how the company’s equipment
is handled and taking action as needed helps reduce the frequency of maintenance, which will
cut the service expenses. Since developing an entirely new product can be costly and time-
consuming (Toyota, n.d.). However, making minor changes to the current product or service
may be preferable for DHL express. This will help the corporation to deliver more quickly
while also saving money by using less fuel.

Secondly, DHL express should implement digitalization. A logistics industry is

definitely a big trend in the future. If a company has a good logistics system, it will stand at the
forefront of its competitors. The goal of digitalization is to enable automation, improve data
quality, and collect and arrange all this information so that improved technology, such as better
and smarter software within logistics system. However, digitalization able to help increase the
performance and improve the sustainability within logistics companies. As a result, data is
growing quickly large because of the implementation of digitalization of various transportation
and logistics processes, necessitating the use of cutting-edge technology such as advanced data
analytics and business intelligence. Therefore, the companies in the transportation business will
be able to plan intelligent decisions with the help of powerful data and AI, which will
undoubtedly reap benefits in the future.

Thirdly, the implementation of Inventory Management Automation is one of our

recommendations. The operation of a logistics company with a large inventory is nearly
impossible without the implementation of automatic inventory management if the inventory is
unknown and the workflow also cannot be carried out properly. We can't tell what kind of
product is available in a large and stocked in warehouse just by looking at it only. Therefore,
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we can design new cost-cutting methods by solving the automatic stockpiling, inventory
removal, and management of the available stock portfolio. For example, if a warehouse is
malfunctioning, a system may alert us and use automatic task assignment to handle purchasing,
preventing customer service failure. When the goods arrive in warehouse, it can be dispatched
quickly thanks to automatic stockpiling so that cutting the delivery time in half.

Next, it will be improving layout optimization within warehouse of DHL express. Since
DHL express are facing the challenge of warehousing which is the available of capacity in
warehouse. The cost of renting a warehouse will not be reduced if we can only store half of it
due to improper inventory placement (Nichols, 2020). We cannot afford the same expense for
a semi-loaded vehicle or a car with a maximum load in the case of freight. Therefore, it can
overcome this issue by improving layout optimization within warehouse. However, DHL
express should sort the goods by its velocity. For example, fast-moving products should be
placed near the packing and shipping departments to reduce trip time and cargo accumulation.
Once a system is in place, it's critical to train staff on where to store tools, cars, equipment,
PPE, personal effects, and other items. Even with a well-organized product storage area, a
warehouse will not work properly if staff are unable to locate assets in the same location.

Last but not the least, the solution that overcome challenges logistics and supply chain
management at DHL express is reduce the goods damage. If a company always have many
goods damages, it will generate extra cost and cause the increase of cost operational within a
business. Moreover, storing fast-moving inventory in the back of a warehouse is not the best
choice for logistics company. This is because the employees can also make a number of
blunders when picking up and transferring goods, so this issue will reduce the productivity of
the firm and resulting in unneeded additional costs.

However, DHL express should consider the problems of improper storage in warehouse.
One of the most common causes of product damage and loss is inappropriate product storage.
Therefore, DHL express should choose racking positions that correspond to the product's shape
and safest orientation in warehouse as well as use plastic or metal boxes and containers to keep
small items contained. Besides that, DHL express need to offer Trainable skills to the
employees, including securing filled pallets with the appropriate quantity of stretch wrap,
evaluating products, and kicking out broken things before choosing.

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CONCLUSION
In conclusion, to overcome issue and challenges of logistics and supply chain
management, there are several steps that are necessary to be implemented. For example,
Enhance the Smart-Truck Project, digitalization, inventory management automation,
improving layout optimization and so on.

Nowadays, logisticians should be familiar with the term of globalization and keep
increase their competence in order to compete with other competitors. Logistics have proven it
is importance in this new era. Even during the COVID-19 pandemic, the whole world economic
was still rely on the logistics to maintain and continue their daily life and business. This is
because good logistics services and perfect supply chain framework can help the peoples save
their time and increase their living quality to a great extent.

Therefore, with the help of information system in DHL Express will be able to continue
fulfilling more and more costumer needs, able to continue growing and extend their company
to more other place around the world so that they can influence and continue partnership with
subcontractor from the global supplier or company with running the logistics even better in
future and being the successful in industry together in the future.

With the help of smart truck project, DHL Express will be able to save more time in
collecting the inventory and complete the customer orders. The high technology improved the
efficiency of their warehouses, reduce the mistakes and increase the frequency in cycle
counting. The digitalization process will also allow DHL Express to have a precise
measurement on their service quality while retrieve the data regarding to the service that should
be offer to the society.

Good logistics management will make the amount of consumer in e-commerce increase.
This is because the consumer can buy their needs through internet without going out and doing
their purchasing by just using internet. The consumer can get their product in time when
logistics system of the seller company was good enough. At the same time, the consumer has
various option when they are buying product through internet.

Hence, a good logistics system can add value to a trade organization. Not only in a
physical store but also for an online shop. In other word, logistics will become an important
role in the future for the global world economy. A good logistics system can bring a lot of
convenience to both seller and buyer.

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 Logistics organization should also practice some new modern initiative such as
implementation of digital warehouse, robotic system, information technologies and so on.
Moreover, logistics team should be familiar with the organization’s supply chain system to
ensure that they can coordinate the whole supply chain process in the most effective and
efficiency way.

Thus, this research makes me realize that a good logistics service and good supply chain
framework is really important to the new era. Our country should keep improving our service
quality to ensure we can be one of the developed countries and become competence to stand
side-by-side with other country on the international stage.

With the help of these suggestion in DHL Express the company will be able to continue
fulfilling more and more costumer needs, able to continue growing and extend their company
to more other place around the world so that they can influence and continue partnership with
subcontractor from the global supplier or company with running the logistics even better in
future and being the successful in industry together in the future.

Thereby, we strongly suggest that the future logisticians should apply robotic
technologies to their logistics services referring to the DHL Express. Hence, we can increase
and enhance our service quality to a certain level and using the least material to create and
generate the most income and output.

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REFERENCES
1. Engage Employee, n.d. DHL STUDY REVEALS SUPPLY CHAIN CHALLENGES.

Retrieved from

https://www.engageemployee.com/blog/dhl-study-reveals-supply-chain-
challenges

2. Toyota. (n.d.). What are the benefits of Smart Trucks for your business? Retrieved from
toyota forklifts: https://toyota-forklifts.eu/about-toyota/news-and-editorials/what-
are-the-benefits-of-smart-trucks-for-your-business/

3. DHL. (2008). DHL. LOGISTICS FOR THE CONNECTED AGE. Retrieved from DHL:

https://www.dhl.com/my-en/home/about-
us.html#:~:text=Today%2C%20DHL%20is%20the%20world's,letter%20to%20your
%20loved%20ones

4. Bennett, R., & Thiele, S. (2004). Customer satisfaction should not be the only goal.
Journalof Services Marketing, 18(7), 514-523.

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