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Company case by DHL Consulting
12.6k
Times solved
Intermediate
Difficulty
Rating

Problem Definition

DHL has been the logistics partner of the Wonderworld Music Festival since 2004. DHL transports all material and equipment for the bands from the UK to the festival locations. Also, DHL is one of the main sponsors of Wonderworld (broadcast advertisement, in site coverage etc.).

With their group-wide environmental protection program GoGreen, DHL is committed to improve carbon efficiency to zero emissions until 2050. Wonderworld’s high octane character places a high burden of proof on any “green” claim.

You have been asked to develop a mitigation strategy to overcome this perceived contradiction and help DHL reach their ambitious goal.

Comments

This case is mostly interviewer-led. The questions should be used to guide the interviewee. The challenge of this case lies in the structured handling of the following three task areas:

  • Structuring
  • Quantitative Analysis (Transparency)
  • Strategic Position and Options for the way forward

Short Solution

Solution

Paragraphs highlighted in green indicate diagrams or tables that can be shared in the “Case exhibits” section.

Paragraphs highlighted in blue can be verbally communicated to the interviewee.

Paragraphs highlighted in orange indicate hints for you on how to guide the interviewee through the case.

I. Structuring

Which elements should a mitigation strategy encompass? What would you analyze?

1. Review strategic fit

  • Benefit of Wonderworld engagement?
  • Benefit of GoGreen program?
  • Development of alternative solutions (e.g. offsetting)

2. Create transparency on effect of Wonderworld

  • Network mapping and “center of gravity” analysis
  • Mode overview
  • Footprint assessment
  • Benchmarking to similar events
  • Setting it into context to DPDHL’s overall footprint

3. Impose customer requirements and satisfaction

  • Operations requirements of involved parties (bands, suppliers, festivals...)
  • Strategic direction of organizer (e.g. more or less festivals? focus regions?), i.e., will the overall model change?

4. Define optimization potential

  • Levers within DHL’s realm
  • Levers within DHL’s realm, requiring alignment with customers (bands, Wonderworld organization)
  • Levers outside of DHL‘s realm

5. Come up with a communication plan

  • To the public
  • To employees
  • To customers

II. Quantitative Analysis (Transparency)

Here’s some basic information on average CO₂ emissions per mode. Please assess the overall footprint of our logistics activities for Wonderworld.

Share Exhibit 1, 2 & 3 with the interviewee.


Exhibit 1: Wonderworld Schedule 2020


Exhibit 2: Carbon Emission Factors per Transport Mode

Exhibit 3: DPDHL Carbon Footprint 2017

  • Total emissions = ∑ distances * weight * emission factor per mode
  • For an overview of the input factors, check Exhibit 4.
  • The candidate has to differentiate into 10 Overseas festivals (road+air) and 9 European festivals (only road) using Exhibit 1, 2 and 3.
  • The following assumptions need to be made (marked in yellow in Exhibit 4):
    • Transported weight per band and festival: 20 t
    • Travelled round trip distances per festival per band:
      • Overseas: 2x 200 km road + 2x 8,000 km air
      • Europe: 2x 1,000 km road
  • Emissions for the Overseas festivals will then be calculated as follows:
    • Road emissions: 10 festivals * 12 bands * 100 / 1,000,000 g/tkm CO² emission * 20 t weight * 400 km distance = 96 t CO²
    • Air emissions: 10 festivals * 12 bands * 800 / 1,000,000 g/tkm CO² emission * 20 t weight * 16,000 km distance = 30,720 t CO²
    • Total emissions for overseas festivals= 96 t + 30,720 t = 31,248 t CO²
  • Emissions for the European festivals will be calculated as follows:
    • Road emissions: 9 festivals * 12 bands * 100 / 1,000,000 g/tkm CO² emission * 20 t weight * 2,000 km distance = 432 t CO²
    • No air emissions
    • Total emissions for European festivals = 432 t CO²
  • ​Total emissions for Overseas and European festivals = 30,720 t + 432 t = 31,248 t CO²
  • As stated in Exhibit 3, the total DPDHL emission is 28,700,000 t CO². The footprint of Wonderworld therfore amounts only for 0.11 % of DPDHL‘s total footprint.

Once the interviewee has defined a solution, Exhibit 4 can be shared.

Exhibit 4: Calculation Quantitative

III. Strategic Position and Options for the way forward

For what reasons might DHL have chosen to sponsor Wonderworld?
  • High value logistics revenue
    • Demanding logistics needs of festivals
    • Core competency of DHL (fast and reliable delivery incl. customs clearance worldwide)
  • Fit to brand values
    • Good fit to overall brand promise “Excellence. Simply Delivered.”
    • High international coverage, specifically in emerging markets (India, Brazil, Turkey, Abu Dhabi etc.), similar to DHL
    • Customer orientation, teamwork, seamless operations, delivery of a high quality service

Given the result of the footprint analysis, what strategy should DPDHL pursue?

The primary goal of this question is to understand the candidate‘s ability to grasp the overall context. He/she might be for/against Wonderworld Logistics activities. However, a stable line or argumentation has to be shown.

Possible argumentation:

  • The total footprint of Wonderworld amounts only for 0.11% of DPDHL’s total footprint
  • Efficiency objective of GoGreen program can be applied to all sorts of transportation services, i.e. also those for Wonderworld events

What could DHL do to optimize its carbon footprint in the Wonderworld Music Festival?
  • More efficient fleet
  • Smarter network design
  • Higher utilization of assets/stronger bundling of volumes
  • Higher awareness (e.g. driver training)
  • Less pollutive type of energy (e.g. bio fuels)

What could Wonderworld do to optimize its overall carbon footprint?
  • Regarding logistics
    • Shift some Air Freight volumes to Ocean Freight
    • Source and dispose locally (e.g. stop shipping drinking water, stop shipping back damaged equipment)
    • Reduce the number of festivals
    • Shift focus of events closer to homes of bands (“nearshoring“)
    • Optimize schedule
    • Encourage shared use of instruments by bands
    • Reduce shipping of additional backup audiovisual and sound system equipment and event decorations
  • Regarding overall footprint
    • Turn it into a virtual event, i.e., no spectators on-site
    • Limit max. amount of energy to be used per festival to induce an “event/music for efficiency“
    • Reward efficiency in general

Exhibits


Exhibit 1: Wonderworld Schedule 2020


Exhibit 2: Carbon Emission Factors per Transport Mode


Exhibit 3: DPDHL Carbon Footprint 2017

Exhibit 4: Calculation Quantitative Analysis

Do you have questions on this case? Ask our community!
12.6k
Times solved
Intermediate
Difficulty
Do you have questions on this case? Ask our community!

Exhibits


Exhibit 1: Wonderworld Schedule 2020


Exhibit 2: Carbon Emission Factors per Transport Mode


Exhibit 3: DPDHL Carbon Footprint 2017

Exhibit 4: Calculation Quantitative Analysis