DHL Supply Chain has been awarded a three year contract to manage Hankook Tyres’ UK warehousing operations.
Under the new agreement DHL has assumed responsibility for the receipt, check and stock replenishment of inbound tyre deliveries, plus picking for next day distribution from the South Korean manufacturer’s facilities in Daventry, Northamptonshire.
Hankook’s market share in the UK has increased significantly in recent years, requiring the tyre manufacturer to re-engineer its supply chain operations. In response to growing demand, a lease has been agreed on a warehouse adjacent to the company’s existing 85,000 sq. ft. facility, creating an additional 140,000 sq. ft. of space to support the company’s continued expansion.
While retaining control of the real estate, Hankook turned to DHL for strategic guidance on how to optimise its warehouse processes. A strong relationship has developed between the two organisations since 2008, when DHL was first awarded the contract to distribute Hankook’s tyres UK-wide through its collaborative tyre network. Since then, consistently excellent performance and DHL’s proven track record in tyre warehousing led to the new opportunity.
Taking time to understand how to drive significant improvements in the warehouse operations, DHL worked with Hankook to develop training, process design and operational changes to cope with increased business volumes, while improving customer service and cost effectiveness.
Within eight weeks, Hankook was able to push back its sales order cut off time from 15:00 to 17:30, enabling orders to be placed later for next day delivery, while the introduction of new processes has significantly increased pick accuracy. Increased levels of customer service performance are helping Hankook achieve higher sales and DHL has introduced two working shifts to manage the surge in demand.
Tony Lee, managing director at Hankook Tyre UK Ltd, said: “DHL has always provided a good distribution service for Hankook - something that we wanted to maintain and improve as our facilities expanded. Since DHL took over the management of our warehouse, the distribution service has been boosted in terms of handling accuracy, operational proficiency and flexibility.
“We have been able to provide our customers with an enhanced service, which we plan to improve further with the help of DHL. As a premium tyre manufacturer, providing a top-class logistics service is central to our current and future operations and is something that we anticipate will play a key role in Hankook's growth.”
Jim Marsh, head of tyres, DHL Supply Chain added: “I’m delighted that Hankook has chosen to outsource this important operation to DHL. The new warehousing operation complements DHL’s existing distribution service and will provide further opportunities for DHL to integrate and fully optimise Hankook’s logistics operations.”