Case Study Ups

United Parcel Service, a logistics company has established itself through its strong corporate culture, continuous ability to innovate, and its far-reaching global network. The company has maintained a competitive advantage over the years by implementing continuous growth strategies—the first was geographic expansion, next the early adaptation of electronic tracking technologies, and then came a series of acquisitions. Although UPS is financially strong and is able to maintain its role in the courier and delivery industry—it is vital that UPS continue to act strategically as to strive for long-term success. UPS is heavily dependent on the U.S. economy and it is important that it find greater and more profitable ventures

The United Parcel Services share of the marketplace commands attention: -400,000 (+) employees -$51.5 billion earned 2008 -14% profit margin -90,000 vehicles and 268 jets -Operations in over 200 countries (Thomas, Linder, & Dutra, 2006). Organization has allowed UPS to operate in financial, retail, technology and nonprofit markets as well as logistics. Management Leads with the philosophy of talent cultivation through long-term employment relationships, developing committed, aligned and experienced partners. 54% of full-time drivers started as part-time. 68% of management was promoted from within. 78% of Vice-presidents once held non-management positions with UPS (Thomas et al., 2006). Controlling within UPS develops around the standard of constructive dissatisfaction, the belief that all process can be improved on and all parameters may be extended. Constructive dissatisfaction, a culture of ownership along with continual training and market awareness keep UPS a pioneer. External Factors Globalization has empowered UPS to update their strategy to synchronizing global commerce: of goods, information and funds (Thomas et al., 2006). Once a local delivery service, now UPS is recognized globally, embracing diversity with owners and customers in from every nation. Concerned with environmental impact of big business, UPS has cut carbon emissions, from airliners, 22% since 1990, and plans to cut

UPS still relies on its chocolate-colored trucks, but United Parcel Service (UPS) aims to be more than a plain-vanilla delivery business. Seattle teens, Jim Casey and Claude Ryan started American Messenger Company, a phone message service, in 1907. They were soon making small-parcel deliveries for local department stores and in 1913 changed the company's name to Merchants Parcel Delivery. Service expanded outside of Seattle in 1919 when Merchants Parcel bought Oakland, California-based Motor Parcel Delivery. By 1930, the company, which had been renamed United Parcel Service, served residents in New York City (its headquarters from 1930 to 1975); Newark, New Jersey; and Greenwich, Connecticut.

Studying FedEx, UPS and their competitive relationship in the decade from mid - 80's to mid - 90's gives a good insight for the companies' and industry's future. The two companies have different strategic goals and are operating in the same industry but in different main markets: FedEx is working on "producing outstanding financial returns" and focuses on the overnight air market while UPS is looking for "earning reasonable profit" and its core business is the two-day ground delivery. However, by 1981, the two companies started to have a strong sense

Operation leaders are tasked to identify the critical success factors and core competencies of their business functions and objectives in order to generate sustainable long-term growth. Critical success factors are actions essential for a business to reach its objectives. (Heizer & Render, p. 42, 2009). UPS’s key success factors are its efficiencies in scheduling, integrating the stream of goods, its ability to provide multiple solutions such as “harmonizing the flow of goods, information and funds across customer supply chains” while enabling consumers to “evolve in new and necessary ways” (Lewis, Forquer & Quinter, pg. 2, 2007). UPS’s environmental factors include their supply chain design and planning, competitors in logistics such as FedEx, distribution services, diversification in the global environment and focusing on differentiation. UPS is also an expert in its industry because the strategy is globally focused and is centered on diversification of its systems (See Appendix1.1)

In the past there was no thing as overnight express delivery for packages or freight. Then the top 3 competitors in the delivery service industry that held 85% of the market were Airborne Express (AE), United Parcel Service (UPS) and Federal Express (FedEx) and, the remaining market share was among six second-tier companies. In the past few years, the express mail businesses had grown extremely fast due to the ability to provide and fulfill overnight shipping accompanied by next-morning delivery services for both individuals and businesses customers. By 1996, this segment of the expedited shipment delivery had grown to a $16-17 billion dollar industry business in the US alone.

By 1976, at a volume of 1,300 packages per day, FedEx’s Courier Pack service was only fulfilling one tenth of a percent of the “emergency rush” market, which totaled 870,000 packages delivered per day. By comparison, at 13,400 deliveries per day, the company’s Priority One “emergency rush” service accounted for one percent of the total market. Clearly both services have potential to gain more share of the rush delivery market, but the Courier Pack’s untapped potential is nearly limitless. Surely, the remaining 98 percent or so of customers using competing services for emergency rush delivery, including Emery Air Freight and USPS Express Service, are not familiar with Fed Ex’s less expensive, and more consistent Courier Pack service, and would switch brands with heightened awareness gained through careful marketing.

UPS system is based on traditional ABC in that it takes detailed functional cost and maps it to the products based on the activities that the products drive (ups.com). UPS is a cross functional discipline, in that it identifies activities within a function or process, measures the cost associated with the activity and then assigns the cost to a product. UPS responded to technology, the market and changing times by developing new business strategies to focus on customer needs. The new change in the business environment demands the organizations to gather the relevant data and information about the customers, costs, procedures, services, products and activities (Danish, Hasan & Abid, 2013). They needed a better understanding of specific segments of their business. UPS operations are extremely complex with a wide variety of service options, operating conditions and support activities (ups.com). UPS’s ABC system is unique in that it leverages our database of work measurement and package movement detail

UPS is a global package delivery business that specializes in not only managing the movement of goods, but the information and funds that moves with those goods in more than 200 countries and territories worldwide. UPS’s target market is primarily U.S. companies that ship business to business via ground delivery and whose delivery time is not

United Parcel Service (UPS), is the world’s largest express package delivery firm that handled more than 4.7 billion packages and documents in 2015. This global transportation and logistics service provider operates in more than 220 countries, and offers an array of supply chain management solutions (UPS Fact Sheet, n.d.). The firm has diversified its products and/or services to include freight forwarding and logistics services via air, ground, rail, and sea. U.S. Domestic Package operations, International Package operations, and Supply Chain and Freight operations are the three operating segments UPS. Through technology advancements UPS delivers online package tracking, e-commerce services, and specialized

Trends and opportunities of the parcel service industry include globalization, e-commerce, and supply-chain management. Internet logistics was FedEx and UPS’s fastest growing business. The internet enabled customers to link directly to retailers and their manufacturers. In 2001, parcel carriers served almost all of the online market. They were able to provide information on packages to customers through tracking systems on the web. This allowed customers to plan ahead and decrease delays in deliveries. It also allowed for faster transactions and lower communication costs. Parcel companies created partnerships with large Internet retailers. These partnerships allowed parcel service companies to expand its overall delivery volume. Parcel companies improved tracking by implementing several technological innovations. These included “laser scanners and bar codes, state of the art software programs, satellite and cell phone communication equipment, electronic information interchanges, and the Internet.”

UPS has been in the package delivery business for 95 years, providing services to businesses and consumers worldwide in more than 200 countries. In 1994, UPS began to investigate the potential of e-commerce and started an internal group focused on enabling e-commerce. UPS redefined its core business and found ways to change its structure and processes, forming new businesses to take advantage of new opportunities. UPS was interested in finding ways to leverage their extensive infrastructure and expertise in basic transportation of goods, services, and

* Before the package is even picked up, the data from the scannable bar coded label is transmitted to one of UPS’s computer centers in Mahwah, New Jersey, or Alpharetta, Georgia and sent to the distribution center nearest its final destination. Dispatchers at this center

United Parcel Service (UPS) founded in 1907 is the largest transportation company and the largest air freight carrier in the world. In 1987 due to rapidly changing external environment UPS faced serious challenges to its long-established policies of on-the-job training and promotion from within. With the increase in competition UPS realized that it is lagging in computerization and it thought of seeking technical expertise which it could not get from within. The concerns they had are how to hire new talent, how to assimilate, and to what extent new people would conform to UPS culture.

UPS is a global leader in logistics, offering a broad range of supply chain solutions including transporting packages and freight, facilitating international trade, and deploying advanced technology to more efficiently