UPS and HP: Value Creation through Supply Chain Partnerships Executive Summary United Parcel Service (UPS) and Hewlett Packard (HP), both global leaders in their industries, strategically aligned themselves to capitalize on their ability to competitively provide superior services to their customers. UPS, a global distribution company and HP an information technology firm signed a contract solidifying a three year partnership in the early 2000s enabling them to capitalize on both company’s core competitive competencies already in place. UPS and HP recognized their competitive strengths and abilities in domestic and international territories as they continued to seek …show more content…
Second, both companies wanted to play an active role in understanding what domestic and international consumers demanded from UPS and HP and finally HP recognized UPS’s current systems were efficient, but were deficient in generating sustainable value. Analysis and Application Long-Term Business Growth 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) HP, an expert in the hi-tech industry understands the fiercely competitive environment where technological and innovative advancements could create turbulent
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
In this paper we answer a series of questions on the case study "UPS competes globally with information technology". This is then followed with recommendation on how UPS can increase its efficiency with the MIS system and how they can implement an improved version of their current MIS system.
In 2016, UPS made over five (5) billion delivers to customers. To date, the company has 434,000 highly driven employees, 2,000 operating facilities and 26,000 UPS access point locations that tremendously contribute to the company’s growth and success (Investor Relations, 2016). It is a worldwide supplier of store network administration solutions, which gives an extensive variety of transportation, capital, online shopping, air, ground, sea services. It is viewed as one of the largest courier organizations globally and the United States global leader in the supply chain industry (Investor Relations, n.d.). The organization is focused on improving customer experience, both international and domestic. UPS major competitors are FedEx, DHL and USPS, however, the competitive advantage that UPS has over its competitors are the fast, reliable, guaranteed, convenient delivery service that UPS offers to all customers, regardless of demography, country and culture.
In order to understand the expansive information systems that UPS uses, it is important to understand UPS’s background. UPS was founded in 1907, when James E. Casey established the American Messenger Company in Seattle Washington (“Company History”, n.d). Initially, the company focused on delivery for retail stores (“Company History”, n.d). By 1918, the company became one of the largest package delivery services in Seattle (“Company History”, n.d). In 1919, the company began expanding, which resulted in the company changing their name to the United Parcel Service (“Company History”, n.d.). The company began expanding at a rapid rate by buying local package delivery services (“Company History”, n.d.). In 1999, the company became a publicly traded company (“Company History”, n.d.). Currently, UPS operates in more than 220
UPS has a deep legacy of experience and expertise, and a heritage of doing the right thing for their customers, communities and employees. They are in the business of connecting their audiences to the things, people, places and answers they need, the moment they need them. They never stop looking for ways to be better so their team members can be at their best. They do this by uncovering new ideas, transforming their business, or simply doing more with their day. The UPS brand helps them bring this heritage and DNA to life, from the words they say, to the colors and photography they choose, to the experiences they deliver. By upholding and protecting the brand, UPS continues to build lasting relationships with their audiences, meet their
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
The overall performance of United Parcel Service (UPS) during the past year was good. The company 's ROI for the last five year is 14.27 while the industry average is only 12.70. UPS is the market share leader in the express delivery market with a 53% share of the market, and 50% in the ground shipping industry (Lazich, 2007). Based on its Net Profit Margin, Return on Assets, and Earnings per Share the company 's profitability is strong. Overall, UPS performed well in 2006.
Because of its superior profitability and cash generating capabilities, UPS has better prospects for funding growth through internal and external sources. Even if we weaken the assumption of past history as a good indicator for the course of future financial performance and management, the data still indicates UPS is in a better financial position for taking on future growth.
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
The success of a business begins with identifying the possible weaknesses and threats of the company. An organization can be better prepared when the company’s opportunities and strengths are given high priority. It is important for the company to identify the strengths in order for the strengths to be applied effectively. When evaluating the following elements, strengths, weaknesses, opportunities, and threats, it is best to begin breaking down the organization internally. Among having over 400,000 representatives worldwide, being the largest package delivery company in the world that is perceived as a top Fortune 500 Company, UPS also manages to produce the most revenue out of any other package delivery company. Although UPS holds up with much impressive strength, it is imperative to recognize the weaknesses as well.
UPS is the world’s largest package delivery company, in terms of revenue and volume, and a global leader in supply chain solutions and less-than-truckload transportation services. In 2009, the company delivered an average of 15.1 million packages and documents per day throughout the US and to more than 200 countries and territories. The primary business of the company is the time-definite delivery of packages and documents. Besides that, the company also has extended their capabilities to encompass a broader spectrum of service, which known as supply chain service, such as freight forwarding, customs brokerage, fulfillment, returns, financial transaction, repairs and less-than-truckload transportation services (UPS, 2010a).
The deliveries must be on time, there should be accuracy by way of deliveries, ownership of not only the land based vehicles but also airplanes are important for success. Key success factors include safe deliveries and an excellent reputation. Recently there are key success factors related to information. Accessing the UPS website gives critical information about the whereabouts of the parcel to any customer at a low cost. Information about the merchandise, customers and goods is critical for success.
Because UPS has a very open and consensus based culture PPM is widely accepted as a management tool. Strategically, for UPS to be successful they must align portfolios with the organizational goals of providing logistic solutions, supply chain management, e-commerce and sustainability with the least amount of risk. To accomplish this UPS restructured their organization from a functional-based structure to one that is pure-process. Their processes focus on customer relationship-management, product management, package management, customer information-management and business information and analysis.
In 21 key cities of 2nd & 3rd tier, led by Yiwu and Chongqing, UPS is also increasing the brand 's business coverage and exposure to meet the needs of export corporations centered in these cities, such as later pickup cut-off times, more flexible transportation, and more diversified express service, so as to help them expand business on a global scale. The integrated service portfolio, extensive global network, and leading industry insights of UPS will accelerate its footprint expansion in China, so as to better help Chinese manufacturing enterprises to go worldwide.