ups case study by lance williams

7/28/2019 UPS Case Study by Lance Williams

1/43

UPS Case Study

Lance Williams

CSUCI MBA Program

Business 550


2/43

UPS

Founded in 1907 in Seattle Washington asAmerican Messenger Company

Started with just $100 dollars.

1919 started service in Oakland, CA

1930 started service in New York, NY

1952 Began to offer Air service (threw 3rd party

airlines) 1988 launched its own air fleet

1999 UPS becomes a public company


3/43

Main competitors

Transportation Fedex Deutsche Post (DP) United States Post Office

Logistics Exel Li & Fung

System Integrators Accenture IBM Global Services


4/43

Locations

Headquarters are now based out of SandySprings, Georgia (near Atlanta).

Formerly headquartered in Seattle, WAand then Greenwhich, CT.

Worldport is their main air hub is inLouisville, KT.


5/43

The 90s

Started the decade with $14 billion inrevenue

By 1999 was at $30 billion in revenue

They realized that they were spending themajority of their cost on logistics, eventhough 95% of revenue came frompackage deliveries.


6/43

UPS Industrial Engineers

Always employed a large staff including the worlds largest staff of industrialengineers. In the late 90s they shifted away from the focus being on

industrial engineers, to information technology specialist.

There was also a focus on adjacent businesses, moving away from the

traditional package delivery services.


7/43

Out of every dollar spent on logistics, six

cents is spent on moving small packages. The

other 94 cents is the other part of the supply

chain. Its fulfillment, its warehousing and

its the cost of the goods. So we have been

moving into the other 94 cents.

Mike Eskew, Vice Chairman

and incoming CEO


8/43


9/43

Logistics

Supply Chain Optimization

Inventory Optimization

Transportation Optimization

Package Engineering

Hazardous Materials

Warehouse Design

Business Process Reengineering


10/43


11/43

Supply Chain Optimization

They use a ten step process to analyze and design a unique solution. Define project scope Gather detailed data set Establish design assumptions Baseline existing supply chain network Identify improvement opportunities Develop scenarios Run scenarios

Rationalize the scenarios Compare scenarios to each other and the baseline Develop recommendations, present conclusions

Benefits RealizationTry to give at least a 5, 10, or even 15% reduction in supply chain costs resulting in a competitive advantage byhaving a more efficient, flexible and, responsive supply chain.

You could see benefits from the following:

Improved assignment of customers to servicing distribution centers with optimum mode/service useOptimized inventory levels throughout your supply chainMapped supply chain throughData collection/validation process, question/answer sessionsBaseline flow maps, tablesBaseline costs by typeCustomer "test drive" scenarios prior to significant capital investments
http://www.ups.com/content/us/en/bussol/browse/supply-chain-optimization.htmlhttp://www.ups.com/content/us/en/bussol/browse/supply-chain-optimization.html


12/43

Inventory Optimization

They will review raw materials and component inventories through internalchannels and nodes and, in some cases, all the way down to the retail shelf.UPS uses a combination of business analysis, intellectual property, andmodeling tools to assist you in developing and defining strategies forsourcing, transportation, and inventory holding cost.

Analysis and assessment address the following: Inventory levels by product Inventory form at each node--raw material, finished goods, WIP Inventory drivers Service

Supply and demand uncertainty Lead times Inventory policies Transportation modes Node to node impacts
http://www.ups.com/content/us/en/bussol/browse/inventory-optimization.htmlhttp://www.ups.com/content/us/en/bussol/browse/inventory-optimization.html


13/43

Transportation Optimization

They develop a transportation strategy for yourcompany resulting in efficient movement ofproducts as a result will help keep costs low andcustomer satisfaction high.

Customer Solutions evaluates multipletransportation modes, carriers, routes, shippingstrategies, and support to find the lowest cost

combination for your companies transportationoptimization needs.
http://www.ups.com/content/us/en/bussol/browse/transportation-optimization.htmlhttp://www.ups.com/content/us/en/bussol/browse/transportation-optimization.html


14/43

Package Engineering

Movement along your supply chain can take a toll on your shipments,and your packaging must be able to hold up under variousconditions.

UPS's test lab is a place where packages are tested for their enduranceunder extreme conditions.

Packages are tested for: Compression Impact Vibration

Shock

The data from these tests help our engineers identify the mostappropriate packaging for your product to help prevent damages,minimize reshipments, and keep your customers coming back formore.
http://www.ups.com/content/us/en/bussol/browse/package-engineering.htmlhttp://www.ups.com/content/us/en/bussol/browse/package-engineering.html


15/43

Hazardous Materials

UPS has support services to help with the transportation ofyour hazardous materials.

Medical

Pharmaceutical

Bio-med

Toxic Waste

Video - Temperature Shipments
http://www.ups.com/content/us/en/resources/ship/hazardous/index.htmlhttp://www.youtube.com/watch?v=6OBUNoHfaM0http://www.youtube.com/watch?v=6OBUNoHfaM0http://www.youtube.com/watch?v=6OBUNoHfaM0http://www.youtube.com/watch?v=6OBUNoHfaM0http://www.youtube.com/watch?v=6OBUNoHfaM0http://www.ups.com/content/us/en/resources/ship/hazardous/index.html


16/43

Warehouse Design

UPS will help redesign your warehouse.From layout to function, CustomerSolutions can help you design or redesign

your distribution center so it works in themost efficient way as possible to suit yourindividual needs.
http://www.ups.com/content/us/en/bussol/browse/warehouse-design.htmlhttp://www.ups.com/content/us/en/bussol/browse/warehouse-design.html


17/43

Business Process Reengineering

The first step to refining your supply chain is tounderstand where improvements can make asignificant difference in performance.

UPS can help by running a business processreengineering (BPR) assessment to map thecurrent and desired future state of your supply

chain, evaluate current roles andresponsibilities, review data to prioritize yourpath forward, and identify areas for improvedperformance.
http://www.ups.com/content/us/en/bussol/browse/business-process-reengineering.htmlhttp://www.ups.com/content/us/en/bussol/browse/business-process-reengineering.html


18/43

Capital

Financial Services has many tools in which it help withassist the clients of UPS. Some of those servicesinclude:

Lending

Funding

Restructuring

Insurance services Credit Card Processing


19/43

Consulting

Supply Chain forecasting and planning.

Procurement, Production and fulfillment consulting

Cash Management Consulting


20/43

Freight Forwarding/Brokerage

Freight Transportation

Trade Management Services

Material Management Services (JIT fulfillment)


21/43

Mailboxes Ect.

In 2001 UPS purchased Mailboxes Ect. Giving thecompany 4,400 retail locations in which to offer theirservices from.


22/43

Mail Innovations

Various levels of shipping services including:

Ground

Air

2nd day

Overnight

Freight

Hazardous Materials


23/43

iShip

Web bases solutions for management to track theshipping services for the entire company.

They can track by department, employee and evenspecific details about packages.

Allows for one system for filling your shippingneeds. From the desktop to the mail room, all

the way to accounting, the information is enteredonly once because one system is all that isrequired.


24/43

Technology Innovations

As UPS says, they used to be a truckingcompany that had technology and now

they are a technology company, that just

happens to have trucks.

Video - Technology at UPS
http://www.youtube.com/watch?v=KDKCmgBew30&feature=plcphttp://www.youtube.com/watch?v=KDKCmgBew30&feature=plcphttp://www.youtube.com/watch?v=KDKCmgBew30&feature=plcphttp://www.youtube.com/watch?v=KDKCmgBew30&feature=plcphttp://www.youtube.com/watch?v=KDKCmgBew30&feature=plcp


25/43

ConnectShip

UPS's Customer Solutions focuses on giving yourteam visibility at any point in your order pipelineand across multi-modal or multi-carrierenvironments. They help you streamline yourshipping operation and control shipping costs.

They will use their vast quantity of technological

programs to put together a single shippingapplication that has all the tools you are lookingfor and can be implemented in a short timeframe.
http://www.ups.com/content/us/en/bussol/browse/customer-solutions-connectship.htmlhttp://www.ups.com/content/us/en/bussol/browse/customer-solutions-connectship.html


26/43

UPS SampleSure

UPS SampleSure captures data from the moment youinitiate a drug sample order and tracks it all along the

way.

It's designed to help you ship pharmaceutical samples tolicensed practitioners, hospitals, and drug sample

representatives, securely, and reliably.

Vital information for every shipment can be stored for futurereconciliation and reporting. Missing shipping or deliveryinformation proactively triggers a follow-up.
http://www.ups.com/content/us/en/bussol/browse/sample-sure.htmlhttp://www.ups.com/content/us/en/bussol/browse/sample-sure.html


27/43

UPS Trackpad

Trackpad eliminates the need for paper manifests.

It will show package data to show where it is stored for look-up andreports. You can even make information available at each desktopto minimize "where is my order" calls. Trackpad creates an efficient

information pipeline enabling all users and administrators to manageand search for information in seconds rather than minutes. It will

also will print existing barcodes or customize new ones on demand.
http://www.ups.com/content/us/en/bussol/browse/trackpad.htmlhttp://www.ups.com/content/us/en/bussol/browse/trackpad.html


28/43

UPS Complete View Shipping(iShip)

Use the Web-based interface and eliminate the need toinstall software on each employee's computer. Alongwith a customized look and feel, and options that workfor you, your job gets easier with every use. It has theability to use multiple views of shipping options to

request additional bar codes for your shipping label.

iShip can create reports detailing: Tracking Performance Claims Billing Brokerage shipment data
http://www.ups.com/content/us/en/bussol/browse/complete_view_shipping.htmlhttp://www.ups.com/content/us/en/bussol/browse/complete_view_shipping.html


29/43

UPS Returns on the Web - Readyto Use

UPS Returns on the Web is a ready to use self-servicereturns solution that automates the returns process.

This service allows returns to be completed online by the

customer, including the delivery of a UPS return label.

It can also link your back-end databases to the returnsprocess to maximize the use of the return product

information, reducing costs while improving customerservice.
http://www.ups.com/content/us/en/bussol/browse/returns-on-the-web-ready-to-use.htmlhttp://www.ups.com/content/us/en/bussol/browse/returns-on-the-web-ready-to-use.htmlhttp://www.ups.com/content/us/en/bussol/browse/returns-on-the-web-ready-to-use.htmlhttp://www.ups.com/content/us/en/bussol/browse/returns-on-the-web-ready-to-use.htmlhttp://www.ups.com/content/us/en/bussol/browse/returns-on-the-web-ready-to-use.htmlhttp://www.ups.com/content/us/en/bussol/browse/returns-on-the-web-ready-to-use.htmlhttp://www.ups.com/content/us/en/bussol/browse/returns-on-the-web-ready-to-use.html


30/43

UPS PLD File Type

In 1994 UPS went to a central file type for all packages called a PLD.

It contains all of the packages information such as: departure address

destination address

sender

recipient consignee,

product data,

package content

international customs information

The benefit to this is that there is no need to have multiple systems atUPS. The one file type can be used by all the various programs and

communicate seamlessly between all the various departments.


31/43

DIAD

1991 DIAD I was released

1993 DIAD II which could update the datebasses via cellular transmitters in the vehicles.

1999 DIAD III real time uploads and 2 way textmessaging for immediate pick-ups

2004 DIAD IIII had Bluetooth, WiFi and GPRS orCDMA connectivity options. Also had GPS builtinto the unit for real time tracking.


32/43

DIAD V


33/43

DIAD VReleased in 2010

Includes to following upgrades: First device in industry to switch on-the-fly between

cellular carriers independent of cellular technology.

Faster WiFi support (600 mbps) enables larger and richercontent downloads such as training videos

A state-of-the-art color display and microprocessor withexpanded memory to support driver training and futureapplications including navigation

About half the size (3.5) and weight (1.3 pounds) of DIAD

IV.

A color, auto-focus, flash camera could be used to

enhance proof-of-delivery and to help resolve customerclaims.

An aggressive multi-dimensional imager to decode manysymbologies, including UPS linear barcodes, withoutrequiring the driver to rotate the DIAD to capture thebarcode.


34/43

Before PLD and the DIAD, the driver had to pick up aphysical piece of paper from the customers, obtain thesignature and validate the number of packages. Now hejust scans the packages and uploads the delivery

Information with the DIAD, which gets matched with thePLD information from the shipping systems. Our billing ismuch more accurate and many driver tasks areautomatic. Theres a whole driver process that has beeneliminated based on the DIAD and PLD technology.

Phil Nardomarino, VP of IS, Operations Portfolio


35/43

The DIAD V has Enabled Real Time Tracking

UPS - Redundant Servers


36/43

UPS - Redundant Servers

UPSs centralized data operations center is in Mahwah, New Jersey

The second data center is in Windward, Georgia to provide redundancy.


37/43

Current stats:

CEO Scott Davis

Revenue - $53.105 Billion

Net Income - $3.804 Billion Employees 425,000 Employees

Trucks 95,000 Vehicles

Airplanes 238 Aircraft (A300, B747,B757, B767,MD-11)


38/43

Awards

Awarded the Computerworld Smithsonian Award in 1991 and in 1997

In 2000

UPS named Americas and the Worlds Most Admired mail, package and freight

delivery company by Fortune Magazine.

Forbes magazine named UPS company of the year. Named on Red Herrings 100 Most Important Companies

Named in PC weeks Fast-track 100

MIT Sloan School of Management gave UPS a clicks-and-mortar award


39/43

Any Questions?


40/43

Question # 1

The latest version of the UPS DIAD is the:

A) DIAD I

B) DIAD III

C) DIAD V

D) DIAD VIII


41/43

Question # 2

Which of the following are services offered under theLogistics division of UPS?

A) Supply Chain Optimization

B) Package Engineering

C) Warehouse design

D) All of the above.


42/43

Question # 3

UPS was given the following award from the MIT Sloanschool of management?

A) At-a-boy award

B) Thumbs-up award

C) Clicks-and-Mortar award.

D) Oscar award


43/43

The End

ups case study by lance williams

Documents