ups competes globally with information technology

UPS COMPETES GLOBALLY WITH INFORMTION TECHNOLOGY

UPS COMPETES GLOBALLY WITHINFORMTION TECHNOLOGY

A CASE STUDYCONTEXT

CONTEXT United Parcel Service (UPS) started out in 1907 in a closet-sized basement office founded by Jim Casey and Claude Ryan promised the "best service and lowest rates." UPS has used this formula successfully for more than a century to become the world's largest ground and air package-delivery Company. It's a global enterprise with over 400,000 employees, 93,000 vehicles, and the world's ninth largest airline. UPS delivers 15.6million packages and documents each day in the United States and more than 220 other countries and territories. The firm has been able to maintain leadership in small-package delivery services despite stiff competition from FedEx and Airborne Express by investing heavily in advanced information technology. UPS spends more than $1 billion each year to maintain a high level of customer service while keeping costs low and streamlining its overall operations. CASE STUDY1: UPS COMPETES GLOBALLY WITH INFORMTION TECHNOLOGY1CONTEXT From getting feedback from their customers the company developed acquisition device called DIAD. The input of the device is a new radio communication links. The process allows the DIAD to send communication back to the UPS centre to inform them if the packages have been delivered. The drivers are trained to use "340Methods" developed by industrial engineers to optimize the performance of every task from lifting and loading boxes to selecting a package from a shelf in the truck. . UPS also have a mobile apps and a mobile Website for iPhone, BlackBerry, and Android smartphone users. UPS provides tools that enable customers, such Cisco Systems, to embed UPS functions, such as tracking and cost calculations, into their own Websites so that they can track shipments without visiting the UPS site. A Web-based Post Sales Order Management System (OMS) manages global service orders and inventory for critical parts fulfilment. CASE STUDY1: UPS COMPETES GLOBALLY WITH INFORMTION TECHNOLOGY2

CONTEXT And an automated e-mail or fax feature that keeps customers informed of each shipping milestone and can provide notification of any changes to flight schedules for commercial airlines carrying their parts.In 2006, UPS started running the supply chains of medical device and pharmaceutical companies. UPS has partnered with Pratt & Whitney, a world leader in the design, manufacture, and service of aircraft engines, space propulsion systems, and industrial gas turbines, to run its Georgia Distribution Center, which processes 98 percent of the parts used to overhaul Pratt & Whitney jet engines for shipment around the world.CASE STUDY1: UPS COMPETES GLOBALLY WITH INFORMTION TECHNOLOGY3

CONTEXT In 1919, service began in Oakland, California. The name United Parcel Service was adopted. The first official logo was released. In 1930, a consolidated service began in New York City, and soon after in other major cities in the East and the Midwest. In 19401959, Services are expanded by acquiring "common carrier" rights to deliver packages between all addresses, any customer, private and commercial. In 1976, UPS established itself in Europe with a domestic operation in West Germany. In 1982, UPS Next-Day Air Service is offered in the US and Blue Label Air became UPS 2nd Day Air Service. In 1988, UPS Airlines was launched.Fun FactsAll UPS vehicles are then painted the familiar Pullman brown, chosen because it was considered neat, dignified, and professional.CASE STUDY1: UPS COMPETES GLOBALLY WITH INFORMTION TECHNOLOGY3

STRATEGIES DESCRIBESTRATEGIES DESCRIBEDAPPROACHES TAKENUPS spends more than $1 billion each year to maintain a high level of customer service while keeping costs low and streamlining its overall operations. It uses scannable bar-coded label that contains the detailed information about the sender, the destination, and when the package should arrive. Customers can download and print their own labels using special software provided by UPS or by accessing the UPS Website. Information from the "smart" label is transmitted to one of UPS's computer centres. Dispatchers at this centre download the label data and use special software to create the most efficient delivery route for each driver that considers traffic, weather conditions, and the location of each stop. CASE STUDY1: UPS COMPETES GLOBALLY WITH INFORMTION TECHNOLOGY4

STRATEGIES DESCRIBEDAPPROACHES TAKENTo increase cost savings and safety, drivers are trained to use "340Methods" developed by industrial engineers to optimize the performance of every task. The first thing a UPS driver picks up each day is a handheld computer called a Delivery Information Acquisition Device (DIAD), which can access a wireless cell phone network. As soon as the driver logs on, his or her day's route is downloaded onto the handheld. The DIAD also automatically captures customers' signatures along with pickup and delivery information. Through its automated package tracking system, UPS can monitor and even re-route packages throughout the delivery CASE STUDY1: UPS COMPETES GLOBALLY WITH INFORMTION TECHNOLOGY5

STRATEGIES DESCRIBEDAPPROACHES TAKENA Web-based Post Sales Order Management System (OMS) manages global service orders and inventory for critical parts fulfilment. The system enables high-tech electronics, aerospace, medical equipment, and other companies anywhere in the world that ship critical parts to quick1yassess their critical parts inventory, determine the most optimal routing strategy to meet customer needs, place orders online, and track parts from the warehouse to the end user. An automated e-mail ar fax feature keeps customers informed of each shipping milestone and can provide notification of any changes to flight schedules for commercial airlines carrying their parts.CASE STUDY1: UPS COMPETES GLOBALLY WITH INFORMTION TECHNOLOGY6

STRATEGIES DESCRIBEDAPPROACHES TAKENIt created a UPS Supply Chain Solutions division that provides a complete bundle of standardized services to subscribing companies at a fraction of what it would cost to build their own systems and infrastructure. These services include supply chain design and management, freight forwarding, customs brokerage, mail services, multimodal transportation, and financial services, in addition to logistics services.CASE STUDY1: UPS COMPETES GLOBALLY WITH INFORMTION TECHNOLOGY7

STRATEGIES DESCRIBEDAGENCIES AND ACTORS INVOLVEDJIM CASEY AND CLAUDE RYANFounders of the United Parcel Service (UPS) established last 1907 in a closet-sized basement office.FEDEX AND AIRBORNE EXPRESS Small-package delivery services close competitor of United Parcel Service (UPS).CUSTOMERS Using the special software provided by UPS or by accessing the UPS Website and using their mobile phones, they can easily download and print their own labels.

CASE STUDY1: UPS COMPETES GLOBALLY WITH INFORMTION TECHNOLOGY8

STRATEGIES DESCRIBEDAGENCIES AND ACTORS INVOLVEDUPS'S COMPUTER CENTERS (Mahwah, New Jersey, Or Alpharetta, Georgia)This is where the information from the "smart" label is transmitted. (label contains detailed information about the sender, the destination, and when the package should arrive) DISTRIBUTION CENTERThe information transmitted to the UPSs computer centers will then be sent to distribution center. It is the nearest destination of the package. DISPATCHERSThe operator of the distribution center. They download the label data and use special software to create the most efficient delivery route for each driver that considers traffic, weather conditions, and the location of each stop.CASE STUDY1: UPS COMPETES GLOBALLY WITH INFORMTION TECHNOLOGY9

STRATEGIES DESCRIBEDAGENCIES AND ACTORS INVOLVEDUPS DRIVERSTrained to use "340Methods" to ensure increase cost savings and safety. A UPS driver picks up each day a handheld computer called a Delivery Information Acquisition Device (DIAD). When logged in, his or her day's route is downloaded onto the handheld. The DIAD also automatically captures customers' signatures along with pickup and delivery information during pickup and automatically upload it in the internet.MEDTRONIC INC.The Minneapolis-based medical device company.


STRATEGIES DESCRIBEDAGENCIES AND ACTORS INVOLVEDCUSTOMER SERVICE REPRESENTATIVESCheck the status of any package from desktop computers linked to the central computers and respond immediately to inquiries from customers.PRATT & WHITNEYUPS partner, a world leader in the design, manufacture, and service of aircraft engines, space propulsion systems, and industrial gas turbines, to run its Georgia Distribution Center, which processes 98 percent of the parts used to overhaul Pratt & Whitney jet engines for shipment around the world.


CHALLENGESThe major promise and various perspectives that the UPS wants to prove to its client is the "best service and lowest rates." UPS also proves its leadership beyond the stiff competition from FedEx and Airborne Express. CASE STUDY1: UPS COMPETES GLOBALLY WITH INFORMTION TECHNOLOGY12

CHALLENGESCHALLENGESLow Website UsabilityUPS online services are as crucial as offline delivery serviceUPS provides customized web pages according to your location and language you use. Lack of localization causes inconvenienceCustomers have to type in their addresses all in English without no guideline or instructionsExcessive Restrictions on Access to ServicesIf you are not a member of UPS.comNo tracking informationNo text message serviceNo pickup packagesConfirmed delivery window service comes with a $5 fee or premium membership ($40/year)CASE STUDY1: UPS COMPETES GLOBALLY WITH INFORMTION TECHNOLOGY13

OUTCOMESOUTCOMESUsing the formula "best service and lowest rates." UPS successfully proved it for more than a century and become the world's largest ground and air package-delivery company. It's a global enterprise with over 400,000 employees, 93,000 vehicles, and the world's ninth largest airline. UPS delivers 15.6million packages and documents each day in the United States and more than 220 other countries and territories. The firm has been able to maintain leadership in small-package delivery services despite stiff competition from FedEx and Airborne Express by investing heavily in advanced information technology. UPS estimates its delivery trucks save 28 million miles and burn 3 million fewer gallons of fuel each year as a result of using this technology.CASE STUDY1: UPS COMPETES GLOBALLY WITH INFORMTION TECHNOLOGY14

OUTCOMESUPS is now leveraging its decades of expertise managing its own global delivery network to manage logistics and supply chain activities for other companies. It created a UPS Supply Chain Solutions division that provides a complete bundle of standardized services to subscribing companies at a fraction of what it would cost to build their own systems and infrastructure. In 2006, UPS started running the supply chains of medical device and pharmaceutical companies. UPS and Pratt & Whitney employees together keep track of about 25,000 different kinds of parts and fulfill up to 1,400complex orders each day-ranging from a few nuts and bolts to kits comprising all the parts needed to build an entire engine. On the receiving side of the 250,OOO-square-footbuilding, UPS quality inspectors check newly arrived parts against blueprints.CASE STUDY1: UPS COMPETES GLOBALLY WITH INFORMTION TECHNOLOGY15

REFLECTIONREFLECTIONInformation system consist of 3 dimensions:Organizations: Tracking packages and managing inventory more easily. Fast in providing information to customers about their orders.Management: Can monitor service levels and costs. UPS are able to quickly access up-to-date information. UPS managers are able to make better decisions due to fast access of information.Technology:Handled computers, bar code scanners, networks, desktop computers. Customers take less time in placing their orders.With the system customer will be able to track their orders and where and when will the package be delivered.


REFLECTIONWith UPSs package tracking system used as part of its technologies that are related to its business strategy, Best Services, Low Cost, UPSs information system are able to address operational excellence and competitive advanced strategic business objectives. Without UPSs information systems and the technology tied to it, UPS would not be able to maintain its leadership in small-package delivery service.CASE STUDY1: UPS COMPETES GLOBALLY WITH INFORMTION TECHNOLOGY17

GUIDE QUESTIONSCASE STUDY QUESTIONSWhat are the inputs, processing, and outputs of UPSs package tracking system?

What technologies are used by UPS? How are these technologies related to UPSs business strategy?

What problems do UPSs information systems solve?

What would happen if these systems were not available? CASE STUDY1: UPS COMPETES GLOBALLY WITH INFORMTION TECHNOLOGY18

ANSWERANSWER1. What are the inputs, processing, and outputs of UPSs package tracking system? Inputs: Raw data captured/collected from within the organization or from its external environment.Detailed information about the sender, destination and date of package arrival. Traffic, weather conditions, and locations of each stop.Customers signatures, pick up information, delivery information.Package tracking information transmitted to UPSs computer network for storage and processing.Current progress/location/status of package en-route to destination.


ANSWER1. What are the inputs, processing, and outputs of UPSs package tracking system? Process: Conversion of input into a meaningful formInformation transmitted to UPSs central computers in Mahwah, New Jersey and Alpharetta Georgia.The reorganization of package tracking information transmitted to UPSs computer network through the Delivery information Acquisition Device (DIAD).The reorganization of information through the automated package tracking system.Software creation of most efficient delivery route for each driver


ANSWER1. What are the inputs, processing, and outputs of UPSs package tracking system? Output: Transfer of processed information to people who will use of activities for which it will be used.Pickup and delivery times.Package recipientAccessible information available worldwide for proof of delivery and customer queries.Monitoring and re-routing of packagesCurrent progress/location/status of package en-route to destination.Most efficient delivery route from each driver downloaded into the DIAD handheld.Bill documentation.


ANSWER2. What technologies are used by UPS? How are these technologies related to UPSs business strategy?What technologies are used by UPS?UPS has adopted several technologies that resulted in its unbeatable position in the industry. Technologies include handheld computers (DIADs), barcode scanning systems, wired and wireless communications networks, desktop computers, UPSs central computer (large mainframe computers), and storage technology for the package delivery data. UPS also uses telecommunication technologies for transmitting data through pagers and cellular phone networks. The company uses in-house software for tracking packages, calculating fees, maintaining customer accounts and managing logistics, as well as software to access the World Wide Web.


ANSWER2. What technologies are used by UPS? How are these technologies related to UPSs business strategy?How are these technologies related to UPSs business strategy?UPS has used the same strategy for over 90 years. Its strategy is to provide the best service and lowest rates. One of the most visible aspects of technology is the customers ability to track his/her package via the UPS Web site. However, technology also enables data to seamlessly flow throughout UPS and helps streamline the workflow at UPS. Thus, the technology described in the scenario enables UPS to be more competitive, efficient, and profitable. The result is an information system solution to the business challenge of providing a high level of service with low prices in the face of mounting competition.


ANSWER2. What technologies are used by UPS? How are these technologies related to UPSs business strategy?How are these technologies related to UPSs business strategy?Best Services:The DIAD system allows information concerning package tracking be viewed by customers and answers customers queries.When customers are able to know the progress of their delivery, this provides them with customer satisfaction.The OMS sends automated email or fax to each customer of its shipping milestone and any possible delivery changes.When customers are able to feel that the company care for their concern, this creates customer satisfaction. Customer satisfaction = customer loyalty = business strategy of best services


ANSWER2. What technologies are used by UPS? How are these technologies related to UPSs business strategy?How are these technologies related to UPSs business strategy?Low cost: By adopting the barcode scanning, dispatchers in centres can download label data, uses special software to create most efficient delivery route for each driver.This route considers the traffic, weather conditions, as well as the location of each stop.Picking the most efficient and fastest for each route can save time and send more packages.This helps to save cost for the company and allows customers to receive their packages with a lower rate.


ANSWER2. What technologies are used by UPS? How are these technologies related to UPSs business strategy?How are these technologies related to UPSs business strategy?Low cost: By adopting the barcode scanning, dispatchers in centres can download label data, uses special software to create most efficient delivery route for each driver.This route considers the traffic, weather conditions, as well as the location of each stop.Picking the most efficient and fastest for each route can save time and send more packages.This helps to save cost for the company and allows customers to receive their packages with a lower rate.


ANSWER3. What problems do UPSs information systems solve?UPS is always interested in current and emerging technologies that can assists its business and improve its efficiency.Operational excellence: Expense of fuel consumption account s for an average of 5.6% of UPSs operating revenue.In October 2004, an electric vehicle was deployed to deliver packages in Manhattan. This technology not only helps in fuel efficiency but also reduce maintenance cost and environmental impact.


ANSWER3. What problems do UPSs information systems solve?The use of Delivery Information Acquisition Device (DIAD) reduces the number of miles driven and fuel consumption.Able to process customer packages, time card reporting, and conduct time and motion studies thereby improving the efficiency of the company. Competitive advantage: High level of customer service: The information obtained from DIAD can be accessed worldwide to provide proof of delivery to customers or to respond t customers queries. The recent introduction of UPS My Choice provides a better customer service and support the strategic initiative of UPS. Lower Cost: Quantum View Data, an online service available for free to any customer that has a UPS account. This allows the business to invoice the customer immediately, leading to quicker, more efficient billing,


ANSWER3. What problems do UPSs information systems solve?allowing the business to get paid sooner. Online billing centre has reduced customers administrative cost. It is a convenient feature for companies who ship regularly with UPS and receive multiple invoices a any particular time.New products, services, and business models: In June 2009 UPS launched a new Web-based Post Sales Order Management System (OMS) that manages global service orders and inventory for critical parts fulfillment. The system enables high-tech electronics, aerospace, medical equipment, and other companies anywhere in the world that ship critical parts to quickly assess their critical parts inventory, determine the most optimal routing strategy to meet customer needs, place orders online, and track parts from the warehouse to the end user.


ANSWER3. What problems do UPSs information systems solve?Customer and supplier intimacy: Customers can download and print their own labels using special software provided by UPS or by accessing the UPS Web site. UPS spends more than $1 billion each year to maintain a high level of customer service while keeping costs low and streamlining its overall operations.Improved decision making: Special software creates the most efficient delivery route for each driver that considers traffic, weather conditions, and the location of each stop. UPS estimates its delivery trucks save 28 million miles and burn 3 million fewer gallons of fuel each year as a result of using this technology. To further increase cost savings and safety, drivers are trained to use "340 Methods developed by industrial engineers to optimize the performance of every task from lifting and loading boxes to selecting a package from a shelf in the truck.


ANSWER4. What would happen if UPS's information systems were not available?Arguably, UPS might not be able to compete effectively without technology. If the technology were not available, then UPS would, as it has through most of its history, attempt to provide that information to its customers, but at higher prices. From the customers perspective, these technologies provide value because they help customers complete their tasks more efficiently. Customers view UPSs technology as value-added services as opposed to increasing the cost of sending packages.


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UPS COMPETES GLOBALLY WITHINFORMTION TECHNOLOGY

A CASE STUDYTime travel transitionSeBnull14544.0

ups competes globally with information technology

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