FedEx Integration of Technology SCM Latest

8/11/2019 FedEx Integration of Technology SCM Latest

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Post-Graduate Programme in Management

(PGPM: 2013-2015)Term: IV (Jun- Sep, 2014)

Management Development Institute - Gurgaon

Supply Chain Management

Case 05

FedEx

ID Name

1 13P089 Neelanjan Bhattacharya

2 13P095 Suneel Palukuri

3 13P106 Sagar Mohanty

4 13P113 Soumyajyoti Bhowmick

5 13P118 Vaibhav Dash

6 13P140 Disha Agarwal

SCMCase Presentation

Presentation Date: 22/07/2014


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Logistics

Logistics Management is that part of Supply Chain Managementthat plans, implements, and controls the efficient, effectiveforward and reverse flow and storage of goods, services and

related information between the point of origin and the point of

consumption in order to meet customer requirements

Logistics

BusinessLogistics

MilitaryLogistics

EventLogistics

ServiceLogistics


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Satisfying worldwide demand for fast, time definite,reliable distribution with a customer focused approach

To provide its customers with a service that is fast

paced, efficient and reliable that benefits both thebusiness and its customers

FedExCorporation


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International Flight Network

Founded: 1971

HQ: Memphis, Tennesse

Countries served: 228

Airports served: 375

Global Revenues: 43 billion USD (2012)

Average daily package volume:8.5 million shipments

Transport Infrastructure:688 Aircrafts, 90,000

motorized vehicles


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FedEx Model

Flights arrive 15min ahead of

schedule

Control ofMemphis

Airport at 11PM

Sorting atMemphis super

hub

FedEx planestake off to

destinations

Move, Communicate, Shoot

Low

High

Respon

siveness

Cost (Efficiency) LowHigh

Efficiency frontier

FedEx Customers

Information about package

is as important as thedelivery of package itself


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Hub and Spoke model

A

B

C

D

E

F

G

H

A

B

C

D

E

F

G

H

No. of Routes = 8C2 =28 routes No. of Routes = 8 routes

Low Cost

More Efficient

Economies of scale

Increased connections

Interdependencies


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FedEx Supply chain services

Extension of services beyond pure transportation to address supply chain service needs

of customers

FedEx Home services: Supply chain management for booming e-tailers

FedEx Insight: Help customers plan manufacturing, distribution ,

manage inventories and returned goods, decrease inventory

management costs and increase customer satisfaction

Virtual Order: Software for business partners to set up an onlinecatalogue residing on FedExs secure server.

Exclusive delivery agreements with e-tailers like eToys, Pro-Flowers, LL

Bean etc to give them international reach


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Integration of Technology

1 Internet Technologyadoption 2 Wireless Solutions &Bluetooth

3 SuperTracker

Technology

4 Package scanning

5

Microsoft Powerpad&

Bluetooth

6

Digital Pen

7 Radio frequencyidentification (RFID) 8 Velcro Wristband RFID


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Internet technology

Key strategy to acquire & retain customersmeetinghigh service levels

Customers & business partners to have access to

information regarding :

A. Shipment process

B. Locations

C. Tracking

D. Freight servicesE. Expedited services


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Wireless Solutions & Bluetooth

SuperTracker Technology:

WAP phones Personal Digital Assistant PagerTracking of shipments and customer notification about package location

Package scanning:

Barcode scanning Information Upload Customer Retrieval


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FedEx PowerPad

FedEx uses a Bluetooth radio to send package information

a data collection device for information

The FedEx PowerPad is a Microsoft Windows-Powered Pocket PC that can

scan barcodeson each parcel and RFID tags to determine the location and

status of the shipments

PowerPad immediately uploads information such as signatures, proof of

delivery, and time stamp into the FedEx network

Micro-radio for communication with a printer and mobile computer in thecouriers delivery vehicle

Boosts courier efficiency, and maximizes package visibility, thus saving

time for both FedEx and customers


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Wireless transceiver & InfraredCamera that takes images ofuser writing patterns

Transform handwritteninformation to digital data(needing no behavioural change

from customers)

Security & proof of usersinputted information and realtime transmission

Reliability of information andreduces paper waste

Digital Pen


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Radio Frequency Identification (RFID)

FedEx has been using RFID technology since1999.

Easily monitor the arrival and automatically retrieve

data

Helps reduce inventory overload in storage as well as tracking and monitoring

of shipments

FedEx using Bluetooth and GPRS ensures efficient dissemination ofinformation for easy traceability of shipment


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Velcro Wristband RFID

FedEx uses an automatic keyless entry and ignition system.

The wristband offers FedExs delivery employee a hands-free vehicle

access rather than having to scramble around to find keys while holding

customer packages.

The wristband is beneficial to FedEx because

it provides efficiency for the couriers to get

products out to their customers without difficulty

RFID is an efficient tracking device providing FedExs customers speed,

reliability & visibility


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The Sandwich Strategy- Situation

FedEx was the leader in Overnight Premium Delivery

USPScreated a product called Express Mail that cost $8.95 vis--vis

FedExs $12 offering

Had FedEx reacted by lowering their price they would have

Given legitimacy to USPSs competition signaling similarity of product

offerings

Conceded that they have been overcharging their customers for years


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The Sandwich Strategy- FedEx

Response

RedefiningCurrent Market

FedEx re-segmented market not only in terms of day of deliverybut also in terms of time of delivery

Re-segmentingcurrent markets

Morning Delivery

Afternoon Delivery

Application &Executing

FedEx Priority(Morning)- $13, Guaranteed delivery by 10 am FedEx Standard(Afternoon)- $9, Guaranteed delivery by 3 pm


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The Sandwich Strategy- Execution

FedExPriority

Helped create a premium segment andhence higher margins

Companies like JP Morgan, McKinsey etc.upgraded to this offering

FedExStandard

Helped FedEx gain access to a new marketsegment


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Sandwich Strategy- Success Criteria

Made new products customer

centric so the value perceived by

the consumer is price paid for

the product

Elements of successful execution

Cost Leadership

Speed of execution

Market Expansion

Stronger Brand


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Documents

FedEx Integration of Technology SCM Latest