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7/28/2019 UPS Case Study by Lance Williams
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UPS Case Study
Lance Williams
CSUCI MBA Program
Business 550
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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
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Main competitors
Transportation Fedex Deutsche Post (DP) United States Post Office
Logistics Exel Li & Fung
System Integrators Accenture IBM Global Services
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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.
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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.
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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.
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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
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Logistics
Supply Chain Optimization
Inventory Optimization
Transportation Optimization
Package Engineering
Hazardous Materials
Warehouse Design
Business Process Reengineering
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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
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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
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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.
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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.
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Hazardous Materials
UPS has support services to help with the transportation ofyour hazardous materials.
Medical
Pharmaceutical
Bio-med
Toxic Waste
Video - Temperature Shipments
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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.
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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.
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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
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Consulting
Supply Chain forecasting and planning.
Procurement, Production and fulfillment consulting
Cash Management Consulting
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Freight Forwarding/Brokerage
Freight Transportation
Trade Management Services
Material Management Services (JIT fulfillment)
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Mailboxes Ect.
In 2001 UPS purchased Mailboxes Ect. Giving thecompany 4,400 retail locations in which to offer theirservices from.
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Mail Innovations
Various levels of shipping services including:
Ground
Air
2nd day
Overnight
Freight
Hazardous Materials
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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.
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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
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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.
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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.
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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.
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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
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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.
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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.
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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.
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DIAD V
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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.
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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
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The DIAD V has Enabled Real Time Tracking
UPS - Redundant Servers
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UPS - Redundant Servers
UPSs centralized data operations center is in Mahwah, New Jersey
The second data center is in Windward, Georgia to provide redundancy.
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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)
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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
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Any Questions?
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Question # 1
The latest version of the UPS DIAD is the:
A) DIAD I
B) DIAD III
C) DIAD V
D) DIAD VIII
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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.
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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
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The End