United Parcel Service (UPS), the international package delivery company, grew out of a messenger service established in Seattle in 1907 by an enterprising 19-year-old named James E. 'Jim' Casey and his friend, Claude Ryan. Beginning with two bicycles, one phone, a tiny office in the basement of a saloon, and $100 borrowed from Ryan's uncle, the two lay the foundation for what became a multi-billion dollar corporation involved in the flow of goods, funds, and information around the world.
Today, UPS is a global company with one of most recognized and admired brands in the world and they have become the world’s largest package delivery company and a leading global supplier of specialized transportation and logistics services. Since the beginning of United Parcel Service in 1907, many things have changed but the promise of the “best service and low rates” has stayed the same. UPS provides 15.6 million packages and documents each day in the United States and more than 220 other countries and area. UPS invests billions every year to upkeep a high level of customer satisfaction all the while keeping its own costs low. One of the biggest factors of their victory is owed to the scannable barcode label and the handheld computer, the Delivery Information Acquisition Device or the DIAD, where all the material and information regarding the package is stored. A web-based post sales order management system (OMS) operates global service order and inventory for critical parts fulfillment. From optimal routing, to tracking shipments two days delivery is guaranteed nationwide which in turn assist keep customer satisfaction high while keeping costs low.
UPS provides 15.6 million packages and documents every day in the United States and more than 220 other countries and territories. Technologies include DIADs, wired and wireless communications networks, barcode scanning systems, desktop computers, storage technology for the package delivery data and UPS’s central computer. As well as the company uses in house software for tracking packages, maintaining customer accounts and managing logistics, calculating fees and software to access the World Wide Web. And as well as include UPS mobile app for smart phones, Web based post sales order management system, Cisco system with tools for UPS customers to make shipment tracking and cost calculations.
UPS’s strategy is to provide the “best service and lowest rates'. One of the most visible forms of technology is the customer’s ability to track them package via the UPS website. However, technology also enables data to seamlessly stream throughout UPS and helps streamline the workflow at UPS. Thus, the technology expressed in the scenario enables UPS to be more competitive, efficient, and profitable. And 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.
UPS's information systems address the following strategic business objectives:
- Deliver the best service, at the lowest rates. Their information systems allow them to supply the best service and the lowest costs through efficient and effect method. Customer get what they want, when they want it and they are able to provide it to them at lower costs.
- Saving costs to improve service quality and expanding level of output. 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, medical equipment, aerospace, 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.
- 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.
- Competitive advantage. UPS is leveraging its decades of expertise managing its own global delivery network to manage logistics and supply chain activities for other companies. Its Supply Chain Solutions division 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.
- Operational excellence. UPS has maintained leadership in small-package delivery services despite stiff competition from FedEx and the U.S. Postal System by investing heavily in advanced information technology.
- 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. UPS uses an array of information technologies including barcode scanning systems, large mainframe computers, handheld computers, wireless networks, the Internet, and many different pieces of software for tracking packages, maintaining customer accounts, managing logistics and calculating fees.
If the technology were not available, they wouldn't have the competitive advantage. These technologies provide value for customers to complete their tasks more efficiently. If the technology were not available, the process of providing information to customer will become slow. The customer cannot receive the information speedily. With other leaders in small parcel delivery such as FedEx and DHL, their operations would be lacking in comparison. Loyal customers would switch to something faster, more effective, and cheaper. Physical UPS offices would be very busy and the image the public has of the company would rapidly fall. UPS may not be able to offer the supply chain solution to other client companies. If these systems were not available then UPS will not be able to compete with others and it will not become the largest package delivery company as it is today.
So, in summary, United Parcel Service's victory can be attributed to their mission to manage and continue to strengthen their core competencies. They strive to have reliable and timely distribution, affordable shipping expense, and excellent customer service. Through continually analyzing these core competencies, they have seen tremendous success throughout their history, establishing themselves as industry controller on a global level. They guide to provide high quality services while at the same time eliminate waste in their process, and thus their customer wellbeing rates are consistently impressive. This can be attributed to their highly skilled labor force and strategic training schedule. UPS provides packages faster and at higher affordable prices than their competitors. And they ensure all packages are only handled by qualified and talented employees and shipped in the quickest and secure manner, whether it is via ground freight, ocean freight, or airfreight. UPS has proven that effective application can allow a company to reach 8.2 million customers per day in 220 countries and areas across the globe. Furthermore, UPS showed that establishing durable relationships with customers leads to major increases in income, and in turn a largest market share.
- Olear, M. (n.d.). Case Analysis of UPS Information Systems. Retrieved from https://www.studocu.com/en-ca/document/ryerson-university/business-information-systems-i/mandatory-assignments/ups-case-study/2808904/view
- Warren, J. R. (1999, 20 9). United Parcel Service (UPS). Retrieved from United Parcel Service (UPS): https://www.historylink.org/File/1679