UPS Corporation Business Analysis
The business that UPS or United Parcel Service is in is a matter of being able to satisfy customers, and remaining ahead of competition. It was FedEx who first introduced a wireless network application in order to keep track of the document as well as parcel shipments, but this forced UPS to come out with a similar or more improved service. This resulted in the introduction of a cellular-based wireless data service throughout the country in February 1993. This started them on an important exploitation of wireless, Internet and its supporting technologies in order to attain a competitive advantage over others as well as to better worker productivity. (Best Practice Case Studies) The success or failure of the company is in being able to stay ahead of competition in this activity.
Analysis:
This is a matter which United Parcel Service, which is now headquartered in Atlanta, knows very well. It has been extending and improving upon its package routing system from the days it started off as a Seattle message delivery organization in the year 1907. The name of the company was then known as the American Messenger Co. And today, Worldport is its activity level for achievement of perfection. This is a facility that cost about $1.1 billion in order to build and has been functional from September 2002. The method of working is interesting and around 11:10 P.M., the first of about 100 or above planes lands down and taxis to an open gate at a 4 million-square-foot facility at this facility named Worldport. Activities go on for the next 4 hours, and result from 800,000 to 1 million packages being unloaded and sorted by the 5,000 staff. Within the facility itself there are 17,000 conveyor belts which total a stretch of 122 miles, and the computer system processes 59 million database transactions for about an hour to ensure the service. (Out of the Box – UPS eyes a future going far beyond package delivery)
UPS has a global telecom network, in order to link about a quarter of its million users in over 70 international locations, and this makes UPS to be the biggest user of cellular technology in the world, though they are only a courier organization. Presently, over half of all shipment order information from the customers is being sent to the company electronically. The numbers are huge and UPS handles about 1.6 million customers who send out 12.1 million packages and documents every day, and it can be seen that the service required is staggering. (Donlon, 27) When the work ends, the Boeing 757s, Airbus A300s, and all other jets refuel and reload with packages, which have been sorted by destination, and then they start to lift off, one in every 2 minutes, and disappear into the early-morning darkness for cities throughout the world, inclusive of international air hubs in Philippines, Hong Kong and Germany. The work at Worldport ends and by 4 a.m., most workers go home, and the company’s team of meteorologists starts to plan for the day’s weather. The facility becomes almost quiet. (Out of the Box – UPS eyes a future going far beyond package delivery)
While the UPS brand is still viewed as an organization with ground delivery by trucks, at least in the U.S. And less individuals know that they are also the 11th biggest airline in the world, as they have to deliver 2 million packages and documents daily. The speed of activity is like their other services and UPS Airlines still stands as the biggest and fastest airline startup in the FAA history. (Bloomemkranz, 35) The organization has many units and within the organization, UPS Supply Chain Solutions processes more than 120,000 orders daily for clients, inclusive of “order fulfillment, inventory, product configuration and testing, subassembly, repackaging, repair, and critical parts deployment.” (Out of the Box – UPS eyes a future going far beyond package delivery) This unit acts as the behind-the-scenes operators for many activities of companies like National Semiconductor, Lexmark, and so on. This was not easy to achieve and is the culmination of a 3-year, $1 billion acquisition binge that took over 25 companies, of which a majority of them dealing with customs clearance, freight forwarding, logistics, and finance. It is clear that the growth of UPS has come over a period of time and as a result of the concentrated efforts of people over several years. And 1 Basketball, a Paoli, Pa., manufacturer of basketball clothes and sneakers, gets its entire back office functions done by Supply Chain Solutions. The job involves getting the product from contract manufacturers in China directly to the Louisville facility, and over there warehousing it, and distributing to retailers such as Champs and Foot Locker. This clearly shows that there is a shift and the de-emphasis on that of the package delivery. This has also been emphasized by UPS through replacing its familiar logo which is of 41 years old, a bow-tied parcel on top of a shield, with a shield showing an upward swooping yellow stripe. (Out of the Box – UPS eyes a future going far beyond package delivery) Clearly there is an emphasis within the company for development into more profitable lines.
At the same time, the company follows clear lines. The economic efforts have been outlined as seeking new ways to empower the customers of the company, mainly through the implementing new technologies, and by considering each customer as if they are their only customer; through investments in new services, processes and channels that link more and more individuals to the world of trade; finding out new methods to make the business more efficient and effective; and by supporting, and stimulating, the removal of artificial and regulatory hindrances that prevent the flow of commerce among various trading partners of the company and nations. (The Future)
There also some social objectives and these involve preventing obstacles that harm and affect the success and progress of company employees; encouraging equal opportunity on a world-wide level for the employees; seeking remedies that provide UPS share ownership facilities for employees of the company on a global scale; investing in training and growth facilities for all employees throughout the world, and providing them with the tools to maintain safe, productive and successful careers within the organization; promoting and implementing a comprehensive technique and protocols for philanthropy, community involvement and volunteerism wherever we function in the world. For being able to operate all around the world without trouble, it is essential that organizations become part of the societies in individual countries. Considering the troubles that exist around the world today, there are also environmental targets and that involves researching, testing and making use of new technologies and fuels that enable to minimize consumption and emissions; developing new operational processes and technologies that best utilize the network and minimize waste; and reinforces the company’s environmental philosophies on a worldwide basis. (The Future) After all an organization can not last if it does not want to become a partner in the development and growth of the world.
It is not possible that ownership battles trouble UPS as over half the stock of the company is being owned by employees and retirees. The staff is also secure as internal promotion is another aspect. This has led to the average tenure of the executives on its management team consisting of 12-persons being of 32 years; but all of them except one are an UPS lifer. The salaries are good and the delivery men and women influencing the emblematic brown UPS “package cars” get salaries of $60,000 a year, on average, including that of overtime. Partly because of the compensations paid, turnover among drivers is just only 1.8% and is almost nonexistent among the managers. Even part-time workers, most of who are college students and have to show up in the middle of the night in order to sort out packages, get complete health benefits as well as their own pension plan. The entire operation is huge and there is a delivery of 14 packages every second, 13.3 million in a day, and more than that of 3.5 billion a year. The transport operations involve a fleet of 88,000 vans, tractors, cars, and motorcycles. (Out of the Box – UPS eyes a future going far beyond package delivery)
At the same time, the company has not forgotten to look at developing markets and Jetair Business Solutions Pvt. Ltd. was considered as the exclusive master licensee in order to develop The UPS Store business within India. This is the introduction of The UPS Store brand for the first time in a new market as well as for the first time outside North America has been developed uniquely as The UPS Store. The UPS Store will be India’s first full-service network of having retail outlets that includes shipping, packaging and other business products along with Jetair airways ticketing services. (The UPS Store Global Expansion Begins with India and Canada) When the new market develops, UPS will develop with it. This is recognized by the stock market and J.P. Morgan has upgraded express mail services provider United Parcel Service, Inc. In order to overweight from the neutral level, with the statement that it believes the company is being positioned for new momentum. (Market Pulse: UPS upped at J.P. Morgan, renewed momentum seen) Thus the faith in the organization exists even among experts.
Conclusion:
The management of the company is aware of changes and the requirement to adjust to changes and the statement at the end of the first year of UPS as a public company said “the world has tried to understand now as to what we have realized for years: regarding the fact that we are very well positioned, is in a position to execute, that we have a history consisting of innovation and above all, that we have the most unique people in our industry.” (Michael, 10) When an organization is a part of a rapidly growing industry, the weaknesses are always covered up as the profits remain high. Till the market drops, it would be difficult to talk about weaknesses of this company.
References
Benjamin, Matthew. Out of the Box – UPS eyes a future going far beyond package delivery.
Retrieved at http://www.usnews.com/usnews/biztech/articles/040126/26eeups.htm. Accessed 17 October, 2005
Best Practice Case Studies. Retrieved at http://www.mobileinfo.com/Case_Study/ups.htm. Accessed 17 October, 2005
Bloomemkranz, Larry. Evolving the UPS brand. Design Management Review. Spring, 2004.
Vol: 4; No: 1; pp: 35-37
Donlon, J.P. Big Brown boots up – Nickname for United Parcel Service of America Inc.; UPS’
Internet services. The Chief Executive. March, 1999. pp: 26-30
Lagorce, Aude. Market Pulse: UPS upped at J.P. Morgan, renewed momentum seen. 14 October, 2005. Retrieved at http://biz.yahoo.com/cbsmb/051014/45875bc497ce41d0a0b0598b9aae14f5.html?.v=1Accessed 17 October, 2005
Michael, S. UPS’s Future is the Future of Global Commerce, Execs Say. Business Wire. 2
November, 2000, pp: 8-11
The Future. Retrieved at http://sustainability.ups.com/future/main.html. Accessed 17 October, 2005
The UPS Store Global Expansion Begins with India and Canada. 5 August, 2005. Retrieved from http://ups.com/pressroom/corp/press_releases/press_release/0,1088,4612,00.html. Accessed 17 October, 2005
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