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United Parcel Service (UPS) was founded in Seattle, Washington in 1907 by James E.
Casey and was originally named "American Messenger Company."
In 1919,
American Messenger Company became "United Parcel Service." Ten years later,
UPS became the first package delivery company to provide air service via private
airlines. The following year, UPS expanded to the east coast and began operations
in New York. UPS became the first package delivery company to serve every
address in the United States by 1975 and started international air service in 1985.
In 1992, UPS began tracking all ground packages and developed their website in
1994. Users could calculate shipping rates in 2000 via text message, with a
personal digital assistant (PDA), pager or other form of wireless device. Currently,
UPS is the world's largest parcel carrier, and is the largest company in its industry in
terms of revenue and profits.
Theres a reason why so many statistics are being cited. These enormous numbers
represent a monumental process challenge, and the ongoing globalization of
business will move each of these numbers upward. Add to this the trend for many
enterprises to subcontract most or all of the manufacturing and assembly of their
products to specialized firms wherever in the world that it makes sense, and the
opportunities are clear for UPS in providing logistics.
Having an enormous package delivery network offers UPS an opportunity to create
even greater value for their customers by using the network to manage the
integration of information, transportation, inventory, warehousing, material
handling, packaging and even the security of packages. This logical move higher in
the value chain means offering integrated solutions that are an excellent match for
the challenges of increasing globalization.
INDUSTRY PROSPECTS AND OVERALL ATTRACTIVENESS
The alliance between air freight companies and ITES companies will bring
exponential growth to the Air Freight industry.
This industry should remain attractive, with concentration on competition for
market share, service differentiation, and brand image.
Current Advertising has been aimed at being better than the competitor for
different reasons.
UPSs values, mission, and strategy statements provide guidance regarding our
daily decisions. They make clear our priorities and encourage us to seize new
opportunities. By following these principles, our actions are aligned to meet the
needs of our company, people, customers, shareowners, and communities.
Values: Our Enduring Beliefs
Integrity-It is the core of who we are and all we do.
Teamwork-Determined people working together can accomplish anything.
Service-Serving the needs of our customers and communities are central to
our success.
Quality and Efficiency-We remain constructively dissatisfied in our pursuit of
excellence.
Safety-The well-being of our people, business partners, and the public is of
utmost importance.
Sustainability-Long-term prosperity requires our continued commitment to
environmental stewardship and social responsibility.
UPS is seeking to integrate into freight with larger haul trucks and it is adding
capacity in Asia and Europe with acquisitions of Sinotrans, a Chinese joint
venture and Stolica, a Polish parcel and express company.
UPS is the 11th largest airline world, with nearly 600 planes, 15 airport hubs
worldwide and 900 airports served. Connecting these airports hubs to
customers are 1,750 distribution facilities that sort packages into 90,000
trucks for deliveries to the home, office, and 72,000 retail outlets. All this
requires the integration of air, ground, logistics and trade financing that UPS
maintains is a key competitive strength.
The company is highly liquid with 1 times the cash necessary to cover
current liabilities. UPS increased its dividends at 20% per year for the past
five years with an even higher growth in the rate it has been buying back
stock, at 47% over the same period.
The firm has been paying down debt over the last five years while steadily
increased Fixed Assets and Working Capital, in line with developing the
infrastructure to support the latest in logistics technology and their
customers push towards JIT manufacturing. Over the past five years, Working
capital has increased 24% per year.
The firms capital structure is in line with a company that has been run by
traditional long time employees. 50% of the capital structure is equity with
the remaining sources of capital split between current liabilities at 20% and
long term debt at 14%.
The company is investing its cash in to Working Capital. The evidence there is
a 28% growth rate in cash versus a 14% rate for Retained Earnings, which is
experiencing a decelerating growth rate for the past five years.
CHALLENGES
Levels of Technology
These levels help define the technology required based on the information
requirements of a project:
1. Level one is a paper based information system for small projects were use
of technology is not required or not available.
2. Level two requires the use of basic computer applications to manage
project information.
3. Level three identifies the use of databases to manage the increased
volume of information.
4. Level 4 will require a fully integrated system.
The graph below shows the relationship between the volume of information
and the quality of an information system comparing the four different levels
shown above:
Each level drops in its efficiency as the volume of information grows. Projects need
to identify when to move to the next level
Level 1
Level 2
Level 3
Level 4
None
Low
Medium
High
One or two
times a year
Every
month
Every week
or more
One or two
times a year
Every
month
Every week
or more
None
Four to six
times a
year
Four to six
times a
year
None
Medium
Large
None
None
Medium
Large
No
A few
Some
Several
No
A few
Some
Several
UPS has become one of the worlds premier logistics companies, from its direct-tostore delivery model, its forward-thinking embrace of the cloud as a new
platform for international shipments and dedication to ensuring that Brown also
means green.
Supply Chain Strategy
At UPS we believe that an organization is only as strong as its supply chain. Your
supply chain is a critical and influential component of your overall strategy typically
impacting 75 percent of operating results. Yet this integral part of operations
remains one of the most underrated in terms of its value to the organization.
Setting the right strategy is critical, but having operations and resources capable of
implementation is fundamental. One key component is Strategic Network
Optimization which tackles some of the toughest, and yet most basic, issues when
setting up or redesigning a more responsive, flexible supply chain.
Origin of orders
Our experienced consultants can guide organizations in making and assessing the
critical decisions that influence optimization. We can design supply chains that
support higher returns on invested capital, reduce capital assets, and respond to
marketplace requirements.
Supply Chain Management
UPS is the world's largest package delivery company and a leading global provider
of logistics and supply chain management solutions. Its business unit, UPS Supply
Chain Solutions, makes it easier for customers to access UPS's expanding range of
logistics, transportation, freight, and consulting services in order to improve the
performance of their global supply chain management.
Refrance : https://www.ups-scs.com/consulting/strategy.html
Organization
The
business
trend to
Globalizati
UPS
Competitiv
e pressure
1995 Worldwide Logistics Unit (WWL) and Service Parts Logistics (SPL)
integrated and called UPS Supply Chain Solution Unit
WORLDWI
DE
SERVICE
TRUCK
LEASIN
G
CONSULTI
NG
DISTRIBUCTI
ON CETER
Storin
g
Trackin
g
Replaceme
nt Parts
Shipping
UPS SCS
Sonic
Air
Logistics has you covered end-to-end. Whether shipping packages and freight via
UPS Trade Direct or packages only with World Ease, UPS can streamline your supply
chain and customs clearance. Individual shipments to the same destination country
or into the European Union are grouped as one shipment. UPS handles pickup, air or
ground transportation, deconsolidation and delivery. You save time and money while
reducing time to market and eliminating the need for distribution centers.
When your supply chain becomes a supply network
The term supply chain can be misleading when describing todays global inbound
supply chains. A supply chain implies a linear flow of goods from one end to the
next, but international order management and inbound cargo flow is far more
complex. The factors and flow of goods and information from multiple locations and
various points in the inbound supply chain could more accurately be described as a
supply web or network. Manufacturers can source from hundreds of suppliers for a
single plant or operation. Retailers may change suppliers more frequently based on
labor costs, quality and other factors. Regardless of the industry, the task of
managing these suppliers from the creation of a purchase order (PO) to final
receipt of goods can be challenging. Compound this with the complexities of
managing vendors located thousands of miles away, in different time zones,
speaking different languages, and order management can easily become
overwhelming for many companies. This is where industry-leading order and vendor
management programs and cutting-edge visibility technologies can help.
Acquisition
Internal New
Venture
Joint Venture
Compensation
Salary-plus-Incentive formula
- Stock incentive
- Common stock price incentive policy
(benefit from a project)
- Sales incentive plan
- 20-40% of sales expenditure is
compensation
Network
Expense
P&L Plan
Stock Incentive
Salary-plus-Incentive
formula
Sales Revenue
Vary base geographic,
industries targeted
Bonus Incentive
Manager
Sales
Business Strategies
Value Proposition
1. Supply chain improvement
2. Reduce time to market
3. Technology (Sorting, Tracking, Costing World ship software)
4. Global Service (make customers business from local to worldwide)
5. Network optimization (Customers cost saving)
Strengths and Weaknesses
Strengths
1. Expert on Industrial Engineering
2. Owned completely supply chain resource
3. Premium services (Next-day delivery)
4. Strong brand with trusted logistics provider
5. Long history and possess large customers based
Weaknesses
1. Sales force doesnt has enough knowledge to selling supply chain solution
2. High turnover rate (Developing program stressor)
3. Weak brand in supply chain consulting
Recommendations
1. UPS SCS should to focus on single service customer as well, because of these
customer group can be developed to solution service customer if they have more
experience and grow up in the future. UPS SCS should position them like a business
partner for helping customer to success
2. Develop customer knowledge through various media or advertising
3. Focuses more on sustainable development especially human resources.
Refrance:
from_m_app=ios
https://www.slideshare.net/popcorp/ups-scs-case-study2012-eng?
SWOT ANALYSIS
STRENGTHS
Global brand
Strong distribution network
OPPORTUNITIES
Expansion of online shopping
Emergence of international middle class
WEAKNESSES
Perception of ground delivery instead of
overnight
Heavy union presence
THREATS
Increasing fuel costs
Competitive landscape (DHL, FedEx)
Potentially slowing global economy
MAIN LESSONS
UPS has done a remarkable job of leveraging their core competencies for the
new world of e-commerce. They have figured out how to deliver their core
business services in new ways, while leveraging their tremendous
infrastructure assets.
They haven't forgotten where they came from. In that they have managed to
preserve their company culture. It has served them very well in promoting
the creative thought necessary to come up with new ways to do business and
grow the company.
They were brave enough to change the vision, starting at the top, and
committing themselves to it from the top all the way down through every
employee of the company. They managed to do it quickly by making changes
in their processes and organizational structure.
UPS has been aggressive in finding new revenue streams with existing and
new customers. They understand not only their customers and related needs,
but have also figured out ways to deliver more value. They have expanded
the roles they can play in the overall value web by leveraging their
infrastructure and expertise.