FedEx CORP.

:
STRUCTURAL TRANSFORMATION
THROUGH E-BUSINESS
 FedEx Overview

Founded in 1973 by Fred Smith

From an express delivery company to a
global logistics and supply-chain
management company
1998 acquisition of Caliber systems
and development of a powerful
technical architecture
FedEx was having difficulties about the
company image
 THE EXPRESS
TRANSPORTATION AND
TheLOGISTICS
growth of the INDUSTRY
express
transportation and logistics
industry…
• Globalization
emerging new markets & using
cheap materials and resources, this
situation needed rapid transportation
of materials and final products.
the quick delivery shortened the
 THE EXPRESS
TRANSPORTATION AND
•

LOGISTICS INDUSTRY
Advances in IT & Changing market demand
Ø Promoted the globalisation of commerce
Ø
(ctd.)
Sharing info reduced costs and improved
customer services by generating operational
efficiencies.
Ø Many transportation companies expanded into IT-
supported logistics management services.
Ø Interconnectivity thru Internet and Intranet
enabled reengineering sales and supply-chains.
Ø Just-in-Time inventory management
 THE EXPRESS
TRANSPORTATION AND
LOGISTICS
…resulted INDUSTRY
in following key
competitive advantages:
Ø Speed
(ctd.)
Ø Ooperational efficiencies
Ø Improved customer service
Ø Value-added services
 FedEx Corp.
“If we’re all operating in a day-to-
day environment, we’re thinking
one to two years out. Fred’s
thinking five, ten, fifteen years
out..” William Conley, VP
Shortened lead times for companies
PC’s loaded with FedEx software for customers
Hand-held scanners for drivers
in 1994 ffirst to launch a Website with tracking system
High capital investment, losses in first 3 years
Core strategy: use IT to help customers take advantage of
international markets.
 Transportation and
Logistics Infrastructure
Acquired its own transportation fleet
While handling logistic operations of
Parts Bank, they faced warehousing
problems, decided on the idea of
overnight distribution of parts.
Transportation growth attributable to:
Ø Government deregulations of air and truck
industry
Ø Trade deregulation
 Building the Virtual
Information
COSMOS(Customer, Operations,
Infrastructure
Service, Master, Online System); kept
track of all packages handled by the
company, barcode for tracking
PowerShip programme; aimed at
improving efficiency and control
EDI (Electronic Data Interchange) and
the Internet; one to one relationships
with customers
F ● ●V
RC
F F
D oieD
PD a
X bkdX
S rX Management and
ei i
C rnL bS
Operations Issues
o tgao The bu story of Federal
r slg Express ep Corporation
i
F
p towards “FedEx” p
a
rs nl
E
xet They y tried to
pi T
rgc integrate
rC FDX brand
ehs together
ah with the
st image
na of logistics
s and si EC company
pn
o
rS
te
ar
 FDX subsidiaries
Federal Express: Leader in the
overnight package delivery business
RPS: North America’s second largest
provider of B2B ground small package
delivery
Viking Freight: first less than truck load
freight carrier in the Western United
States
Roberts Express: the world’s leading
surface-expedited carrier for non-stop,
 January 2000
Reorganization
Needs for reorganization:
Ø %10 down in operating income
Ø Rising fuel prices & US domestic market
slowing down
Ø The internet market and e-Tailing
Ø First, logistics management, using Internet, re-
engineering supply-chain
Ø Second, express transportation with growth of
e-tailing, business-to-business EC
Ø Strong competitors: all capitalizing on
technology
F●VC
F ● F
e ei ae
d dk rd January 2000
i iE
E
E
x xn bxX
X Reorganization (ctd.)
g3 b major strategic
C T Ginitiatives
L
E
C H
eL for
o
x
F
u
r
o reorganization: o
a
asrpgo ngm
r
dteriu ie Ø New branding
p
eoisn T s strategy
gstd rtD
m
hsi aie Ø FedEx Corporate
N
tc( ncl
eC Services: new
tr(sf si subsidiary serving
ifo pv
w as a pool for group
ot(r oe Ø Introduction of
rifmr
FedEx Home
oe ty
kcm
Delivery
saer a
 REORGANIZATION
BEFORE AFTER

Multiple brands under A single branding system

FDX umbrella leveraging the power of
the FedEx brand so more
Separate sales force customers can use FedEx
with directed reliability as a strategic
cooperation competitive advantage
Multiple invoices and A single, expanded sales
account numbers force especially targeting
Multiple automation small and medium-sized
platforms offering all businesses, cross-selling
FDX services a wide portfolio of
services and pricing
Separate customer schemes
service, claims trace
ThankYou!
 Questions

Question Number 1
One of the problems FedEx faced was that it
had a "transportation company" image in the
eyes of the customers. That was one of the
reasons of January 2000 Reorganization of
FedEx and it tried to change Company's image
by renaming the company from "Federal
Express Corporation" to "FedEx Co.". Was that
the best alternative FedEx had? Could there
be a better solution to create a brand
recognition among the customers so that they
could receive it as a global logistics and EC