FedEx- Supply Chain Analysis

By: Group 16, Section B

ASWIN KUMAR T PGP/22/013
ROHAN BANSAL PGP/22/287
PRATEEK TULSYAN PGP/22/297
Introduction
● American multinational courier
delivery services company
headquartered in Memphis,
Tennessee
● Founded in 1971
● Operating units include:
○ FedEx Express
○ FedEx Ground
○ FedEx Freight
○ FedEx Services
Supply Chain Analysis
● FedEx uses a hub and spoke model with hub surrounded by nodes
● Supply chain can be divided into 4 parts:
○ Package collection- Either from home or sorting center
○ Scanning- Electronic scanning of package
○ Transportation- From home to hub, hub to jet, jet to destination
○ Delivery
Value Addition
● Pick-up can be arranged
anywhere and at any
time
● Money back guarantee
for packages not arriving
on time ensures timely
delivery
● Customer service-
Tracking feature keeps
customer updated on FedEx’s Value Chain
package status
Cost Analysis
The rate card for delivery of a single package of 1 Kg, 330 km through FedEx is
as follows:
SERVICES CHARGES

Base Rate 270

Additional Charges (+)

+ Freight on value 10

+ Pick up 100

+ Fuel Surcharge 98.60

+ Tax 100.7

Total 579.3

Assuming margins of 8.6% , cost of operations = 529.48 INR

Customer Value
● FedEx service has been rated
average by customers (as evident
from the customer reviews available
online) mainly due to the delay in
delivery
● The costs seem to be on par with
other courier companies that
operate in the same region
● Therefore the customer value is less
due to low responsiveness
● FedEx uses multiple network system
that offers different delivery options
Eg : FedEx Express and FedEx
Ground
Comparison with competitor
● Similar cost structure
● UPS uses single network system
where all the service levels share
resources and it doesn’t matter
whether a small parcel shipment is
air or ground, each package follows a
similar flow from origin to destination
● This makes UPS more flexible
Potential Sources of Disruption
● Technology : E-Commerce
High growth of e-commerce and consumer demands for choice, convenience
and control means there is a need for high growth in supply chain capacity to
meet the high demand especially during peak times and addressing
inefficiencies in packaging.
● Cyberattacks
Recent research reveal the global cyberattacks, generally, caused by virus
delete data, rather than just lock them for financial gain. This means
companies may take longer to recover from the respective attacks. Therefore,
it demands the need for logistics continuity plans in case of disruption and the
growing threat of cyberattacks worldwide.
Thank You!