Impact of technology and management on United Parcel Service operations

Information Technology

Technology and Management of United Parcel Service

The purpose of this case study is to review the journal article from University of Maryland College Library's database entitled "Competing with it: The UPS Case" published in Volume 7 Number 2, Journal of American Academy of Business, Cambridge in September 2005

The United Parcel Service, Inc. is a package delivery company, express carrier, package deliverer and global provider of specialized transportation and logistic services and has been in business for more than 90 years expanding from a small delivery service to one that is global. The technological integration with IBM as well as various service applications are presented on the logistics group website at www.e-logistics.ups.comand www.upslogistics.com.UPS developed an it network that is synchronous with global commerce through the coordination of good flow, information flow and the flow of funds all of which is global in nature. The Delivery Information Acquisitions Devices (DIAD) utilized by the UPS Drivers gives the company a competitive advantage. The DIAD is handheld wireless computers that have assisted UPS drivers for approximately 40 years. Delivery information is delivered to the driver via the DIAD and recent additions have added Internet access, extra memory storage, wireless connectivity options and Global Positioning Satellite (GPS) the company's UPS Hubs Technology connects logical and physical networks for the customers of UPS in more than 200 countries and regions across the globe.

The company's location at WorldPort is a $1.1 billion facility serving as the central processing system in the delivery of global packages and "facilitates international shipments by allowing U.S. Customs to process shipments through query functionality." (Alghalith, 2005) This processing center saved the company approximately $70 million in costs with its packaging screening process which identifies and stops all imports that have a potentiality to be either dangerous or illegal. The core operation of UPS packaging is "Package Level Detail" (PLD) which assigns a smart label to packages that identifies packages moving it from point a to point B. In the allotted timeframe. (Alghalith, 2005)

Website tracking of items being shipped is available online at the UPS website. UPS uses what is termed the 4 Es which are "Enhance, Extend, Expand, and Exit" for the business model. Package flow technology was boosted with a $600 million investment geared toward optimization. Further reduction in package cars in the amount of 100 million miles a year will result in a savings of 14 million gallons equaling $600 million annually.

The stated "four key industry trends" are:

Globalization

Increased for time-definite services

Significant advances in technology

Industry consolidation (Alghalith, 2005)

The packaging and delivery industry has experienced rapid expansion over the last twenty years and is stated to be "drive by the integration of world markets, the world markets, the rationalization of corporate supply chains and markets, and the implementation of enterprise software and Internet based information technology solutions." Transportation of a time-definite nature has grown from 4% to over 60% since 1977 in the U.S. parcel delivery market. Shipments although becoming smaller are also becoming more frequent.

In terms of competition UPS was forced to update its' network applications for tracking documents and parcels that had been shipped when FedEx in implemented a wireless network application for tracking of their shipments. In 1993 UPS introduced a "nationwide cellular-based wireless data service." (Alghalith, 2005) Technologies that achieved competitive advantage and improved worker productivity was in full swing at this time.

Statement of the Problem

UPS has approximately 4,000 it employees, 14 mainframes, 11,344 MIPS, 74 Terabytes of Mainframe and UNIX Storage, 713 mid-range computers, 245,000 PCs, 3500- 130,000 LANs/Connected Workstations and 126,000 DIADS. The potential of the Internet has been acknowledged by UPS and the company has made a commitment to enable global commerce via the Internet. This challenge and the changing needs in terms of customer due to the e-business evolution has UPS looking a variety of business solutions.

Analysis

Present systems and services are as follows:

1. UPS e-Ventures: A "corporate incubator for UPS that "explores ideas and takes the great ones and makes them reality. UPS e-Ventures does the research and development, tests and launches ideas and places products as well as services into place. Finally UPS e-Ventures manages the supply chain from the warehouse to transit. The stated objectives of UPS e-Ventures are:

Helps companies put the "E" in their businesses

Identify and rapidly develop entirely new businesses related to supply chain management and e-commerce.

Provides complete, end-to-end business solutions for the rapid, low-cost launch of e-commerce startups.

Create UPS's electronic commerce strategy for providing technology solutions to integrate the UPS global enterprise into the business processes of UPS customers.

2. E-Commerce Solutions: Assist companies in competing and winning in the marketplace through improvement of operations, decrease of costs, increases in sales and facilitation of communication with customers, partners and employees.

3. UPS Online Tools: UPS Tracking, UPS Signature Tracking, UPS Rates and Service Selections, UPS Address Validation, UPS Time in Transit, UPS Document Exchange, UPS Internet Shipping, E-Commerce Service Providers.

The UPS Logistics center is based in Atlanta, Georgia and "Provides integrated and end-to-end supply chain management services to e-commerce businesses. The Order Management System (OMS) is provided as an option for businesses that require a "more complex distribution solution like active management of more sophisticated orders through disciplined product control and reporting. OMS allows businesses to:

Direct the processing of each individual line in an order

Make changes to orders or individual lines after submission

Schedule shipments in advance with assurance they will be shipped in accordance with scheduling.