United Parcel Service Competes Globally

United Parcel Service Competes Globally With Information Technology

United Parcel Service (NYS: UPS) ended its latest fiscal year with Revenue of $46B, attaining a net Income of $2.2B, which is a very significant accomplishment given how turbulent and difficult the global economy has been for the three years. UPS has successfully differentiated itself from competing services providers by concentrating on how technology can enable greater efficiencies in their operations over time (Alghalith, 2005). There are nine strategic areas of services that UPS concentrates on, and this paper mentions each and looks in detail at Supplier/Vendor Management. It is noteworthy that UPS also relies heavily on information technologies to support their extensive analytics, data mining and data warehousing initiatives as well, which give them insights competitors do not have (Garrow, Ferguson, 2008).

UPS Services and Solutions

In addition to its Shipment Delivery business, UPS also offers services in Returns, outsourced Technology support including UPS Mobile, Logistics that includes Supply Chain and Supplier & Vendor Management, International Trade, Location-based Transportation, E-Commerce, Sustainability and Decision Green, and Financial Services including small business loans, insurance, credit card services and global supply chain finance. Appendix a in the Appendix provides an overview of these services from a recent screen capture from the UPS website. All of these services have the element of time associated with them from a customers' expectation standpoint. Each also combines in some form a transaction, between either external suppliers and distribution partners, or acorns internal networks of suppliers and logistics centers. All of them are mission-critical to a customers' business and in the case of Supplier and Vendor Management, the lifeline of a company's production centers to its customers. Supply chains are what give manufacturers the necessary components and materials to produce their products and get them delivered to customers on time or ahead of schedule.

Supplier and Vendor Management

UPS is unique in how they approach managing supply chains, as the company relies heavily on it systems and processes to analyze and seek to optimize supply chain performance on behalf of its clients (Garrow, Ferguson, 2008). Lessons learned by UPS in managing its air fleet are directly applicable to how they now assist their clients with their supply chain optimization requirements (Armacost, Barnhart, Ware, Wilson, 2004). UPS has a culture that sizes intelligence and attempts to transform it into a service, which is one of the primary factors in their profitable performance despite a global economic recession. More and more manufacturers are turning to outsourcing to alleviate the higher costs of running supply chains, and UPS has been able to quickly benefit from this trend.

Lessons learned in air freight optimization at UPS have also made a significant impact on revenue management and supply chain optimization in their Supplier and Vendor Management service as well (Armacost, Barnhart, Ware, Wilson, 2004). Using the analytics, business intelligence and data mining to better understand how supply chains can be improved is ample evidence of how successful UPS is in using technologies to translate their expertise into value for clients (Garrow, Ferguson, 2008). All of these aspects of UPS and its expertise with it have also made it possible for the Supplier and Vendor Management initiatives to contribute to other service areas of the business.