Fredrich Smith

8/14/2019 Fredrich Smith

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PRESENTED TO:

SIR MUHAMMAD ASIF

INSTRUCTOR:ENTREPRENEURSHIP

PRESENTED BY:MBA 3RD SEMESTER (NIGHT)

MUHAMMAD SHAHZAD AHMAD KHANGHAZANFER


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FREDRICH W.SMITH

A HISTORY OF SUCCESS


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BRIEF INTRODUCTION

Founder, Federal Express.

Date of birth: August 11, 1944


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FATHER OF THE OVERNIGHTDELIEVERY BUSINESS

Born in Memphis, Tennessee,United States of America.

The Smiths were a well-to-do family,

Frederick's father died when he wasonly four.

Growing boy had to rely on hismother and uncles for guidance.


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While attending Yale University,

Fred Smith wrote a paper on theneed for reliable overnight deliveryin a computerized information age.

His professor found the premise

improbable, and to the best ofSmith's recollection.

He only received a grade of C forthis effort.

But the idea remained with him.


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After graduation, Smith enlisted in theMarine Corps.

Served two tours of duty in Vietnam. Lt. Smith had some adjustments to make

to the realities of war.

He cherished the advice given him by a

veteran Marine sergeant: "There's only three things you got to

remember:

shoot, move and communicate."


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The young entrepreneur raised $80 millionto launch Federal Express, informally knownas FedEx.

The delivery service began with smallpackages and documents.

On the first night of operations, a fleet of 14jets took off with 186 packages.

In the first two years, the venture lost $27

million. In a short time, the company was on the

verge of bankruptcy.

It appeared that Smith had lost all of hisinvestors' money, including the capital of his

own brothers and sisters. But Smith succeeded in renegotiating

his bank loans and was able to keep the

company afloat.


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Unlike many entrepreneurs, FredSmith is also a hands-on manager,who directs every facet of corporate

strategy. He determined at the outset that

FedEx was in the informationbusiness.

That knowledge about origin,present whereabouts, destination,estimated time of arrival, price andshipment cost of his cargo was as

important as its prompt delivery.


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Another principle Smith applied atFedEx was to make sure everyemployee felt they could share in the

success of the company.

FedEx managers are carefully trainedto ensure respect for all employees,and their performance is monitored.

Mangers are evaluated annually byboth bosses and workers to ensuregood relations between all levels of thecompany.

Smith believes that fair treatmentinstills company loyalty, and that

company loyalty always pays off.


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In 1997, Smith acquired the $2.7billion Caliber System, whosetrucking subsidiary RPS ranked

second in ground shipments,exceeded only by UPS, the UnitedParcel Service.

The RPS fleet of 13,500 trucks

increased FedEx's profit margin.Because ground fleets arecheaper to operate than airplanes.

It also gave FedEx the extra

muscle it needed to step into thebreach.


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Fred Smith's effort to instill company

loyalty bore fruit. During the UPS strike, when FedEx was

swamped with 800,000 extra packages aday.

Thousands of employees, many of whomhad already worked a full day, voluntarilypoured into the hubs a little beforemidnight to sort the mountain of extra

packages. Smith publicly thanked them in 11 full-page newspaper ads; he also orderedspecial bonuses.


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FedEx had pulled 2% points ofmarket share away from UPS,increasing its share of the express

transportation market to more than43 percent.

FedEx pilots are among the best-compensated and most contented

in the industry. The stock market responded to

FedEx's gains.

Over the course of the year, the

company's share price rose bynearly 70 percent.


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Continuous improvement is one of FedExfundamental management principles.

In the 1990s, the company installed

computer terminals in the offices of over100,000 customers, enabling shippers tolabel their own packages.

Today, more FedEx customers print theirown labels directly from the FedEx web site.

FedEx receives electronic notification to pickup the cargo, then ships and delivers.

Competitors in the express delivery businessare still rushing to catch up with FedEx's

technological advances.


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In 2001, FedEx made an unprecedenteddeal with the United States Post Office,contracting to transport large mailshipments for the Post Office, whileinstalling FedEx drop boxes in U.S. PostOffices.

Three years after, FedEx also took oninternational express shipments for thePost Office.

That same year, FedEx purchased thedocument services company Kinko's,renaming the business FedEx Kinko'sOffice and Print Center.

At over 1,000 locations across the United

States, customers can print, copy and bindtheir documents and dispatch them forovernight shipping from one convenientlocation.


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Today, FedEx Express is the world'sleading express transportation

provider. As of 2007, more than 290,000

FedEx team members worldwidewere fielding a fleet of 672 aircraft

and 75,000 other vehicles,delivering over 7.5 million packagesevery business day, to more than220 countries and territories.


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Businesses seeking to reduce thecosts of maintaining large inventoryare increasingly adopting "just intime" delivery practices, increasingthe demand for express services likeFedEx.

The rise of Internet commerce andthe growth of the global economy

are also contributing to thecompany's growth.

FedEx has capitalized on both ofthese trends.

Around the globe, communicationsand transport continue to developalong the lines undergraduate FredSmith predicted in his term paperover 40 years ago.


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Since the very beginning, FedEx had beenrenowned as a technologically drivencompany.

Smith stipulated three goals, which hebelieved would form the critical success

factors of FedEx's business in future Speed, reliability and customer service.

In order to achieve these goals, Smithinvested heavily on IT.

Smith strongly believed that for an

express industry, it was necessary to useIT to provide customers with real-timeinformation.

EMPHASIS ON INFORMATIONTECHNOLOGY


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COMMITMENT TOWARDSEMPLOYEES

Smith believed that in a service oriented

organization like FedEx, it was veryimportant to have highly committedemployees..

FedEx's employees were made to believethat they were not merely performing their

duties but were solving the transportationproblems of the customers.

In the initial years at FedEx, there wereseveral occasions when the employees didnot receive salaries in time.

Still, they had no complains, instead theycontinued to support Smith.


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A GLOBALIZATION ADVOCATE

Smith had always been a strong advocate ofglobalization.

After performing exceedingly well in the US,Smith felt that FedEx should commenceinternational operations.

In 1984, FedEx started operations in Europeand Asia.

In his pursuit to expand rapidly in globalmarkets, Smith acquired several major foreigncompanies.

FedEx's acquisition of Tiger Internationalin 1989, transformed it into the world's largestfull-service, all-cargo airline, with flying routes

to 21 countries. In 1995, he lobbied intensively to pressurize

the US Federal Government to allow FedEx'splanes to fly on 11 new routes in Asia...


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SMITH - THE ENTREPRENEUR

Smith transformed FedEx from a loss-

making company during its early yearsto a $1 bn revenue company in 1983.

FedEx became the first company tocross $1 bn revenue figure within

10 years of inception, Under the leadership of Smith, FedEx

continued to register significant growthin the next two decades.

FedEx Corporation has consistentlybeen named one of Fortune's"World's Most AdmiredCompanies."

AWARDS


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2008 Franklin InstituteBower Award for Business

Leadership. "2006 Person of the Year"

by the French-AmericanChamber of Commerce,

Chief Executive's 2004"CEO of the Year."

He has also won threemilitary honors:

the Silver Star, Bronze Star

Purple Heart.

AWARDS


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QUESTIONS ARE WELCOMED

Fredrich Smith

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