INTERACTIVE SESSION: TECHNOLOGY
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INTERACTIVE SESSION: TECHNOLOGY UI?S COMPETES GLOBALLY WITH INFORMATION TECHNOLOGY United Parcel Service QUpS)"started out .in 1907 in a closet-sized b asement office. Jim Casey and Claude Ry.an- two t eenagers 'from Seattle'with two bicycles and one p hone-e-promised therbest service and lowest rates ." UPS has used this formula successfully . , " . ' .': , ," , , ' " ,' , " fqr more. than 100 years tobecome theworld's largest groundandair package delivery company. It's global enterprise'with o ver '408,090 employees, 96,000 yehicles ,andthe world'S ninth largest airline. ThdaY iUPS delivers 'more than 15 'million pack- ages and each 'day in th e United States and more than 200 other countries and'territories. The.firm has b een able to maintain.leadership in small-package delivery services despite stiff competi- tionfrom FedExartdAirborne Express by investing h ea Vily in advanced informatiofi'technology. UPS ,- , - spends more than $1 billion each-year to maintain a h igh level of custo mer service while keeping costs low and streamlining 'its overall operations. - It all st arts with the scannable bar-coded label attache d to a .p ackage, which contains detailed infor- mation about the sender, the destination, and 'when the-package should arrive. Customers can download and prini: their ow l1labels usi ng special software ' provided by.UPS or by accessing the UPS Web site. Before the package is even picked up, information from the "smart" label I s' transmttted to one 'of UPS's , " corripu ter .clmters in Mah wah" New Jers ey, or Alpharetta, Georgia, and sent to the distribution center n earest.its finaldestination . Dispatchers at th is cen t er download gata and use special 'software to createthe most efficient delivery route for each driver that co nsiders traffic, weather conditions; and. the location.of ea ch stop. UPS estimates its delivery trucks save 28 million miles ana b urn 3 milli on fewer gallons of fuel each ye ar as a result of using this teclinology.Th further increase cost savin gs and safety, drivers are trai ned to use "340 Methods" deyeloped by industrial engineers to op tim ize th e perfofmanceof.everytask fromlifting and loadi rigb oxes to selecting a package from a shelf in the truck. The first thing a UPS driver picks up each day is a hanClheld comp uter .called a Delivery Information Acquisition De vice (DIAD), which can access one of . " ..- the wire less netwq,f ks cellphon es r ely on . As soon as the drive r logs on, his or her day'S rout e is down- loaded onto the handheld. Th e DIAD also aut omati- cally capture s customers' signatures along with pickup and delivery information. Package tracking information is th en transmitted to UPS's computer network for storage and processing. From there, the information can be accessed worldwide to provide proo f of delivery to customers or to respond to cu stomer qu eri es. It usually takes less than 60 seconds from the time a driver presses "complete" on a DIAD for the new information to be available on the Web. Through its automated package tracking system, UPS can monitor and ev en re-route packages throughout the delivery process. At various points along the rout e from sender to receiver, bar code devices scan shipping information on the package label and feed data about the progress of the package into the central computer. Customer service representatives are able to check the status of any package from desktop computers linked to the central computers and re spond immediately to inquiries from customers. UPS customers can also access this information from the company's Web site using th eir own computers or mobile phones . Anyone with a package to ship can access the UPS Web site to check delivery routes, calculate shipping rates.determine time in transit, print labels, sched- ule a pickup, and track packages. The data collected at the UPS Web sit e are transmitted to the UPS cen- tral computer and then back to the custome r aft er processing. UPS also provides tools that enable cus- tomers, such Cisco Systems, to embed UPS fun ctions, such as tracking and cost calculations, into their own Web sites so that they can tr ack shipments without visiting the UPS site. In June 2009, UPS launch ed a new Web-based Post-Sales Ord er Management System (OMS) that manag es global service orders and inventory for critical parts fulfillment. Th e system enables high- tech electronics, aerospace, medical equipment , and other companies anywhere in the world that ship critical parts to quickly assess their critical parts ,inventory, d etermine the most optimal routing strategy to meet customer needs, place orders online, and tra ck parts from the war ehouse to the end user. An automated e-mail or fax fe ature keeps customers informed of each shipping milestone and can provide notification of any changes to flight schedules for commerci al airlines carrying their parts. Once orders
Transcript of INTERACTIVE SESSION: TECHNOLOGY
INTERACTIVE SESSION: TECHNOLOGY
UI?S COMPETES GLOBALLY WITH INFORMATION TECHNOLOGY United Parcel Service QUpS)"started out .in 1907 in a closet-sized basement office. Jim Casey and Claude Ry.an- two teenagers 'from Seattle 'with two bicycles and one phone-e-promised therbest service and lowest rates." UPS has used this formula successfully
. , " . ' .': , ," , , ' " , ' , ~ "
fqr more. than 100 years tobecome theworld's largest groundandair package delivery company. It 's ~
global enterp rise 'with over '408,090 employees, 96,000 yehicles,andthe world'S ninth largest airline.
ThdaYiUPS delivers 'm ore than 15 'million packages and document~ each 'day in th e United States and more than 200 other countries and'territories. The.firm ha s been able to maintain.leadersh ip in small-package delivery services d espite stiff competitionfrom FedExartdAirborne Express by investing h eaVily in advanced informatiofi 'technology. UPS,- ,
- spends more than $1 billion each-year to maintain a h igh level of customer service while keeping costs low and streamlining'its overall operations.
It all starts with the scannable bar- coded label attache d to a .p ackage, which contains detailed information about the sender, the destination, and 'when th e-package sho uld arrive. Custom ers can download and prini: their owl1labels using special software ' provided by .UPS or by accessing the UPS Web site. Before th e package is even picked up , information from th e "smart" label Is'transmttted to one 'of UPS's
, "
corriputer. clmters in Mahwah" New Jersey, or Alphare tta, Georgia, and sent to the distribution center nearest.its finaldestination. Dispatchers at th is cen ter download the'lab~! gata and use special 'software to createthe most efficient delivery route for each driver that considers traffic, weather conditions; and.the location.of ea ch stop. UPS estimates its delivery trucks save 28 million miles ana burn 3 milli on fewer gallons of fuel each year as a result of using this teclinology.Th further increase cost savings and safety, driv ers are trained to use "340 Methods" deyeloped by industrial engineers to op timize th e perfofmanceof.everytask fromlifting and loadirigboxes to selecting a package from a shelf in the truck.
The first thing a UPS driver picks up each day is a hanClheld computer .called a Delivery Information Acquisition Device (DIAD), which can access one of
. " ..
the wire less netwq,fks cellphones r ely on . As soon as the drive r logs on, his or her day'S route is download ed onto the handheld. The DIAD also automati
cally captures customers' signatures along with pi ckup and delivery information. Package tracking information is then transmitted to UPS's computer network for storage and processing. From there, the information can be accessed worldwide to provide proo f of delivery to customers or to respond to customer qu eri es. It usually tak es less than 60 seconds from the time a driver presses "complete" on a DIAD for th e new information to be available on the Web.
Through its automated package tracking system, UPS can monitor and even re-route packages throughout the delivery process. At various points along the route from sender to receiver, bar code devices scan shipping information on the pa ckage label and feed data about the progress of the package into th e central compute r. Customer service representatives are able to check th e status of any package from desktop computers linked to the central computers and respond immediately to inquiries from customers. UPS customers can also access this information from the company's Web site using their own compute rs or mobile phones.
Anyone with a package to ship can access the UPS Web site to check delivery routes, calculate shipping rates.determine time in transit, print labels, schedule a pickup, and track packages. Th e data collected at the UPS Web site are transmitted to the UPS central computer and then back to the customer after processing. UPS also provides tools that enable customers, such Cisco Systems, to embed UPS fun ctions, such as tracking and cost calculations, into their own Web sites so that they can track shipments without visiting the UPS site.
In June 2009, UPS launched a new Web-based Post-Sales Ord er Management System (OMS) that manages global service orders and inventory for critical parts fulfillment. The system enables hightech electronics, aerospace, medical equipment, and other companies anywhere in the world that ship critical parts to quickly assess their critical parts ,inven tory , determine the most optimal routing strategy to meet custom er needs, pla ce orders online, and track parts from the warehouse to the end user. An automated e-mail or fax feature keeps customers informed of each shipping milestone and can provide notification of any changes to flight schedules for commercial airlines carrying their parts. Once orders
are complete, companies can print documents such as labels and bills of lading in multiple languages.
UPS is now leveraging its de cades of experti se managing its own global delivery network to manage logisti cs and supply chain activities for other companies. It created a UPS Supply Chain Solutions division that provides a complete bundle of standardized services to subscribing companies at a fraction of what it would cost to build their own systems and infrastructure. These services include supply chain design and management, freight forwarding, customs brokerage, mail services, multimodal transportation, and financial services, in addition to logistics services .
Servalite, an East Moline, Illinois, manufacturer of fast en ers , sells 40,000 different products to hardware
CASE STUDY QUESTIONS
1. What are th e inputs, processing, and outputs of UPS's package tra cking system?
2. What technologies are used by UPS? How are th ese technologies related to UPS's business strategy?
3. What strategic business objectives do UPS's information systems address?
4. What would happen if UPS's information systems were not available?
stores and larger horne i in p~o veJ:1~nt s,tores. The company had used multiple warehouses -to provide two-day delivery nationwide. UPS created a new logistics plan for the company tlfat helped it reduce freighttime in transit and consolidateinvcntory. Thanks to these improvements, Servalitehas , been able to keep.its two-day delivery guarantee while lowering warehousing and inv~nt~~costs:
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Sources: Jennifer Levitz,' ·UPS Thinks Out of th e Box on ' Driver, . . . . .- l "".
Training," The . Wall Street Journal, April 6, 2010; United Parcel , , .. ' ." ' " ' . ~
Service, "In a Tighter EconomY, a 'ManufactureL.Fastens Down -Its Logisti cs," UPS Comp ass, accessed May S, z OlO;Agam ,shah, "U"PS Invests $1 Billion in ~Techn o ldgy to Cut Costs," Bloombei-g Businesswee( March 25,'"2010; UPS, ·UJ:'S De livers N~w Appror Coogle's Android," ApriI12,2010; .Chris Murphy, "In for 'th eLong Haul," Information Week, January 19, 2009; Unit edParce lSenice," UPS Unv eils Global Technology for Critical Parts Fulfillment .vJ une 16: 2009; and www.ups.corn, acc essedMay 5, 2010. .
MIS IN ACTION
Explore the UPS Web site (www.ups.com) ap d answer the following questions:
I. What kind of information and services-does the Web site provide for individuals, small businesses, and large businesses? List .theseservices.
2. Go to the Business Solutions pOrlionoftne UPS Web site. Browse the UPS Business Solutions by category (such as shipment deli..very,returns, or, international trade) and wri te.a description of all the services UPS provides for one"'of these cat egories . Explain how a business would benefit from these services.
3. Explain how the Web site helps ~lJPSacN~ve some or all of the strategic business objectives we describ ed earlier in this chapter. wh~arwouldbe " the impact on,UPS's business ifthis Web §ife ~ere not available?
