UPS Case Study
Lance Williams
CSUCI MBA Program
Business 550
UPS
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Founded in 1907 in Seattle Washington as
American Messenger Company
Started with just $100 dollars.
1919 started service in Oakland, CA
1930 started service in New York, NY
1952 Began to offer Air service (threw 3rd party
airlines)
1988 launched its own air fleet
1999 UPS becomes a public company
Main competitors
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Transportation
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Logistics
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Fedex
Deutsche Post (DP)
United States Post Office
Exel
Li & Fung
System Integrators
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Accenture
IBM Global Services
Locations
 Headquarters
are now based out of Sandy
Springs, Georgia (near Atlanta).
 Formerly headquartered in Seattle, WA
and then Greenwhich, CT.
 Worldport is their main air hub is in
Louisville, KT.
The 90’s
 Started
the decade with $14 billion in
revenue
 By 1999 was at $30 billion in revenue
 They realized that they were spending the
majority of their cost on logistics, even
though 95% of revenue came from
package deliveries.
UPS – Industrial Engineers
Always employed a large staff including the worlds largest staff of industrial
engineers. In the late 90’s they shifted away from the focus being on
industrial engineers, to information technology specialist.
There was also a focus on “adjacent businesses”, moving away from the
traditional package delivery services.
Out of every dollar spent on logistics, six
cents is spent on moving small packages. The
other 94 cents is the other part of the supply
chain. It’s fulfillment, it’s warehousing and
it’s the cost of the goods. So we have been
moving into the other 94 cents.
—Mike Eskew, Vice Chairman
and incoming CEO
Logistics
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Supply Chain Optimization
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Inventory Optimization
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Transportation Optimization
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Package Engineering
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Hazardous Materials
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Warehouse Design
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Business Process Reengineering
Supply Chain Optimization
They use a ten step process to analyze and design a unique solution.
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Define project scope
Gather detailed data set
Establish design assumptions
Baseline existing supply chain network
Identify improvement opportunities
Develop scenarios
Run scenarios
Rationalize the scenarios
Compare scenarios to each other and the baseline
Develop recommendations, present conclusions
Benefits Realization
Try to give at least a 5, 10, or even 15% reduction in supply chain costs resulting in a competitive advantage by
having a more efficient, flexible and, responsive supply chain.
You could see benefits from the following:
Improved assignment of customers to servicing distribution centers with optimum mode/service use
Optimized inventory levels throughout your supply chain
Mapped supply chain through
Data collection/validation process, question/answer sessions
Baseline flow maps, tables
Baseline costs by type
Customer "test drive" scenarios prior to significant capital investments
Inventory Optimization
They will review raw materials and component inventories through internal
channels and nodes and, in some cases, all the way down to the retail shelf.
UPS uses a combination of business analysis, intellectual property, and
modeling tools to assist you in developing and defining strategies for
sourcing, transportation, and inventory holding cost.
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Analysis and assessment address the following:
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Inventory levels by product
Inventory form at each node--raw material, finished goods, WIP
Inventory drivers
Service
Supply and demand uncertainty
Lead times
Inventory policies
Transportation modes
Node to node impacts
Transportation Optimization
They develop a transportation strategy for your
company resulting in efficient movement of
products as a result will help keep costs low and
customer satisfaction high.
Customer Solutions evaluates multiple
transportation modes, carriers, routes, shipping
strategies, and support to find the lowest cost
combination for your companies transportation
optimization needs.
Package Engineering
Movement along your supply chain can take a toll on your shipments,
and your packaging must be able to hold up under various
conditions.
UPS's test lab is a place where packages are tested for their endurance
under extreme conditions.
Packages are tested for:
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Compression
Impact
Vibration
Shock
The data from these tests help our engineers identify the most
appropriate packaging for your product to help prevent damages,
minimize reshipments, and keep your customers coming back for
more.
Hazardous Materials
UPS has support services to help with the transportation of
your hazardous materials.
Medical
Pharmaceutical
Bio-med
Toxic Waste
Video - Temperature Shipments
Warehouse Design
UPS will help redesign your warehouse.
From layout to function, Customer
Solutions can help you design or redesign
your distribution center so it works in the
most efficient way as possible to suit your
individual needs.
Business Process Reengineering
The first step to refining your supply chain is to
understand where improvements can make a
significant difference in performance.
UPS can help by running a business process
reengineering (BPR) assessment to map the
current and desired future state of your supply
chain, evaluate current roles and
responsibilities, review data to prioritize your
path forward, and identify areas for improved
performance.
Capital
Financial Services has many tools in which it help with
assist the clients of UPS. Some of those services
include:
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Lending
 Funding
 Restructuring
 Insurance services
 Credit Card Processing
Consulting
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Supply Chain forecasting and planning.
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Procurement, Production and fulfillment consulting
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Cash Management Consulting
Freight Forwarding/Brokerage
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Freight Transportation
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Trade Management Services
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Material Management Services (JIT fulfillment)
Mailboxes Ect.
In 2001 UPS purchased Mailboxes Ect. Giving the
company 4,400 retail locations in which to offer their
services from.
Mail Innovations
Various levels of shipping services including:
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Ground
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Air
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2nd day
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Overnight
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Freight
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Hazardous Materials
iShip
Web bases solutions for management to track the
shipping services for the entire company.
They can track by department, employee and even
specific details about packages.
Allows for one system for filling your shipping
needs. From the desktop to the mail room, all
the way to accounting, the information is entered
only once because one system is all that is
required.
Technology Innovations
As UPS says, they used to be a trucking
company that had technology and now
they are a technology company, that just
happens to have trucks.
Video - Technology at UPS
ConnectShip
UPS's Customer Solutions focuses on giving your
team visibility at any point in your order pipeline
and across multi-modal or multi-carrier
environments. They help you streamline your
shipping operation and control shipping costs.
They will use their vast quantity of technological
programs to put together a single shipping
application that has all the tools you are looking
for and can be implemented in a short time
frame.
UPS SampleSure
UPS SampleSure® captures data from the moment you
initiate a drug sample order and tracks it all along the
way.
It's designed to help you ship pharmaceutical samples to
licensed practitioners, hospitals, and drug sample
representatives, securely, and reliably.
Vital information for every shipment can be stored for future
reconciliation and reporting. Missing shipping or delivery
information proactively triggers a follow-up.
UPS Trackpad
Trackpad eliminates the need for paper manifests.
It will show package data to show where it is stored for look-up and
reports. You can even make information available at each desktop to
minimize "where is my order" calls. Trackpad creates an efficient
information pipeline enabling all users and administrators to manage
and search for information in seconds rather than minutes. It will
also will print existing barcodes or customize new ones on demand.
UPS Complete View Shipping
(iShip)
Use the Web-based interface and eliminate the need to
install software on each employee's computer. Along
with a customized look and feel, and options that work
for you, your job gets easier with every use. It has the
ability to use multiple views of shipping options to
request additional bar codes for your shipping label.
iShip can create reports detailing:
 Tracking
 Performance
 Claims
 Billing
 Brokerage shipment data
UPS Returns on the Web - Ready
to Use
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UPS Returns on the Web is a ready to use self-service
returns solution that automates the returns process.
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This service allows returns to be completed online by the
customer, including the delivery of a UPS return label.
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It can also link your back-end databases to the returns
process to maximize the use of the return product
information, reducing costs while improving customer
service.
UPS – PLD File Type
In 1994 UPS went to a central file type for all packages called a PLD.
It contains all of the packages information such as:
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departure address
destination address
sender
recipient
consignee,
product data,
package content
international customs information
The benefit to this is that there is no need to have multiple systems at
UPS. The one file type can be used by all the various programs and
communicate seamlessly between all the various departments.
DIAD
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1991 DIAD I was released
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1993 DIAD II which could update the date
basses via cellular transmitters in the vehicles.
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1999 DIAD III real time uploads and 2 way text
messaging for immediate pick-ups
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2004 DIAD IIII had Bluetooth, WiFi and GPRS or
CDMA connectivity options. Also had GPS built
into the unit for real time tracking.
DIAD V
DIAD V
Released in 2010
Includes to following upgrades:
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First device in industry to switch on-the-fly between
cellular carriers independent of cellular technology.
Faster WiFi support (600 mbps) enables larger and richer
content downloads such as training videos
A state-of-the-art color display and microprocessor with
expanded memory to support driver training and future
applications including navigation
About half the size (3.5”) and weight (1.3 pounds) of DIAD
IV.
A color, auto-focus, flash camera could be used to
enhance proof-of-delivery and to help resolve customer
claims.
An aggressive multi-dimensional imager to decode many
symbologies, including UPS linear barcodes, without
requiring the driver to rotate the DIAD to capture the
barcode.
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Before PLD and the DIAD, the driver had to pick up a
physical piece of paper from the customers, obtain the
signature and validate the number of packages. Now he
just scans the packages and uploads the delivery
Information with the DIAD, which gets matched with the
PLD information from the shipping systems. Our billing is
much more accurate and many driver tasks are
automatic. There’s a whole driver process that has been
eliminated based on the DIAD and PLD technology.
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—Phil Nardomarino, VP of IS, Operations Portfolio
The DIAD V has Enabled Real Time Tracking
UPS - Redundant Servers
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UPS’s centralized data operations center is in Mahwah, New Jersey
The second data center is in Windward, Georgia to provide redundancy.
Current stats:
– Scott Davis
 Revenue - $53.105 Billion
 Net Income - $3.804 Billion
 Employees ≈ 425,000 Employees
 Trucks ≈ 95,000 Vehicles
 Airplanes ≈ 238 Aircraft (A300, B747,
B757, B767,MD-11)
 CEO
Awards
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Awarded the Computerworld Smithsonian Award in 1991 and in 1997
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In 2000
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UPS named America’s and the World’s Most Admired mail, package and freight
delivery company by Fortune Magazine.
Forbes magazine named UPS company of the year.
Named on Red Herring’s 100 Most Important Companies
Named in PC weeks Fast-track 100
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MIT Sloan School of Management gave UPS a clicks-and-mortar
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award
Any Questions?
Question # 1
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The latest version of the UPS DIAD is the:
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DIAD I
 B) DIAD III
 C) DIAD V
 D) DIAD VIII
Question # 2
Which of the following are services offered under the
Logistics division of UPS?
A) Supply Chain Optimization
B) Package Engineering
C) Warehouse design
D) All of the above.
Question # 3
UPS was given the following award from the MIT Sloan
school of management?
A) At-a-boy award
B) Thumbs-up award
C) Clicks-and-Mortar award.
D) Oscar award
The End