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Group 4 Chapter 4 Case 1 Page 103 Crystal Enloe Christian Gasse Johnny Vanhorn Reanetta Walker

FedEx. Group 4 Chapter 4 Case 1 Page 103 Crystal Enloe Christian Gasse Johnny Vanhorn Reanetta Walker Stacy Adkins Thilo Grabo. RWC 1: Page 103: “FedEx versus UPS: Playing Catch-Up in Telecommunications Innovations”.

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Group 4 Chapter 4 Case 1 Page 103 Crystal Enloe Christian Gasse Johnny Vanhorn Reanetta Walker

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  1. FedEx Group 4 Chapter 4 Case 1 Page 103 Crystal Enloe Christian Gasse Johnny Vanhorn Reanetta Walker Stacy Adkins Thilo Grabo

  2. RWC 1: Page 103: “FedEx versus UPS: Playing Catch-Up in Telecommunications Innovations” “Information about the package will soon be just as important as the delivery of that package.” (1979) Statement of Frederick W. Smith, Founder and CEO of the FedEx Corp. (1980) FedEx launched a wireless data network called Digitally Assisted Dispatch System (DADS): ► Efficiency was increased by eliminating radio chatter because the DADS was able to use text messages to change drivers’ routes and pickup requests. ► DADS led to a 30 % increase in couriers’ productivity (1986) FedEx installed wireless handhelds, called Super Trackers: ► These devices capture package data via a bar-code scan. When couriers return to their trucks, they insert the Super tracker in their DADS unit, and the information is downloaded to FedEx’s tracking system, the Customer Oriented Service and Management Operat- ing System (COSMOS). Thilo Grabo (Group 4)

  3. RWC 1: Page 103: “FedEx versus UPS: Playing Catch-Up in Telecommunications Innovations” “We will harness the appropriate technology to create new services and to strengthen our operations and networks.” (1994-2004) Statement of United Parcel Service of America, Inc. In contrast to FedEx’s freewheeling management style, UPS exercises a button-down management style. For example, UPS has four IT committees: finance, governance, strategy, and technology. ► The 94-year old UPS tries hard to improve its IT but always lags by a step in comparison to FedEx’s IT Innovations. (1980)UPS has begun to invest $ 14 billion to build integrated global networks. (1990) UPS introduced its own handheld, called the Delivery Information Acquisition Device (DIAD). ► DIAD captures and transmits delivery data in real time (FedEx’s DADS has no real time features). ► DIAD can be used as cell phone, and has new ease of use and maintainability features. Thilo Grabo (Group 4)

  4. RWC 1: Page 103: “FedEx versus UPS: Playing Catch-Up in Telecommunications Innovations” Furthermore UPS has installed a online platform which offers services to business and private customers. The Future (PowerPad) It is a wireless tool which should connect systems across divisions because FedEx is also a large player in ground, palletized-freight, and international shipping. (One transparent system for the whole corporation.) UPS, too, is upgrading its handhelds and also focusing on automating processes at its sorting facilities in an effort to reduce training costs. Thilo Grabo (Group 4)

  5. FedEx http://clk.about.com/?zi=1/XJ&sdn=businessmajors&zu=http%3A%2F%2Fbiz.yahoo.com%2Fp%2Ff%2Ffdx.html Crystal Enloe (Group 4)

  6. FedEx Products/Services: • FedEx is a global provider of transportation • e-commerce • supply chain management services. Number of employees: • More than 138,000 employees (latest count figure) Reanetta Walker (Group 4)

  7. FedEx Sales:For the six months ending 11/30/03 • Revenues rose 4% to $11.61 billion • Net income decreased 46% to $219 million Results reflect strong growth of international yields at FedEx Express, offset by the $415 million in business realignment charges. Reanetta Walker (Group 4)

  8. FedEx CEO: Fred Smith Competitor:UPS is the major competitor of FedEX Mergers & Acquisitions 2003: Acquired Kinko’s for $2.4 billion in cash 2001: Acquired American Freightways, Inc. 1998: Acquired Caliber Systems, Inc. Reanetta Walker (Group 4)

  9. FedEx Why does telecommunication play such a key role in the competition between FedEx and UPS?

  10. FedEx • This is the information age. Customers want and demand information. • Between these two companies, the one that offers the most accurate information to the customer about their package will most likely attract a greater number of customers and gain market share. Excellent telecommunication devices are currently the only way these companies can offer the customer this additional service. Stacy Adkins (Group 4)

  11. FedEx You can also track using: • FedEx InSight– they will use the internet to give you incoming and outgoing package information without entering a tracking number on their web page. • FedEx Wireless Solutions -Package tracking - Enter your tracking number and send the results to as many as 3 email addresses. Dropoff locator - Simply enter your ZIP code to access information about the closest FedEx Dropoff location. Also, receive driving directions to those locations. • My FedEx - Access and customize many fedex.com online services with a single user ID and password.

  12. Why does “information about the package” have such a strategic business value in the express delivery business? Information about the package Higher value for the customer Higher value for the company Christian Gasse (Group 4)

  13. Higher value for the customer Frederick W. Smith, founder and CEO of FedEx, projected in 1979 that the information about the package will soon be just as important as the delivery of that package. • The delivery has become a matter of course. • Now it is possible that the customer might e.g. track his package via internet. • Customers can check the status of the delivery or where it is right in that moment of time. • If, for example, a delivery is late because of various reasons, the customers has the opportunity to adjust their planning and to react on this delay. Christian Gasse (Group 4)

  14. Higher value for the company • Referring to the example of a delay in the delivery process, FedEx/UPS also has the chance to react immediately and take certain steps to minimize the delay or at least to inform the customer. • The exact tracking of packages provides the operator with other useful information. • Route Management • Human Resource Management Christian Gasse (Group 4)

  15. FedEx What telecommunication products or services would you recommend that FedEx or UPS use to improve their competitive position in the overnight delivery and shipping business?

  16. FedEx They could expand by utilizing the mobile phone technology, voice and color picture transmission. • This could give a competitive advantage by allowing communication visually and verbally. • Providing more efficiency to the corporate office, field office, and to the trucks. • The companies could also establish partnership agreements to use the phone’s facilities which are in operation. Johnny Vanhorn (Group 4)

  17. FedEx Another area of expansion open to both UPS and FedEx is the shipping industry. • World waterways are much more cost efficient than air or land transportation. • Their telecommunications technology and expertise could be used in many ways not conceived by any of the world’s shipping companies. Johnny Vanhorn (Group 4)

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