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UPS Case Study

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Hafiz Wisnupratomo

on 23 May 2013

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Transcript of UPS Case Study

Question 3 - What strategic business objectives do UPS's information systems address? Operational Excellence Customer and Supplier Intimacy Question 4 - What would happen if UPS's information systems were not available? UPS has maintained leadership in small-package delivery services despite stiff competition from FedEx and the U.S. Postal System by investing heavily in advanced information technology:

The Delivery Information Acquisition Device (DIAD) is able to automatically capture customers' signatures through scanning the packages and upload the delivery information. Annihilating any physical paper work within the driver process. The automated process has been found to save 30 minutes per day.

The drivers are trained to use "340 Methods" developed by industrial engineers to optimize the performance of every task from lifting and loading boxes to selecting a package from a shelf in the truck. New Products, Services and Business Models UPS launched a new Web-based Post Sales Order Management System (OMS) that manages global service orders and inventory for critical parts fulfillment (E.g. high-tech electronics, aerospace, medical equipment). The system enables companies that ship critical parts to quickly assess their critical parts inventory, determine the most optimal routing strategy, place orders online, and track parts from the warehouse to the end user. At various points along the route, bar code devices scan shipping information on the package label and send data about the progress of the package to the central computer. Enabling the customer service to check the status of any package based on customers' inquiries. Improved Decision Making UPS uses a special software that creates the most efficient delivery route for each driver that considers traffic, weather conditions, and the location of each stop. UPS delivery trucks saves 28 million miles and burn 3 million fewer gallons of fuel each year. Competitive Advantage UPS uses its decades of expertise to manage logistics and supply chain activities for other companies with the UPS Supply Chain Solutions division. This division makes UPS one step ahead from its competitors since it means UPS more field of service. UPS may not be able to compete effectively without its information systems. If the technology were not available, the costs would be larger, which would then force UPS to provide its services at higher prices.

From the customers’ perspective, these technologies provide value because they help customers complete their tasks more efficiently. Case Summary History -United Parcel Service (UPS) started out in 1907 by Jim Casey and Claude Ryan.
-They have been operating more than 100 years and UPS has a global enterprise with over 408,000 employees, 96,000 vehicles and the worlds 9th largest airline.
- UPS delivers 15 million packages and documents each day in the US and more than 200 other countries and territories.
-They spend more than 1 billion dollars each year to maintain a high level of customer service. How the packages are prepared? -Each package is attached with scan able bar-coded label which contains sender’s information, the destination and when the package should arrive.
-The UPS provides customers with software so they can get their own label. Before each package is picked up, the smart label is transmitted to one of the UPS computer centers.
- Dispatchers at this center download the most efficient delivery route for each driver that considers traffics, weather conditions, and the location of each stop. What are the benefits? -This technology has save 28 million miles and burns 3 million fewer gallons of fuel each year.
How the drivers are trained by UPS?
-Drivers are trained to use the “340 Methods” to optimize the performance of every task from lifting and loading boxes to selecting a package from a shelf in the truck. What are the functions in the website? The website has many functions such as:
-to check delivery routes,
-calculate shipping rates,
-determine time in transit, print labels,
- schedule a pickup,
- and track packages.
Additional points:
All data from UPS website is transmitted to the UPS central computer.
UPS also provides tools that enable customers, such Cisco Systems, to embed UPS functions such as tracking and cost calculations for their company’s website. What is new in UPS? OMS
-The new web-based Post-Sales Order Management System (OMS) manages global service orders and inventory for critical parts fulfillment.
-This system enables:
1.customer to assess their critical parts inventory,
2. determine the most optimal routing strategy,
3. place orders online,
4. and track parts from the warehouse to end users.
-Email or fax feature will inform customers about their shipping milestone and notification of any changes to flight schedules of their parts.
-Orders can be printed as labels and bills of lading in multiple languages.
Supply Chain Solutions
-UPS Supply Chain Solutions provides a complete bundle of standardized services to subscribing companies at a fraction of what it would cost to build their own system and infrastructure.
-These services includes:
1. supply chain design and management,
2. freight forwarding ,
3. customs brokerage,
4. mail services,
5. multimodal transportation,
6. and financial services ,in addition to logistics services. MIS Issues 1. MIS Issue: DIAD
The Delivery Information Acquisition Device (DIAD) is a handheld computer where the drivers can obtain information about the customers package.

- It relies on the wireless networks cell phones
-when the driver logs on, his or her day's route will be downloaded on the handheld
-The package tracking information is then transmitted to UPS's computer network for storage and processing. 2. Package tracking system The Package tracking system can monitor and re-route packages throughout the delivery process.

-They use barcode devices scan the shipping information on the package label and feed data of the package into the central computer.

-UPS customers can access this information and respond immediately from the company's website by their own computer and mobile devices

-The customer service is fast where the inquiries linked to the central computer. Question 1 - What are the inputs, processing, and outputs of UPS’s package tracking system? Inputs Outputs Question 2 - What technologies are used by UPS? How are these technologies related to UPS’s business strategy? The inputs include the package information that is the sender, the destination and location scan able bar code labels are used.

UPS uses the Delivery Information Acquisition Device (DIAD). The DIAD is used to capture customer’s signature, the pickup and delivery details. The DIAD is provided to all UPS drivers Processes UPS uses smart labeling on their packaging, the information from the smart labeling is transmitted to one of their computer centers.

Further the UPS correspondents at the centers would choose the most efficient route for the delivery trucks, with consideration to the weather conditions, traffic and location.

Therefore the data is organized in such a way that it can be tracked easily by customer account, date and driver, in order to ensure the efficient delivery of the parcels. The outputs: include pickup and delivery times, as for the delivery trucks.

The drivers are even provided with the appropriate location while en route, and information regarding the location of the package recipient.

The storage of data by the computer centers, enables UPS customer service representatives to assist customers. As they are able to deal and respond to customer queries regarding the parcels

Furthermore the inputs and processes of the package tracking system not only helps UPS but even the customers to monitor the status of the parcels through out the delivery process. Business Strategy United Parcel Services focus on a simple business strategy that is “ best service for lowest rates”.

The business strategy is to focus on efficiency, with the aim of providing the best services with low costs .

UPS emphasized efficiency in its delivery services.

UPS had been capitalizing on opportunities created by information technology to increase the efficiency UPS relies on technology to maintain efficiency, to keep prices competitive, and to provide new customer services.

Between 1986 and 1996 UPS invested more than $11 billion in information technology.

Telephone calls were costing UPS more than $2.00 each, while web inquiries cost only ten cents therefore the use of API has helped the organization to cut costs. The United Parcel Service (UPS) invests heavily in information systems technology

UPS uses a number of information technologies :
bar code scanning systems,
wireless networking,
Central computer centers for the storage of data,
Package tracking systems
Desktop computers connected to the central computers
and a variety of software's for tracking packages
The IT unit built a web front-end and were using the API (application program interface) Technologies used by UPS
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