Introduction for UPS

United Parcel Service (UPS) was founded in Seattle, Washington in 1907 by James E.
Casey and was originally named "American Messenger Company."
In 1919,
American Messenger Company became "United Parcel Service." Ten years later,
UPS became the first package delivery company to provide air service via private
airlines. The following year, UPS expanded to the east coast and began operations
in New York. UPS became the first package delivery company to serve every
address in the United States by 1975 and started international air service in 1985.
In 1992, UPS began tracking all ground packages and developed their website in
1994. Users could calculate shipping rates in 2000 via text message, with a
personal digital assistant (PDA), pager or other form of wireless device. Currently,
UPS is the world's largest parcel carrier, and is the largest company in its industry in
terms of revenue and profits.
Theres a reason why so many statistics are being cited. These enormous numbers
represent a monumental process challenge, and the ongoing globalization of
business will move each of these numbers upward. Add to this the trend for many
enterprises to subcontract most or all of the manufacturing and assembly of their
products to specialized firms wherever in the world that it makes sense, and the
opportunities are clear for UPS in providing logistics.
Having an enormous package delivery network offers UPS an opportunity to create
even greater value for their customers by using the network to manage the
integration of information, transportation, inventory, warehousing, material
handling, packaging and even the security of packages. This logical move higher in
the value chain means offering integrated solutions that are an excellent match for
the challenges of increasing globalization.
INDUSTRY PROSPECTS AND OVERALL ATTRACTIVENESS
The alliance between air freight companies and ITES companies will bring
exponential growth to the Air Freight industry.
This industry should remain attractive, with concentration on competition for
market share, service differentiation, and brand image.
Current Advertising has been aimed at being better than the competitor for
different reasons.

UPSs values, mission, and strategy statements provide guidance regarding our
daily decisions. They make clear our priorities and encourage us to seize new
opportunities. By following these principles, our actions are aligned to meet the
needs of our company, people, customers, shareowners, and communities.
Values: Our Enduring Beliefs
Integrity-It is the core of who we are and all we do.
Teamwork-Determined people working together can accomplish anything.
Service-Serving the needs of our customers and communities are central to
our success.
Quality and Efficiency-We remain constructively dissatisfied in our pursuit of
excellence.
Safety-The well-being of our people, business partners, and the public is of
utmost importance.
Sustainability-Long-term prosperity requires our continued commitment to
environmental stewardship and social responsibility.

Innovation-Creativity and change are essential to growth.

Mission: What We Seek to Achieve
Grow our global business by serving the logistics needs of customers, offering
excellence and value in all that we do.
Maintain a financially strong companywith broad employee ownershipthat
provides a long-term competitive return to our shareowners.
Inspire our people and business partners to do their best, offering
opportunities for personal development and success.

Lead by example as a responsible, caring, and sustainable company making a

difference in the communities we serve.
UPS Enterprise Strategy
Create Value, Transform, and Invest to Grow
Create value for customers using our superior portfolio of logistics
capabilities
Demonstrate how the power of logistics can create a competitive advantage
for our customers.
Offer products and services that expand our customers access to global
markets.
Configure our broad portfolio of solutions for targeted industries.
Offer industry-leading technology that simplifies and improves our customers
business processes.
Continually transform to strengthen our leadership position
Deliver an exceptional customer experience.
Apply marketing and sales excellence to drive profitable growth.
Enhance performance through quality, efficiency, and technology.
Invest to accelerate growth in key markets and new opportunities
Accelerate growth by leveraging our global network and scale.
Build our infrastructure and presence in key emerging markets.
Expand our offerings of integrated logistics solutions.

FUNCTIONAL ANALYSIS (Marketing)

OBJECTIVE: Provide a complete logistics infrastructure to businesses of any size.

UPS is targeting a global market of producers and consumers, while making a

move to become the supply chain integrator of choice in e-commerce.
They offer products and services that are state of the art in logistics, which
include the use of bar codes and RFID, high speed package routing systems,
and consulting services.
UPS charges package prices that are in alignment with the industry and is
willing to raise prices alongside FedEx. It has been able to charge fuel
surcharges successfully.
A sales force is maintained to reach business customers and producers
crucial to UPS mission in expanding its role in logistics to become the supply
chain integrator of choice.
There are 150,000 different places to access UPS, worldwide. Customers can
reach them by phone, web, retail outlets, customer service centers,
distribution centers and any of the drivers will pick up packages. This level of
reach to customers is necessary if UPS expects to gain market share from
FedEx.

FUNCTIONAL ANALYSIS (Operations\ Tech)

OBJECTIVE: Highly integrated operations support product offerings to offer low cost
delivery operations.

UPS is seeking to integrate into freight with larger haul trucks and it is adding
capacity in Asia and Europe with acquisitions of Sinotrans, a Chinese joint
venture and Stolica, a Polish parcel and express company.
UPS is the 11th largest airline world, with nearly 600 planes, 15 airport hubs
worldwide and 900 airports served. Connecting these airports hubs to
customers are 1,750 distribution facilities that sort packages into 90,000
trucks for deliveries to the home, office, and 72,000 retail outlets. All this
requires the integration of air, ground, logistics and trade financing that UPS
maintains is a key competitive strength.

FUNCTIONAL ANALYSIS (Human resource)

OBJECTIVE: A high sense of culture and esprit, stock participation plan, and
promotion opportunities contributes to a low turnover rate of employees.

The company is managed from a highly centralized Management Committee

organized along for the most part in to functions as opposed to business
units. There are business unit presidents in the Management Committee but
only to the extent that the business unit is organized at a global or firm wide
level.
UPS is the USs 3rd largest employer with nearly 400,000 employees
worldwide

FUNCTIONAL ANALYSIS (Finance)

OBJECTIVE: Highly liquid company has been investing at a faster rate than returning
cash to investors, which are for most employees.

The company is highly liquid with 1 times the cash necessary to cover
current liabilities. UPS increased its dividends at 20% per year for the past
five years with an even higher growth in the rate it has been buying back
stock, at 47% over the same period.
The firm has been paying down debt over the last five years while steadily
increased Fixed Assets and Working Capital, in line with developing the
infrastructure to support the latest in logistics technology and their
customers push towards JIT manufacturing. Over the past five years, Working
capital has increased 24% per year.
The firms capital structure is in line with a company that has been run by
traditional long time employees. 50% of the capital structure is equity with
the remaining sources of capital split between current liabilities at 20% and
long term debt at 14%.
The company is investing its cash in to Working Capital. The evidence there is
a 28% growth rate in cash versus a 14% rate for Retained Earnings, which is
experiencing a decelerating growth rate for the past five years.

CHALLENGES

To make strategic technology group from a small strategic planning process.

This was basically required for finding major gap in technologies.
Competition from both private companies and large government supported
agencies.
Execution of Scenario-planning session.
To tackle the impact of axis of uncertainty.
Formation of scenarios for future strategic planning
To manage the strategy road map and implement the centennial plan.
To tackle the implication for technology and infrastructure initiatives, growth
strategies and options, and workforce development at both the global and
region level.
Since most managers in the company were focused on short term goals. It
was difficult to keep the perception in mind that this was not about UPS but
rather how the world affected UPS.
To resolve the strategic integration responsibility.

STRATEGIES ADOPTED BY UPS

Investing in the core business of worldwide distribution and logistics.

Building competencies in the integration of goods, funds, and information.
Using technology to create new services.
Attracting talented people.
Studying customer behavior and anticipating their needs.
Practicing innovation that leads to growth.

Developing an environment that enables them to treat each customer as if he

or she were the only one.

Levels of Technology

These levels help define the technology required based on the information
requirements of a project:
1. Level one is a paper based information system for small projects were use
of technology is not required or not available.
2. Level two requires the use of basic computer applications to manage
project information.
3. Level three identifies the use of databases to manage the increased
volume of information.
4. Level 4 will require a fully integrated system.
The graph below shows the relationship between the volume of information
and the quality of an information system comparing the four different levels
shown above:

Each level drops in its efficiency as the volume of information grows. Projects need
to identify when to move to the next level

MIS technology needs

Project Information needs

Level 1

Level 2

Level 3

Level 4

What are the requirements of information

from the country office management in
terms of volume?
How often do we need to collect, and
organize our information?

None

Low

Medium

High

One or two
times a year

Every
month

Every week
or more

How often do we need to analyze, report our

information?

One or two
times a year

Every
month

Every week
or more

What is the volume of information we need

to collect from Beneficiaries?
What is the expected volume of surveys the
project will undertake?
Do we need to do complex analysis on the
data collected?
Do we need the use of complex software
packages? (SPSS, EPi Info etc)

None

Four to six
times a
year
Four to six
times a
year
None

Medium

Large

None

None

Medium

Large

No

A few

Some

Several

No

A few

Some

Several

UPS has become one of the worlds premier logistics companies, from its direct-tostore delivery model, its forward-thinking embrace of the cloud as a new
platform for international shipments and dedication to ensuring that Brown also
means green.
Supply Chain Strategy
At UPS we believe that an organization is only as strong as its supply chain. Your
supply chain is a critical and influential component of your overall strategy typically
impacting 75 percent of operating results. Yet this integral part of operations
remains one of the most underrated in terms of its value to the organization.
Setting the right strategy is critical, but having operations and resources capable of
implementation is fundamental. One key component is Strategic Network
Optimization which tackles some of the toughest, and yet most basic, issues when
setting up or redesigning a more responsive, flexible supply chain.

Strategic Network Optimization

Critical elements of the supply chain include distribution networks and fulfillment
processes designed for optimum efficiency.
Some key issues need to be analyzed when creating demand-responsive supply
chains that facilitate the highest rate of network optimization. These issues include:

Location of end users, manufacturing, suppliers, and partners within the

supply chain

Origin of orders

Location of distribution centers

Fulfillment and delivery capabilities

Our experienced consultants can guide organizations in making and assessing the
critical decisions that influence optimization. We can design supply chains that
support higher returns on invested capital, reduce capital assets, and respond to
marketplace requirements.
Supply Chain Management
UPS is the world's largest package delivery company and a leading global provider
of logistics and supply chain management solutions. Its business unit, UPS Supply
Chain Solutions, makes it easier for customers to access UPS's expanding range of
logistics, transportation, freight, and consulting services in order to improve the
performance of their global supply chain management.

UPS Supply Chain Solutions is uniquely positioned to develop end-to-end supply

chain management. Our comprehensive service portfolio and advanced IT systems
combined with our network of worldwide distribution facilities make us the global
provider to turn to when you want a single, trusted source for your supply chain
needs.

Refrance : https://www.ups-scs.com/consulting/strategy.html

Organization

UPSs Growth Motivation

The
business
trend to
Globalizati

UPS
Competitiv
e pressure

UPS SCSs Growth

1995 Worldwide Logistics Unit (WWL) and Service Parts Logistics (SPL)
integrated and called UPS Supply Chain Solution Unit

WORLDWI
DE
SERVICE

TRUCK
LEASIN
G

CONSULTI
NG

DISTRIBUCTI
ON CETER

WORLDWIDE LOGISTICS UNIT (WWL)

Storin
g

Trackin
g

Replaceme
nt Parts
Shipping

SERVICE PARTS LOGISTICS

(SPL)

UPS SUPPLY CHAIN SOLUTION (UPS SCS)

1997 Acquires Sonic Air and offer next-day delivery (growth in

replacement parts market)

UPS SCS

Sonic
Air

Capacity to quickly ship from 40

Parts Warehouses around the
World

1999-2001 16 key acquisitions to build the capacity and need people on

the ground Offers completed supply chain solution from UPSs business
network advantage

Consolidate shipments to shorten your supply chain

Logistics has you covered end-to-end. Whether shipping packages and freight via
UPS Trade Direct or packages only with World Ease, UPS can streamline your supply
chain and customs clearance. Individual shipments to the same destination country
or into the European Union are grouped as one shipment. UPS handles pickup, air or
ground transportation, deconsolidation and delivery. You save time and money while
reducing time to market and eliminating the need for distribution centers.
When your supply chain becomes a supply network
The term supply chain can be misleading when describing todays global inbound
supply chains. A supply chain implies a linear flow of goods from one end to the
next, but international order management and inbound cargo flow is far more
complex. The factors and flow of goods and information from multiple locations and
various points in the inbound supply chain could more accurately be described as a
supply web or network. Manufacturers can source from hundreds of suppliers for a
single plant or operation. Retailers may change suppliers more frequently based on
labor costs, quality and other factors. Regardless of the industry, the task of
managing these suppliers from the creation of a purchase order (PO) to final
receipt of goods can be challenging. Compound this with the complexities of
managing vendors located thousands of miles away, in different time zones,
speaking different languages, and order management can easily become
overwhelming for many companies. This is where industry-leading order and vendor
management programs and cutting-edge visibility technologies can help.

UPS SCSs Growth Strategy

Diversify into New

Market

Acquisition

Internal New
Venture

Joint Venture

Acquisition is main instrument to UPS SCSs growth

Understanding local customers and requirements by People on the ground
Acquires capacity is key strategic planning

Performance Standard & Compensation Model

Performance Std.
- Profit-and-Loss plan
- Station manager is expected to
achieve 5% of target P&L
Sales performance standard will be
changed by geographic and the
industries targeted

Compensation
Salary-plus-Incentive formula
- Stock incentive
- Common stock price incentive policy
(benefit from a project)
- Sales incentive plan
- 20-40% of sales expenditure is
compensation

Performance Standard & Compensation Model

Performance based compensation

Network
Expense
P&L Plan

Stock Incentive

Salary-plus-Incentive
formula

Sales Revenue
Vary base geographic,
industries targeted

Bonus Incentive
Manager

Sales

Business Strategies

Improve customers businesses by adding value to each part of the supply

chain
Industrial engineering is core competency
Acquire resource, skill and competency from others
Build UPS to be Trusted Brand

Value Proposition
1. Supply chain improvement
2. Reduce time to market
3. Technology (Sorting, Tracking, Costing World ship software)
4. Global Service (make customers business from local to worldwide)
5. Network optimization (Customers cost saving)
Strengths and Weaknesses
Strengths
1. Expert on Industrial Engineering
2. Owned completely supply chain resource
3. Premium services (Next-day delivery)
4. Strong brand with trusted logistics provider
5. Long history and possess large customers based
Weaknesses
1. Sales force doesnt has enough knowledge to selling supply chain solution
2. High turnover rate (Developing program stressor)
3. Weak brand in supply chain consulting
Recommendations
1. UPS SCS should to focus on single service customer as well, because of these
customer group can be developed to solution service customer if they have more
experience and grow up in the future. UPS SCS should position them like a business
partner for helping customer to success
2. Develop customer knowledge through various media or advertising
3. Focuses more on sustainable development especially human resources.

Improve incentive system and others compensation / benefits

Recruit new generation / talent, into proper development system. Build
organization on which diversity of generation, allow people to initiate new
ideas for work process improvement
UPS brand is just transportation provider in mostly customer perception, UPS
should to position brand image to be consultant who provide solution on best
practices with experienced team, not only theory.

Refrance:
from_m_app=ios

https://www.slideshare.net/popcorp/ups-scs-case-study2012-eng?

SWOT ANALYSIS
STRENGTHS
Global brand
Strong distribution network
OPPORTUNITIES
Expansion of online shopping
Emergence of international middle class

WEAKNESSES
Perception of ground delivery instead of
overnight
Heavy union presence
THREATS
Increasing fuel costs
Competitive landscape (DHL, FedEx)
Potentially slowing global economy

MAIN LESSONS

UPS has done a remarkable job of leveraging their core competencies for the
new world of e-commerce. They have figured out how to deliver their core
business services in new ways, while leveraging their tremendous
infrastructure assets.
They haven't forgotten where they came from. In that they have managed to
preserve their company culture. It has served them very well in promoting
the creative thought necessary to come up with new ways to do business and
grow the company.
They were brave enough to change the vision, starting at the top, and
committing themselves to it from the top all the way down through every
employee of the company. They managed to do it quickly by making changes
in their processes and organizational structure.
UPS has been aggressive in finding new revenue streams with existing and
new customers. They understand not only their customers and related needs,
but have also figured out ways to deliver more value. They have expanded
the roles they can play in the overall value web by leveraging their
infrastructure and expertise.