UPS COMPETES GLOBALLY WITH INFORMATION TECHNOLOGY

CASE STUDY

UPS COMPETES GLOBALLY WITH INFORMATION TECHNOLOGY

CASE SUMMARY

UPS has created its own information system with Delivery Information Acquisition Device (DIAD) and Web-based Post-Sales Order Management System (OMS) globally by using developed information technology. These special systems help the company to reduce the cost of transaction greatly. By building its efficient order information management system, UPS can make optimal routing strategy, place orders online, and track shipments to meet customer needs. These information systems guarantee the possibility of two-day delivery nationwide as well as lower warehousing and inventory costs for the company.

1.      What are the inputs, processing, and outputs of UPS’s package tracking system?

a)        Inputs

The inputs include package information, customer signature, pickup, delivery, time-card data, current location (while en route), and billing and customer clearance documentation.

b)        Processing

The data is transmitted to a central computer and stored for retrieval. Data is also reorganized so that it can be tracked by customer account, date, driver, and other criteria.

c)         Outputs

The outputs include pickup and delivery times, location while en route, and package recipient. The outputs also include various reports, such as all packages for a specific account or a specific driver or route, as well as summary reports for management.

                     

2.    What technologies are used by UPS? How are these technologies related to  UPS’s business strategy?

        Technologies include handheld computers (DIADs), barcode scanning systems, wired and wireless communications networks, desktop computers, UPS’s central computer (large mainframe computers), and storage technology for the package delivery data. UPS also uses telecommunication technologies for transmitting data through pagers and cellular phone networks. The company uses in-house software for tracking packages, calculating fees, maintaining customer accounts and managing logistics, as well as software to access the World Wide Web.

  

3.      What strategic business objectives do UPS's information system address?

Some problems this information system solves relate directly to logistics and supply chain activities, not just for itself, but also for other companies. These services include supply chain design and management, freight forwarding, customs brokerage, mail services, multimodal transportation, and financial services, in addition to logistics services. Because of the advanced integration of its technology, UPS can provide these services cheaper and more efficient than most companies can create them in-house.

ü Operational excellence:

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.

ü  New products, services, and business models:

In June 2009 UPS launched a new Web-based Post Sales Order Management System (OMS) that manages global service orders and inventory for critical parts fulfilment. The 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, determine the most optimal routing strategy to meet customer needs, place orders online, and track parts from the warehouse to the end user.

ü  Competitive advantage:

UPS is leveraging its decades of expertise managing its own global delivery network to manage logistics and supply chain activities for other companies. It's Supply Chain Solutions division 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.

4.      What would happen if UPS's information systems were not available?

a)      Arguably, UPS might not be able to compete effectively without technology. If the technology were not available, then UPS would, as it has through most of its history, attempt to provide that information to its customers, but at higher prices. From the customers’ perspective, these technologies provide value because they help customers complete their tasks more efficiently. Customers view UPS’s technology as value-added

b)        services as opposed to increasing the cost of sending packages.

-       Incurs more cost

-       Slow in providing information to customers

-       Slow Operation

-       Slow in finsing customer information