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United Parcel Service: Business Transformation through Information Technology

United Parcel Service: Business Transformation through Information Technology. BUS 550 Contemporary Firm 03 May 2011. by Karen Seiberlich. Contents. Background Business organization Business Decisions Technology Capabilities Challenges & Risks Opportunities Business solutions

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United Parcel Service: Business Transformation through Information Technology

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  1. United Parcel Service:Business Transformation through Information Technology BUS 550Contemporary Firm 03 May 2011 by Karen Seiberlich

  2. Contents • Background • Business organization • Business Decisions • Technology • Capabilities • Challenges & Risks • Opportunities • Business solutions • Services • Questions

  3. Background • 1907: Jim Casey & Claude Ryan - American Messenger Company, Seattle, WA • 24/7 service by foot or bicycle • U.S. Post Office largest customer –special delivery • 1918 – Department store “common carrier” • 1922 – Acquired Los Angeles company • Accepted checks • Multiple try delivery & scheduled pick-ups • 1924 – 1st package handling conveyor belt • 1930 – “United Parcel Service” - U.S. consolidation • Pullman brown • 1st mechanical package sorting • 1953 – Air carrier service • 1975 - Interstate Commerce Commission grants permission • 1981 – 1982 - 1st aircraft; Louisville, Kentucky hub • 1988 – Operate own aircraft • 1994 – UPS.com • 1999 – Initial Public Offering/New York Stock Exchange “Best service and lowest rates"

  4. Revenue Segments http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9ODUzODd8Q2hpbGRJRD0tMXxUeXBlPTM=&t=1

  5. Revenue Recovery http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9ODUzODd8Q2hpbGRJRD0tMXxUeXBlPTM=&t=1

  6. Organization Customer order • Employees- 400,600 Customer Service • Shipping • 1,757 flights/day • 99,795 Trucks • Data Centers Customers 8.5 million Worldport Server Room 1 million data transactions/ minute • International shipping • 220 countries • 2,773 Operating facilities Delivery • 2010 -3.94 billion deliveries • 61,775 - Retail access Warehousing 1914 alternative fuel vehicles

  7. IT Business Decisions • 1986-1996-invested $11 billion in IT • Centralized and standardized IT • Subsidiaries managed like start-up companies • Information systems – I year to develop; 6 month release cycles • UPS & Genzyme: Pharmaceutical serialization initiative • Commitment to patient safety & investment in future: "bottle" traceability • Hired IT managers with > 10 years diverse experience • Many small servers for back-up • 2 data centers back up each other • Ensure source of electricity; back-up diesel generators • UPS Mobile App for iPhone – Shipping labels

  8. 12 Mainframes • 51.898 MIPS • 191,052 laptops • 15,727 servers • 108,938 DIADs • 2 data centers • 10 Petabytes data • 4,442 IS FTEs IT Technology • 15 Mainframes • 19,400 MIPS • 906 servers • 245,000 PCs • 2,700 LANs • 91,000 DIADs • 2 data centers • 176 Terabyte data • 5,000 IS FTEs • 1 • 6 Mainframes • 1200 MIPS • 300 minicomputers • 39,500 PCs • 600 LANs • 77,400 DIADs • I data center • 4 Terabyte data • 2000 IS FTEs 2011 2001 1992 1 Mainframe 118 IS FTE’s 1985

  9. IT Budget

  10. Technology Evolution Package Level Detail (PLD) • Production Flow System (PFS)

  11. IT & Green Awards

  12. Challenges & Risks • Competition • Integrating subsidiaries • $ Gasoline, Diesel, & Jet Fuel • Security breaches • Greenhouse gas emissions • Weather • Exchange rates - British £, Canadian $, € • Emerging markets • Strikes – Teamsters http://en.wikipedia.org/wiki/File:Venezia0750UPS.jpg

  13. Opportunities • Customer Service • Better staff relationships with managemetn • 2012 London Olympics • London Olympic Logistics Center • Paralympics Games • Official Logistics and Express Delivery • Supporter of 2012 Olympics

  14. Extensive Website http://www.ups.com/content/us/en/contact/index.html?WBPM_lid=/homepage/ct1.html_mod_qlk

  15. Sustainable Solutions Alternative fuel technologies/options: 1980s: Compressed Natural Gas & propane 1998:Hybrid-electric vehicles 2004 UPS - All-electric vehicles in and then Liquefied Natural Gas (LNG) tractors Korea - Liquefied Petroleum Gas Experimented with hydraulic-hybrid & Hydrogen fuel cell technologies Bicycles

  16. Recognition • 2000-Fortune named “most admired” in its industry • 2000-Forbes Magazine – one of Top 10 most reputable companies • United Way – UPS and employees - first company to donate more than $1 billion • President Obama asked UPS to serve on Export Council with administration and business leaders • Goal: Double U.S. exports in next 5 years Technology is the key to progress

  17. Adjacent Business Sectors Compass® Business solutions and tips • Customers with missed sales opportunities • UPS international fees added at website • International shipment delays • UPS redesign supply chain • Custom delays into Canada • Discount Ramps.com – Virtual presence in Canada • Reduce brokerage fees, simplify process

  18. UPS Capital Services • Distribution Financing • First International Bank-gov’t guaranteed export/import financing • Glenlake Insurance-loss protection choices • Global Trade Finance-protect & expedites export services- • COD Enhancements – direct from banks • Equipment leasing-telecom systems, business equip.

  19. UPS Airlines • One of the world’s largest airlines • More than 500 owned and chartered aircraft • 1,757 daily flight segments • 2800 pilots • Access 766 airports across the globe

  20. Japan Tsunami Relief http://www.pressroom.ups.com/Video/Japan+Earthquake+Relief+video?srch_pos=3&srch_phr=Haiti+and+earthquake

  21. Haiti Relief • January 2010 • UPS Donates $1 Million to Haitian Earthquake Relief • $500,000 cash - American Red Cross / CARE / UNICEF • & other long-term relief organizations • $500,000 – shipment services of needed supplies http://www.pressroom.ups.com/Video/UPS+Trackpad+Helps+with+Relief+in+Haiti

  22. Discussion Questions • How can UPS improve customer service? • What is the biggest obstacle in doubling exports in 5 years? • How canUPS develop a stronger brand reputation? • Have you ever observed their trucks speeding? • What can UPS do to market luggage shipping?

  23. Question • Who asked UPS to work with the administration and business leaders and serve on the Export Council? • Al Gore • President Obama • Duke of Cambridge • Hillary Clinton http://en.wikipedia.org/wiki/Barack_Obama http://www.google.com/search?q=al+gore&hl=en&rls=com.microsoft:*&prmd=ivnsubol&source=univ&tbm=nws&tbo=u&sa=X&ei=Hbi_TbXYO-bjiALUraWdAw&ved=0CEkQqAI&biw=761&bih=397 http://en.wikipedia.org/wiki/Hillary_Rodham_Clinton http://en.wikipedia.org/wiki/Duke_of_Cambridge

  24. Works Cited • Ross, Jeanne, Draper, Will, Kang Paul, Schuler, Seth, Gozum, Ozge, and Tolle, Jessica, United Parcel Service: Business Transformation through Information Technology”, MIT Sloan School of Management, September 2002 • 2010 Annual Report http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9ODUzODd8Q2hpbGRJRD0tMXxUeXBlPTM=&t=1 • UPS and Genzyme: A Pioneering Drug Serialization Initiative http://www.pressroom.ups.com/Case+Study/UPS+and+Genzyme%3A+A+Pioneering+Drug+Serialization+Initiative • UPS And Honeywell Set Stage for Next High-Tech Handheld for UPS Drivers http://www.businesswire.com/news/home/20100113005851/en/UPS-Honeywell-Set-Stage-High-Tech-Handheld-UPS • https://www.upsbrandexchange.com/journalistHome.awsp • http://www.pressroom.ups.com/Video/Japan+Earthquake+Relief+video?srch_pos=3&srch_phr=Haiti+and+earthquake • http://www.ups.com/content/us/en/contact/index.html?WBPM_lid=/homepage/ct1.html_mod_qlk • http://www.investors.ups.com/phoenix.zhtml?c=62900&p=irol-homeprofile#strengths • http://www.pressroom.ups.com/Video/UPS+Trackpad+Helps+with+Relief+in+Haiti • http://en.wikipedia.org/wiki/File:Venezia0750UPS.jpg • http://www.google.com/search?q=al+gore&hl=en&rls=com.microsoft:*&prmd=ivnsubol&source=univ&tbm=nws&tbo=u&sa=X&ei=Hbi_TbXYO-bjiALUraWdAw&ved=0CEkQqAI&biw=761&bih=397 • http://en.wikipedia.org/wiki/Hillary_Rodham_Clinton • http://en.wikipedia.org/wiki/Barack_Obama • http://en.wikipedia.org/wiki/Duke_of_Cambridge • “

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