Logistics Management of Federal Express Canada - Case Study Example

? Federal Express Canada: Case Analysis (Add (Add (Add Executive summary The case study en d Federal Express (Canada) was written by Gordon H.G McDougall and Keith Dorken. The Federal Express is a multinational shipping company that transports millions of packages every day. The major findings from the case study are outlined below. 1. The company faces some serious issues with its logistics management 2. The company’s customer service department seems very weak in performance It is clear that late and inappropriate package delivery would cause customer dissatisfaction and this situation may eventually lead to customer attrition. Hence, the company must immediately respond to these issues in order to ensure long terms sustainability. Logistics computerization is one of the most recommendable policies for the FedEx to improve its logistics and customer service operations. The company has to raise additional finance. It also has to recruit more skilled employees to implement the planned changes. Finally, the FedEx should develop potentials systems to monitor the performance efficacy of the implemented changes. Background Federal Express or FedEx is a North American shipping company notable for its ‘fast response to customer requests and constant tracking of every shipment’ (McDougall & Dorken, 1998). The company (as cited in McDougall & Dorken, 1998), employs nearly 137,000 people worldwide (including 3,500 in Canada) and offers shipping services to 212 countries; and every night, FedEx planes carry approximately 2.9 million packages weighing a total of nearly 2 million pounds. The FedEx maintains 60 shipping facilities in Canada to meet Canadian shipping needs from coast to coast. The organization gives primary focus on Quality Management and Assurance and attained ISO 9000 for its operations worldwide. FedEx is the first service based company that has won the Malcolm Baldrige National Quality Award in the US. The company has a good reputation in the shipping sector and maintains a huge potential customer base. Statement of Issues While analyzing the case scenario, it is clear that the FedEx has some potential issues with its logistics management and customer service practices. McDougall & Dorken (1998) clearly indicate that the company failed to meet shipping requirements of Desktop Innovators and the situation caused the DI to suffer from huge business loss. The DI placed a shipping order on FedEx to send two boxes from Kitchener, Ontario to Simpsonville, South Carolina. The DI wanted to get those two boxes at the destination by 12th October so that the firm’s dealer would get plenty of time to transfer them on to Charlotte, where the trade show had been arranged. However, only one of those boxes was delivered at Simpsonville on time and therefore the DI could not display its software packages at the trade show stalls. Similarly, the FedEx did not timely and properly respond to queries raised by the DI’s Office Manager Anita Kilgour. Hence, Kilgour could not get actual status of the DI’s goods in transit and this situation caused great confusion to both Kilgour and the dealer. While scrutinizing the FedEx’s service delivery policies, it is obvious that the company violated its delivery terms and conditions, which the client had been had been promised at the time of order placement. Situation Analysis The identified issues relating to the two management areas (logistics management and customer service management) raise many potential threats to the FedEx’s long term sustainability. Effective logistics management is crucial to customer satisfaction since customers are the end users of a firm’s all logistics activities. It is obvious that every shipment is intended for a particular purpose and therefore it will be of no use if the shipped goods are delivered late. In other words, the FedEx’s weakness in logistics management would lead to huge troubles in future since the company handles millions of packages every day. If once a customer experienced bad service delivery, he might not continue his dealings with the company in future. Furthermore, even such a single poor service delivery incident would pass a wrong message to other clients and therefore they may not be ready to risk their future shipments by using FedEx shipment facility. In short, FedEx’s inefficient logistics management operations would adversely affect the company’s market stature. Similarly, it is evident that the FedEx’s customer service department is weak and it continuously fails to keep in touch with customers. The case context reflects that FedEx customer care executives could not give a proper reply to Kilgour even though she had rung the FedEx office several times to know about her shipment’s actual status. Undoubtedly, poor customer service would lead to customer dissatisfaction and eventually to customer attrition. Management theories suggest that effective customer service is vital to enhance customer retention. As per the FedEx Money-Back Guarantee Policy, the company needs to refund the money if it fails to inform customer about his package status within 30 minutes after his inquiry. Hence, irresponsible acts of customer service department would cause huge losses to the FedEx. If the company continues to fail to answer customer queries on time, it would gradually go out of business. Analysis of Alternatives As McDougall & Dorken (1998) clearly reflect, FedEx has seriously violated the terms and conditions of the shipment. Since the company’s poor service delivery has already caused huge losses to the client, the company has no other option other than refunding the money to DI. However, if the company has potential reasons for the service failure and the management can properly convince the client about those matters, then the company may avoid or cut down the amount of money refund with the consent of the client. Alternatively, the company may offer DI a free charge shipment over next some orders. Primarily, the organization has to necessarily reply to the client’s complaint letter in proper way in order to retain her confidence. Recommendations In order to resolve the current service delivery issues and to improve the logistics management activities; the FedEx has to initially review its various processes in the supply chain. Such an analysis would assist the organization to accurately identify the areas where further improvement is required. It is advisable for the company to computerize its logistics operations so as to enhance the accuracy and reliability of the service delivery. A computerized package delivery system would also greatly benefit FedEx executives to get actual status of particular package in transit at any time. Logistics computerization may also enable the organization to record every transaction detail concerning a package. Thus, the firm can easily find out why it could not deliver a package on time. Furthermore, this transaction recording system may benefit the organization to identify employees who fail to meet their job requirements. In addition, it is recommendable for the organization to provide its employees with extensive training packages that may lead to employee empowerment. It would be better if the firm established an automated customer calling system so that every customer would timely get his/her shipping status. It is also advisable for the organization to divide its workforce into several units and assign them the responsibility of certain volume of packages. This strategy would help employees to easily deal with package delivery and respond on time to customer queries. Action Plan In order to implement the above discussed action plan, the FedEx has to raise additional funds. In addition, the organization has to recruit skilled employees in computer applications in order smoothly operate the computerized logistics management system. The company has to make arrangements for obtaining customer feedbacks so as to make sure that the implemented changes meet its objectives satisfactorily. Finally, FedEx managers must identify and punish employees whose irresponsible acts cause improper or late package delivery. Reference McDougall, G. H. G & Dorken, K. (1998). Federal express (Canada): Case thirteen. FedEx Worldwide Service Guide, 144-151. Read More