The US Postal Service - Essay Example

Case Study: UPS UPS made a humble beginning in 1907. Over the years, it expanded beyond national boundaries and is today recognized as much more than a ‘courier’ company that ships parcels, packages, and overnight letters. The employees of this multi-billion-dollar company work assiduously with the objective of ‘enabling commerce around the globe.’ In line with this, UPS positioning statement is “to synchronize the world of commerce by developing business solutions that create value and competitive advantages for our customers.” In order to compete, UPS provides value added services to its customers. With the objective of providing complete supply chain solutions to its customer, the company established the UPS Logistics Group in 1995. Today, the company manages the flow of goods, funds and information in more than 200 countries and territories every day. UPS provides specialized transportation, logistics, capital, and e-commerce services to its valued customers. It also enables its clients with warehousing, freight forwarding and returns management (Research and Markets 2011). UPS owns a large fleet of trucks, trailers, vans et al to ensure smooth functioning of day to day business. The company has imbibed the latest technology from time to time so as to provide superior services to its clients. UPS offers both ‘LTL’ and ‘TL’ services to cater to needs of all its clients ((PR Newswire 2006). From time to time, the Atlanta based company ventured in oversees markets and made a mark there as well. 2) The U.S. Postal Service, headed by a Postmaster General and a Board of Governors, is a branch of the federal government. The USPS is, by statute, under obligation to provide mail services to all Americans. This mandate has to be followed by the USPS irrespective of where the customers live. USPS has to serve these customers/territories even if a cost-benefit analysis suggests that they do not make commercial sense (Harreld, Heather 2000). This obligation obviously leads to high costs, reduced efficiency and thus puts a strain on the financials of the company. Since USPS, a government agency is bound to operate even in non lucrative areas; UPS is relieved of this obligation, legal as well as moral, to do business in such areas. As such, UPS can concentrate on areas, services and customers that it deems would give the company decent profits. 3) An intermodal approach entails the placing of parcels, packages or letters that UPS is required to deliver in an intermodal container or vehicle. This intermodal container can be used in various modes of transportation including rail, road, water and air. Thus the goods that UPS has to deliver can be moved and transferred through various modes without having to handle the goods per se. The entire lot of goods is handled in one go and that too with the help of machines. The use of this intermodal approach would accord many benefits to UPS. The method trims down cargo handling thereby enhances security, reduces the chances of lost packets and minimizes the chances of damage. It helps reduce labor cost and enables the goods to be transported and delivered faster (Watson 2008). 4) UPS commenced its International operations in 1975 in Canada. A year later, it ventured into the German market. By the end of the 1980’s the company had gained a foothold in many countries throughout Europe, the Americas, the Pacific Rim, Africa, and the Middle East. To service such a vast territory, UPS needed a strong and valuable network. In order to remain competitive, the company needed a reliable delivery mechanism. Long distance deliveries could be covered in the stipulated time only with air travel. Given the huge volumes to deliver and wide geographies to cover, it made business sense for UPS to develop their own airline. UPS commenced its own airline in 1988 and can today boast of being one of the 10 largest airlines in the USA (Wall Street Journal 2003). Having its own airline has given UPS better control and more flexibility in conducting its business. The company is in a better position to let the customer know of the exact status of their shipments. This has been made possible because the company has its own fleet of 296 aircrafts. 5) Once a company has mastered the business in the home country, it can replicate that success in foreign countries. Such expansion also enables a company achieve economies of scale. UPS is a strong brand well known for its reliability and accuracy in the United States. Such brand equity enables UPS attract customers immediately when it ventures on foreign soil. Latest technologies in ICT have made the job for UPS much easier. The company can identify countries, regions or geographies that are not being serviced well by other companies enter those markets and grab a large chunk of the market share. DHL and Fedex are big names in this industry. While the former does not have US operations, the latter is not so strong in Europe. Thus by being a global player, UPS can use its ‘best practices’ in different continents and identify countries those can be termed as ‘low hanging fruit.’ Tapping such territories will enable UPS increase its revenue manifold. 6) UPS is dependent on oil for its smooth running of business. Any upward change in the prices of oil tends to swell the company’s input costs. The company has consciously tried to reduce its dependence on the use of oil and is operating more than 2,000 alternative-fuel vehicles (AFVs) for the conduct of its business. The use of these AFVs also enables the company to cut down on carbon emissions and contribute towards the environment in a beneficent way. 7) Partnering with a behemoth like UPS for SCM services would accord the benefit of reliability for my organization. UPS has a proven track record of providing SCM services since the inception of the UPS Logistics Group in 1995. Since UPS has a robust network that spans practically throughout the world, my company would be able to procure its supplies from a vendor which supplies good quality material at the cheapest price. UPS is financially strong and can easily bear any change in the business environment which has financial implications. As a financially strong business partner, UPS can give an extended credit period to my company. A demerit of associating with such a big company like UPS would be the lack of flexibility in operations. Furthermore, the price charged by UPS for rendering the SCM services may by higher than some smaller, regional players. References Consumer services brief -- united parcel service inc.: Plan for furloughs is scrapped as pilots take voluntary offers. 2003. Wall Street Journal, Mar 07, 2003. http://search.proquest.com/docview/398915541? (accessed May 5, 2012). Harreld, Heather. 2000. USPS: Fighting for survival. Federal Computer Week 14, (18) (Jun 05): 18-22, http://search.proquest.com/docview/218847045? (accessed May 07, 2012). Hodges, Jane. 1997. Tom daly: United parcel service. Advertising Age 68, (28) (Jul 14): S16-S16, http://search.proquest.com/docview/208342858? (accessed May 6, 2012). Lukas, Paul, and Maggie Overfelt. 2003. UPS: United parcel service. FSB : Fortune Small Business., http://search.proquest.com/docview/233436420? (accessed May 7, 2012). McGrath, Neal. 1994. United parcel service: Steady as she goes. Asian Business 30, (9): 14-14, http://search.proquest.com/docview/199822551? (accessed May 5, 2012). Postal service, united parcel service expand business relationship. 2006. PR Newswire, Jun 28, 2006. http://search.proquest.com/docview/447626773? (accessed May 7, 2012). Research and Markets: United parcel service inc. - SWOT analysis. 2011. Business Wire, Mar 25, 2011. http://search.proquest.com/docview/858452867? (accessed May 6, 2012). Services brief: United parcel service inc. 2003. Wall Street Journal, Feb 11, 2003. http://search.proquest.com/docview/398863840? (accessed May 5, 2012). Soupata, Lea. 2001. Managing culture for competitive advantage at united parcel service. Global Business and Organizational Excellence 20, (3): 19-26, http://search.proquest.com/docview/215021206? (accessed May 7, 2012). Watson, Rip. 2008. Change in shipping patterns cuts intermodal intl. volume. Transport Topics(3793) (May 19): 3-3,34, http://search.proquest.com/docview/210800011 (accessed May 07, 2012). Read More