FedEx Business Goals - Essay Example

In the long term, the Company plans to increase its revenue by 10% every year and increase returns and cash flows. The Company also aims to achieve a 10% increase in its operating margin. To attain this long-term objective, the Company has set out certain business goals, as laid out below (www.fedex.com):

• Increase its international operations and strengthen its international deliveries and customer base
• Consolidate and integrate its core business of mail delivery to enhance its revenues and improve productivity (www.brainmass.com)
• Continue to recognize business needs that it can tap into in order to provide the necessary customer services
• Improve the supply chain to streamline operations
• Increase its e-commerce business for the business to business mailings
• Develop and improve their operations by developing technology solutions.
• Continue to provide the kind of working conditions, incentives, and benefits

  Additionally, the Company also plans to improve its reputation as an environmentally friendly organization, by reducing carbon dioxide emissions by 20 percent by the year 2020. (www.thaipr.net). The central focus of the Company’s plans and goals revolves around its people, i.e., “people are the wind beneath our wings.”(Frock, 2006:201).

             In the achievement of its goals, FEDEX has capitalized on the vision of its founder, Smith who believed the success of the Company lay in IT(Lappin, 1996) and has implemented IT systems that are geared towards strengthening its e-commerce operations. The realization that information systems could play a vital role in ensuring the success of the business has enabled the Company to survive and gain a head start in package delivery (www.garyclarke.com). The Company has made large investments in technology, using the tracking software in order to ensure that the current delivery status of a package is always available, through the use of its proprietary network called Cosmos. The Company also sets up computer terminals at its customers’ offices and allows them access to the tracking software as well, so that they are able to generate their pick-ups and deliveries (www.brainmass.com).

          Customer tracking of packages is facilitated through the use of the Powership software and terminals (www.informationweek.com). The Company has been using wireless applications for a long time, but the efficiency of its current operations has been achieved by integrating SAP into its tracking system in managing its supply chain. A significant aspect of its technology development is the use of SAP R/3 systems to integrate its tracking systems with its supply chain logistics. FedEx has already been offering its customers the use of computer terminals where they can track their packages and also arrange pick-ups and deliveries; however, with the integration of tracking software with RP-3 software in the supply chain, the Company is also offering its customers the option to manage their supply chain and transportation services.

               FEDEX’s IT policies have been very useful in providing it a competitive edge, as compared to other courier companies like UPS. FEDEX has a Virtual order System, whereby certain companies can link directly to FEDEX so that online ordering, authentication, payment, and shipping can be integrated. UPS however has integrated with third-party companies in providing customers with e-commerce solutions. Therefore, in comparison, IT integration at FEDEX is more advanced, especially since UPS was also later than FEDEX in incorporating IT solutions.  This has enhanced FEDEX’s competitive advantage.