UPS – STUDY CASE QUESTIONS 1.0 introduction:
United Parcel service typically referred to as UPS, it started off as messenger service in 1907 by James Casey capitalized with $100 in debt. It officially became UPS in 1919, when service began in Oakland, California. Many individuals perceive it to be direct competitors of DHL and Fed ex
2.0 Key Issues (300 words)
From the perspective of Flyweather Technology, the concern for the business is the loss of competitive advantage and ability to remain up to date. Innovation and fast response are factors important in any business, but even greater in technology industry where things can become obsolete almost overnight.
The main issue to overcome in order to address Flyweather’s business concern was the supply chain strategy, more accurately the lack of one. Flyweather had continued supplying quality products but not considered exactly how to deliver their supplies which was hindering their competitive advantage.
Supply chain strategy focuses on the logistics of the company. Considers the sourcing of materials and the distribution of products.
From the perspective of UPS was being able to deliver across Asia with Flyweather’s distribution centers/staff and to Flyweather’s customers. A problem because Flyweather’s facilities and staff require an overhaul and technology update whilst Flyweather’s customers need an education on the improved efficiency and transparency.
2.0 Secondary Issues (300 words)
Linkage to Theory & Concepts
For the UPS case study, Chapter 12 on Logistics: sourcing and distribution, gives greatest insight. The chapter can divided into 5 aspects that make up logistics – International Logistics, International Sourcing, International Distribution, Internantional Retailing and finally E-commerce and International Logistics
International Logistics
According to Kotabe etl International Logistics is the
“design and management of a system that directs and controls the flow of materials and the associated information flow into, through and out of the organisation across national boundaries”. It encompasses materials management: the inflow of raw materials, parts and supplies in and through the organisation, along with physical distribution: the movement of the finished product to customers. Flyweather’s international logistics had little direction and control with the flow of the material, product, information movement because of its growth into such a fragmented.
Factors that contributed to the increased complexity and cost of international logistics that lost Flyweather’s domestic competitive advantage include: * Distance
That significantly increased as the company spread across asia and thousands of islands. * Exchange rate fluctuation
Which impact business dealings as one country’s currency affect buying value in another. * Foreign intermediaries
That are needed to negotiate each individual country’s customs, laws and regulations. Important with flyweather operating in different cultural values, customs and language. * Security
Concerns with protection of transportation, product, staff and the company as a whole.
These factors grew in importance as Flyweather expanded its borders past Singapore’s national lines, but were not addressed appropriately so became costs and disadvantages to the company.
Flyweather’s engagement with UPS can be viewed as the use of a Third-Party Logistics (3PL). As a 3PL, UPS can be seen as the customer developer type because it has become so fundmentally integrated into Flyweather; so much so that it may be considered as a Fourth-party logistics (4PL) since its gives analysis of the customer needs to determine inventory and distribution.
International Sourcing
According to Kotabe etl International sourcing is described as
“ the movement of raw materials and components into a manufacturing plant and the movement of finished products from the plant to the
