Technological Developments in the Package Delivery Industry
University of Phoenix
December 5, 2005
"Moving eight miles a minute for most of the time", while these are lyrics to a song by Bob Seger, these words could describe a package's experience being shipped by one of today's leading package delivery companies. How these companies have used technology to improve their services and how they may expand the use of technology to increase productivity and reduce costs is the focus of this paper. Package Delivery Industry Best Practices
Learning Team A identified two package delivery companies to be studied for current best practices regarding technological leveraging. These were United Parcel Service and FedEx, two companies that place heavy emphasis on innovation and investment in emerging technology. For each company, two current best practices have been identified and researched and several overall opportunities discovered that could leverage technological advancements to benefit the companies. United Parcel Service
Founded in 1907 as a simple messenger company, United Parcel Service (UPS) has grown into a $36 billion corporation focused on global sales (UPS, 2005). A key to UPS success is the technology in which they have invested more than $1 billion per year in website and e-commerce improvements thereby creating a more efficient parcel delivery system (Hayter, 2002). As with many other companies, rapid advancements in technology are creating constant need for opportunity assessment (Rayport & Jaworski, 2004), and UPS has certainly made the most of these developments. One UPS best practice is the development of an on-line customer service center website which acts as a marketspace or the digital equivalent to the physical marketplace (Rayport & Jaworski, 2004). By accessing the UPS website, a customer can manage his package shipping experience by creating shipments, printing shipping labels, calculating fees, tracking packages, and having customer service questions answered (UPS, 2005). This has created a more efficient value system by enabling ease of access for customers (Rayport & Jaworski, 2004). Through a series of frequently asked question pages, nearly every customer service issue is addressed, minimizing the need for live employees monitoring phones while maintaining high customer service standards. The second best practice of UPS is that of package flow technology, a program that places a hand held computer with each UPS delivery driver. UPS identified a need for more personalized experiences for the package recipient (Witt, 2005), a goal that was achieved through this program. These computers contain a manifest identifying the packages and the route, enabling the driver to provide better service by minimizing missed or late deliveries due to misplaced packages (Witt, 2005). This technology improved productivity and efficiency resulting in cost reductions and increased customer satisfaction. In addition to this computerized manifest and route information, package tracking is offered through UPS Signature Tracking. Through this system, digital proof of delivery is available on the website within minutes of actual delivery through the use of a digitized signature of the package recipient (Hickey, 2001). Research has shown relatively few problems implementing these programs. Cost was a major factor, but UPS realized this investment was necessary. Redirecting customers to the website has been a major expense, but as technology increased, more people began going to the website prior to calling the company. The cost of package flow technology implementation and maintenance has also been high, but customer satisfaction surveys show a return on this investment. The logistics of equipping each delivery person with a computer and training them was time-consuming, but in the end, worthwhile. This...