22 Part One Organizations, Management, and the Networked Enterprise
INTERACTIVE SESSION: TECHNOLOGY
United Parcel Service (UPS) started out in 1907 in a
closet-sized basement office. Jim Casey and Claude
Ryan—two teenagers from Seattle with two bicycles
and one phone—promised the “best service and
lowest rates.” UPS has used this formula successfully
for more than 100 years to become the world’s largest
ground and air package delivery company. It’s a
global enterprise with over 408,000 employees,
96,000 vehicles, and the world’s ninth largest airline.
Today, UPS delivers more than 15 million pack-
ages and documents each day in the United States
and more than 200 other countries and territories.
The firm has been able to maintain leadership in
small-package delivery services despite stiff competi-
tion from FedEx and Airborne Express by investing
heavily in advanced information technology. UPS
spends more than $1 billion each year to maintain a
high level of customer service while keeping costs
low and streamlining its overall operations.
It all starts with the scannable bar-coded label
attached to a package, which contains detailed infor-
mation about the sender, the destination, and when
UPS COMPETES GLOBALLY WITH INFORMATION TECHNOLOGY
cally captures customers’ signatures along with
pickup and delivery information. Package tracking
information is then transmitted to UPS’s computer
network for storage and processing. From there, the
information can be accessed worldwide to provide
proof of delivery to customers or to respond to
customer queries. It usually takes less than 60
seconds from the time a driver presses “complete” on
a DIAD for the new information to be available on
the Web.
Through its automated package tracking system,
UPS can monitor and even re-route packages
throughout the delivery process. At various points
along the route from sender to receiver, bar code
devices scan shipping information on the package
label and feed data about the progress of the package
into the central computer. Customer service
representatives are able to check the status of any
package from desktop computers linked to the
central computers and respond immediately to
inquiries from customers. UPS customers can also
access this information from the company’s Web site
The system must also provide information to satisfy the needs of
managers and workers. UPS drivers need to be trained in both package
pickup and delivery procedures and in how to use the package tracking
system so that they can work efficiently and effectively. UPS customers may
need some training to use UPS in-house package tracking software or the UPS
Web site.
UPS’s management is responsible for monitoring service levels and costs and
for promoting the company’s strategy of combining low cost and superior
service. Management decided to use computer systems to increase the ease of
sending a package using UPS and of checking its delivery status, thereby
reducing delivery costs and increasing sales revenues.