The document provides an analysis of the air delivery and freight services industry. It discusses the major players and their 2010 revenues, with the US Postal Service having the highest total revenue but seeing a decline from 2008. It also lists the employee counts of major companies. General factors affecting the industry are discussed, including the economy, globalization, regulations, and IT impacts like e-commerce and package tracking technologies. The document then analyzes United Parcel Service (UPS), discussing its history, current leadership, finances, accomplishments like international expansion, and potential risks like security issues or union strikes. It closes by covering UPS' use of telematics technology for fleet management and how information technology is crucial to their package tracking abilities.
1. Industry & Firm Analysis: Air Delivery & Freight Services industry Sarah Schleigh Presentation and Paper can be viewed here: http://www.slideshare.net/SchleighS
2.
3. Nearly every business entity in the country relies on the parcel industry to ship its products, supplies, and correspondence.
4.
5. Impact of IT on the Parcel Industry Growth of e-commerce = more shipped packages; partially (but not fully) offset by reduced catalog ordering Delivery trucks now rely on GPS to find the quickest and most efficient paths to their destinations Handheld electronic devices and scanners enable parcel industry personnel to track packages, and web-based technology allows consumers to see where their package is and when it will be delivered Email has resulted in a reduction of regular mail and written correspondence which has had an adverse effect on the industry – most of which was born by the U.S. Postal Service which is the primary mail carrier in the U.S.
6. Firm Analysis – United Parcel Service (UPS) Founded in 1907, by 19-year old James E. (“Jim”) Casey, who along with his business partners and teenage employees, delivered packages by foot and by bicycle. The company now operates in over 220 countries and territories and has become one of the most recognized companies in the world. The company is decentralized with a small presence in nearly every city or small town in the country Current CEO – D. Scott Davis (2007 – present) Corporate headquarters: Sandy Springs, Georgia
7. UPS – Financials and Other Figures * Data taken from the 2010 UPS Annual Report
8. UPS - Recent Accomplishments and potential future risks Accomplishments: expanded international reach, opened new facilities, increased the size of aircraft and truck fleet PR wins: one of only four companies in the world to receive the highest score on the Carbon Disclosure Index received the highest score in the industry on the American Consumer Satisfaction Index (ACSI) recently Treasury Secretary Timothy Geithner visited the UPS Worldport air hub in Louisville, KY and commended the recent expansions of the facility for providing jobs and growing the economy Risks: Increased security requirements and the threat of a security breach The effect of climate change or more specifically, climate change regulation that could drive up costs Strikes, work-stoppages, and slowdowns by unionized employees (which comprise more than half of UPS’s workforce) Employee health and retiree health and pension costs which are a significant expense to the company Changes in fuel prices or interruptions in the supply of fuel Any major breakdown of their IT systems could result in serious disruption of service and intense customer dissatisfaction The potential for an adverse outcome in any one of the pending litigations against the company.
9. The Role of IS at UPS Since 2008, UPS has been deploying a new technology called telematics, which combines information from drivers’ handheld devices with GPS and automotive sensors that helps them better manage their ground fleet. This technology provides benefits in the following areas: vehicle maintenance, safety, service, and reductions in vehicle expense, fuel consumption and carbon emissions. The company’s Chief Information Officer (CIO) is David A. Barnes, who worked from the ground up after joining the firm in 1977. Barnes was the lead business manager on the development of the International Shipments Processing System (ISPS), a Smithsonian award-winning software application developed internally at UPS. The UPS Information Technology Governance Committee is responsible for directing the company investments and undertakings in the IT world UPS considers IS to be the backbone of the company. Their IT systems give them and their customers the ability to track the shipment of packages across the world. Any significant problems with their system could result in major losses, both in terms of financial loss and customer loss.