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FedEx Corporation Management Information System Prepared by: AABHAS RASTOGI 11DCP053 SECTION - B
Table of ContentsORGANIZATIONAL OVERVIEW ......................................................................................... 1FEDEX E-COMMERCE SOLUTION .................................................................................................. 6BASIC E-COMMERCE PROCESS ....................................................................................................... 9TECHNOLOGIES AND FEATURES ................................................................................................ 10 IMPORTANCE TO ENTERPRISE ................................................................................................. 13
ORGANIZATIONAL OVERVIEWFedEx Corporation was founded in 1973 by entrepreneur Fred Smith. Today, with a fullyintegrated physical and virtual infrastructure, FedEx‘s business model supports 24–48hour delivery to anywhere in the world. FedEx operates one of the world‘s busiest data-processing centres, handling over 100 million in-formation requests per day from morethan 3,000 databases and more than500,000 archive ﬁles. It operates one of the largestreal-time, online client/server networks in the world. The core competencies of FedExare now in express transportation and in e-solutions.FedEx Corporation To understand the corporate level strategy of FedEx it is necessary to first know whatindustries they currently compete in, as well as where they stand within those industries.Currently FedEx is made up of six independent business units: FedEx Express, FedExGround, FedEx Freight, FedEx Custom Critical, FedEx Trade Networks, and FedEx Services,each compete in different sectors of the transportation industry in order to tailor the entireFedEx service to best fit each customers‘ needs. Its parent company is the FedExCorporation, which offers all of the strategic leadership, as well as the financialaccountability for all of the business units. The business model that is followed at FedExCorporation is ―Operate independently, compete collectively.‖ Figure 1 lays out the decisionmaking tree at FedEx Corporation.FEDEX ORGANIZATIONAL CHART Fred Smith, CEO, ChairmanT. Michael Alan B. Graf, CFO Robert Carter, Kenneth Masterson,Glenn, VP ChiefCorporate Information General CounselCommunications Officer Secretary
The board of Directors sits in conjunction with the vice presidents and is responsible for anarray of activities such as auditing, executive compensation, information technologyoversight, and governance. Although FedEx Corporation is a the parent company of the sixindependent business units, FedEx Corporation offers strategic leadership at a corporate leveland the operate on their own and are therefore solely responsible for their decisions andultimate success. The top two performing companies, as well as the most widely knownFedEx companies are FedEx Express and FedEx Ground.FEDEX EXPRESSThe first of the six independent units is FedEx Express. The president and CEO, David J.Bronczek heads this unit. FedEx Express is the world‘s largest express transportation firm. Ithas three subsections of U.S., International, and Freight. Offering guaranteed service to 120different countries for packages from 1- 2,200 lbs. FedEx Express accounts for over one-halfof FedEx‘s revenue.FEDEX GROUNDFedEx Ground is the next business unit, headed up by Daniel J. Sullivan, president and CEO.FedEx Ground guarantees delivery to every business address in the U.S., Canada, and PuertoRico. It currently accounts for a little over $3 billion in revenue.FEDEX NEW OFFERINGS FedEx is a very large company that occupies a large portion of market share in the express delivery sector as well as the ground sector.We have concluded that FedEx does not so much possess distinctive competencies, as it has strong existing competencies that allow it to compete competitively with industry leader UPS. These competencies include a very timely customer response time, cutting-edge technology and innovation. Its most recent endeavour, characterized as a diversification from its ―usual‖ product offering of actual shipment of good‘s, is the newer service offering of consultation. Labelled FedEx Trade Networks, this newest division of the FedEx offerings showcases the company‘s vast competence of international shipping knowledge to an array of customers.
These customers are provided value creation with the knowledge that can greatly increase efficiencies through the supply chain. FedEx Trade Networks offers a full range of international support services, including customs clearance, freight forwarding, Trade & Customs Advisory Services (TCAS) and trade technology solutions.THE PROBLEM/OPPORTUNITYInitially, FedEx grew out of pressures from mounting inﬂation and global competition. Thesepressures gave rise to greater demands on businesses to expedite deliveries at a low cost andto improve customer services. FedEx didn‘t have a business problem per se but, rather, hasendeavoured to stay ahead of the com-petition by looking ahead at every stage foropportunities to meet customers ‗needs for fast, reliable, and affordable overnight deliveries.Lately, the Internet has provided an inexpensive and accessible platform upon which FedExhas seen further opportunities to expand its business scope, both geographically and in termsof service offerings. FedEx is attempting to fulﬁll two of its major goals simultaneously: 100percent customer service and 0 percent downtime.THE IT SOLUTIONA prime software application used by FedEx is e-Shipping Tools, a Web-based shippingapplication that allows customers to check the status of shipments through the company‘sWeb page. FedEx is also providing integrated solutions to address the entire selling andsupply chain needs of its customers. Its e-Commerce Solutionsprovide a full suite of servicesthat allow businesses to integrate FedEx‘s transportation and information systems seamlesslyinto their own operations. These solutions have taken FedEx well beyond a shippingcompany. FedEx markets several e-commerce hardware/software solutions:FedExPowerShipMC (a multicarrier hardware/software system), FedEx Ship Manager Server(a hardware/software system providing high-speed transactions and superior reliability,allowing an average of eight transactions per second), FedExShipAPI (an Internet-basedapplication that allows customization, eliminating redundant programming), and FedEx Net-Return(a Web-based item-return management system). This infrastructure is now known asFedEx Direct Link. It enables business-to-business electronic commerce throughcombinations of global virtual private network (VPN) connectivity, Internet connectivity,leased-line connectivity, and VAN (value-added network) connectivity. Below provides anexample of one of FedEx‘s e-commerce solutions. It shows how FedEx customers can tapinto a network of systems through the Internet. When a customer places an online order, theorder is sent to a FedExWeb server. Information about the order and the customer is then sentto the merchant‘s PC, and a message is sent to the customer to conﬁrm receipt of the order.After the order is received and acknowledged, the FedEx Web server sends
FEDEX E-COMMERCE SOLUTIONCOMPONENTS OF THE E-COMMERCE SOLUTIONAccording to me some information systems/processes involved Order Management System Inventory Management System Supply Chain Management system Warehouse Management Payment ProcessingSystem (from client) Payroll Management System (for internal employees and vendors) Reporting Systems for sales (area wise/product wise) A Customer Relationship Management on the client sideEvery customer‘s order will be managed and details will be logged and maintainedAndanindividual order will act as mini system in itself.
RFID TECHNOLOGY IN CARGO AND SHIPMENT TRACKINGRadio frequency identification devices (RFID) are low-cost tags that assist in the tracking ofgoods and vehicles. These devices are placed on individual items and can either be active,i.e., constantly emitting a radio frequency signal; or passive, i.e., only emitting a signal whenqueried by an outside source.In order to track goods, readers (either hand-held or fixed) need to be installed to track andrecord the numbers from the RFID devices affixed to each product or container. Installationof these readers, however, adds addit ional costs which would be assumed by the shipper orpassed along to the consumer/end user.RFID tags are limited in the number that can be screened by each reader at one time. Forlarge numbers of loose goods, individually tagging each good is not an efficient use ofresources. Tagging the unit containing these loose goods is a more practical solution. RFIDtags may not be practical for all applications, including tracking liquids and items wrapped inmetal or foil, as these environments can create interference.The RFID tags only serve as a tracking Cargo and vehicle tracking is the ability to tracegoods, their containers, and their conveyances from the point of origin to their destination.Tracking is increasingly associated with information transfer using smarter tools such asradio frequency identification devices and global positioning systems.The RFID tags only serve as a tracking mechanism; they do not possess any effective securityapplications. To work properly, specific frequencies will need to be designated for RFID useonly. Government assistance and cooperation is needed in order to prevent interference withother existing devices and applications.While RFID development is progressing rapidly, three issues could limit its spread in the nearfuture. First, there is an ongoing intellectual property dispute regarding parts of thespecifications related to commercializing the electronic product code (EPC) technology.Second, EPCGlobal, the nonprofit organization charged with commercializing the EPCtechnology, and the International Standardization Organization (ISO) differ on thespecification dealing with the numbering systems to which RFID tags relate. Finally, many ofthe products being sold are not fully upgradeable to the next generation of RFID technologythat will be released shortly.Authentication/Legitimization of Customs Procedures Tracking can help verify the identityand contents of a vehicle or cargo container, and its use—coupled with risk managementtechniques—make some of the current customs procedures redundant. Elimination of thoseredundant procedures would expedite the customs examination process and increase theassurance that the vehicle or cargo container is safe and originates from an authorized orlegitimate shipper.
RFID uses radio waves to automatically identify an object, often by storing a serial number(and any additional information up to 2 MB) on an antenna. A receiver emits a short-rangealert when the integrity of the bulk has been compromised. Some RFID tags also monitorenvironmental conditions.Tracking automates the customs clearance system, thus minimizing the opportunity forcorruption through bribery of customs personnel. Barcode scanning simplifies the trackingprocess by identifying the cargo and conveyance through an individual code and a fixedreader and transmitting that information to a central point.CARGO AND VEHICLE TRACKING SATELLITE SYSTEMS USING GPS & GPRSGlobal Positioning System (GPS) tracking utilizes satellites to monitor fleets of vehicles orcargo containers, thereby ensuring there are no unplanned stops and that a pre-planned routeis followed. Geostationary Earth Orbit (GEO) satellite systems use satellites that orbit theearth in order to continuously monitor a particular area continuously.These satellite mapping areas can be as large as North America or Australia, yet can identifyindividual containers and vehicles. Networks of multiple satellites that sweep the globe andmonitor activity all over the world comprise Low Earth Orbit (LEO) systems. This categoryincludes voice-capable ―big LEO‘s‖ and lower cost, data-only systems dubbed ―little LEO‘s.‖Satellite systems are only viable options for tracking when the transmitter located on thevehicle or cargo has a direct line of sight to the satellite. They are consequently impracticalwhen utilized on double-stacked railcars, in the holds of vessels, and in the stacks at containeryards.GPRS is utilized to send the information to and fro from a GPS enable device in the remoteareas. GPRS also helpful in integrating and sending information on additional units likesensors and other functionalities based on the requirements.
BASIC E-COMMERCE PROCESSPROCESS In 1995 FedEx began to offer Internet Services which allowed the customers to track their shipments online by means of a reference number that they keyed into the web front end of theonline tracking system. FedEx Internet ship now offers onscreen preparation and printing out of air-shipment documents to the customer, storage of address books on the FedEx server and management of shipping history information. FedEx Virtual order helps business to get online by giving them software which enables them to set up online catalogue that resides on a FedEx secure server. This user interface links into a FedEx offer-handling system that registers online customerorders and assigns confirmation numbers, then passes the order to the software at the customer or the merchant. The merchant then packs the order possibly with automatic inventory updating and the merchant software generates shipping labels for the shipment by FedEx.
TECHNOLOGIES AND FEATURESA. VALUE CHAINThe value chain for FedEx Express can be seen as starting with the pick-up of the packages.FedEx employees gather the packages from various locations such as drop boxes, businessesand residences. Value is created for the customers by making package pick-ups possible justabout anywhere or anytime. FedEx has a money back guarantee for those people whosepackages do not arrive on time, therefore creating value by assuring timely delivery of thepackages.After the packages are initially picked up, they must then be transported to a hub. The hub isa central location where packages are sorted according to their destinations. The packageswill likely pass through many hands before reaching their final destination. The packagesstay at the hub until they are picked up and shipped either by truck or plane.The package delivery is probably the greatest value creation activity for Fedex Express. Thedrivers of the planes and trucks must perform their activities efficiently to increase theperceived value of the service. The drivers must absolutely no matter what, get the packagesto their destinations on time, and they do a good job in doing so. By meeting and exceedingthe customers‘ expectations value is increased with each positive result.The final primary activity is customer service. This function is to provide after sales serviceand support, however, FedEx provides customer service during the use of the service byletting customers track their package while it‘s in route. This creates extreme value forcustomers because they are able to check the status of their package at any given moment foran increased sense of security.Each of the primary activities is able to take place due to support activities such as companyinfrastructure, which is planes, buildings, trucks etc. Information systems, another supportactivity, allow the customers to track their products and place orders on-line. Materialsmanagement and human resources are additional support activities. Materials managementcan also be referred to as logistics, or the flow of goods or services through production intodistribution. Overall, the support activities allow the primary activities to take place andfunction correctly.
FedEx has a competitive advantage with their information systems and possibly companyinfrastructure. Their advanced information systems allow for precise package tracking,which few other companies offer. The customers can track their package by way of theInternet, without having to contact someone from customer service, which can be very timeconsuming. Other companies provide tracking numbers for packages but often times it is ahassle to track down a package.The massive fleet of airplanes, automobiles, and employee‘s add up to an enormous companyinfrastructure. This infrastructure allows FedEx to have a very reliable delivery service.FedEx is very confident with their time restricting package delivery service, they guaranteetheir packages arrive on time when the customer wants it delivered.B. PRODUCT TECHNOLOGYFedEx Corporation‘s main businesses in the transportation industry are the FedEx Expressand FedEx Ground. As found in our previous research, FedEx Express and FedEx Groundaccount for over $14 billion in revenues. While some technologies are specific to these twobusiness units, FedEx‘s dominant product technology adheres to all businesses in thetransportation industry in which FedEx operates.The dominant product technology used by FedEx for managing operations of all businessunits in the transportation industry is the internet. ―FedEx has always been a technologytrailblazer, and the success of fedex.com is testament to that.‖ The company was one of thefirst to harness the power of the Internet, launching its Web site in 1994 with a bold newpackage tracking application one of the first true corporate Web services. Soon after, FedExbecame the first transportation company with Web site features that allowed customers togenerate their own unique bar-coded shipping labels and request couriers to pick upshipments.Today, fedex.com hosts more than 6.3 million unique visitors per month and handles onaverage over 2.4 million package tracking requests daily. More than 2.3 million customersconnect with the company electronically everyday, and electronic transactions account foralmost two-thirds of the more than five million shipments FedEx delivers daily. Thefedex.com Web site is widely recognized for its speed, ease of use and customer-focusedfeatures. The Web Marketing Association praised fedex.com as the "Best Transportation WebSite" and eWeek saluted it as a top e-business innovator.‖
In addition to the Internet, FedEx also uses technologies specific to its FedEx Express andFedEx Ground businesses. Example of these technologies is the ―FedEx Solutions.‖ In short,FedEx Solutions is a ―variety of electronic tools, applications and online interfaces forcustomers to integrate into their processes to shorten response time, reduce inventory costsand generate better returns and to simplify their shipping.‖i For example, Global TradeManager is a comprehensive online resource to help identify the documents needed forinternational shipping.Technical standard is ―a set of technical specifications that producers adhere to when makingthe product or a component of it.‖ An example of technical standard that FedEx adheres to inits FedEx Ground business is an ―IEEE 802.11b.‖ ―This wireless LAN standard, ratified inlate 1999, lets data fly through the air at Ethernet-level speeds: up to 11Mbps. FedEx Groundis taking advantage of that start by expediting the movement of shipping information fromdelivery workers terminals to a central database. Wireless LAN technology lets FedExGround give its customers faster delivery confirmations, including signed proof of delivery.Last fall, the company began deploying wireless LANs at each of its more than 400 localpickup and delivery centers as part of an $80 million technology upgrade project. As the vansreturn home, the LAN automatically moves package data from drivers portable computers tothe database. ―As mentioned in the article ―Wireless LAN technology was designed to beopen.‖ This suggests that the standard is accessible to anyone and is therefore in the publicdomain. In my understanding, this standard was set by the IEEE P802.15 Working Group forWireless Personal Area Networks (WPANs)
IMPORTANCE TO ENTERPRISE With the application of E-commerce, Transtec has noticed an increase in turnover, improvement in customer and supplier relationships and in productivity. Other benefits have been that it attracts new customers and has improved its image and market reputation. The Internet is now comprehensively integrated into the companys bussinessprocesses andsupports the employees in their daily activities.CUSTOMER BENEFITSImagine the speed and simplicity of accessing FedEx® transportation services and all yourtransportation needs through a single system. A system offering a FedEx CompatibleSolution* can make it happen. These fee-based solutions combine FedEx quality with theefficiency of a single-source shipping solution, so you enjoy the following:INCREASED EFFICIENCY One streamlined system eliminates redundancies of separate terminals for different transportation carriers. Evaluate shipping options and rating information for FedEx and other carriers from a single touch-point. Automate document preparation such as shipping manifests and customs documents. Integrate with your host system for seamless information transfer.GREATER RELIABILITY Check where you are in the delivery process at any time via centralized tracking. Direct technical questions through one automation expert who knows your shipping system.REDUCED COSTS Manage your companys shipping expenses more easily and accurately. Minimize costly employee training by focusing on a single shipping system - initially and with each system upgrade.i http://www.fedex.com/us/about/technology/automation.html, 2003. ―About FedEx Automated Solutions,‖ October 26.