Tuesday, April 21, 2009

Projects and Planning

An example of a project for UPS is the everyday activity they perform – package handling. There are set amount of times for each step in the process, so Gantt charts are most likely used. A regular 20 pound package has a set amount of time for each step of its trip, depending on how long it is supposed to be shipped. After the customer ships the package out via UPS, it is processed and loaded at one point, delivered to a local hub (possibly another one after that), unloaded and loaded again and then finally shipped to the recipient. This process is for a regular 20 pound package, and if shipped standard, then it can be expected anywhere between 4-7 business days. The software UPS uses is not applicable.
I believe the system they use is great because it has worked for 102 years and UPS is the leading package handling company in the world. To be more efficient in certain areas, I would make certain hubs more versatile. Constructing some hubs to take in packages over 120 pounds (max that can be processed through a local hub for delivery) would help lower cost of traveling and increase efficiency and customer satisfaction.

Monday, April 13, 2009

Supply Chain Management

The supply chain for UPS from raw material to customer is interesting. Because they are a service provider, UPS does not necessarily have raw materials. They deliver service, not develop products. The process actually starts with the UPS customer shipping a package, goes through the company, and ends with another customer. It is picked up by a driver, taken to a local hub where it is unloaded off of a trailer and loaded back onto a local package car to be delivered.
Bob Stoffel is the leader of the UPS Supply Chain. He directs the distribution and logistics operations of the company and is also responsible for the UPS Corporate Strategy and engineering functions. He says, “the mission that all supply chain professionals strive to achieve is to improve business processes by bringing providers, shippers, consumers, and goods closer together, and by doing so, enable global commerce."
UPS is so advanced in Supply Chain Management that they offer their services in UPS Supply Chain Solutions. Here, they help other businesses supply chain by improving and managing inventory and moving products.

Tuesday, March 24, 2009

Quality Control

UPS uses certain quality control methods. It is unknown if they use quality control charts, but the assumption can be made that they use some type of QC charts. This is because the continuous improvement at UPS package delivery department is measured by certain errors (will be explained shortly), so charts of some sort may be used.
Continuous Improvement is used at United Parcel Service. They want to make sure that the system that is in place can constantly deliver a superior service, and to do that, it is vital that they closely observe data to fix minor problems that can add up over time. Pareto Analysis is a tool UPS uses to correct mistakes for package delivery. For example, it was noticed that the package car drivers have been taking a longer amount of time to deliver packages than usual. Having this problem, along with a 2008 year that yielded the first loss in the company’s history, was not something they needed. To correct this, they collected data of what areas had the most mis-loads (package loaded into the wrong truck) and attacked them first.

Six-Sigma is also used to improve the package delivery process. The loading process is the one that needs improvement. The goals are set to reduce time to deliver packages. The causes of a longer route time are identified and proven to be a combination of mis-loads and loading the packages out of order. The improvement step includes writing the address and sequence number on the part of the package facing out and put in order so the driver can quickly identify and deliver. Controlling this process is done by meetings with supervisors to make sure that it is still being enforced and routine checks inside trucks are being conducted.
An idea that UPS should consider is keeping this process of writing the numbers, but also adding it as part of the training process for employees. If employees can thoroughly understand this process before jumping into the actual work, it will be a lot easier for them to adapt and master this way of loading.

Tuesday, March 10, 2009


Quality of design is determined before the product is produced. Since UPS does not produce anything, their service is determined and blueprinted before being delivered. For example, there are certain steps in delivering a package. Things that are predetermined before executing include: where the package is going, when it needs to arrive, how it will be handled, who will deliver it, etc. If a person needs a document delivered the next day, the package will be handled like every other package that goes through the corresponding hub depending on where it will be delivered. Before it is loaded on the truck, it is put into a separate pile strictly for next day delivery. All next day deliveries are taken to a separate location where they are either delivered by ground or air depending on proximity. This design has been researched and studied and determined the most efficient quality of design.

The package handling part of UPS generally has a low quality of conformance. Procedures and operations are already in place before the customer order and few specifications are made. UPS Supply Chain Solutions is a different story. In this area, UPS offers their service in helping businesses control and maintain products as well as other services, like helping with inventory and helping manage certain business aspects. These parts include: transportation and freight, logistics, international trade, consulting services and industry solutions. Quality of conformance would be high in this area because the service has to be tailored to the company’s specifications. United Parcel Service needs specific information and details in order to provide businesses with their Supply Chain Solutions unit.
Availability for UPS customers is everyday. UPS employees manage the flow of goods, funds, and information everyday in over 200 countries. Reliability is the same concept as availability for UPS customers – the service is guaranteed. In the package handling department, a customer will always receive the package in the allotted time they have requested and paid for.
Field service is convenient for customers of UPS. After the service is performed, if a package is damaged or lost, that customer (recipient or shipper) can file a claim. If it is a lost package, UPS will conduct a search and if it is not found, then the shipper can file a claim up to the declared value. If the package is damaged, then damage inspection will be conducted by UPS and depending on the results, the shipper can file a claim for repair or replacement cost up to the declared value. This process is simple through the UPS website. Entering in the tracking number is all the customer needs to do and after answering a few short questions, UPS employees will be right on it. This can also be done by telephone.
The system of quality in place for UPS is simple. The system is designed where every customer order can easily be processed and delivered in a cost efficient manner. The package handling process has been standardized with numerous hubs that receive and deliver packages within their area to either other UPS locations or directly to customers. Simplicity is a huge aspect for the United Parcel Service quality process. The customer wants to be able to ship, receive, or track without any hassle. Customer specifications are minimal and the system is set to where the service is always delivered smoothly.

Since the process itself does not need to be tampered with, improvements can be made elsewhere. UPS was in the red for the first time in its 102 year history for year ended 2008. Obviously, this is due to the struggling economy. Less people shipping as well as less businesses to ship is why UPS is down. Since UPS prides itself on its superior service and the process which they operate, they should focus on what they are already doing right and improve there. The transportation UPS uses can cut costs by using more gas efficient vehicles or ones that are less gas-reliant. Going green is a huge movement right now and UPS should jump on board. Maybe it will cost money now, but the investment will help stabilize UPS for the future.

Tuesday, March 3, 2009

Service Process Design

UPS employees are equipped with tecnical skills, are flexible and personable, and willing to work with customers face to face at any store or even on the the phone or online. Also, UPS provides all of the information on your shipment and it can be accessed via phone or internet.

UPS spends more than $300 million per year on training and education programs for its worldwide workforce. From driver safety training to the Community Internship Program, UPS ensures that its employees have the knowledge necessary to do their jobs safely and effective. Here is an example why they have good customer service contact: ATLANTA, Oct. 4, 2005 - UPS (NYSE:UPS) today announced the induction of 354 drivers into its "Circle of Honor," pushing to 3,956 the total of active elite drivers who have steered clear of accidents for 25 years or more. - better driving is better service.

UPS Service Guarantees
The customer always feels safe when the company offers guarantees. This means that its assures that they will actaully perform as promised.

The new reliability guarantee, offered at no additional cost, applies to direct shipments between points in the United States (48 contiguous states) and points served by UPS Freight service centers in Calgary, Edmonton, Halifax, Moncton, Montreal, Toronto, Vancouver, Windsor and Winnipeg. It is being offered at a time of continued strong trade growth between the two countries. The U.S. Transportation Department says surface transportation trade totaled $45 billion in February, up 18% over the prior year.
The 3 elements of the UPS service-product bundle include:
1- Tangible Service (Explicit Service): the actual service that UPS does for their customers by delivering their product.
2- Psychological Benefits (Implicit Service): How secure UPS customers feel when they choose UPS as a service for their product to be delivered to their destination and how efficient they do the service.
3- Physical goods (facilitating goods): How UPS gives the impression of how good, neat, professional and efficient UPS employees dress, deal with consumers, and how fast and convenient they get the package delivered to their customers in a great condition.

The cell they operate in on the service matrix:
The cell that ups operates in on the service matrix would be co-routed because it’s a standard service with different prices and options of how fast the customers wants his package to be shipped by using moderately repeatable sequence.

Monday, February 16, 2009

Process Design

The United Parcel Service uses a traditional assembly line to deliver their main service – delivering packages. An assembly line is defined in the book as: “Assembly-line flow is characterized by a linear sequence of operations. The product moves from one step to the next in sequential manner from beginning to end.” Even though they don’t necessarily “assemble” anything, the process is still the same. In the package delivery process, the sequence of events is the same from beginning to end. Belts, chutes, diverters, and people make this process. The package is unloaded off a trailer and placed onto a belt where the sorter receives the package. Here, the sorter places the package on a belt that corresponds to the area in the hub it will be loaded. When the package arrives at the correct area, it is cut off by a diverter. The package then travels down a chute where they are handled by more sorters. They put the package on another belt or in a cage where it finally arrives to the loader where he or she loads it onto a package car or trailer where it will be delivered to its proper destination. This process reflects the assembly line process because of the continuous flow and movement of products from place to place by a conveyor system.
The customer order that UPS processes is hard to describe because they deliver a service and do not produce goods for customers. But, the process that is most resembled would be the Make to Order process. This is because it starts with the customer order, which is when the package is sent out by a person. The only thing added is labor (employees processing the package) and then it is delivered. This customer order process is very simple, quick, and easily explained. It is also why UPS is the number one package delivery service in the world.

Obviously, the process characteristics matrix that UPS falls into is Assembly Line/Make to Order. This process is used to mass produce a certain product where it is easy on the customer. In this case, UPS has a mass produces a service and it is guaranteed to be delivered in the allotted time. Factors that influence this process are supply and demand as well as equipment. They can efficiently provide a superior service because of the many facilities, transportation, and equipment they own and operate. They use planes, trucks, hubs, warehouses, conveyor systems, and much more equipment to be successful. They also have many employees that execute an easily learned system of delivery. Also, people always need to deliver items to other places whether it is businesses or the average man or woman. So, the demand is always high, which makes the supply high, and vice versa.

There would be no adoption of a mass customization method because they already have a process similar to Modular Production. Although they don’t assemble a product, the package being sent can be sent as quick as the customer wants to send it. It can arrive to the destination in a week, or overnight. It all depends on how the person would like to customize their order

Tuesday, February 3, 2009

Inventory Management

Since the United Parcel service provides a service as opposed to goods, their inventory is their assets. Inventory is described as a stock of material used to facilitate production or to satisfy customer demand. UPS is a package delivery service and to facilitate production or satisfy demand they need to get packages to customers on time.
The transportation is what they consider inventory. Package cars, trailers, and the airline fleet are all used to measure inventory. How long they last, repairs needed, and fuel usage is all important to managing these assets. The fast delivery service is not only a benefit to their customers, but their inventory management as well. The quicker they can get the job done in the shortest amount of time helps them save money on fuel and mileage. Anyway, package cars at UPS are used for local deliveries to residents and stores. They last for about 20-25 years and at the end of their life they are either scrapped for spare parts or repainted and used internally. Tractors are used for long halls and deliver packages to certain hubs. They are great for managing inventory because they can carry many packages in two 28 foot or one 53 foot trailer and take less trips. The airlines use 747, 757, and 767, aircrafts to deliver internationally and use optimal space and conserve trips. United Parcel Service even employs bicycle messengers in some cities. The transporting of goods is the service that UPS is based on, so doing it efficiently is important to managing inventory.
The most important people to running this company seems like it would be the Chief Operating Officer (David Abney), and Senior Vice President UPS, Engineering, Strategy and Supply Chain (Bob Stoffel). Abney directs all operations worldwide and oversees the pick-up/delivery of 15.8 million packages and documents daily. Stoffel directs the distribution and logistics operations of the company. He is also responsible for the corporate strategy and engineering functions of the company.
As UPS has to handle their own inventory, one service they provide to their customers is helping with Inventory Management. This is run through UPS Supply Chain Solutions. Access to their global network, comprehensive services, and advanced systems help customers manage their own inventory. UPS Supply chain solutions help their customers improve their order and inventory management and make it a more effective part of your operations. The standard services that they offer include Vendor Compliance and Order Management, Global Information Management, Global Distribution Management, Regulatory Compliance Management, and Transportation Management.