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.