Ups Competes Globally with Information Technology

UPS is currently ranked #46 in the universe of companies with more revenues in the world.^[1] This is due to their straight position – “best service and lowest rates” – they were able to be the world's largest ground and air-package distribution company.

Although competing directly with DHL, USPS or FedEx ^[2], United Parcel Service, Inc. is still able to deliver small-packaging delivery services with a heavy advanced information technology investment.

One of the main technologies used to automatically capture customers’ signatures is a Delivery Information Acquisition Device (DIAD) , who has revolutionized the packaging delivery system and business in 1991 ^[3]. Monitoring and tracking packages is therefore possible for customers and professionals of UPS.

Thus, UPS Campus Ship is a multi-channel capability that allows multi-offices to make and control shipments, centralizing their shipping processes and gaining control of time and costs. It is totally browser-based with no installations or costly updates, accessible anywhere.^[4]

Thanks to Information Technologies, UPS is able to reinvent themselves, having an International Reported Operating Profit of $529 Million, with a healthy revenue growth across all three segments (International Operating Segment, U.S. Domestic Segment and Supply Chain and Freight Segment).^[5]

What technologies are used?

UPS uses some main technologies that are worth of mention:

• Delivery Information Acquisition Device (DIAD), that is a customer signature capture system, along with pickup, delivery and time-card information. It is a key-traceability information system that allows information to be world-wide accessible.
• Automated Package Tracking System – with the aid of the bar-code readers and several check points throughout the process, packaging tracking is possible to UPS/customer, through their website.
• UPS website – “(…) track packages, check delivery routes, calculate shipping rates, determine time in transit, and schedule a pickup.” (see Case Study no. 1).
• UPS Campus Ship is a multi-channel capability that allows multi-offices to make and control shipments, centralizing their shipping processes and gaining control of time and costs. It is totally browser-based with no installations or costly updates, accessible anywhere. 4
• UPS Supply Chain Solutions – division of UPS providing standardized services to the subscribing companies for a very low price.

What are the inputs, processing, and outputs of UPS’s package tracking system?

Inputs:

Automatic capture of customer and package information (using DIAD).

Package labels (bar coded), pickup, delivery and current location.

Processing:

The information is sent, through mobile networks, to UPS computer network (Computer Center, Automated Tracking System, UPS Website).

Based on the inputs, UPS process, ship, monitors and track the orders.

Outputs:

Clients can access all the processed data through UPS Website and track their packages.
Information is sent through UPS tools to customers own Websites.

How do UPS’s systems provide value for the company and its customers?

UPS is a giant operator in the platform of delivering packages.

By saving more human resources and customer’s time, UPS and its customers can share the benefits of this prominent and distinguished system. UPS is operating and providing services in an efficient way and at a high-level, finding the benefits and opportunities for earning and maximizing profits for the company.

If we consider the customer's side, this is a system that gives to the customer a feeling of efficiency, trust, reliability and confidence in the company. Through its automated package tracking system, UPS’s can monitor the packages throughout the delivery process, providing the information regarding its location by being instantly updated on the UPS website.

This kind of information allows UPS and even its customers to see at a glance if a package is lost, or delayed.

How are these technologies related to UPS’s business strategy?

UPS focuses more on having the best service in the industry, rather than focusing on price. That’s why they invest so much in technology, because it allows them to have a more differentiated service than their competitors, and get higher margins.

One on their value propositions is precisely “promise great customer service and timely deliveries”. With newer technology, they have been able to deliver their products faster, and be more efficient, helping them to keep the customer satisfied, and serve more customers per day, than their competitors.