Strategic Planning at United Parcel Services

1/28/2009 Baringin Emily Matthew Smith Shin-haa

Background

History
Founded by Jim Casey in 1907 on $100 borrowed from friends Originally, focused on delivering messages in Seattle Several Transformations:
From messages to package delivery To international air transport company Finally, in the 1990s, to a logistics company

Background
In 2006, a $37B corporation World s largest package-delivery company Leader in specialized transportation and logistics Serves 200 countries 3,500 retail locations via purchase of Mail Boxes, etc. Employs 384,000 Operates one of the 10 largest airlines

Organization
CEO is Mike Eskew Centralized, hierarchal with traditional structure at the top Senior management and staff set direction, priorities, budgets, and initiatives Tactical at the regional level, strategic at the corporate level Low levels of autonomy at the regional level

Culture
Consensus building Focused on efficiency and execution Continuous improvement Strong values: service excellence, employee ownership, commitment to stability Low turnover, loyal workforce

Competition
Private postal companies
Federal Express

Large government-supported agencies

USPS Deutsche Post

Strategic Planning at UPS

Early Strategic Planning

Early on done by a small group of senior managers Project-based
E.g.: expansion to Canada and Germany

In the 1991, strategy driven by a corporate mission and strategy statement

Goal to serve: customers, UPS people, shareowners, and communities

Advancements
Driven by competition 1996, Jim Kelly establishes the CSG to develop future processes for planning for the future Result of the CSG was to develop its own strategic process
In 1997, held scenario-planning session In 1999, drafted the UPS Charter to move from leadership in package distribution to an enabler of global commerce

Centennial Plan
Organized by Eskew in 2002 Meant to guide company through its 100 year anniversary 5 year plan Provided themes and broad overall direction Developed a strategy roadmap But, what happens after 5 years?

Scenario Planning

Background
UPS struggled to come up with creative ideas Chose to bring in consultants from Global Business Network to facilitate scenario planning Conducted interviews and developed a key focal issue: the future of UPS s global business in an ever-changing competitive environment Developed 4 different scenarios

Uncertainty
Worked to determine driving forces and critical uncertainties Defined two axes of uncertainty:
1. Horizontal the market environment
Flow of goods and funds across borders Regional and national markets Trade barriers to a more global market

2. Vertical demand characteristics

Nature of consumers Types of goods and delivery required Traditional consumers versus Prosumers

The 4 Scenarios
1. Tangled Paths
Highly competitive business environment Strong regional and national regulations Desire for more variation in products

2. Regressive World
Strong regional and national regulations More traditional supply chain, competitive landscape, and set of consumers

The 4 Scenarios (cont d)

3. Global Scare Prevails
Slow adoption of new technology due to stable demand More traditional consumers and industry consolidation

4. Brave New World

Deregulated globalized marketplace Mass customization of goods and services to proactive consumers New forms of competition and virtual organizations alliances and business webs

Outcomes

Example Slide 1
Plain slide

Example Slide 2
Slide has the whiteboard dude

Example Slide 3
Just a plain brown slide

Slide Example 4
Slide with a truck