1. 1.

Introduction

2. 1.1. Package Delivery and Logistics Services Industry and Information Systems

3.

Logistics Industry manages the movement of the valuable things and services between the

starting point and the usage point for providing the requirements of individuals and corporations.

The industry includes the reliable mixture of the elements of raw materials and goods handling,

transportation, inventories, storage, packaging, information systems, and security. The main

expectations of the stake holders of this industry are best service and lowest costs and rates.

Suitable, reliable, appropriate and correct usage of the information systems on logistics industry

can be one of the main drivers to meet the expectations of the stake holders. The targets of the

logistics industry, such as realizing of the short delivery times, lowering the inventories level,

making higher of the capacity usage and reliability, can be provided by the integration of the

information system at all level of the logistics services business activities. Creation of the

information systems for making more efficient and more flexible industrys core business

activities, has made the industry a technology driven industry. It has given new business

opportunities and also focusing on emerging business areas.

1.2. United Parcel Service Inc and Information System ups (United Parcel Service Inc)

is the biggest worldwide organization in the packages and the freight delivery services, the

specialized transportation services and the logistics services industry. According to the Fortune

Magazine at Fortune 500 - 2011 ranking list, the Atlanta - USA based company is the 48th

biggest company in USA by generating $ 49,545 million revenues and $ 3,488million profits. Also

United Parcel Service Inc is the 166th biggest company all over the world. (Fortune, 2011) The

company has 400,600 employees, 91,196 motor vehicles and 225 aircrafts to operate its

business successfully. Its daily worldwide packages and documents delivery volume is 15.6

million in the service area for over 220 countries and territories. In 2010, United Parcel Service

Inc delivered3.94 million packages and documents. The company services daily 8.5 million

customers and it faces daily 26.2 million online tracking requests. The companys operation is

based on 12 air hubs, 1801operating facilities, over 20.000 retail points of access and 40.000
drop boxes. In the recent two decades, as the company implements its worldwide operations in

package delivery and logistics services, specialized transportation and supply chain

management, there is a huge technology behind its business operations. The growing demand of

the short time delivery services forced the 1907 established company to develop its technology

for maintaining its efficiency, reducing its costs, providing new customers, and keeping its prices

competitive.

The companys package tracking systems technology -which was firstly set up on 1992 by

attaching ascendable bar-coded label to the packages for electronic tracking- includes handheld

devices, specially designed vehicles, global computer and communication systems, networks,

data management processors, worldwide web site and user friendly softwares. Based on its

information systems technology, UPS can record, upload, and monitor the detailed delivery

information immediately. And the customers can also receive real time information about their

deliveries through the UPS web site by using their own computers. Its the successful

implementation of the cloud computing on logistics industry. The detailed information on the

electronic label is transmitted to companys computer centres by using the handheld devices

-Delivery Information Acquisition Device (DIAD). Then the information is processed and stored

for using when it would be used. The electronic labels and the handheld devices are also used

for creating the most efficient route, keeping distance from traffic and weather conditions,

efficiently arranging the changed collection schedules etc. However, UPS spent tens of billions of

dollars to develop its information systems technology, it benefits from its information systems

technology investment. The electronic label -which can also be created and printed by customers

online- gives the opportunity to the company to create the most efficient routes even before the

delivery pick up. According to UPSs estimation, the company saves approximately 28 million

miles and millions of gallons of fuel every year.

1.3. Supply Chain Management Solutions for Other Companies

In the late 1990s the UPS management discerned that the companys expertise in despatching

and tracking can be used to manage logistics and supply chain activities of the other companies

instead of building their own logistic services. In 1995, The UPS Logistics Group was formed,

and the company began to offer supply chain management solutions and consultancy to the
other companies. This solution helps the companies to provide their logistics activities, package

delivery and freight activities, financial, and mail services to increase their business activities and

develop their worldwide supply chains. In the year of 2010, UPS made $ 8.7 billion net revenues

from supply chain management and freight activities. Its almost one in five of the total annual

revenues. And also UPS acts as the consultant of the logistics services activities for thousands of

major enterprises in globe. The expertise in logistics give the opportunity to UPS to be the default

dispatcher of growing e-commerce businesses. In 2000s, UPS launched its Supply Chain

Management (SCM) software -UPS Road Net Transportation Suite- which offers distributor

companies independently planning their own delivery routes daily. The software -which based on

the expertise of UPS- provides the opportunity to distributor companies reducing their distribution

costs and fleet miles, increasing resource utilization, knowing the actual cost per stop, setting

and checking drivers standards, decreasing routing time,contingency planning and reporting that

evaluate companies successes. The other service of UPS is UPS Document Exchange, an

internet based system, allows overthousands of businesses to securely deliver their critical and

important documents, files andsoftwares in the interactive virtual area. United Parcel Service Inc

makes alliances with leadingtechnological companies to prepare itself for the beyond and for

taking necessary steps to continueits industry dominancy and growth.

2. Literature Review

As it is said before in heading 1.1, UPS is the worlds largest company in transportation and

logisticsindustry. The rivals in this industry, such as FedEx, US Postal Service, Airborne Express

DHL, CHRobinson Worldwide Inc., TNT and others, force UPS to improve its business activities

efficiently bydeveloping its managing information systems. The rivals have improved their

managing information systems simultaneously with UPS. But the goals and the future prospects

of the United Parcel Inc willleverage the companys position. As the package delivery, freight and

logistics services industrycontinues to grow there is no obstacle that UPS will not continue to be

the industrys dominantleader with its wide range of divisions and companys managing

information systems technologydevelopments.

2.1. Managing Information Systems

The mandatory of the sustainability of the company beyond the random and chaotic business

worldand the stiff competition with rivals, has shown the importance of the improvement of

theManaging Information Systems to making decisions prudently and reasonably.

ManagingInformation Systems (MIS) -as a mixture of the elements that collect, process, store

and distributeinformation to help decision making and control- supports decision makers, staffs

and customers tocoordinate, control, analyze, and visualize issues while the business activities

are being realized.(Laudon, 2007)Managing Information Systems (MIS) refers to providing data,

collecting in a systematic way,processing, storing, widening and enhancing of the information to

execute the activities in aneffective way and profitably. It objectives to facilitating the decision

making, providing the essentialinformation from entire sections, emphasizing the critical points,

making reasonable decisions.(Laudon, 2007) The Managing Information Systems (MIS),

ultimately goals the optimization, has tohave the characteristics of providing relevant information

for all levels of management from top todown, directing actively by the management, covering all

the functions of the organization, havingthe common data flow to avoid the overlapping and

reiteration, being in a long term planning atleast 3 to 5 years, flexible and user friendly. It must not

be forgotten that the well quality of theinputting data, well designing of the process and the

system, and well managing of the processingsystem directly affect the quality of the necessary

information which enables the organization tobecome productive and profitable.Its must not be

confused that MIS and Information systems are the same term. The informationsystems dont

include the decision making systems. MIS is widely used to totalize the informationbased

management systems. These are Supply Chain Management (SCM), Customer

RelationshipManagement (CRM), Enterprise Resource Planning (ERP), Decision Support

Systems (DCS), ProjectManagement, Knowledge Management and Executive Support Systems.

(O`Brien, 1999)The technology of MIS is based on Hardware/Software, Data Capturing and

ManagementTechnology, Networking and Telecommunications Technology. MIS plays a

significant role all level ofthe pyramid of business activities such as operational, management or

strategic (decision makingand executive) levels. (Laudon, 2007)

2.2. Strategic Information Systems (SIS) and Competitive Advantage

SIS is developed to implement business strategies by using information systems and

computersystems simultaneously in response for adding businesses initiative. The objectives

may be lowercost, differentiation, focusing on a nishe market, innovation, new product, new

services or newbusiness models, customer and supplier intimacy. The companies which use

effectively SIS may havesignificant competitive advantage.SIS is the systems such as Decision

Support Systems (DCS) which customize the information fromdatabases to fix the problem and

make decision, or Executive Support Systems (ESS) which quicklyreports to executives for all

levels of the organization.

2.3. Enterprise Content Management (ECM)

Enterprise Content Management is a process which the MIS based on it. It is the strategies,

methodsand tools that used for capturing, storing, managing, keeping and delivering contents

anddocuments related to the organizational processes. Its components are capturing,

managing,storing, keeping, and delivering. (AIIM, 2010) 2.4. Cloud Computing and Web based

Interactive SessionCloud computing is the delivery of computing as a service whereby resources,

softwares andinformation are provided to computers and other devices, such as smart phones or

PDAs, as a utilityover a network. (Gruman, 2008)Web based interactive session is the permanent

interactive interchange, dialogue, meeting orconversation in a particular network, between a

computer and a user. Sessions use cookies andcryptic technology for security and storing as

much data on the server. This process must guaranteedconfidentiality, data integrity and

authenticity. 3. AnalysisIn the early 1990s, the sensitivity of the customers about package

tracking caused the companieson package delivery and logistics industry to make investments

on tracking capability. Before theseinvestments all the companies, as well UPS, hired a few

employees on their IT departments tosupport their urgent IT needs. Now, UPS hired over 5000 IT

employees, and the most importantly allthe employees from top to down use information systems

technologies on their daily businessactivities.

3.1. Technology used by UPSThe technology used by UPS is based on computers, hardwares,

softwares, Data Capturing andManagement Technology, Networking and Telecommunications

Technology and IT Infrastructure.These are drivers handheld devices -Delivery Information

Acquisition Device (DIAD)-, smart barcoded labels, barcode recognition devices which is

integrated with handheld devices, wirednetworks, wireless networks, cellular phone networks,

individual computers, central computers,data storage and backup technology, softwares that

manage the enterprise closed circle data,softwares that using by customers, web based tracking

system and so on.Known as the industrys most comprehensive handheld device, DIAD, contains

data capturing,collecting and transmitting technologies, as well digital signiture capturing. The

smart bar code labelincludes the information of sender, destination and arrival time. Once the

label is recognized and thesigniture captured by DIAD, it takes 60 seconds the information

available on the UPS web site. Theinputs such as receivers signiture, package data, and billing

are processing in the central computerand then become outputs for customers. The hand held

device uses cellular phone network totransmit the data to UPSs central computer. The

technology on this enterprise contentmanagement process has known as Bar Code Recognition

Technology. All the vehicles such as trucks,aircrafts, trains and ships are tracking by GPS

technology, The DIAD and GPS technology are usedduring the process of package

transportation and the customer tracks the package movement.According to a study at UPS IT

Department, the capturing data by DIAD, saves 30 minutes per day onper driver. If its thought

about over 70.000 drivers, it is a huge amount of savings for the company.Since UPS launched

its world wide web site -www.ups.com- the company has improved its internetbased technology

from static situation to click-and-mortal interactive session situation. In 2011, thecustomers are

able to track their package real time in virtual area. The layers of customer,application, platform,

infrastructure and server of cloud computing makes possible to get the realtime information about

their deliveries for customers. The UPS Package Tracking Systems are able to monitoring

performance, to speeding customersdelivery actions, to tracking the deliveries of each steps of

the movement, to estimating the cost ofthe delivery, and so on.

4. Recommendation

The stiff competition on the package delivery services and logistics industry is still based on

focusingon the research for quicker and safer delivery methods. And the customers still demand

moreexpectations on package tracking. The technological developments either cope with the

needs ofcostumers or leverage customer expectations.

4.1. Industry Based Problems

The industrys core element is the packages which need to deliver from the first point to the

usagepoint quickly and safely. The target must be treating each package like its the only one

package thatmust be delivered.The problems are still mainly based on the package tracking.

They are caused by lost packages,damaged packages, stolen packages (even by the staffs),

return packages, wrong or incompletedestination addresses, unavailability of receiver, return

packages, unexpected delays accordingweather, natural disaster and traffic conditions, and

uncollected payments. Especially lost packages,damaged packages, and stolen packages cause

companies to pay huge amount of compensations.Also the reputation of the company badly

affects by these problems. Even if the companies hugelyinvests package tracking systems, they

still spend huge amount of their budgets for compensationand fixing their reputation. Even if the

hand held devices are so clever or the labels on the packagesare smart, the package tracking

system is still based on bar code capturing. As the delivery processruns, If any of the hand held

device does not capture the bar coded label, actually the package is notunder control.On the

other hand, the senders generally dont care about declaring the exact destination address,even

if they are very sensitive about their packages. The receivers often arent informed about

thepackage delivery by senders. This problem caused companies spending huge amount of

theirbudgets to cope with return packages. For the deliveries except US and UK, once a

destinationaddress identify by the sender, it is not be verified. Especially return packages for the

internationaldestination deliveries, which are relatively costs more, causes to spend huge amount

of budgets forthe companies. Although the package tracking system is focused on giving real

time information tothe senders, there is a gap to inform the receivers. The international

destination address verificationand the interactive package tracking system from the enterprise to

receiver are still the gaps of theinformation systems of the industry.When its searched on web, it

can be observed that the large portion of the complaints about theindustry comes from the

receivers. The receivers widely complaint about the lack of the exactdelivery times. The
companies generally offer daily 9am to 5pm for US and UK deliveries, and weeklyMonday to

Friday for deliveries except US and UK. It should be considered that its inconveniencedfor the

receivers for wasting their time to wait their deliveries. There must be an information systemthat

available to interactively inform the receivers for the range of the reasonable delivery times

inreasonable times. The unexpected delivery times for the deliveries based on the unexpected

weather, traffic jams anddisaster conditions are the other problems for the companies. The

expectations of the customers areso spoiled that they dont care about any natural disaster on

any side of the globe. The customersare in the expectation of being have a secondary

emergency plan for all unexpected conditions.Existing delivery and tracking systems are not

available to cope with the really unexpected conditions. The ash cloud disaster on 2010

uncovered the gap of the secondary plans of the industrycompanies.As the years of 2000s, the

global terrorism affected all industries, as well package delivery andlogistics industry. The

industry is one of the most mouth watering channels for the global terroristorganizations. Finally a

global terrorist organization tried to use the industry for attacking its target.In the early 2010, a

delivery from Middle Africa territory to US via Europe, contained an explosive ina printer

machine. Fortunately the explosive deactivated, before it is burst. The package delivery

andlogistics companies dont actually know about the consisting of the packages. The companies

donthave any technology based strict security control for the packages which they run for

delivering.

4.2. Solutions for Problems

It is recommended that the bar coded capturing system, which the package tracking system is

basedon it, can be changed with RFID (radio frequency identification) capturing system. The

radio wavesare used to transmitting data even from several meters. While the delivery is in

progress, thepackages can be track by using the RFID label on the packages. The lost or stolen

packages problemcan be prevented by this technologys simultaneously check. Once a package

embedded with anyvehicle or a warehouse by using the RFID technology, the package will be

kept in safe there.The address verification system for the declared destination addresses except

US and UK addressescan prevent the return delivery problems. This system can be related with

automated messageservice for receivers. The unavailability of the receiver can be partially
prevented by thisimprovement. Also the wide range of the expected delivery time intervals can be

minimized. Theelectronic security checking systems can be adapted on the delivery systems to

prevent of partialillegal goods delivery.

5. Conclusion

UPS is the biggest package delivery and logistics service firm of the industry for a long time

becauseof its differentiation on managing information systems. The differentiation on MIS helps

UPS for itscore competencies, using synergy, giving opportunity to entering new emerging

markets, andachieving a competitive advantage.Total word count excluding Cover Page,

Question and References: 3067 7

UPS COMPETES GLOBALLY WITH INFORMATION

TECHNOLOGY

The input, Processing and output of UPSs package tracking system

can be explained with the process chart below:

1.

1. UPS used the following technologies in pursuing

their business strategies:
 Computer Center (Data Center): This is the
Data Center built by UPS that handles the
processing and storage of all the global data
that is feed into the tracking system. This help
in the streamlining of thier business operations
where every UPS office in the world could
connect the central database to track products
that are transited, was picked up and or
delivered at their respective offices.

Barcoding technology The Barcode

technology goes with their strategy in
delivering packages at the fastest possible
time. The barcode technology which allows
dispatchers to scanned straight into the
system, package details reduces the time
dispatchers would have spent entering that
data one after the other from the package into
the computer.

Delivery Information Acquisition Device

(DIAD) The DIAD also supported their
business strategy of streamlining their
business operations to provide best service to
the customers. This is because the devices
being connected to wide Area network of UPS
via internet, helps them to collect pick up or
delivery data in real time and updates the
tracking system under sixty seconds. With the
 use of special software, best possible routes
are downloaded onto the DIAD which helps the
drivers to use the efficient routes in delivering
the packages, A strategy to cut operational
cost.

A Web-based Post Order Management

System. Management of other businesses supply
chain with its own Global delivery network
technology, i.e. the web-based Post Order
Management System, was another new
product/business model that UPS introduced as a
strategy to stay in competition by offering lowest
rates for providing supply chain solutions as
compared to those companies managing it
themselves.

UPSs Wide Area Network and Internet: UPSs

wide area network helped in connect all their
offices globally to connect to the centralized Data
Center using Internet so that they can update the
tracking system with live information and data for
customers to also view in real time.

1. The strategic business objectives that UPSs

information system address are:

Increasing cost savings and safety

Delivering packages at the shortest possible

time
 Increasing company revenue by introducing
new products and business models

Updating customers in real time, progress of

their packages

Streamlining companies operations

Building a Global delivery network

1. The following are some of the issues that would

have happen if UPS had not introduced information
system in their operations:

Inefficient delivery of Packages: they

currently have a software that detects the best
efficient routes to the destination of each
package. So without this software, drivers
would have spent a long time delivering
packages which would have led to the burning
of lots of fuel and customer dissatisfaction.

Delayed communication with customers

about package progress: Without the
tracking system which allow customers to
track thier their packages, Customers would
have had to wait till their packages are given
them. Also Customers care representatives
wouldnt have any information on package
delivery progress to tell customers, in case
 they call, which would lead to customer
dissatisfaction.

Limited Business model to generate

income: The introduction of a Web based Post
Sales Order management System to provide
supply chain solution, was another business
model and new product to help then generate
additional revenue. So UPS wouldnt have had
this additional revenue generation venture in
their business

Un-Streamlined operations: The Package

tracking system accompanied by the
Computer Center with communications
networks and database and the DIAD, allowed
each branch, offices and delivery officers of
UPS worldwide to all work from the same
database which allow each center to update
the system constantly and on time, when an
order is picked or delivered or transited at
their office. Without this system, dispatchers
would have had to wait till they finish delivery
for the day before coming to the office to
update supervisors. Customer care officers
wouldnt have known the state of a package
until it gets to their desk and would cause
customer dissatisfaction when they call in.
Dispatchers and customer care officers would
 have also spent a lot of time entering
extracting package details from packages that
are transiting, or have been delivered and has
to be delivered to the customer.

Staff Demotivation: In this age, most

employees are motivated when thier work is
backed by technologies that makes them more
productive, smart and easy to accomplish
without stress. Imaging when a liquid pours
onto or the wind blows away, the sheet the
dispatchers would have recorded the pick-up
and delivery information? Then there is loss of
valuable data. Customer care officers would be
soo demotivated when customers has to call
them and insult them all they because they
dont know where their packages are.