Name Marks: 10, Time: 40 minutes

Read the uploaded case study and answers the following (Answer must be given on 1-page):

Q1. How can you reconstruct and recreate the Value Chain Model for United Parcel Service?
(Refer to the Porter Value Chain Model).

Answer:

The Business Value Chain Model consists of 2 types of activities namely primary activities and
support activities. I shall discuss, reconstruct and recreate the value chain model for united parcel
service UPS below point by point:

Primary Activities:

Inbound Logistics: Various distribution centres located closest to the delivery destination receive
packages routed from USPs computer centres located in New jersey, Mahwah or Alpharetta as
inbound logistics. Another example of inbound logistics can be the route selection through use of
special software by the dispatchers after getting relevant delivery data.

Operations: Sending of data and packages from their receiving centres to dispatch centres all follows
certain processes and falls in operations. For instance, drivers using “340 methods” to optimize
performance of every task from lifting & loading boxes to selecting package from shelf in their trucks
are part of operations and even operational excellence.

Outbound Logistics: The primary activity taking place in outbound logistics for UPS is the delivery of
packages to customers. Different software systems are performing in this activity as support and
increasing accuracy and efficiency like the DIAD plays its role & then package tracking system. Even
transfer of data and packages within company from one department to another constitutes inbound
activity for the receiver and outbound for the sender.

Marketing & Sales: UPS is leveraging its decades of expertise in supply chain and logistics to sell
their supply chain solutions to other companies. Their order management system OMS also supports
and offers solutions to other companies towards their critical parts fulfilment and inventory
management. This in turn provides further business & sales to UPS.

Service: They spend $1Billion on their customer service and support systems and companywide
mechanism and provide top notch customer involvement and real time tracking from order
placement to its delivery.

Support Activities:

Firm Infrastructure: Maintaining “Best service at Lowest rates” is their company mantra and their
financial structure revolves around it. They work for improving and maintaining cost and process
efficiency.

HRM: Their human resource from top to bottom including IT specialist operating their various
systems and their users, down to the delivery drivers and dispatchers get up to date training to
perform effortlessly and have their operations streamlined.

Technology development: UPS is using multiple tech platforms throughout their company & its
operations. To name a few are: Delivery information acquisition device (DIAD), Package tracking
system, CISCO systems with embedded UPS functions, Order management system OMS & they are
also selling UPS supply chain solutions to other companies.
Procurement: Their OMS system is helping manage their global service orders and inventory for
critical parts for their own company and also giving solutions to other companies in need.

Conclusion:

All in all UPS, as discussed in case study, is using their business value chain model optimally and
attaining business success. Their use of tech and operational procedures/systems also provides for a
smooth running of operations at such a large global scale.