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Management Development Institute - Gurgaon

Supply Chain Management

FedEx : Delivering the Goods
Case Presentation





Presentation Date: 22 FEB’2017

National Management Programme-29
Term: IV (Jan-Mar 2017)

About FedEx

FedEx revolutionized global business practices and
now defines speed and reliability

3 million packages and documents every business day . FedEx’s Reach Fedex has a global presence delivering to customers in more than 210 countries and handling about 3.

FedEx’s Services .

payments & delivery . Culture at FedEx • Thrived on culture based on delivering quality customer service • Internet acted as a natural complement • Started offering web based customer services in 1995 : Track shipment using a reference number FedEx • This took customer service believes that experience to newinformation about heights – one to the shipment one customer is relationships as important as the shipment itself • Customer engagement through all channels possible phone +mail + web • Huge cost saving : saved on call centers Reasons for success Low cost Free set up & services Ease of use Trouble free ordering.

000 yearly on IT FedEx has pioneered almost all the software solutions that ever existed in supply Chain management .000.Supply Chain at FedEx • Hub and Spoke model • Integration of Technology • The sandwich strategy FedEx spends nearly $1.000.

HUB AND SPOKE MODEL Involves a series of nodes (hubs) connected by arcs (spokes) that represent transport alternatives between two nodes FedEx Approach Conventional Approach • COSTLY • TAKES MORE TIME .

HUB AND SPOKE MODEL Advantages Dis-Advantages • Transportation Cost • Disruption at the hub can create delays throughout the system • Cycle Time • Overall operating efficiency is also limited by the • Reduce Inventory capacity of the hub • Just in Time • Day-to-day operations may be relatively inflexible Hub and spoke model still considered to be the best in the logistics industry .

Integration of technology FedEx Integrates WIRELESS BLUE Old technology + New technology SOLUTIONS TOOTH = Provide services to its customers RFID Internet Technology adoption has helped FedEx to acquire and retain its customers .

to scan barcodes on shipments to record time. Personal Digital Assistants & pagers enabled with Super-Tracker Technology to notify customers about the where about of their package  Uses wireless devices for data collection also . productivity and increased communication with the customer . destination & delivery information that is updated on their supercomputers to be retrieved by the customers Technology adoption increases efficiency . Integration of technology Wireless Technology  FedEx uses wireless technology for efficient package tracking and package scanning for both its business & its customer  Package tracking done through ‘Super-Tracker Technology’  Uses web-enabled devices like WAP phones.

proof of delivery & time stamp into FedEx network  It has a Bluetooth radio for hands-free communication with a printer & mobile computer in the courier’s delivery vehicle  The Power pad enables enables to retrieve current information about the package Boosts courier efficiency & maximizes package visibility thus saving time for FedEx and its customers . Integration of technology Microsoft power pad and Bluetooth  FedEx Power Pad is a Microsoft Windows-Powered pocket PC that works by scanning a package & uploading information like signatures.

Integration of technology Digital Pen  Device that converts handwritten information to digital data  Provides security & proof of a user’s inputted information and is immediately transmitted in real time  Digital data can be sent via GPRS to another phone. fax machine  Problems with Bluetooth – signal interference from the same frequency using 3-year old 802. PDA. PC.11b network. radio noise emitted from sorting belts’ engines & lights Use of digital pen offers reliability of information and reduces paper waste .

tracking and monitoring shipments . Integration of technology Radio Frequency Identification (RFID)  FedEx using RFID since 1999  RFID is an integrated technology allowing businesses to monitor and easily retrieve the data  Radio Frequency Identification (RFID) consists of a tiny silicon computer chip and an antenna  Small electronic tag transmits data via a radio signal to RFID reader and related software and hardware RFID helps to reduce inventory over load .

packed and shipped  Expiration dates  Numbers that will have to be stored. transmitted in real-time and shared with warehouse management. financial and other enterprise systems . inventory management. picked. Integration of technology Benefits of Radio Frequency Identification (RFID)  What the product is  Where it has been  When it expires  When and where merchandise is manufactured.

95. like in professional marketplace. who would warm up with the idea of getting delivery in morning or before 10 am  FedEx also had an edge over USPS due to it providing package tracking Helped FedEx gain market share and increase profitability . it didn’t react only on price but redefined its market  Re-segmentation included two deliveries.$12  FedEx really understood its customers. hence. that was cheaper than FedEx’s express delivery . one priority delivery that was available in morning and one standard one during afternoon  Reason FedEx survived through this strategy is because it understood that it has some customers. Sandwich Strategy  FedEx faced competition from USPS as they created a product for express delivery priced at $8.



and vessels in particular. refineries. in which supply chain terrorist attacks occur on a regular basis • The oil and gas industry and its transportation infrastructure. such as Colombia. including hubs.• Supply chains are targeted by terrorist organizations at least once every 7 days. and Thailand. are especially attractive to terrorists . on average • BSI has identified 35 countries. Egypt. India.

KILLING TWO BIRDS WITH ONE STONE • In-Q-tel and US department of Homeland security. has introduced a laser scanning device which tracks everything from 50 meters • The device is so effective that it can track minor traces of gun powder and drugs • Also if used on human can tell what they had for dinner • The machine is ten million times faster—and one million times more sensitive—than any currently available system. .

Learnings from the case Hub and Spoke model is still considered the best in the logistics industry Due to implementation of IT in FedEx internal processes were optimized and automated Customer Satisfaction was increased because of the implementation of new tools. .