Operational Management of

FEDEX
 Introduction:
• FedEx is the world’s largest express transportation
company founded in 1971.
• There are more than 280,000 employees
worldwide, serving 210 countries and 366 airports
worldwide, with 657 aircraft.
• The ground vehicle fleet numbers 43,500
worldwide.
• There are 44,000 drop boxes, 2400 FedEx shipping
sites and 7600 authorized shipping centers.
 Supply chain:
• FedEx Supply Chain Services designs, develops, and applies
transportation management and e-Logistics solutions to
improve inventory visibility, velocity, and speed to market
•  Their transportation management service improves
transportation processes and can increase efficiencies.
• The FedEx network uses a HUB and SPOKE system allowing
flexibility in primary warehousing, distribution, secondary
warehousing to ensure minimum inventory holding cost
providing the customers with a cutting edge over its
competitors.
 Transportation and logistics management
• Transportation is the linkage process in logistics and often
consumes much of the resources provided to the logistics function
especially with a package delivery process companies like FedEx.
• It once dominated the distribution activity but for most companies
it is now integrated into an overall activity.
• There are three factors that need to be considered. Operational
factors include customer, environmental, product and company
characteristics.
• Their transportation management service combines sophisticated
information technology with human resources to improve the
inbound and outbound transportation processes of their
customers.
 Transportation and logistics management
• They streamline transportation management by providing a single
point of contact for all of customers shipment and delivery needs.
• A team of dedicated coordinators is assigned to each account.
• Clients order service via electronic data interchange, the Internet,
phone, or fax. They identify the carrier that will provide the lowest
cost and best service for a customer’s shipment via software bases
developed by FedEx.
• Then, a coordinator alerts the selected carrier and dispatches a
vehicle.
• The result is a simplified, cost-effective process for managing
transportation and inventory carrying costs.
 Customer service in the supply chain
• Efficient Consumer Response refers to the situation
that makes the consumer the hero by providing
better service to customers at lower cost, fewer
stock outs and new products they want.
• Consumers will get a better deal overall.
• All this is done through control of information and
product form the point of manufacturing to the point
of sale, with the intent of eliminating waste and
reducing cost cross an entire distribution pipeline.
 Example:
• FedEx has a 24 hour call center; the customers can call and make an
order for pickup and delivery. FedEx assures a maximum 1 hour response
time for pick up.
• The customer is expected to package the goods to be sent.
• Also after the pick-up has taken place, a one-hour time for doing the
necessary paperwork is required
• Following this a maximum of 6 hours processing time is needed at the
airport for bagging, tagging, foreign exchange remittance, security check,
clearance, etc.
• Keeping in mind the time for departure of flight, FedEx works backward
to ensure that the product is picked and delivered on time
• For achieving this FedEx has a call cutoff time after which they stop
taking calls for that particular day
 Supply Chain
• DHL is completely service oriented therefore it does not have its
own material movement, that means it only involves physical
distribution and procurement.
• Procurement also includes the material needed for packaging
such as paper, molded trays and boxes, wooden crates, standard
containers wraps, plastic inlays etc.
• The materials or the goods collected from the senders (including
papers, documents, physical goods like clothing, household good,
chemicals, exotic animals are weighed, checked for condition,
and depending upon its various characteristics it is packed.
• The goods are then dispatched to their destinations.
 Supply Chain
• Supply Chain is divided into two flows
1. Coordination flow
2. Operation flow
 Coordination flow
• Coordination is the backbone of the overall
information system, It implies estimating the
time requires for collecting the goods from the
door step of the sender and then estimating
the time for the goods to reach the final
custome
 Operation flow
• The second aspect of information requirements is
concerned with directing operations to receive, process,
and ship inventory as required supporting customer and
purchasing orders. Operational requirements deal with:
• Order management
• Order processing
• Distribution operations
• Inventory management
• Transportation and shipping
• Procurement