Let's Talk Freight
Maryann Cassidy Kearns
e-Commerce Sales
United Parcel Service
January 24, 2001
Facing a virtual reality?
Importance of Fulfillment
Christmas 1999 "items arrived later than promised-and some didn''t arrive at all. It became apparent that E-business success depends more on capable back-end fulfillment systems than on flashy Web sites".
--Information Week, September 2000
A Tradition of Watching Our Customers' Back-Ends
- Technology vision looks first at the back-end
- $11 billion investment
The UPS Perspective
- 13 million packages each day
- Seven percent of US GDP
- A decade of applying technology to commerce
Supply chains are being transformed...
...into pull value chains
Combining Three Flows.of Commerce
- Goods
- Information
- Funds
Characteristics of the new electronic supply chain
- Customized products and services
- Global visibility
- Agile
- Lightning velocity
- Managing multiple suppliers seamlessly
Integration Throughout the Customer's Business Process
Order Entry
- Select Service
- Rate & Validate
- Tracking
- Reference Number Tracking
- Time in Transit
Account Process
- Proof of Delivery
- Electronic Payment
Customer Service
- Tracking Service Information
- Tracing Proof of Delivery
- Service Availability
Inventory
- Interface to Inventory Systems
Pick, Pack, & Ship
- Print Shipping Labels
- Send Shipping Detail
- Ship Notice to Facilitate Pmt
- Send Tracking Number and Package Count to Merchant
- Initiate Pickup
Returns
- Initiate pickup at customer's location
- Verify pickup address
- Confirm pickup and route notice to merchant
Integration = Process Improvement
| Tracking
|
Direct Integration
Inbound and Outbound Real Time Visibility |
Improve
Customer Service |
| POD
|
Days Sales Outstanding
Cash Flow |
Enhance
Corporate Financials |
| TNT
|
Planning and Forecasting
accuracy |
Improve
Inventory Turns |
| Electronic
Billing |
Integrate transportation into
enterprise finance system |
Eliminate
Freight Bill Audit |
Two Strong Forces Creating Revolution in Commerce
- Globalization
- Consumer Pull
The UPS View: Drop the "E" in E- Commerce
- Computers can't cough up packages
- Technology can combine three commerce flows
Applying Technologies For Customer Value
- Target the Right Customers
- Streamline business processes that impact the customer
Total Peak Day.Customer Inquiries
- Let customers help themselves
Our Customers' Cost of Tracking a Package:
- Phone - over $2.50 /occurrence
- Internet - under $0.10 /occurrence
- Help customers do their jobs
Ford and UPS Have A Better Idea- Track vehicles from factory floor.to dealership
- Reduce costs; improve customer service
- Manage Ford's transportation system to shorten time to market by 40 percent
In Summary...
- Enabling Commerce
- Supply Chains are changing rapidly
- Evaluate all business processes for effectiveness and efficiency...
Process Improvement is the Key to Value Creation
Strapping New Technology to Old Business Processes Will Negatively Impact Value.
