Ups Case Study

Introduction

UPS has always been a stable, smart company that knows where it wants to go and how it was going to get there. Long-term profitability was never a question; however, increased competition and technological advancements have been two of the major forces behind UPS's wake-up call. In 1994, it was announced that UPS would be undergoing some drastic changes in the future, which caused much stress and concern company-wide. One of the changes that have affected every person at UPS is the company's new quality initiatives. UPS is not known for rushing into things, but finally realized that the 90s was a decade of necessary change. Upper-level management began to contrast the "Old" and the "New" UPS, with one major characteristic of the "New" UPS being a company-wide goal of customer satisfaction achieved through quality initiatives. Change is not easy and the transition from the "Old" to the "New" UPS while traveling down the "Road to Quality" will prove to be long trip for a company deeply grounded in tradition.

History

United Parcel Service (UPS), headquartered in Atlanta, Georgia, is the world's number one package delivery company and the third largest private company in the United States. The company was started in 1907 by James (Jim) E. Casey at the age of nineteen. There was a great need in America for private messenger and delivery services. Personal messages and packages had to be delivered privately. Jim Casey borrowed $100 from a friend and started American Messenger Company in Seattle, Washington. The company did well, despite the stiff competition, because of Jim's strict policies: customer courtesy, reliability, round the clock service, and low rates. He used the slogan: "Best Service and Lowest Rates."

In 1913, the company began to focus on package delivery for retail stores. Jim merged with a competitor, Evert McCabe, to form Merchants Parcel Delivery. Charles W. Soderstrom joined the firm in 1918 and helped manage the growing fleet of delivery vehicles. The 1920s and 1930s were characterized by growth, ingenuity, and change. The company expanded its operations to Oakland and Los Angeles, California. By 1930, delivery services were provided in all major West Coast Cities, and a consolidated delivery service was established in the New York City area. Many innovations were adopted included the first mechanical system for package sorting, and a 180-foot-long conveyor belt was installed in Los Angeles. The company changed its name to United Parcel Service. "United" because shipments were consolidated, and "Service" because, as Charlie Soderstorm observed "Service is all we have to offer". All UPS vehicles were painted the now familiar Pullman brown color, selected by Charlie Soderstorm because it was neat, dignified, and professional.

World War II prompted UPS to redefine itself. Retail stores encouraged their customers to carry their packages home, rather than have them delivered because of the fuel and rubber shortages. The trend continued after the war as much of the population began moving into the suburbs, where shopping centers were being built. The convenient shopping made it easy for customers to drive home with their own packages. UPS managers began looking for new "common carrier" rights to delivery packages between all addresses. This included any customer, private or commercial and it placed UPS in direct competition with the U.S. Postal Service.

UPS was restricted from operating in any parts of the country. Federal authority was needed for each state border crossed, and each state had to grant permission for the movement of packages within its borders. It took UPS almost twenty-five years to obtain authorization in all 48 mainland states. In 1975, national parcel delivery service was finally a reality.

UPS began offering two-day service to major cities on the East and West coasts in 1953. Packages were flown in the cargo holds of regularly scheduled airlines. This service was called UPS Blue Label Air and was available in every state by 1978. As the demand for air parcel delivery increased in the 1980s, federal deregulation of the airline industry provided new opportunities for UPS. UPS began to assemble its own jet cargo fleet and by 1985 they were offering overnight air delivery. UPS airline is among the ten largest airlines in the United States.

UPS entered the international shipping market in the 1980s, establishing a presence in several countries and territories in the Americas, Eastern and Western Europe, the Middle East, Africa, and the Pacific Rim. Today UPS operates an international small package and document network in more than 200 countries and territories (Hoover's Handbook of American Business, 1996, p.1456).

Although