Technological Developments in the Package Delivery Industry

Running head: TECHNOLOGICAL DEVELOPMENTS IN THE PACKAGE DELIVERY INDUSTRY

Technological Developments in the Package Delivery Industry

University of Phoenix

MBA 501

December 5, 2005

Technological Developments

“Moving eight miles a minute for most of the time”, while these are lyrics to a song by Bob Seger, these words could describe a package’s experience being shipped by one of today’s leading package delivery companies. How these companies have used technology to improve their services and how they may expand the use of technology to increase productivity and reduce costs is the focus of this paper.

Package Delivery Industry Best Practices

Learning Team A identified two package delivery companies to be studied for current best practices regarding technological leveraging. These were United Parcel Service and FedEx, two companies that place heavy emphasis on innovation and investment in emerging technology. For each company, two current best practices have been identified and researched and several overall opportunities discovered that could leverage technological advancements to benefit the companies.

United Parcel Service

Founded in 1907 as a simple messenger company, United Parcel Service (UPS) has grown into a $36 billion corporation focused on global sales (UPS, 2005). A key to UPS success is the technology in which they have invested more than $1 billion per year in website and e-commerce improvements thereby creating a more efficient parcel delivery system (Hayter, 2002). As with many other companies, rapid advancements in technology are creating constant need for opportunity assessment (Rayport & Jaworski, 2004), and UPS has certainly made the most of these developments.

One UPS best practice is the development of an on-line customer service center website which acts as a marketspace or the digital equivalent to the physical marketplace (Rayport & Jaworski, 2004). By accessing the UPS website, a customer can manage his package shipping experience by creating shipments, printing shipping labels, calculating fees, tracking packages, and having customer service questions answered (UPS, 2005). This has created a more efficient value system by enabling ease of access for customers (Rayport & Jaworski, 2004). Through a series of frequently asked question pages, nearly every customer service issue is addressed, minimizing the need for live employees monitoring phones while maintaining high customer service standards.

The second best practice of UPS is that of package flow technology, a program that places a hand held computer with each UPS delivery driver. UPS identified a need for more personalized experiences for the package recipient (Witt, 2005), a goal that was achieved through this program. These computers contain a manifest identifying the packages and the route, enabling the driver to provide better service by minimizing missed or late deliveries due to misplaced packages