Understanding and Learn, Case Study of Leveraging Information Technology to Grow Business in FedEx.
Federal Express is a global express transportation and logistics company that provides customers with a single source for global shipping, logistics, and supply chain solutions. It was founded in 1973 by Frederick W. Smith. Since its launch, FedEx has led the express delivery industry. The company focused on the main business of express delivery and provided delivery services to customers at night globally. However, the change of businesses and customers from the old economy to the new economy forced FEDx to shift itself from ‘overnight delivery service’ to the ‘one-stop-shop’ for the full logistic requirement of the business. The company became the logistics service provider of major organizations like General Motors. Also learn, Case Study of Leveraging Information Technology to Grow Business in FedEx.
Background of FedEx:
In the late 1960s, Frederick Smith (Smith) emphasized the idea of starting an airline courier company. During this period, it was a common practice for sending commercial packages such as cargo on commercial carriers such as American, United or Delta Airlines. There were many shortcomings in this exercise because the passenger airlines usually operated during the day and were on land in the night. In addition, freight forwarders (the company responsible for taking the package from the airport to the destination address) usually do not offer home delivery. Smith felt the need to start an airline courier company which would solve all these problems.
During his college years, he recognized that the United States is becoming a service-oriented economy and requires a reliable, overnight delivery service company designed to fully package and transport documents. He wrote a Yale Term Paper on this idea and received the ‘C’ grade. His professor thought that this would never work. Fortunately for Frederick Smith, he did not take it in his heart and finished building the company he dreamed of. Smith found investors willing to contribute $ 40 million, used $ 8 million in family money and received bank financing. They started the Federal Express with more than $ 80 million, from which it was ever funded by capital.
In the last 36 years, in the past 36 years, FedEx has called for the addition of Fadex Express (formerly the Federal Express), FedEx Ground (formerly the Roadway Package System), FedEx Custom Critical (formerly the Roberts Express), FedEx Logistics (formerly Caliber Logistics) Horizontally expanded with five subsidiaries, and Viking Freight. Consequently, the FedEx family has been able to compete collectively in clear transport and logistics industries. The FedEx strategy is to collaborate on all sales and engagement for FedEx companies, but run different operations and keep each company’s strengths and markets separately. Today, the services provided by FedEx include worldwide express delivery, ground small-parcel delivery, less truckload freight, and global logistics, supply chain management and electronic commerce solutions. Federal Express is the world’s largest package delivery company today.
FedEx began operations with the sole focus on improving customer quality, pricing, and quality of services for the overnight delivery market in the United States. Since then, it has emerged to provide leading document and freight services for more than 212 countries across North America and abroad.
The Federal Express Corporation had a visionary leader to become the first motivator in the express transport and logistics industry, leaving FedEx with a remote source: their ability to help them control the entire supply chain management.
The ability of the company to use technology and its supply of resources has made competitors difficult to match standards of company standards. FedEx is mainly successful because of their technical progress. Technology has given them better customer service and quality which is not unique by any company. No company was able to offer overnight delivery of packages with speed and precision of the Federal Express.
FedEx’s modeling capabilities gave them a competitive advantage because they implemented new methods and technology. Currently, they have a superhub with many regional centers and packages are tracked by managed and tracked systems. COSMOS – A centralized computer system to manage people, operations, and services, Master Online Systems, people, packages, vehicles and weather scenarios in real time. This system allowed the customers to know where their packages were on and later integrated for web usage, allowing customers to track the package on the Internet. Apart from this, the company’s customized delivery service is unique in the market.
Leveraging Information Technology:
In the late 1970s, FedEx saw a major advantage in using IT to simplify its business processes. Smith was quick to understand that speed, reliability and customer service were a necessary factor for success in the global transportation industry.
From the beginning of the 1990s, the widespread use of the Internet has thrown open opportunities for FedEx. Since the company already had an EDI based system on which he had spent a lot of money, FedEx decided to use the combination of Internet and EDI. One example was the implementation of the purchase of products. FedEx bought a product from a company named Eriba. Eriba was a demanding system that was placed on the FedEx intranet. The system was installed so that the supplier can retain the database of catalogs that can be accessed by any FedEx employee.
The company’s website hosts more than 6.3 million unique visitors per month and averages more than 2.4 million package tracking requests on average. More than 2 million customers are connected electronically with the company, and the electronic transaction is responsible for approximately two-thirds of the daily shipments of more than 5 lakh shipments. FedEx operates one of the world’s largest computers and telecommunication networks – computers with more than 75,000 networks and thousands of hand-held computers that ship shipment records and track. FedEx’s data center processes more than 20 million information management systems transactions every day, more than any other American company.
The company is involved in connecting 39 hubs around the world, operating 677 aircraft and 90,000 vehicles, monitoring 200,000 employees and delivering six million packages per day in 220 countries, where every second was important. This is ‘FedEx Edge’ which is known for the company. FedEx has changed both customer and business transport models with high speed, reliability, information technology applications, better content handling systems and streamlined logistics networks.
The company popularized the concepts of ‘first-in-time’ and ‘build-to-order’, thereby reducing the time of customer leadership and increasing productivity. In addition to joining the ‘Logistics Solutions Provider’, the company was able to maintain its leadership position in small packages and light freight markets through its unique ‘Hub and Speak’ model.
FedEx played a role in the strategic role played in the strategy. Using IT as a major part of your business, the FedEx has reached almost entirely new groups of people. It has retained its reputation and has increased its business at the same time. IT has created a huge opportunity for customers in the global market. They can now request service, pay for that service, and track the online package. Customers no longer need to talk to FedEx.
They are now free to order, twenty-four hours per day, seven days per week. Because of this, the strategy of FedEx has changed. It is now focused on the use of the internet and other technological advances. Because it is such an important aspect of strategy, the implementation of the strategy should be almost immediate. In order to compete with other major businesses in the industry, FedEx was supposed to serve customers who could be accessed using technology. They had to provide package tracking services too. As soon as they developed this service, their prestige and business increased.
FedEx has done many things with its value chain to develop new business. First of all, they have always recognized the need to work in technology and IT to run logistics. They have developed Internet technologies that work smoothly and efficiently to enable customers and vendors to use Fadex. It has enabled many companies to integrate FedEx technology into their websites for the use of customers.