United Parcel Service Goes Global
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United Parcel Service Goes Global
By
Patricia Zaremba
Jennifer Smith
Brandy Vollbrecht
Michael Simpson
Tiffany Merrills
March 10, 2006
Instructor: Dr. Hammond
American InterContinental University
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United Parcel Service Goes Global
From the corner store to the mega box chain these companies have one thing in common they all operate from a mission statement. In smaller companies this can be as simple as an oral promise to treat everyone fairly. In larger organizations this is a written policy that tells the world these are the standards by which we operate this company. UPS started as a small company in Seattle and has grown into a global powerhouse that follows the same philosophy today as it did in 1907 ' the right thing to do'. James E. Casey's believed that the only way to do business was to adhere to strict policies of customer courtesy, reliability, round-the-clock service, and low rates; these principles, which guide UPS even today, are summarized by Jim's slogan: best service and lowest rates. (UPS/history.com, 2006) UPS's mission statement not only outlines the company's philosophies but show the hierarchy of accountability that is the foundation of UPS.
Mission Statement
* Mission Statement: To guide the company's efforts to provide responsible, ethical business behavior and manage business conduct to achieve and maintain compliance with all applicable regulations and policies for all aspects of UPS business worldwide, including all wholly owned subsidiaries.
* Structure:
* Corporate Compliance Officer - this position is filled by John Beystehner, UPS's COO. He reports directly to the Audit Committee of the Board of Directors.
* Corporate Compliance Manager - reports directly to the COO and twice yearly to the Audit Committee.
* Corporate Compliance Committee - consists of senior managers from each department and subsidiary. At quarterly meetings, the committee reviews initiatives of the Corporate Compliance Department and provides input and direction.
* Corporate Compliance Department - consists of project managers responsible for developing and auditing compliance programs and initiatives. (ups.com, 2006)
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A modern time combined with far reaching branches of the company has made it necessary for UPS to establish a method to hold everyone accountable. UPS Compliance Department was enacted to give everyone that comes into contact with the company as place to go to with concerns as shown in the mission statement. The department ensures that the company worldwide is in compliance with the values and standards set forth in the mission statement and should they fall short of the ideal there are procedures and remedies in place to take the necessary corrective action. UPS expects everyone that does business with them to follow the same high standards and they use several different methods to communicate the "Code of Business Conduct'. Every employee receives the code in a 5x7 format that allows the code to be accessible at all times. The code has been translated into 29 languages and distributed worldwide. Given the global reach of the code UPS executives have not only translated the code into these many different dialects but made it relevant to the local customs and language. UPS management is required to attend various training sessions all geared at helping them ensure that all aspects of the value system and mission statement are adhered to from the beginning to the end of the customers experience with the company. The employees of UPS use the company's governance as the guiding principle for how the business is run. The employees believe in integrity, reliability and trust since they were founded in 1907. UPS also calls the structure their Plan of Action and takes it seriously. In that Plan of Action it states:
* We will continue to expand our distribution and supply chain solutions to synchronize the world of commerce - the flow of goods, information, and funds.
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* We will expand our position as a trusted broker between buyers and sellers worldwide.
* We will harness the appropriate technology to create new services and to strengthen our operations and networks.
* We will attract and develop the most talented people whose initiative, good judgment, and loyalty will help realize our company's mission.
* We will continually study ...
This is a preview of the whole essay
* We will continue to expand our distribution and supply chain solutions to synchronize the world of commerce - the flow of goods, information, and funds.
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* We will expand our position as a trusted broker between buyers and sellers worldwide.
* We will harness the appropriate technology to create new services and to strengthen our operations and networks.
* We will attract and develop the most talented people whose initiative, good judgment, and loyalty will help realize our company's mission.
* We will continually study customers' behavior, anticipate their needs, and design our products and services to exceed their expectations.
* We will create a practice of innovation that leads to sustainable growth. We maintain an environment that enables us to treat every customer as if they are our only one.
* We will leverage the UPS brand to maximize brand loyalty among all constituencies. (UPS.com/governance, 1994)
United Parcel Service was the third name to grace the company by 1919 however it would be the last since it embraced the company's mission. "The word "United" served as a reminder that the company's operations in each city were part of the same organization, "Parcel" identified the nature of the business, and "Service" indicated what was offered." (UPS.com, 2006) They current offer service to over 200 hundred countries,
they are divided into ten regional areas; Africa, Asia, Australia/New Zealand, Caribbean, Central America, Europe, the Middle East, North America, and South America. UPS has international air hubs in Cologne, Taipei, Miami (to serve Latin America), in intra-Asia
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hub in the Philippines, and the UPS world port in Louisville, Kentucky. With UPS having the international network, they facilitate the three flows of the global supply chain, which are, goods, information and funds for businesses worldwide. The extend of services may vary from country to country but one thing remains constant is the desire to do the right thing for the customers and the shareholders.
UPS operates with a centralized and decentralized organization structure as do many global companies today. UPS production facilities, sorting hubs, are decentralized; if the production was centralized to one certain area, delivery would be much slower and much less efficient. The costs would also be much higher. (UPS.com, 2006) United Parcel Service serves over 7.9 million customers daily, handles more than 18.5 million packages and documents daily and has over 92, 277 different delivery vehicles including package cars, vans, tractors, motorcycles and air craft and therefore need many brick and mortar delivery services throughout each country. UPS has more than 1,200 different supply chains and overnight delivery services throughout the world. (UPS.com, 2006) While a multitude of languages and cultural differences are a part of doing business globally; UPS has a set formula from the equipment they use, the uniforms for employees, and expectations of high customer service. No matter what area of the world they are in the brown trucks and uniforms are universally identifiable.
Though the production is decentralized, other aspects of the company are more centralized. The ownership, international sales and marketing, financial aspects, operation management, communications, brand management, compliance issues, legal aspects, public affairs, human resources, information and research are all centralized to
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chief officers, presidents and vice presidents of the company. Packaging requirements may also vary throughout different areas internationally. The products available to different countries may also vary. Of course language on packages, guidelines, advertisements and such would differ from country to country as well.
Centralizing certain aspects of the business is important so that the flow of the company is consistent from area to area, country to country. Every customer should experience the same good service no matter what UPS location they use. (UPS.com, 2006). Although UPS's headquarters is located in Atlanta, Georgia a customers and employees know what to expect whether they are in Atlanta or Beijing due to the international structure of the organization.
United Parcel Service, UPS, understands that in order to be an international company they need to diversify certain aspects of their company and the way they offer their services. "Because of its global impact, UPS has many unique opportunities to reach a broad range of diverse customers. UPS understands that diversity is essential as the company expands and finds ways to solve the individual needs of all customers" (UPS.com, 2006).
UPS is a well known for the service they provide and communication amongst themselves and the customers. UPS is structured for success and will continue to improve and grow as they add services and products to remain one of the top shipping companies worldwide. UPS has several ways to transport, such as ground, air, sea and railway. UPS has International package operations for exporting and In-Country operations. They offer overnight shipments coast-to-coast, freight forwarding, etc.
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At an Investors conference that was held on February 26, 2002 in Louisville, KY they stated that "There is no issue more critical to the future of commerce than managing
global supply chains, which is why the future of UPS is bright." (UPS Discusses Strategy, 1994) The conference was held to discuss the company's strategy and critical role in global commerce. Mike Eskew, one of the Investors that attended the conference stated: "We believe UPS is one of just a few companies, across all industries that actually has a direct impact on the way global commerce is conducted. More than ever, businesses realize there's still too much fat in their distribution systems. But these are costs that can be reduced and managed more effectively with better supply chain planning and execution." (UPS Discusses Strategy, 1994) UPS operates using a global strategy, defined as offering the same products using the same marketing strategy in all markets. (Wild, Wild, Han. 2006) UPS serves many countries but has located air hubs in a few select locals to optimize performance and cost.
This is why UPS has been migrating to a complete supply chain company. UPS is a company that makes it easier for a customer to ship a package or manage a supply chain from Iowa to India as it is from Iowa to Indiana. The future of UPS depends on its ability to develop a strategy that will reduce shipping cost while allowing it to be easier and more efficient for customers to use and track package information from all points on the globe. Some other developments that were discussed at the investors conference was how the company has been successful with pursuing the domestic initiatives that have produced record service levels and saved on cost significantly. Adding new establishments in Asia for operations will add new service capabilities throughout Asia
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and Europe. UPS's export business in Europe grows in excess of 15% per year and the company is poised to expand the market presence. Eskew stated; "We believe we are in the leading position to revolutionize the flow of commerce." (UPS Discusses Strategy, 1994) "We have a great core business, as evidenced by the $1 billion, state-of-the-art air hub now operating here in Louisville; a domestic ground business that remains unparalleled, and an international business growing at a strong rate." (UPS Discusses Strategy, 1994) In doing this it will further expand the substantial competition ahead.
International changes will allow the organization to become more effective if its employees possess the skills and competence to implement these changes. To give its managers these necessary skills, UPS dedicated $550 million to training in 1996. Workshops, developed by The Atlanta Consulting Group, Inc., were the major expense: Trust & Teamwork (developed in 1994) and Quality at Work (developed in 1995).
The objectives of the Trust & Teamwork workshop were as follows:
* Build teamwork and collaboration in our work with others.
* Understand the role trust and credibility play in our personal effectiveness.
* Create an environment of win-win problem solving.
* Listen with skill and understanding.
* Take responsibility for producing desired results.
* Give and receive feedback effectively.
* Confront others in a caring and constructive way.
* Build self-confidence.
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All management and full-time business professionals (non management) were required to attend the three-day workshop, which was comprised of lectures, games, and various learning exercises. The workshop concentrated on showing the relationship between trust and organizational performance, and how teamwork requires a win/win mindset as opposed to a win/lose mindset. UPS is ahead of the competitors when it comes to recognizing the needs of the customer and the steps required to operate a fiscally sound company. Other companies would benefit from look at the strides UPS has made in globalization when deciding how to further expand their international operations.
The Four Ps:
Product: The Product management and Product marketing aspects of marketing deal with the specifications of the actual good or service, and how it relates to the end-user's needs and wants.
Pricing: This refers to the process of setting a price for a product, including discounts.
Promotion: This includes advertising, sales promotion, publicity, and personal selling, and refers to the various methods of promoting the product, brand, or company.
Placement or distribution refers to how the product gets to the customer; for example, point of sale placement or retailing. This fourth P has also sometimes been called Place, referring to "where" a product or service is sold, e.g. in which geographic region or industry, to which segment (young adults, families, business people, women, men, etc.).
These four elements are often referred to as the marketing mix. A marketer can use these variables to craft a marketing plan. The four Ps model is most useful when marketing low value consumer products. Industrial products, services, high value consumer products require adjustments to this model. Services marketing must account for the unique nature of services. Industrial or b2b marketing must account for the long term contractual agreements that are typical in supply chain transactions. Relationship marketing attempts to do this by looking at marketing from a long term relationship perspective rather than individual transactions.
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Reference:
Fact Sheets-UPS Structured for Success (1994) UPS. Retrieved on March 7, 2006 from
http://www.pressroom.ups.com/mediakits/factsheet/0,2305,897,00.html
Governance, The UPS Charter (1994) UPS. Retrieved on March 7, 2006 from
http://www.shareholder.com/ups/corpgov.cfm
Governance (1994) UPS. Retrieved on March 7, 2006 from
http://www.sustainability.ups.com/overview/governance.html
International Operations (1994) UPS. Retrieved on March 7, 2006 from
http://www.pressroom.ups.com/mediakits/international/
UPS. Management Committee. Retrieved March 7, 2006 from
http://ups.com/pressroom/us/bios/bios_index
Wild, J., Wild, K., & Associates. (2006) International Business: The Challenges of Globalization. Upper Saddle River, New Jersey: Pearson Education, Inc.
