Business Honors

So I had to write this essay for business honors here at the Smith School at UMD.

I had happened to read a very good book, The World is Flat by Thomas Friedman. For those of you who want to catch up on your globalization, this is definitely the book for you. I learnt a hell of a lot of stuff reading it, but I have to be honest and say that sometimes, it can get a little dry. Friedman does his best to make the subject matter more interesting by injecting humor, and does a good job, but its still economics and globalization, and for some people, its dry material. I understand that. That said however, I want to highlight a REALLY interesting story about a certain company that we are all familar with. UPS is no longer just the parcel delivery service that we once thought it to be. (No I dont like UPS solely because of their motto "what can brown do for you?" I think UPS has done some really cool stuff to make themselves a really profitable company in the recent years).

Topic: What is your favorite company? What is it about this company that you believe sets it above its competitors, and makes it a great company?

One of the most unique companies in the post dot com era is UPS, United Parcel Service. Thomas Friedman explains in his book, The World is Flat, how UPS took over supply chain and logistics management of various companies to improve their product flow, and in doing so became one of the most important companies in the world. UPS still makes most of its sales by shipping packages around the world, but has streamlined the process of tracking and transporting items so well that it has decreased transaction costs for companies from all sectors of the economy. The impact that the UPS has on today’s economy and businesses makes UPS stand out not only among its competitors, but among all companies worldwide. Their implementation of technology and innovative ideas to trim production and transaction costs for all parties is they key to their success, which combines with the rapport they build with their clients to make them a great company.

Friedman cites the quintessential example of how UPS has reduced transaction costs for many companies. Take for example, Toshiba, which had been receiving complaints that its repair service was too slow. They approached UPS and asked them to help them design a better system for servicing broken laptops. The original process involved a customer dropping off the broken computer at a UPS store, flying it into the Louisville UPS hub, shipping it off to Toshiba, repairing it, then routing the computer back through Louisville to the customer’s house. UPS decided to eliminate all the steps in between. Now, UPS has Toshiba certified repair specialists that fix your computer at the UPS hub in Louisville, and send it right back to you, reducing the time it takes to receive the laptop from over a week to just days.

UPS has changed the face of transportation and supply chaining. They have fostered a high level of trust between themselves and their clients and in doing so, are performing the services of a consulting company. Businesses, large and small, ask UPS to look deep inside their supply chain and logistics processes to make them more efficient. UPS is adept at using technology to aid their shipping. They installed smart labels on all their packages so that they can be tracked from anywhere in the world. These techniques help simplify the customs process also: if US customs wants to inspect a specific package, it can be individually removed from the general flow of packages without slowing down an entire shipment to search for an individual box. This transaction cost reduction benefits all parties involved, and has made UPS a leader in the shipping industry. This also saves UPS’s clients money and time, which creates an incentive to stay with UPS as their courier service.

UPS does not just stop at shipping products or managing logistics, they have even moved into helping businesses finance their technology upgrades. Friedman highlights the newest venture of UPS – a financing section of UPS called UPS Capital. UPS Capital will provide the money needed to transform a small businesses supply chain into one that can compete with the new economy, creating an improved flow of goods and a guaranteed customer for UPS. UPS also benefits financially from funding business expansions and acting as a financial institution. The end result of all of this is more than just supply chain management. UPS has become a company that manages significant portions of other business. From raw materials to delivery of finished products, UPS has complete control over the transportation process. The attention to detail is so fine, that boxes inside the UPS trucks are arranged according to delivery time on the shelves, with the last deliveries in the back of the trucks. UPS adopted an online shipment inquiry system, letting customers check the progress of their package from their computer. The handheld clipboards that UPS drivers carry around are equipped with GPS tracking devices linked to the online system, so that customers know exactly when the delivery truck will be in their neighborhood.

Innovations like these are what set UPS apart from the rest. Although many shipping companies have instituted things like online shipment tracking, UPS is on the frontier of transportation. In the globalized economy with parts coming in from all over the world, reducing transportation costs is an integral part of running a business. UPS is leading the charge by not only focusing on UPS’s own internal efficiency, but by also working with companies to improve their efficiency. As UPS’s reliability grows and their service quality improves, more and more companies will switch to UPS. The fundamental reason that UPS is so great however, owes to the relationship they build with their clients. UPS has earned the enormous amount of trust that is required for UPS to take over entire sections of companies to manage their logistics and restructure entire supply chain processes to meet current demands. They have delivered on their promises, just like they deliver the millions of packages they originally started out to do. UPS has developed into more than just a courier service: they have become an essential part of the modern economy. Friedman notes that at any given day, two percent of the world’s GDP can be found in UPS trucks and cars: in order to have such a volume of business UPS has found a working market strategy. Their commitment to technological improvement and leading edge supply chain strategy makes them a prime candidate to be global synchronizers. After all, that is UPS’s newest motto: “Your world, synchronized.” It might be time to invest in UPS: this company will be bringing home the bacon for its stockholders.

Amazing what UPS has done huh?

Thoughts/comments?