Lets Talk Freight

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Lets Talk Freight

• Maryann Cassidy Kearnse-Commerce SalesUnited
  Parcel Service
• January 24, 2001

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Facing a virtual reality?
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Importance of Fulfillment

• Christmas 1999items arrived later than
  promised-and some didn't arrive at all. It became
  apparent that E-business success depends more on
  capable back-end fulfillment systems than on
  flashy Web sites

--Information Week, September 2000
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A Tradition of Watching Our Customers' Back-Ends

• Technology vision looks first at the back-end
• 11 billion investment

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The UPS Perspective

• 13 million packages each day
• Seven percent of US GDP
• A decade of applying technology to commerce

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Supply chains are being transformed...
Information
Goods
Funds
into pull value chains
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Combining Three Flowsof Commerce
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Characteristics of the new electronic supply chain

• Customized products and services
• Global visibility
• Agile
• Lightning velocity
• Managing multiple suppliers seamlessly

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Integration Throughout the Customers Business
Process
Customer Service
Internet EDI Phone Fax Mail
Order Entry
Acct Process
Pick, Pack Ship
Inventory
Returns
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Integration Process Improvement
Direct Integration Inbound and Outbound Real Time
Visibility
Improve Customer Service
Tracking
Days Sales Outstanding Cash Flow
Enhance Corporate Financials
POD
Planning and Forecasting accuracy
Improve Inventory Turns
TNT
Integrate transportation into enterprise finance
system
Eliminate Freight Bill Audit
Electronic Billing
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Two Strong Forces Creating Revolution in Commerce

• Globalization

• Consumer-Pull

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Two Strong Forces Creating Revolution in Commerce

• Globalization

• Consumer-Pull

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The UPS View Drop the "E" in E- Commerce

• Computers can't cough up packages
• Technology can combine three commerce flows

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Applying Technologies For Customer Value

• Target the right customers

• Streamline business processes that impact the
  customer

• Let customers help themselves

• Help customers do their jobs

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Applying Technologies For Customer Value

• Target the right customers

• Streamline business processes that impact the
  customer

• Let customers help themselves

• Help customers do their jobs

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Total Peak DayCustomer Inquiries
Thousands of Inquiries
90
Electronically Connected
77
51
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Source UPS CSC Analysis
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Applying Technologies For Customer Value

• Target the right customers

• Streamline business processes that impact the
  customer

• Let customers help themselves

• Help customers do their jobs

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• Our Customers Cost of Tracking a Package
• Phone over 2.50 /occurrence
• Internet under 0.10 /occurrence

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Applying Technologies For Customer Value

• Target the right customers

• Streamline business processes that impact the
  customer

• Let UPS customers help themselves

• Help customers do their jobs

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Ford and UPS Have A Better Idea

• Track vehicles from factory floorto dealership
• Reduce costs improve customer service
• Manage Ford's transportation system to shorten
  time to market by 40 percent

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In Summary...

• Enabling Commerce
• Supply Chains are changing rapidly
• Evaluate all business processes for effectiveness
  and efficiency...

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Process Improvement is the Key to Value Creation
Strapping New Technology to Old Business
Processes Will Negatively Impact Value
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Questions? Lets Talk Freight