UPS COMPETES GLOBALLY WITH INFORMATION TECHNOLOGY

United Parcel Service (UPS) started out in 1907 in a closet-sized basement office. Jim Casey and Claude Ryan—two teenagers from Seattle with two bicycles and one phone—promised the “best service and lowest rates.” UPS has used this formula successfully for more than a century to become the world’s largest ground and air package-delivery company. It’s a global enterprise with nearly 400,000 employees, 96,000 vehicles, and the world’s ninth largest airline.

Today UPS delivers 16.3 million packages and documents each day in the United States and more than 220 other countries and territories. The firm has been able to maintain leadership in small-package delivery services despite stiff competition from FedEx and Airborne Express by investing heavily in advanced information technology. UPS spends more than $1 billion each year to maintain a high level of customer service while keeping costs low and streamlining its overall operations.

It all starts with the scannable bar-coded label attached to a package, which contains detailed information about the sender, the destination, and when the package should arrive. Customers can download and print their own labels using special software provided by UPS or by accessing the UPS Web site. Before the package is even picked up, information from the “smart” label is transmitted to one of UPS’s computer centers in Mahwah, New Jersey, or Alpharetta, Georgia and sent to the distribution center nearest its final destination.

Dispatchers at this center download the label data and use special software to create the most efficient delivery route for each driver that considers traffic, weather conditions, and the location of each stop. In 2009, UPS began installing sensors in its delivery vehicles that can capture the truck’s speed and location, the number of times it’s placed in reverse and whether the driver’s seat belt is buckled. At the end of each day, these data are uploaded to a UPS central computer and analyzed. By combining GPS information and data from fuel-efficiency sensors installed on more than 46,000 vehicles in 2011, UPS reduced fuel consumption by 8.4 million gallons and cut 85 million miles off its routes. UPS estimates that saving only one daily mile driven per driver saves the company $30 million.

The first thing a UPS driver picks up each day is a handheld computer called a Delivery Information Acquisition Device (DIAD), which can access a wireless cell phone network. As soon as the driver logs on, his or her day’s route is downloaded onto the handheld. The DIAD also automatically captures customers’ signatures along with pickup and delivery information. Package tracking information is then transmitted to UPS’s computer network for storage and processing. From there, the information can be accessed worldwide to provide proof of delivery to customers or to respond to customer queries. It usually takes less than 60 seconds from the time a driver presses “complete” on a the DIAD for the new information to be available on the Web.

Through its automated package tracking system, UPS can monitor and even re-route packages throughout the delivery process. At various points along the route from sender to receiver, bar code devices scan shipping information on the package label and feed data about the progress of the package into the central computer. Customer service representatives are able to check the status of any package from desktop computers linked to the central computers and respond immediately to inquiries from customers. UPS customers can also access this information from the company’s Web site using their own computers or mobile phones. UPS now has mobile apps and a mobile Web site for iPhone, BlackBerry, and Android smartphone users.

Anyone with a package to ship can access the UPS Web site to track packages, check delivery routes, calculate shipping rates, determine time in transit, print labels, and schedule a pickup. The data collected at the UPS Web site are transmitted to the UPS central computer and then back to the customer after processing. UPS also provides tools that enable customers, such Cisco Systems, to embed UPS functions, such as tracking and cost calculations, into their own Web sites so that they can track shipments without visiting the UPS site.

A Web-based Post Sales Order Management System (OMS) manages global service orders and inventory for critical parts fulfillment. The system enables high-tech electronics, aerospace, medical equipment, and other companies anywhere in the world that ship critical parts to quickly assess their critical parts inventory, determine the most optimal routing strategy to meet customer needs, place orders online, and track parts from the warehouse to the end user.

An automated e-mail or fax feature keeps customers informed of each shipping milestone and can provide notification of any changes to flight schedules for commercial airlines carrying their parts. UPS is now leveraging its decades of expertise managing its own global delivery network to manage logistics and supply chain activities for other companies. It created a UPS Supply Chain Solutions division that provides a complete bundle of standardized services to subscribing companies at a fraction of what it would cost to build their own systems and infrastructure. These services include supply-chain design and management, freight forwarding, customs brokerage, mail services, multimodal transportation, and financial services, in addition to logistics services.

For example, UPS handles logistics for Lighting Science Group, the world’s leading maker of advanced light products such as energy-efficient light-emitting diode (LED) lamps and custom design lighting systems. The company has manufacturing operations in Satellite Beach, Florida and China. UPS conducted a warehouse/distribution analysis to shape the manufacturer’s distribution strategy, in which finished goods from China are brought to a UPS warehouse in Fort Worth, Texas, for distribution. The UPS warehouse repackages finished goods, handles returns and conducts daily cycle counts as well as annual inventory. Lighting Science uses UPS Trade Management Services and UPS Customs Brokerage to help manage import and export compliance to ensure timely, reliable delivery and reduce customs delays. UPS also helps Lighting Science reduce customer inventory and improve order fulfillment.

UPS manages logistics and international shipping for Celaris, the world’s largest wireless accessory vendor, selling mobile phone cases, headphones, screen protectors, and chargers. Cellaris has nearly 1,000 franchises in the United States, Canada and the United Kingdom. The company’s supply chain is complex, with products developed in Georgia, manufactured at more than 25 locations in Asia and 10 locations in the U.S., warehoused in a Georgia distribution center, and shipped to franchisees and customers worldwide. UPS redesigned Celaris’s inbound/outbound supply chain and introduced new services to create a more efficient shipping model.

UPS Buyer Consolidation for International Air Freight reduces complexity in dealing with multiple international manufacturing sources. UPS Worldwide Express Freight guarantees on-time service for critical freight pallet shipments and UPS Customs Brokerage enables single-source clearance for multiple transportation modes. These changes have saved Celaris more than 5,000 hours and $500,000 annually, and the supply chain redesign alone has saved more than 15 percent on shipments.

2. What was the strategy of UPS, and how did the information systems support the company in achieving its strategy?
3. If you are the manager of UPS what are the main opportunities you could use to ensure the success of the information system?  

Q2. A warehouse facilitates the reduction of the order cycle time of raw materials or consumer goods required for a factory or retail outlet respectively.

Please explain how this is achieved. (30marks)

- Reduce travel time.

- Shift resources around the facility to the areas of the most activity.

- Throttle orders to areas that are underutilized and which have idle resources.

- Implement technology that will prevent stock outs and prioritize replenishments before they occur.

Q1)      For each of the four departments (human resource management, e.g. Do we have enough of right talent, skill, and experience ?), (production and distribution, e.g. Can we create product or service within that time, with such product characteristics, at that quality and cost ?) (marketing and sales, e.g. satisfy customers, which customers ? which do you lose while trying to attract which else ? who do we target, general or niche, what do customers demand ??) (accounting and finance, e.g. profitability ? market share ? reputation ? budget constraints ? price wars ? risky investments ?), give examples of DSS decisions made by the middle managers of ...................... .

Q2)      For each of the above four departments, give examples of MIS reports used by the middle managers of ...................... and explain where such reports would be used.

When engaging in cross-cultural communication, there are six (6) fundamental patterns of culture differences. Explain five (5) of them and provide appropriate examples in your response.

INDIVIDUAL CASE STUDY

President Store Corporate operated around 300 Starbucks coffee outlets in Taiwan under a joint venture arrangement in 2013. It also ran over 2,000 of its own City Cafe outlets across Taiwan. Both enjoyed good market share and there appeared to be little cannibalization. What could be the reason for this in the competitive coffee landscape in Taiwan?

STARBUCKS

Starbucks was founded in the U.S. in 1971 and its main product was Arabica coffee beans. In 1987, Howard Schultz took over Starbucks and introduced the roasting technologies and ambience of the Italian cafe. By May 2014, Starbucks had over 23,180 stores worldwide in 64 countries. Starbucks outlets primarily sell coffee, but also offer other hot and cold beverages, pastries, sandwiches, and snacks. Starbucks introduced low calorie coffee in 2008 and instant coffee in 2009. In 2010, Starbucks started selling beer and wine in some outlets in the U.S. In 2011, Starbucks introduced the Trenta, a 31-ounce cup of coffee. Starbucks ventured into the juice bar business in 2013.

In January 1, 1988, the President Starbucks Coffee Corporation in Taiwan was officially founded as a joint venture between Starbucks Coffee International, Uni-President Enterprise Corporation, and the President Chain Store Corporation. Many people have suggested that Starbucks, as an international brand, has basically transplanted the American coffee culture into Taiwan. The concept appears to be good quality coffee at high prices to be enjoyed in a leisurely manner with friends. Coffee on offer includes cafe latte, vanilla latte, hazelnut latte, caramel macchiato, cafe mocha, and cappuccino with a price range of NT$75 (US$2.46) to NT$155 (US$5.08). However, subtle differences can be observed. The pastry cases look similar but their contents are different and include offerings such as curry chicken cannoli. There are numerous tea options including rose fancy tea, green tea, jinxuan oolong, bi luo chun, and oriental beauty (the latter three are specialty Taiwanese teas).

By 2013, Starbucks had almost 300 outlets. Over the past three years, Starbucks in Taiwan has opened 20 to 30 new stores each year, and all stores have achieved their revenue targets and contributed to 10 percent sales growth over the last few years. A research study has concluded that Western culture adoration was an important dimension in coffee consumption for Taiwanese customers at Starbucks. Overall, Starbucks engages in experiential marketing, with the consumer associating the brand with specific smells, tastes, visual elements, and sounds.

CITY CAFE

In 1986, the President Chain Store Corporation launched Cafe Americano through its 7-Eleven chain stores. In 2004, the company began to shift from the American style Americano concept to the new 24-hour Italian City Cafe concept without closing the Americano outlets already in the 7-Eleven outlets. By 2005, there were 500 CITY CAFE outlets, 1,000 in 2007, and 2,000 in 2009. Television advertising was used to build brand awareness and image. The theme used was, “The entire city is my coffee shop;” targeted at students and workers aged between 20 and 40. The concept appears to be a local coffee brand offering low priced coffee anytime and anywhere. Coffee on offer includes latte, cappuccino, and City blend, with prices from NT$25 (US$0.82) to NT$45 (US$1.48).

CITY CAFE started a Music Conservatory in the Hankyu Department Store outlet in Taipei where aspiring local singers and performers can showcase their talents. Performers in March 2014 included Taipei Soul Brothers, featuring five musicians from three different generations, and Lin Ling, a local Taiwanese girl who has been performing since the age of five.

The success of the CITY CAFE coffee bar concept has resulted in many convenience chain stores and fast food chain stores near schools, offices, hospitals, subway stations, and train stations duplicating the idea. Examples of concepts by convenience stores include Mr. Brown Coffee of Family Mart and OK Cafe of OK Mart. McDonalds also launched the McCafe.

According to a review, the coffee scene in Taiwan can be categorized accordingly:

I.     Foreign Cafe Chain

This group is currently dominated by Starbucks. They offer mainly espresso coffee at very high prices of NT$90 (US$2.95) to NT$180 (US$5.90).

2.    Specialist Cafe

This group offers excellent coffee with a large variety of beans. They have varied origins, create their own blends, and roast their own coffee. They sell beans and offer a mix of espresso and brewed coffee. The baristas are experts and know their coffee in a passionate way. Prices of their coffee range from NT$60 (US$1.97) to NT$150 (US$4.92). Examples of such cafes are Orsir and Mojo Coffee in Taichung.

3.    Specialist Cafe Chain

This group offers excellent coffee but with a more limited range. They sell beans and offer mainly espresso, though they do have limited brewed coffee options. They have trained baristas, and the price range is NT$30 (US$0.98) to NT$70 (US$2.30). Examples of such cafes include Wilbeck in Taipei and Cama Cafe across Taiwan.

4.    Taiwanese Cafe

This group serves a variety of coffee from different regions in Taiwan. The cafes are operated by single owner and they roast in small batches. They are often in business for a long time (over 15 years) and they have a small group of loyal customers. They offer mainly brewed coffee, but they have espresso as well. The price range is from NT$70 (US$2.30) to NT$120 (US$3.93).

5.    Taiwanese Cafe Chain

This group serves a single unannounced blend of coffee with no other options. They serve mainly espresso though some may offer drip or brewed coffee. Some baristas may receive training but quality is uneven. The prices range from NT$35 (US$1.15) to NT$75 (US$2.46). Examples are 8S°C and Bakery.

6.    Convenience Store Coffee

This group offers bean to cup machine coffee. They use cheap Taiwanese roasts of unannounced origin. Prices range from NT$25 (US$0.82) to NT$60 (US$1.97). Examples of coffee entities in this group are City Cafe by 7-Eleven and Mr. Brown Coffee by Family Mart.

Three main groups have been identified:

Coffee Connoisseur

It is primarily interested in discovering new, high quality brews of coffee. He is very price insensitive and would frequent specialty cafes with baristas who are experts and know their coffee in a passionate way.

Café Hangout

The Café Hangout Coffee drinker values his coffee as an aspirational drink, to be drunk with a group of friends or to be seen consuming the beverage by others. He is relatively price insensitive, valuing the brand of the Café over the coffee type. The ambience and mood of the café is important to him. He would prefer to have food options available with his coffee as well. This group is a mix of students, who visit cafes as a place to hangout or study at, and working professionals, who value the café as an informal place to relax.

Coffee Fix

The Coffee Fix Coffee drinker values his coffee as his daily sustenance, requiring the energy boost which caffeine from the coffee provides. He may drink up to several cups a day and is not overly concerned with the quality of the coffee. He is also price sensitive as he is not after a premium product.

A survey found that the Taiwanese drink coffee in the following frequencies per day: one cup-46 percent, two cups-13 percent, and various frequencies depending on day and occasions-36 percent. The most frequently consumed coffee is: latte-48 percent, Americano-19 percent, cappuccino-17 percent, cafe mocha-4 percent, others-12 percent. Their favorite coffee venue is: Starbucks-29.1 percent and City Cafe-29.1 percent. Areas in which Starbucks must improve: prices-68.1 percent, promotional offers-15.3 percent, charity activities-9.2 percent, quality-6.9 percent, and refreshments- 6.1 percent. Areas in which City Cafe must improve: quality-29.4percent, refreshments- I4.7percent, promotional offers-14.0 percent, store ambience-13.3 percent, and peripheral merchandize-9.8 percent.

Question 1

What variables should be used to segment the coffee market in Taiwan? (10%)

Question 2

What group is Starbucks targeting in Taiwan and how do Starbucks offerings fit their requirement? How do Starbucks and City Café position themselves in the market and what do they communicate to their target customers? (25%)

Question 3

Why is the President’s group able to dominate the coffee market in Taiwan with the Starbucks and City Café concept rather than cannibalise itself with two brands in the same market? (15%)

How are the SWOT Matrix ,SPACE Matrix,BCG Matrix, Internal & External Matrix (I.E) and Grand Strategy Matrix similar? How are they different?

Explain the positions of secured, preferred and unsecured creditors in the event of a bankruptcy.

Provide examples, where appropriate.

As part of cultural leadership, there are four (4) important culture-based norms and beliefs which need to be considered. Explain each type of culture-based norms and beliefs and provide appropriate examples in your response.

-Explain what is meant by capacity to contract?

-

-Explain what privity of contract means?

-

-Explain what is an invitation to treat?

-

-Explain in detail the 3 essential elements of a contract:

-Intention

-Agreement

-Consideration

The American Metal Fabrication Company (AMFC) produces various products from steel bars. One of the initial steps is a shaping operation, which is performed by rolling machines. There are three machines available for this purpose, the B3, B4, and B5. There features are given by the following table:

       This week there are three products, which must be processed. AMFC must produce at least 218,000 feet of ¼ in. material, 114,000 feet of 3/8 in. material, and 111,000 feet of ½ in. material. The profit contribution per foot excluding labor for these products are .017, .019 and .02. These prices apply to all production, e.g., any in excess of the required production. The shipping department has a capacity limit of 600,000 feet per week, regardless of the thickness. Formulate a linear programming model to maximize profit.

       a)    Please define your variables clearly and the units used.

       b)   What is the value of an additional hour of capacity on the B4 machine?

       c)    What is the value of an additional 2 hours of capacity on the B3 machine?

       d)   By how much would one have to raise the profit contribution/1,000 ft. of ¼” material before it would be worth producing more of it?

5. Larry and Moe are business partners. They want to purchase a property together. They have come to see you to get advice as to whether they should purchase the property as joint tenants or tenants in common. a. Provide Larry and Moe with an explanation about the two different ways of owning the property together. b. Advise them as to which type of ownership would be best, under the circumstances. c. What is meant by an easement? Provide examples, and explain why an easement is called a lesser interest in land. .

Please discuss and support with specific examples TWO influence tactics you would use to get your boss approval for an off-site training on effective decision-making in organizations.

list and explain with examples one decision making bias observed in groups, discuss how can you prevent these biases from negatively influencing decision outcomes.

Case Study 7: The Future of the Crossroads Center Read the Crossroads Center case and answer the following question: 1)How would you design a future search conference, strategic planning session, or scenario planning engagement for the client?

The Crossroads Center was founded 16 years ago as a nonprofit drug and alcohol treatment center for adults and adolescents. The center is located in a quiet rural area about an hour from a major urban center. It consists of six separate cream-colored buildings that encircle a large park, walking paths, and a duck pond.Except for a small, almost hidden sign on the main building, most community members cannot distinguish the center from any other set of office buildings or detached apartment units located in the sleepy town.The center has two segments that operate differently depending on the patient’sage. The first is an adult treatment facility, where treatment primarily consists on support provided by psychologists and licensed therapists. Adults who enroll at the center usually find out about it through their health insurance provider, which pays 100 percent of the center’s fees for up to 30 days of inpatient treatment and 30 outpatient visits. The center’s staff can support up to 120 adults at any given time.The second part of the center is an adolescent residential treatment facility,where patients live together in the facility and are supported by a network of clinical psychologists, physicians, nurses, addiction counselors, and therapists. The center also provides staff teachers who give educational assistance while the patients live at the center, which can last for up to 8 weeks depending on a patient’s needs. The residential center is much more expensive to operate, given the additional staff and housing needs, so there are typically just 30 to 40 patients living at the center at any point in time. The funding sources for the adolescent reatment facility include insurance as well, but also grants and foundations as well as federal and state programs.Darrin Spoldi was appointed director of the center almost 3 years ago. During his short tenure, the center received three new grants from national foundations and increased by one third the number of patients that the center has reached. Darrin called Lisa Rodriguez last week with an urgent request. The center was at risk duet o a new law, and he needed some advice to avoid the worst-case scenario.“I’m really glad that you’re here,” Darrin said, as he and Lisa walked along the sidewalk path outside the center. “We’re in a desperate situation, and if we don’t do something soon, we may not be able to keep the center open.”“You sounded very concerned when we spoke last week,” Lisa admitted. “But I had thought when we spoke a few months ago that things were going so well.”“Exactly,” Darrin said quietly, looking down at the weeds on the edge of the sidewalk. “I had just gotten a major grant and our funding seemed more solid thanat any point during my time here. Ironic, as it turns out. Things were sailing smoothly until just recently. In fact, just a few weeks ago we concluded our yearlong study on adolescent recidivism since we hired the additional therapist staff.”“Recidivism? What’s that?” Lisa asked.“It’s our return rate. We follow up with our patients after they leave the center to see how they are doing and whether they are able to maintain the skills they lear during their time here or whether they need to return to a center for additional treatment. We found out that our patients have the lowest rates of return to drug and alcohol abuse among centers like ours in this region. In fact, the rate has improved by about 15 percent over a few years ago.”“To what do you attribute this result?” Lisa wondered.“There’s no question. It’s both our teachers and our therapists,” Darrin said confidently. “Patient after patient in the study we did reported that they had incredible support from the therapists, and having the teachers here on staff kept them focused on their studies, so that when they returned to school they had little difficulty assimilating. About a year and a half ago we added three new the rapiststo the staff, and the change was incredible. I know how good our work is here. I’ve worked in treatment facilities like this throughout my career, and this is the most successful model I’ve seen.”“Tell me about what’s causing your concern for the center,” Lisa asked.“Don’t misunderstand. I might sound calm now, but I suppose I’m just numb from thinking about this. It’s not just a ‘concern.’ This is the biggest crisis I’ve faced my career,” Darrin said. “You might have heard about the changes that the state legislature just made to the social services budget for this fiscal year. Well, the budget for social services includes a set of regulations requiring that treatment facilities that receive state funding have a certain percentage of their staff hold medical degrees from an accredited medical school. I guess the regulations were intended to address the large number of facilities that are run primarily by lower skilled technicians, with few medical professionals actually administering services. Last year’s controversy regarding abuse in nursing home facilities prompted a number of community groups to call for additional regulations. The result, though, is that even facilities like ours face the same criteria. In any case, the law was just recently signed by the governor, and facilities have just 6 months to comply with the law or forfeit all state funding, retroactive to the signing date of the legislation.”“What does that mean for Crossroads?” Lisa asked.“In other words, the center will continue to receive state funding for the next 6 months, but if we cannot comply with the law in that time period, we need to retur 6 months’ worth of funding to the state,” Darrin said.“What would it take to comply?”“Currently, the center’s staff of teachers and therapists put the staff below the required threshold to receive funding. Most of them have advanced academic degrees, but they are not medical practitioners according to the legal definition. We would have no problem if we just let our teachers and therapists go,” Darrin said.“But they are critical members of our staff, and as I said, our patients give them a great deal of credit for their treatment. I just don’t think that is an acceptable solution. Another possibility would be to refuse the state funding, but then trying to operate with our remaining funds would be impossible. With money coming just from the federal government and from our grants, we would not only have to have a layoff of staff, we’d have to reduce the number of patients we serve by about two thirds, and we would turn away a lot of people who need our help. I’ve done a lot of thinking about this in the last several weeks, and I haven’t been able to come up with a solution that is acceptable to anyone.”“Does the community understand what’s happening to the center and what might happen if it closed?”“We have purposely maintained a low profile in the community for the last several years. Before I arrived, it’s my understanding that there was a call among the county supervisors for the center to close or move, and we did not have a lot of support. I don’t know what all of the issues are, but there is some animosity among the board of directors toward the county board of supervisors. Nothing came of it,obviously, and the board of directors recommended that I not spend a lot of time in the community for a while until things settled down. I’m not sure how many community leaders even know how we’ve contributed to the community by own local adults and adolescents,” Darrin concluded.“What have you done so far?” Lisa asked.“A few weeks ago we had a small meeting of the top administrators, about eight of us. We just talked in circles, bouncing back and forth between trying to figure out how to continue to operate without state funding or trying to meet the state’s requirements and maintain our current funding. We didn’t come to any conclusions, but we agreed to meet again this week. I do have to say, though, that the staff has been great about this. Morale is high, and our administrators are highly involved and motivated to find a solution. I’ve worked with other groups that would have given up or quit, but this group is participative, engaged, and smart. They’re keeping each other going,” Darrin said.“Let me summarize. A highly successful local center is going to close because oa state law that holds unintended consequences, and the closure will affect a large number of patients, staff, and community members. It seems to me that there are a lot of groups who have a stake in this center being successful and continuing to operate. There are the patients and staff, obviously, but also the patients’ families,the grants and foundations that contribute to your success, the community, even the state legislature,” Lisa concluded.“You’ve got it,” Darrin said quietly.Lisa continued, “You have a lot on your shoulders here. I can see that it’s affecting you a great deal personally. What do you think of bringing together a larger group to help you decide what to do? We could keep it to your staff, or we could invite members of these other groups.”“It sounds like a good idea,” Darrin agreed. “And at this point I’m at a loss about what to do next, so I’ll take any suggestions. Tell me more. Who would we invite?How long would it take, and how would it be structured?”“Let me think more about that. I can get you a proposal quickly and we can get started as soon as possible,” Lisa said.“For the first time in a few weeks, I’m starting to feel hope,” Darrin smiled. “I’m looking forward to your proposal.”