Industry Chosen: FedEx

Amal Mansoor Baluch

10320

MKT401 Logistics and Supply Chain Management

Assignment 1

24th November 2016.

Introduction to Logistics & Supply Chain:

Logistics is the movement of services and goods physically from the suppliers to the

point of delivery, with the activities that includes transportation, loading/unloading, storage,

packaging, and distribution. It is a part of supply chain management which implements the

plans and control the flow and storage of the products and services in order to meet the

requirements of the customers. As it is a systematic process of the activities from the

production point to customers. The aim of logistics is to deliver the accurate number of

products to its place and to the customers at the right time specially when the demands of the

customers starts getting unpredictable. At today's business and market, it is necessary for

organisations to develop and set up strategies of logistics management to be successful,

which can be done by coming up with the idea of higher technology to meet the required

demands of customers and prepare accordingly for the future.

The various functional activities of logistics system are:

Customer Service: It is important to make sure that every customer receive the right product

at the right place and at its promised time in a proper condition at a right cost. It is also a

responsibility of a customer department to follow up with the customer’s complaints, claims,

returns or any kind of issues regarding the payment.

Transportation: It is a physical movement of products from one place to another which

includes the options such as the mode of transport, a specific route and the carrier. It is the

most expensive activity of logistics.

Warehouse: warehouse is a place where a company stores the products for specific time

period and is less costly. It requires a larger area if the production amount is high.

Supply Chain Management (SCM):

A coordination or production that moves in a process from the suppliers to the

manufacturer followed by the retailers to customers. These flows are coordinated and

integrated within the organisations for the company to succeed. SCM has been adopted by

many organisations in today's world to ensure the efficiency of the operations to the highest

level at the lowest cost for customer satisfaction. It has 3 levels of the activities for the

different departments of the organisations to focus on, strategic, tactical and operational level.

Supply chain management needs a wider range of technology specially in the large

organisations and take an advantage of internet technologies and web based softwares

between the customers and vendors to be updated with the information.

Introduction to FedEx:

FedEx is a well-known and a large organisation of express distribution and air cargo

services and a global leader in the industry which was founded in 1971. The mission of
FedEx is to provide its customers rapid, time definite and reliable delivery in different

territories and over more than 200 countries. FedEx is world's largest express transportation

company as it promises to provide reliable and fastest services with unmatched air routes and

transportation infrastructure and about 3.6 million shipments each business day. It is known

as a world class company and is recognized for its relations with the employees and

customers, strategy and motivation. It provides the employees with the required told to grow

within the organisation and get a development in their careers and skills. The policy is to

support the employee culture and providing the safe and diverse working area and

environment to the employees and the best services to customers. It is dedicated with the

safest work place and continuously improves and promote the culture of health and safety for

the benefits of employees and stakeholders. More than 7 million packages are delivered to the

customers each business day. They had invested about millions of dollars in their equipment

and technology to avoid any kind of injuries during the operations on the ground or in the air.

Every aircraft is benefited with high and safe technology and a training to the pilots is

provided as it is an essential element of a safety program for a safe movement of products

and freight worldwide.

History of FedEx Supply Chain & Logistics:

FedEx provides integrated solutions to become competitive advantage for its

customers in supply chain management. Customers are provided with the high value products

and integrated services to improve the performance of supply chain and maintain the

information networks and vast shipping around the globe. The focus on customer services,

reduce costs and core competencies is a result of outsourcing these solutions. FedEx makes

sure to match the required delivery time and location for each of its customer with the

appropriate transportation service, and maintains the strategic level all over the world by
providing the Global Distribution Centres network. They operate 24/7 in forward stocking

locations through their office, trade networks, FedEx Express and many other facilities,

where customers are positioned for quick delivery. Most of the facilities are available near

business centres, hotels, hospitals and other strategic locations that gives an easy access to the

customers. FedEx supply chain provides the real time services to customers from a single

integrated and flexible IT network system, where customers can tract their orders or

shipments and inventory levels by just logging in to web application. Not just that, but order

placements and status messaging through electronic data interchange are also available.

They also operate a common warehouse management system that enables more capabilities

and experience over the world. Through FedEx critical inventory logistics, they are able to

figure out and deliver the solutions to generate more revenue, improve asset efficiency and

reduce the cost of goods. According to the increase in the global economy into growth and

out of recession, it is not possible for transport integrators to reduce the shipment costs to

help their customers. Rather what continues as a goal is to develop better capabilities which

enables to exact more value from the supply chain management.

Issues & Challenges in Supply Chain Management in FedEx:

Every organisation faces issues regarding something or the other, and they set up a challenge

for their company to come over those issues to avoid any kind of production loss.

Issues:

1) Time zone differences: Due to time zone differences, many of the shipments and orders

takes time to deliver, maybe up to 5 business days maximum. Customers might not be able to

contact verbally through phone calls at main offices regarding the placement of their orders

or any issue faced by them.

2) Vessel delays due to weather condition: Bad weather conditions can delay the flights

which eventually gets a delay in the shipment delivery as the flights stops due to weather

conditions until the weather conditions gets better.

3) Production loss: During the season of winters when there are more chances of the bad

weather conditions, the orders and shipments gets delay for days or a week which leads to the

loss of production as the customers do not prefer any kind of shipments or cargo during the

season.

Challenges:

1) Maximum customer satisfaction: Enhancing customer service is the most important

challenge and it is done by managing shipments according to the specific requirements of the

distribution to meet the needs and expectations of customers.

2) Cost Savings: FedEx SCM focuses on supporting the movement of the goods and services

worldwide and provide supply chain visibility end to end by a Global Supply Chain

Management technology.

3) Improving inventory management: Consistent on time delivery is promised to the

customers with safety of the goods, and internal transportation management is eliminated to

increase the assets and labour efficiency.

Changes in relationship with:

1) Suppliers: Quality supplier list evaluation occurs, where the suppliers are to measure their

performance and monitor it for the purpose of cost reduction, mitigating risk and

improvements. Supplier evaluation is mitigated by the recent and frequent data integrity and

management. Some of the organisations prefer a simple way by creating a survey where the

various questions are outline to evaluate the suppliers in multiple ways.

2) Customers: To maintain good relationships with the customers the only focus of the

FedEx is to provide their customers with the right quality and right quantity of the product at

the right time and right place.

3) Shipping: Freight charges and optimal service level will bring changes in relationship

between the supplier and shipments.

Future of Logistics and Supply Chain management:

Every organisation needs to survive not by standing still, but by growing a successful

enterprise and expanding which means increasing the investment from more warehouses to

the more market locations and to enlarge the system to control and manage everything needs

extra cost and more staff. A new strategy is a must for the future growth that allows to work

with experienced supply chain partners to provide dedicated and additional services with the

new product lines or customer segments. It is necessary to meet the growth targets with the

same logistics cost and without increasing it to make an impact on the market, by managing

unique processes and specific business rules, providing value added services to ensure to be a

part of competition. Bringing a change by creating a multi-functional team is the next step of

FedEx Supply Chain specialists and implementing on the advantageous supply chain

solutions for the customers. It can even reflect the company to increase communication and

accomplish the most ideal results basically by giving IT a chance to converse with IT and

Engineering liaise specifically with Supply Chain Managers.

References:

FedEx. Retrieved 20 November 2016, from http://www.fedex.com/gb/shipping-

services/industry-solutions/supplychain/our-solutions.html

Supply Chain Specifics. The Balance. Retrieved 20 November 2016, from

https://www.thebalance.com/supply-chain-specifics-4073684

Pierce, F. (2011). FedEx talks supply chain logistics. Supplychaindigital.com.

Retrieved 20 November 2016, from

http://www.supplychaindigital.com/logistics/2609/FedEx-talks-supply-chain-logistics