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FedEx Corporation
942 S. Shady Grove Road
Memphis, TN 38120
Main: 901-818-7500
Fax: 901-395-2000
www.fedex.com
Ranked #59 on the Fortune 1000 and #202 on the Global 500
TABLE OF CONTENTS
(Click on links below to view respective section)
Enterprise Applications
o Amdocs ClarifyCRM: ClearCall Center, ClearSupport, ClearSales
o AT&T Sterling Commerce Yantra Warehouse Management System
o Descartes Mobitrac Transportation Execution system
o EMC Documentum
o Hodes iQ talent management solutions
o IBM Lotus Notes, Domino
o Microsoft Exchange Server 2003, 2007
o Microsoft Outlook
o Open Text Bluebird
o Open Text Hummingbird RedDot Enterprise Content Management (ECM)
o Oracle PeopleSoft 7.5, 8.8, 8.9: Financials, Accounts Payable (AP), Asset
Management (AM), General Ledger (GL), Purchasing (PO), Human Resources
(HR)
o SAP Global Trade Services (GTS)
o SAP R/3: Financial Accounting (FI), Supply Chain Management (SCM),
Customer Relationship Management (CRM), Human Resources (HR)
Data Management & Business Intelligence
o BEZ Systems BEZPlus data warehouse tool
o IBM Cognos PowerPlay
o IBM DB2
o IBM Information Management System (IMS)
o Informatica PowerCenter
o Information Builders WebFOCUS
o Microsoft Access 2000
o Microsoft SQL Server 2000, 2005: Data Transformation Services (DTS), Query
Analyzer
o Omniture HBX software
o Omniture SiteCatyst
o Oracle Database 8i, 9i, 10g
o Oracle Fusion Middleware
o Oracle Real Application Clusters (RAC)
o SAP Business Objects Crystal Enterprise 8.5, XI
o SAP Business Objects Crystal Reports 8.5
o SAP Business Objects Set Analysis
o SAP BusinessObjects Web Intelligence, Broadcast Scheduler
o SAP NetWeaver Business Information Warehouse (BW)
o Sun MySQL
o Sybase 10, Adaptive Server IQ (ASIQ)
o Teradata Active Enterprise Data Warehouse V2 R6.0
Hardware/OS/Systems Environment
o Alcatel-Lucent routers and switches
o Cisco 3845 routers
o Cisco Aironet 1100 Series access points
o Cisco Aironet 350 Series Wireless LAN
o Cisco Catalyst 6509 switches
o Cisco IOS
o EMC Symmetrix DMX2000 storage system
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FedEx announced in September 2009 that they are looking to consolidate two data centers
and improve storage efficiency.
FedEx’s capital expenditure’s are expected to be approximately $2.6 billion in fiscal 2010
and include spending for aircraft and related equipment at FedEx Express and network
expansion at FedEx Ground and SmartPost. They will also continue to invest in productivity
enhancing technology solutions.
E-commerce platforms are a vital growth engine for FedEx. For example, FedEx uses
Microsoft Virtual Earth mapping technology to provide dynamic mapping capabilities that
help customers find locations faster and with more refined information.
In 2010 FedEx will be redoubling their efforts to improve on their current high service levels.
An example is FedEx QuickShip, which provides an easy way for customers to ship
packages while working in Microsoft Office Outlook.
In 2009 FedEx implemented cost-reduction initiatives across the enterprise. These initiatives
are focused particularly on their FedEx Express, FedEx Freight and FedEx Services
segments.
In September 2009 FedEx begin deploying 100,000 Motorola MC9500 handheld devices.
They will continue to deploy the devices over the next few years.
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customers to get real-time updates on a package's status. It’s viewed as the successor to
RFID tags.
BUSINESS INFORMATION
FedEx Corporation (FedEx), incorporated on Oct. 2, 1997, is a holding company. The company
provides a portfolio of transportation, e-commerce and business services through companies that
compete collectively, operate independently and manage collaboratively, under the respected FedEx
brand. These companies are included in four business segments: FedEx Express, FedEx Ground,
FedEx Freight and FedEx Services. Effective June 1, 2009, Caribbean Transportation Services, Inc.
(CTS), a provider of airfreight forwarding services between the United States and Puerto Rico, the
Dominican Republic, Costa Rica and the Caribbean Islands, was merged with and into FedEx
Express.
Federal Express Corporation (FedEx Express) is the express transportation company, offering time-
certain delivery within one to three business days. The FedEx Express segment also includes FedEx
Trade Networks, Inc., which provides international trade services, specializing in customs brokerage
and global ocean and air cargo distribution. FedEx Ground Package System, Inc. (FedEx Ground) is
a provider of small-package ground delivery service. FedEx Ground provides day-certain service to
every business address in the United States and Canada, as well as residential delivery through
FedEx Home Delivery. The FedEx Ground segment also includes FedEx SmartPost, Inc., which
specializes in the consolidation and delivery of high volumes of low-weight, less time-sensitive,
business-to-consumer packages using the United States Postal Service or Canada Post
Corporation for final delivery to any residential address or post office (PO) Box in the United States
and Canada.
FedEx Freight is a United States provider of less-than-truckload (LTL) freight services through its
FedEx Freight business (regional LTL freight services) and its FedEx National LTL business (long-haul
LTL freight services). The FedEx Freight segment also includes FedEx Custom Critical, Inc., a critical
shipment carrier. FedEx Corporate Services, Inc. (FedEx Services) provides its other companies with
sales, marketing and information technology support, as well as customer service support through
FedEx Customer Information Services, Inc. The FedEx Services segment also includes FedEx Office
and Print Services, Inc. (FedEx Office), a provider of document solutions and business services, and
FedEx Global Supply Chain Services, Inc., which offers a range of supply chain solutions.
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International express delivery with a money-back guarantee is available to more than 220 countries
and territories, with a variety of time-definite services to meet distinct customer needs. FedEx
Express also offers an international freight service, backed by a money-back guarantee, real-time
tracking and customs clearance. Under an agreement with the United States Postal Service that
runs through September 2013, FedEx Express provides domestic air transportation services to the
United States Postal Service, including for its First-Class, Priority and Express Mail. FedEx Express
also has approximately 5,000 drop boxes at United States Post Offices in approximately 340
metropolitan areas and provides transportation and delivery for the United States Postal Service’s
international delivery service called Global Express Guaranteed (GXG).
FedEx Express’s primary sorting facility, located in Memphis, serves as the center of the company’s
multiple hub-and-spoke system. A second national hub facility is located in Indianapolis. In addition
to these national hubs, FedEx Express operates regional hubs in Newark, Oakland, and Fort Worth
and metropolitan sorting facilities in Los Angeles and Chicago. In June 2009, FedEx Express began
operations at a regional hub in Greensboro, North Carolina. Facilities in Anchorage, Paris and
Guangzhou serve as sorting facilities for express package and freight traffic moving to and from
Asia, Europe and North America. FedEx Office offers retail access to FedEx Express shipping
services at all of its United States locations.
The company competes with United Parcel Service, Inc., DHL, United Parcel Service, Inc., United
States Postal Service and TNT.
FedEx Ground operates a multiple hub-and-spoke sorting and distribution system consisting of 520
facilities, including 32 hubs, in the United States and Canada. FedEx Ground conducts its
operations primarily with approximately 22,500 owner-operated vehicles and 31,500 company-
owned trailers. FedEx Office offers retail access to FedEx Ground shipping services at all of its
United States locations. FedEx Ground is also available as a service option at many FedEx
Authorized ShipCenters in the United States. As of May 31, 2009, approximately 60 percent of all
FedEx Ground service areas nationwide are supported by multiple-route contractors, which
comprise approximately 35 percent of all FedEx Ground contractors.
FedEx SmartPost, through its network of 22 distribution hubs, provides delivery Monday through
Saturday to all residential addresses in the United States, including PO Boxes and military
destinations. During the fiscal year ended May 31, 2009 (fiscal 2009), FedEx SmartPost expanded
its service into Canada for U.S. shippers by using the residential delivery capabilities of the Canada
Post Corporation. The new service, FedEx SmartPost International, is available to all residential
addresses, including PO Boxes, in Canada and includes around the clock shipment tracking status
updates via fedex.com.
FedEx Freight Corporation provides a range of LTL freight services through its FedEx Freight
(regional LTL freight services), FedEx National LTL (long-haul LTL freight services) and FedEx Freight
Canada businesses. Through a network of service centers and information systems, FedEx Freight
provides service to all United States ZIP Codes (including Alaska and Hawaii) with transit times.
During fiscal 2009, FedEx Freight reduced transit times by at least one day in approximately 2,600
service lanes throughout the United States. Internationally, FedEx Freight Canada offers freight
delivery service throughout Canada, and FedEx Freight serves Mexico, Puerto Rico, Central and
South America, the Caribbean, Europe and Asia via alliances and purchased transportation. As of
May 31, 2009, FedEx Freight Corporation was operating approximately 59,000 vehicles and trailers
from a network of 480 service centers.
The company competes with Con-Way Freight, YRC Worldwide Inc., UPS Freight and ABF Freight
System, Inc.
FedEx Office is a provider of document and business services. FedEx Office’s global network of
digitally-connected locations offers access to copying and digital printing, professional finishing,
document creation, signs and graphics, direct mail, Web-based printing, Internet access, computer
rentals, videoconferencing and the full range of FedEx day-definite ground shipping and time-definite
global express shipping services. As of May 31, 2009, FedEx Office’s operations included
approximately 1,800 FedEx Office and Print Centers in the United States and 135 additional
locations in seven other countries, as well as 29 commercial production centers. FedEx Office is
headquartered in Dallas, Texas.
Frederick W. Smith, Chairman of the Board, President, Chief Executive Officer – Dec. 17, 2009.
For the remainder of FY10, we will continue to balance cost controls with investment opportunities
that serve our long-term interests, such as a more fuel-efficient and productive Boeing 757 and 777
aircraft joining our fleet. By the end of FY10, we will have added a total of 17 757s and four 777s.
We will also invest in services that add value for our customers. A few weeks ago, FedEx ushered in
a new era of tracking capability with the announcement of a unique product called [Sensaware].
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Available this spring and designed for the life sciences industry, Sensaware couples a multi-sensor
device and [inaudible] platform for real-time sharing of information on high value, highly sensitive
critical shipments.
We believe the U.S. economy reached a turning point year over year during our second fiscal quarter
with the one-year anniversary of the financial collapse. Several economic indicators related to
industrial demand turned positive compared to the same time last year.
As we look ahead, we see continued opportunities to expand our international business portfolio to
take advantage of its potential for high growth and profitability. For example, FedEx has launched
international direct distribution, a multi-mobile shipping option allowing customers to choose among
air service and ocean transportation based on their transit time needs and strengthening FedEx as a
leading provider of end-to-end supply chain solutions.
STRATEGY
FedEx was incorporated in Delaware on Oct. 2, 1997 to serve as the parent holding company of
their operating companies. Through their holding company, they provide strategic direction to, and
coordination of, the FedEx portfolio of companies. They intend to continue leveraging and extending
the FedEx brand and providing their customers with convenient, seamless access to their entire
portfolio of integrated services.
They believe that sales and marketing activities, as well as the information systems that support the
extensive automation of their package delivery services, are functions that are best coordinated
across operating companies. Through the use of advanced information systems that connect the
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FedEx companies, they make it convenient for customers to use the full range of FedEx services.
They believe that seamless information integration is critical to obtain business synergies from
multiple operating units. For example, their Web site, www.fedex.com, provides a single point of
contact for their customers to access FedEx Express, FedEx Ground and FedEx Freight shipment
tracking, customer service and invoicing information, as well as FedEx Office services. Similarly, by
making one call to FedEx Expedited Freight Services, their customers can quickly and easily
evaluate surface and air freight shipping options available from FedEx Express, FedEx Freight and
FedEx Custom Critical in order to select the service best meeting their needs. Through this one point
of contact, customers can select from a broad range of freight services, based on their pickup and
delivery requirements, time sensitivity and the characteristics of the products being shipped.
They manage their business as a portfolio, not a particular operating company. As a result, they
base decisions on capital investment, expansion of delivery, information technology and retail
networks, and service additions or enhancements on achieving the highest overall long-term return
on capital for their business as a whole. For each FedEx company, they focus on making
appropriate investments in the technology and assets necessary to optimize their long-term earnings
performance and cash flow. As an example of their commitment to managing collaboratively, their
management incentive compensation programs are tied to the performance of FedEx as a whole.
While they have increased their emphasis on competing collectively and managing collaboratively,
they continue to believe that operating independent networks, each focused on its own respective
markets, results in optimal service quality, reliability and profitability from each business unit. Each
FedEx company focuses exclusively on the market sectors in which it has the most expertise. Each
company’s operations, cost structure and culture are designed to serve the unique customer needs
of a particular market segment.
Their “compete collectively, operate independently, manage collaboratively” strategy also provides
flexibility in sizing their various operating companies to align with varying macro-economic conditions
and customer demand for the market segments in which they operate. For example, although the
current global recession has negatively impacted all of their companies, their FedEx Express, FedEx
Freight and FedEx Services segments have been disproportionately affected. Meanwhile, their
FedEx Ground segment continues to grow. Accordingly, although they have implemented cost-
reduction initiatives across the enterprise during 2009, these initiatives have been focused
particularly on their FedEx Express, FedEx Freight and FedEx Services segments. For instance, they
have reduced hours, personnel and network capacity at those segments, but they continue to
increase network capacity at the FedEx Ground segment, albeit at a slower rate.
The following four trends have driven world commerce and shaped the global marketplace in the
past, and despite the current global recession, they believe they will continue to do so over the long
term:
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Globalization: As the world’s economy has become more fully integrated, companies are sourcing
and selling globally. With customers in more than 220 countries and territories, they facilitate this
supply chain through their global reach, delivery services and information capabilities.
Supply Chain Acceleration: As the economy has become increasingly global, it has also become
more fast-paced, and companies of all sizes now depend on the delivery of just-in-time inventory to
help them compete. They have taken advantage of the move toward faster, more efficient supply
chains by helping customers obtain near real-time
information to manage inventory in motion, thereby
reducing overhead and obsolescence and
speeding time-to-market. Do you conduct formalized Strategic
Account Planning with business partners?
Growth of E-Commerce: E-commerce
acts as a catalyst for the other three Our customer use CRUSH Reports to facilitate
trends and is a vital growth engine for the discussions.
businesses. Through their global
transportation and technology networks, they
contribute to and benefit from the growth of e-commerce.
These trends have produced an unprecedented expansion of customer access to goods, services
and information. Through their global transportation, information technology and retail networks,
they help to make this access possible. They continue to position their companies to facilitate and
capitalize on this access and move toward stronger long-term growth, productivity and profitability.
To this end, they are pursuing a number of initiatives to continue to enhance the FedEx customer
experience. For instance, notwithstanding the current global recession, they continue to invest in
long-term strategic projects focused on expanding their global networks to accommodate future
volume growth and increase customer convenience. In addition, they are broadening and more
effectively bundling their portfolio of services in response to the needs and desires of their
customers. For example, in 2009, they:
In June 2009, they announced a multi-year agreement with OfficeMax to offer U.S. domestic FedEx
Express and FedEx Ground shipping services at all U.S. OfficeMax retail locations (over 900
locations), beginning later in calendar 2009. These additional staffed drop-off locations are expected
to complement their existing retail network, including their FedEx Office and Print Centers, and
further expand customer access to their services.
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They reduced the capacity of the FedEx Express and FedEx Freight networks. They will further
reduce personnel and work hours. They expanded pay actions to include non-US employees where
permitted. They will be streamlining their information technology systems and other internal
processes. They will reduce spending in additional categories and increase economies purchasing
goods and services. These actions are targeted to reduce expenses by about $1 billion.
FedEx Express improved its international and domestic services in Mexico with an expanded air
cargo terminal, bonded warehouse and a new hub. In China, FedEx Express began operations at
their new $150 million Asia/Pacific hub located at the new Baiyun International Airport in Guangzhou,
China.
Their new Asia/Pacific hub in Guangzhou, China, which will officially open on Feb. 6, will be the
largest FedEx facility of its kind outside the United States overtaking their large in Paris, France and it
represents a $150 million capital investment. It will be the heart of their APAC operations, which are
integral to their long-term growth strategy. Their new hub in Guangzhou, China, puts them in the
heart of Asia’s fastest-growing production and trade center. Because of Mexico’s growth as a
manufacturing center, they’ve launched domestic express service there. And they’re constantly
opening and expanding FedEx Ground hubs to match trade patterns within the United States. In
Canada, they launched FedEx SmartPost service. Despite the weak economy, they continue to
expand their service portfolio, putting the right capabilities in the right places and expanding access
to the global economy for their customers.
They have added to their three solar facilities already running in California, as they have broken
ground this past fiscal year on what will be their largest solar plant and their first outside the U.S., in
Cologne, Germany. They are investing in alternative fuels as well as more fuel-efficient aircraft that
lower emissions and use significantly less fuel per pound transported. With a goal of making their
vehicles 20 percent more efficient by 2020, they continue to invest in their hybrid-electric vehicle fleet
and in all-electric prototypes. Furthermore, they are cutting transit times and fuel use through
smarter routing based on new proprietary software. They are also streamlining their processes.
Through Quality Driven Management (QDM) they’ve taken a whole new approach to standardizing
quality across the entire company. QDM simultaneously lowers costs and improves efficiency.
FedEx is exploring ways to expand their frozen-shipping capabilities for the life sciences industry, so
that products can remain frozen for extended periods, unlike dry-ice shipping, which often requires
re-icing during transit. They’ve refreshed their online tracking tools to increase the visibility of
shipments via the Web through desktop or mobile devices. They pioneered a new aircraft avionics
system that will dramatically improve efficiency during takeoff and landing of their aircraft. FedEx
Freight initiated a 10:30 a.m. delivery commitment option, a first for the less-than-truckload freight
industry. FedEx Trade Networks introduced a service to help customers meet new U.S. Customs
filing requirements.
They’re focused on steady gains in market share and productivity. They’re focused on continuing to
improve their customer’s experience, keeping the purple promise. They’re positioning FedEx to take
full advantage of the recovery. Because they can flex their networks and pull many other levers at
their disposal FedEx continues to operate profitably. Their service levels are extremely high.
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FedEx looks to find ways to reduce costs for all the goods and services they buy across the
company. They will make purchasing a more strategic activity. They are streamlining and simplifying
internal processes within FedEx Services particularly and focus on their Information Technology
functions especially. They aim to reduce duplication, overhead and non-essential costs.
They instituted a hire freeze on all hiring expect for mission critical positions. They cut discretionary
spending and because they believe there should be a strong relationship between pay and
corporate performance they eliminated all bonus and variable incentive compensation payouts
representing hundreds of millions of dollars.
Their strategy for long-term growth, productivity and profitability depends in part on their ability to
make prudent strategic acquisitions and to realize the benefits they expect when they make those
acquisitions. In furtherance of this strategy, during 2007 they acquired the LTL freight operations of
Watkins Motor Lines (renamed FedEx National LTL) and made strategic acquisitions in China, the
United Kingdom and India. During 2004, they acquired Kinko’s, Inc. (now known as FedEx Office).
While they expect their past and future acquisitions to enhance their value proposition to customers
and improve their long-term profitability.
IT EXPENDITURES
FedEx’s capital expenditures were $2,459 million, $2,947 million and $2,882 million in 2009, 2008
and 2007, respectively. Capital expenditures during 2009 were lower than the prior year primarily
due to decreased spending at FedEx Express for facilities and aircraft and aircraft-related
equipment.
FedEx’s technology expenses were $298 million, $366 million and $431 million in 2009, 2008 and
2007, respectively.
They reduced capital spending for fiscal year 2009 from $3 billion at the start of the year to estimate
at $2.4 billion. They refuse to compromise their outstanding service levels in return for short-term
gain. In fact, they’re redoubling their efforts to improve on even their current high service levels.
The company anticipates cash flow from operations will exceed their investing activities, excluding
any acquisitions. Their capital expenditures for 2010 are expected to be approximately $2.6 billion,
as they will continue to balance the need to control spending with the opportunity to make
investments with high returns, such as in substantially more fuel-efficient Boeing 757 (B757) and
Boeing 777 Freighter (B777) aircraft. They will also invest in related equipment at FedEx Express,
network expansion at FedEx Ground and revenue equipment at FedEx Freight. They continue to
invest in productivity-enhancing technologies. They expect approximately 61 percent of capital
expenditures in 2010 will be designated for growth initiatives and 39 percent for ongoing
maintenance activities.
FedEx Express’ capital expenditures were $1,348 million, $1,716 million and $1,672 million in 2009,
2008 and 2007, respectively. Prior year FedEx Express capital expenditures included construction of
a new regional hub in Greensboro, N.C., sort expansion of the Indianapolis hub, expansion of the
Memphis hub and construction of a new office building in Memphis.
FedEx Ground’s capital expenditures amounted to $636 million $509 million and $489 million in
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2009, 2008 and 2007, respectively. Capital spending at FedEx Ground increased in 2009 due to
increased spending on facilities and sort equipment associated with its comprehensive network
expansion plan. Capital spending at FedEx Ground is expected to decline slightly in 2010 with the
majority of their spending resulting from their continued network expansion and productivity-
enhancing technologies. They are committed to investing in the FedEx Ground network because of
the long-term benefits they will experience from these investments.
FedEx Freight’s had capital expenditures of $240 million, $266 million and $287 million in 2009,
2008 and 2007, respectively. Capital spending at FedEx Freight is expected to increase slightly in
2010 with the majority of their spending resulting from the replacement of transportation and
handling equipment and information technology projects.
FedEx Services had capital expenditures amounting to $235 million, $455 million and $432 million in
2009, 2008 and 2007 million in 2009, 2008 and 2007, respectively. FedEx Services capital
expenditures decreased in 2009 primarily due to the planned reduction in FedEx Office network
expansion, decreased spending and the postponement of several information technology projects,
along with the substantial completion of information technology facility expansions in the prior year.
FedEx Services capital expenditures decreased in 2009 primarily due to the planned reduction in
FedEx Office network expansion, decreased spending and the postponement of several information
technology projects, along with the substantial completion of information technology facility
expansions in the prior year.
IT DEVELOPMENTS
The result was a group of applications called FedEx Unified Strategic Information Optimization
Network, or FUSION. Its three entities are Shipment FUSION, Customer FUSION, and Revenue
FUSION. The solution ties together the shipment systems of each business unit to provide
internal and external users with a single resource for all shipment tracking and account
reporting. These applications depend on Oracle WebLogic Server Enterprise Edition, a core
foundational component of Oracle Fusion Middleware. Oracle WebLogic Server brings
consistency to how developers interface their core business applications with the databases,
eliminating the concern of how many connections they have to make or how they retrieve
information. “We’ve been a WebLogic shop for many years,” Robertson says. “This software
gives us the performance and reliability that we need to manage millions of transactions daily. It
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also provides the scalability we need to grow with our business and is based on open standards
to help us maintain flexibility.” Robertson appreciates the continued relationship with Oracle. “I’m
very encouraged by the technical direction that I’ve seen from Oracle,” Robertson notes. “Our
companies have a history together, and we look forward to that relationship strengthening.”
(Case study dated January 2009.)
http://www.oracle.com/technology/oramag/oracle/09-
jan/o19appserver.html?_template=/ocom/print
FedEx based the QuickShip application on Microsoft .NET Framework version 2.0. Customers
can download the add-in application, and it connects them to FedEx Web services. FedEx also
used the Microsoft Visual Studio 2005 Professional Edition development system and Visual
Studio Tools for Office Second Edition to create the first FedEx QuickShip prototypes before
Visual Studio 2008 and Visual Studio Tools for Office 3 were available as beta releases. FedEx
pushed the limits of Visual Studio Tools for Office Second Edition, which didn’t always meet the
company’s technical needs. In those cases, the MTC architects and Microsoft Services
consultants helped FedEx developers resolve any issues they encountered.
Microsoft also brought in Clarity Consulting InterKnowlogy. Ben Baker, Technical Principal for
FedEx, said, “Having our Microsoft Services consultants bring in Clarity Consulting also
benefited us. Clarity had successfully completed multiple proof-of-concept projects with
Microsoft, and its consultants had a lot of Office Outlook experience that furthered our
envisioning and architecture design efforts.” Other software and services used include Microsoft
Technology Centers, Microsoft Office Professional 2007, Office Business Applications, Microsoft
Visual Studio 2008 Professional Edition and Microsoft ASP.NET AJAX.
http://www.microsoft.com/casestudies/Case_Study_Detail.aspx?CaseStudyID=4000002585
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Other software includes Microsoft Office Professional Edition 2003, Unified Messaging,
Microsoft Office Outlook 2007 and Microsoft Office Outlook Web Access.
http://www.microsoft.com/casestudies/Case_Study_Detail.aspx?CaseStudyID=4000000579
1. Relationship stewards. FedEx Corp. appoints one person to look after each vendor
relationship. IT executives supervise relationships with the strategic vendors; IT directors
oversee relationships with second- and third-tier vendors. The relationship steward keeps
everyone apprised of what’s going on with a particular vendor. The steward is the go-to
person if an operating company has a question on the technology, the standards associated
with it, training, the best way to deploy it or how to work with that vendor. Thus, the
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relationship stewards also promote best-practice sharing among the operating companies.
They’re also the vendor’s single point of contact inside the company.
2. A purchasing and sourcing group. To ensure FedEx Corp. and its operating companies get
the best deals from their vendors, the corporate IT department created a purchasing and
sourcing group within its vendor management office. The group is responsible for staying on
top of the company’s top 100 contracts and the competitive landscape associated with each
of those vendors. It also provides the IT leaders of the operating companies with a dossier on
their top vendors containing information they can use to negotiate the best deals.
3. Monthly meetings. IT leaders across FedEx meet each month to discuss their practices for
working effectively with technology providers. They talk about the information they share with
their vendors and the due diligence they perform when selecting potential technology
providers. It’s another way of keeping everyone within the geographically dispersed company
in lockstep and of ensuring that FedEx doesn’t become a "victim of vendor roadshow," says
Kevin Humphries, FedEx Corp.’s senior vice president of IT. (Article dated December 2006.)
http://www.cio.com/article/27097/How_FedEx_Ensures_Its_Vendors_Provide_Quality_Service
Michael V. Hmel, SVP, Information Systems and CIO; CIA Interview: Software
Managed Maintenance Program
Michael V. Hmel is the former SVP of Information Systems and CIO for FedEx Ground, Inc. As
SVP and CIO, Hmel was responsible for coordinating all IT services for FedEx Ground, FedEx
Home Delivery, FedEx Supply Chain Services and FedEx SmartPost in the U.S. and Canada.
The majority of his staff was devoted to development, maintenance, and support of field,
financial, and transportation systems. A team of 400 professionals and 50 external consultants
performed new application development, maintenance of legacy systems, software quality
assurance, information engineering, and PC/LAN services.
This April 2006 interview with Michael Hmel pertains to the status of a software managed
maintenance program that FedEx Ground embarked upon with Computer Aid (CAI) in 1996:
“When I first talked to CAI about managed maintenance, we had a very poor environment here
for new development. We were stuck on some old platforms. We had a VAX platform and an
AS/400 that we were still doing a lot of RPG on. And we couldn’t do new development quickly
enough to be responsive to the business. It was obvious that something needed to be done. We
knew we had to get to some new platforms. Consequently, we embarked upon a major initiative
called the open system transformation. That was when we first talked to CAI about managed
maintenance. We realized immediately that this was something that could help move us forward.
Having CAI come in and handle the maintenance of many of our legacy systems really allowed
us to move forward with our strategy and vision. What CAI brought with them that no one else
did — none of the other big players in this space — was a good set of measurements and
processes. This really helped them prove that what they were doing was cost-effective and of
good quality. On example would be the measurements they conducted on the number of help
tickets. A metric like this clearly demonstrates that by fixing problems at their root, tickets don’t
come back. And this drives down the number of help tickets. CAI was also able to prove that as
people learned systems, they became more and more productive. As a result, where it once
took five people to maintain a certain group of systems, over time CAI could drive that down to
four, or three, or two. That was very valuable.”
http://www.compaid.com/caiinternet/ezine/mikehmelinterview.pdf
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Wyse Winterm Thin Client Desktops; Microsoft Windows NT 4.0, Terminal Server
Edition; Citrix MetaFrame Server Software
FedEx required a solution that would allow rapid deployment of strategic, modern tools for
mission-critical operations, the ability to quickly respond to changing business requirements,
prompt response to performance and capacity issues, removal of inflexible system constraints,
and elimination of a single point of failure. In March 2005, FedEx selected Wyse. FedEx began
its successful installation by upgrading to a high-speed Frame Relay network. It then set up
centralized data centers that house clusters of Windows NT 4.0, Terminal Server Edition, with
Citrix MetaFrame server software and provide fast access to Windows-based applications. To
date, more than 4,000 Winterm thin clients have been deployed. “The feedback has been very
good,” says Jeff Crawley, then manager of the Global Resource for Information Decentralization
(GRID) Program. “Now we can control the desktop and give employees the tools that they need.
Our biggest challenge is to meet demand from the field offices.”
http://www.wyse.com/resources/casestudies/pdf/fedex.pdf
Cisco Catalyst 6509 Switches, 3845 Routers, IOS Software, Aironet 1100 Series
Access Points, Aironet 350 Series Wireless LAN, CiscoWorks LAN Management
In 2005, FedEx’s routing equipment was approaching end-of-life and in keeping with its
commitment to assuring the most current technology, FedEx Ground decided to upgrade its
largest sites, “D” and “E” sites, as well as deploy new networking equipment into its new Trident
hubs. Redundancy features were essential. In addition, FedEx Ground wanted high processing
power for maximum performance and the ability to connect satellite and ISDN backup networks.
The company chose the Cisco Catalyst 6509 Switch and Cisco 3845 Integrated Services
Router as its deployment platform. FedEx Ground uses CiscoWorks LAN Management Solution
for upgrading versions of Cisco IOS Software, inventory and serial number control, version
control, and as an occasional troubleshooting tool. The Pittsburgh headquarters is also
completely wireless, using Cisco Aironet 1100 Series access points and Cisco Aironet 350
Series Wireless LAN (WLAN) products. The Cisco Aironet 1100 Series offers an affordable,
easy-to-install, single-band access point that delivers enterprise-class management, security,
and scalability. FedEx Ground’s Cisco wireless solution serves 1,500 people in headquarters,
providing connectivity to everybody with a wireless laptop, PDA or data-enabled cell phone.
“The Cisco 3845 integrated services routers are a good investment to protect our network,” said
Michael Mullen, senior technical analyst for FedEx Ground. “Our management requests that we
deliver 99.9 percent uptime, with .10 percent downtime scheduled, and the new Cisco 3845
routers help us meet that goal. With the new network implementation, we won’t have to change
infrastructure of the large facilities for the next five years.”
(Original source www.cisco.com.)
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FedEx also worked with partners in India and other countries to develop new systems and
applications to help the transformation. That included technologies for improving customer
satisfaction, such as software tools that use rich data to inform customers of all incoming
shipments. Carter assured the audience that its development work overseas doesn't threaten
domestic employees and business partners. Carter called it "variable capacity" rather than
outsourcing. "We're not pushing our systems out, but working with partners to develop them.
We're just not a big outsourcing company," he said. But despite what Carter calls FedEx's
"culture of change," the company still finds itself in stiff competition with UPS and DHL, which
are also trying to stay relevant through innovation and growth.
http://www.informationweek.com/news/global-cio/showArticle.jhtml?articleID=184425795
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took less than a year. The company is adding customer-facing applications called Customer
Fusion, Customer Service, InSight, and others. “Fusion is built on a very-high-speed messaging
architecture,” said Larry Tieman, then SVP of IT at FedEx and chief architect for the project.
“The message bus allows us to loosely couple the business application, apply the proper
business rules, and build a unified application layer.” (Press release dated June 2004.)
http://www.informationweek.com/news/management/showArticle.jhtml?articleID=22103132
Progress Software DataXtend CE for C++, O-R Mapping, Data Caching, Cache
Clustering, Real Time Data Services; Sun Solaris 2.5;! Sybase 10.x; ! I BM 309X
Mainframe;! MVS IMS
FedEx needed a system that would efficiently provide contingency plans in the event of a
problem. Any break in the flow of packages creates a backlog throughout the system. The
company had to accomplish the system changeover while accessing the existing IMS system as
well as a relational database. To keep development and maintenance costs down, FedEx also
wanted a solution that enabled their project staff of mostly IMS system veterans to quickly and
efficiently transfer application knowledge into the new system as well as incorporate new
features. FedEx chose DataXtend CE for C++ to help create an infrastructure for the Service
Recovery Application (SRA) and integrate the IMS system into the multi-tier component based
application. The SRA provides recovery options and contingency plans when pack-ages are at
risk of being delayed. The GOC specialist simply enters a few parameters into the SRA, such as
current weather conditions, and within seconds the system returns an extensive list of ranked
recovery options that could involve various functional groups. The technology environment also
included Sun Solaris 2.5, Sybase 10.x, IBM 309X mainframe and MVS IMS.
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The new object component framework, built with DataXtend CE for C++ as a foundation,
enables previously not attempted projects to be built. FedEx is no longer limited when
considering possible projects because DataXtend CE enables capabilities that were not available
in IMS. Establishing functional relationships between aircraft, maintenance and ground stations
was practically impossible before, but DataXtend CE makes these cross-functional relationships
possible. The data access layer, built using DataXtend CE technology object-relational mapping,
allowed straight-forward migration to multi-tier applications, automated encapsulation of
relational data into objects, and enabled persistent objects. The object-relational mapping tool
made the size and complexity of the object model so manageable the system has already
demonstrated significant maintenance benefits.
Furthermore, because DataXtend CE development tools integrate seamlessly with Rational Rose
modeling tools, FedEx's system developers transitioned smoothly to an object-based
environment. DataXtend CE's code generation capabilities significantly sped up development
time. Not only did DataXtend CE for C++ provide a rapid application development environment,
but it also enabled the integration of legacy systems and employed event-driven mechanisms to
maintain the rapidly changing GOC environment. SRA performance demands and response
expectations were achieved using the DataXtend CE technology server. Without the caching
and pre-calculations done by the DataXtend CE server, the time required to compute a list of
recovery options would have been prohibitive, making the application unusable. By using
intelligent caching, distributed objects performed optimally without necessitating expenditure for
more expensive hardware. Performance increased and hardware costs were kept to a
minimum. The technology environment also included Sun Solaris 2.5, Sybase 10.x, IBM 309X
mainframe and MVS IMS. (Undated case study.)
http://www.progress.com/realtime/customers/fedex_cs/index.ssp
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BEZ Systems BEZPlus Data Warehouse Tool; Teradata Active Enterprise Data
Warehouse (ADW)
FedEx sales representatives used to provide customer quotes that were calculated by static
formulas and published price lists. The problem: variability in costs led to some quotes being too
high, and customers seeking other vendors, while others were too low, resulting in low
profitability. FedEx needed a way to provide real-time quotes driven by specifications for each
customer, including location, destination and many other factors, which are all stored in the
company’s data warehouse. Moreover, they needed to support this application along with all the
other users of their enterprise data warehouse. The company implemented a Teradata active
data warehouse (ADW) application that provides fast, accurate, real-time quotes. To help ensure
the ADW would exhibit OLTP-like characteristics of availability, scalability and throughput, FedEx
turned to BEZ Systems. BEZ’s flagship product, BEZPlus, allows FedEx to keep the ADW
running at optimum performance. Being able to validate how workloads are running before and
after applying Teradata’s priority scheduler is important to the company’s overall performance
management strategy. BEZPlus gives FedEx the ability to quantify the benefits of implementing
specific performance strategies and validates their outcomes, which not only supports Teradata,
but optimizes its performance. (Case study dated 2003.)
http://www.bez.com/success_stories/FedEx_userStory_03b.pdf
HP OpenView Technology
At the heart of FedEx operations is a computer system that can handle more than 100 million
daily electronic transactions. FedEx needed to upgrade this system with one that offered
seamless access to, and distribution of, mission-critical data. FedEx turned to HP to create one
of the world’s most efficient open system implementations. At the core of the new globally
distributed server implementation is HP OpenView technology, which allows FedEx to monitor
its servers and distributed applications from a centralized location. By leveraging the HP
OpenView technology, FedEx has implemented one of the largest automated monitoring and
performance management solutions in the industry. The solution includes HP servers and
StorageWorks virtual array systems. (Undated case study.)
http://www.hp.com/country/us/en/msg/corp/htmlfedex.html
The WebFOCUS platform was deployed essentially to extract the data needed from FedEx’s
OS390 mainframe, and load it onto an Oracle database. Users of the system then use the
reports designed in WebFOCUS to access the data loaded into the Oracle database. Work is
being concentrated on providing access to more types of information and more reporting tools.
Namie says the GSP project is part of a larger information supply chain initiative at FedEx called
ISIS—International Strategic Information System. In its complete form, ISIS will provide business
intelligence not only to FedEx and its GSPs, but also to FedEx’s customers, the customers of
FedEx’s customers, and the customers of the GSPs. “Our goal is to get information into the
hands of decision makers faster, so they can be more predictive,” he says. “It’s about being
able to tell a customer that a package is going to be late before it happens, rather than after the
fact.” (Case study dated 2002.)
http://www.informationbuilders.com/new/magazine/v13-2/pdf/fedx_s02.pdf
*NEW* IT EXECUTIVES
Since joining FedEx in 1999 as VP and CIO of FedEx Logistics, Aaholm has held several
management positions. Her most recent role was SVP of IT for FedEx Services where she was
responsible for IT development of technology solutions globally to support FedEx Express. She also
has been responsible for IT development of solutions to support customs clearance, less-than-
truckload (LTL), supply chain, and freight forwarding for FedEx Services, FedEx Freight and FedEx
Express.
Aaholm has more than 22 years of experience in the logistics and transportation fields. Prior to her
tenure with FedEx, she worked at GeoLogistics Americas Inc., as VP of IT and at Schneider
National/Schneider Logistics, Inc. in various IT and transportation positions. A native of Wisconsin,
Aaholm attended the University of Wisconsin-Green Bay and is a member of the Council of Logistics
Management. In 2005, Aaholm was named to Computerworld’s Top 100 IT Leaders list. Aaholm
serves on the Board of Directors for The Arc of the Mid-South.
http://about.van.fedex.com/executive_bios/sherry_a_aaholm%20?bio=1
The initial logistics plan for using the assets is performed with traditional HPC cluster tools well in
advance of the actual shipments. As the time winds down to the day of execution, the model is
continuously refined (some on grid platforms) to support a real time response. The refined model has
to react to environmental conditions, like weather, mechanical breakdowns and infrastructure
problems. An extremely high capacity computing environment is used to coalesce all the information
in real time. Humphries’ main frustration with high performance computing technology is its
uniqueness. Businesses like FedEx would like to see their HPC assets seamlessly embedded into
their overall enterprise infrastructure rather than have to be treated as an island of resources devoted
to solving specialized problems. He thinks that transition is occurring, but they still struggle with
some of the distinctive aspects of HPC, especially as it pertains to their cluster computing
resources. The mainframes of the past were much easier to deal with compared to a system with
thousands of nodes, where the job has to split up into little pieces. Further constraining the use of
these systems is the limited pool of talent that can manage those resources. "I don't know where
that changes though," Humphries said. "It's not something that every kid is going to learn in college
and it's not something everybody is going to learn on the job."
http://www.hpcwire.com/industry/retail/HPC_in_the_Land_of_247.html
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MILESTONES
2009
August – Renewed global express guaranteed agreement with USPS.
July – FedEx Ground announced plan for largest rooftop solar power system in the U.S.
July – Expanded hybrid electric fleet by 50 percent with groundbreaking conversion
program.
July – FedEx Ground opened new distribution hub in Chicago, Ill.
June – Formed a strategic alliance with
OfficeMax to provide better customer
service. Are
you missing out on opportunities?
June – Elected Susan C. Our customers use CRUSH Alerts to keep their fingers
Schwab to the board of on the pulses of their prospects & customers and to
directors. make sure they don’t miss out on sales
May – Completed commercial
opportunities.
agreement with CryoPort for frozen
shipping services.
March – Expanded SmartPost to Canada.
February – Announced expansions in international and domestic service in Mexico.
February – Opened new Asia Pacific Hub in Guangzhou, China.
January – Introduced new advancements to online tracking tools.
2008
November – Cut transit times on 3,300 routes.
October – Selected site for new Portland, Ore. area distribution hub.
October – FedEx Express broke ground on its largest solar facility and fist outside U.S.
October – FedEx Express Nacional began operation in Mexico.
September – FedEx Freight and BP Solar completed second solar power installation.
July – FedEx Express introduced fuel efficient Boeing 757 to aircraft fleet.
June – FedEx Kinko’s changed named to FedEx Office.
May – Named Brian D. Phillips president and CEO of FedEx Office.
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2007
December – FedEx Ground chose Perryburg, Ohio, as site for new distribution hub.
September – Elected Steve Loranger, ITT chairman, as new director.
September – Elected Gary Loverman, CEO, Harrah’s Entertainment, as new director.
September – ANC became FedEx UK.
August – FedEx Gateway for Central and Eastern Europe moved to Cologne, Germany.
June – FedEx Freight Canada announced new facility in Toronto, Ontario.
June – FedEx Office and Adobe collaborate to deliver print on demand.
May – FedEx Express and Azure Dynamics enter agreement to develop hybrid electric
powertrain.
May – Virginia Albanese promoted to president and CEO of FedEx Custom Critical replacing
retired John G. Pickard.
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EXECUTIVE COMMENTARY
The team accelerated the timeline for the Marimba version 6 to 7 upgrade to 90 days instead of
three to four months. The team performed a thorough study assessing Microsoft’s System Center
Configuration Manager 2007 (SCCM) as a replacement to BMC Marimba. The group concluded
that, due to a negative ROI and concern that the benefits may not be realized, Microsoft’s product
would not be implemented. The team manages two Windows XP desktop image development
projects utilizing SDLC methodologies involving two engineers and coordination of operations,
support, POS development team, quality assurance and field representation.
During the FedEx Office launch the team of programmers implemented and developed Teamsite
SitePublisher, and associated infrastructure, site, pages, templates and components, which
increased FedEx Office visibility by 63 percent. They worked in the following environments: XSLT,
Interwoven SitePublisher CMS, XML, HTML, UNIX, CSS, JavaScript, Perl, Omniture SiteCatalyst.
The group of programmers implemented the first enterprise chat feature that will allow them to have
one global chat contract and no longer pays for other vendors. The product provides uniformity and
efficiency and acquires data that provides innovative analytics. The enterprise chat will provide new
insights on customer perspectives and preferences. Application development used JavaScript,
HTML, Instant Service Chat, and Omniture SiteCatyst.
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The technical environment for the team includes ASP.NET, ADO.NET, C#, Microsoft Internet
Information Server (IIS), SAP Business Objects Crystal Reports, Microsoft Visual SourceSafe (VSS),
IBM Rational Rose and Microsoft SQL Server 2005.
FedEx’s team of analysts implemented the PeopleSoft Financials and BlueBird/ODOC imaging for all
FedEx operating companies, domestically and internationally. The team was in charge of the design,
development and implementation of PeopleSoft 8.17 and 8.8 Financials with the imaging of AP
invoices using BlueBird/ODOC imaging software for FedEx operating companies.
They led the BlueBird receipt imaging integration with the PeopleSoft Expenses module for FedEx
Corporate, Corporate Services and FedEx Freight and provide hardware and software budgeting of
Federal Express Financial systems.
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• Implementing the ORE test bench Web application using the Stripes framework.
• implementing Domain objects, Hibernate mapping classes and Service classes.
• Fixing issues and QC defects in order to help them to process on different levels of
validations.
• Testing the ORE test bench Web application by creating test scenarios.
• XML schema mapping using MapForce and XMLSpy editors.
• Implementing JUnit Test classes.
• Configuring Eclipse and Tomcat System plug-ins for the application server environment.
The technical environment includes J2EE, JUnit, Hibernate, Spring, WebLogic, Eclipse, Oracle 10g,
ClearCase, Oracle SQL*Developer, XML, XMLSpy, Sun Solaris, Apache Tomcat, Maven, HP
Mercury TestDirector, Lotus Notes, Struts, JavaServer Faces (JSF), Vignette Content Server,
Vignette Builder, Adobe Dreamweaver, Microsoft Visio, Perl scripts, SOAP, Cygwin, Quest Toad,
JBoss, IBM DB2, WebSphere Application Server, TIBCO Rendezvous, IBM Rational ClearQuest,
ClearCase Version Control and Altova MapForce.
• Technology lead for the Global Citrix project for the CRM applications.
• CA Unicenter administrator. Utilize Remote Control, Asset management and Software
Delivery to support the Caribbean users and create and deploy packages for the CRM
users.
• Migrated users to Exchange 2003. Supported Outlook 2003 clients. Maintain the Active
Directory and Exchange user accounts.
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The team prototyped and implemented an enterprise application class-loading pattern utilizing APP-
INF and EAR bundling for a 24/7 J2EE-based transportation application. Changes to the application
removed system class-loader dependencies and enabled hot deployment, as well as removed
external application dependencies. The team then migrated to a Linux-based WebLogic cluster
environment. Specialists in Pittsburgh configured and implemented the first WebLogic Application
Server clustered middle tier for the FedEx Ground Dock Load application.
The team has worked to design, implement and maintain FedEx’s Customer Fusion database, which
stores data relating to FedEx’s 22 million customers and groups, sorting FedEx customers by street
address, parent company and geographical location to provide better information to sales and
marketing. The team then designed and implemented the Enterprise Address Service database
using an Oracle Real Application Clusters (RAC) solution for high availability.
FedEx’s Electronic Data Record database system has been redesigned and implemented by this
team in Colorado as well. The database stores information regarding the 3 million packages and
signatures FedEx receives daily and is retained for five years, available for query at any time.
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• Analyzing existing documents and SQL and T-SQL programs for the FedEx customer
information system World Revenue Organization (WRO) metric.
• Identifying data gaps between Enterprise Data Warehouse (EDW) data and SQL Server data
sources by working very closely with the business users and EDW team members.
• Validating WRO metrics with data loaded from production server.
• Rewriting views, functions and DTS packages for the WRO metric to execute using EDW
source data.
• Implementing data quality assurance checks and performing data cleaning activities based
on business rules.
• Writing stored procedures and functions in T-SQL to implement business and data
validation to meet data quality goals.
The team’s technical environment includes Microsoft SQL Server 2000, SQL Server Management
Studio, SQL Query Analyzer, Microsoft Windows XP, and Teradata SQL Assistant and Enterprise
Data Warehouse.
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IT CONTACTS
The following contact names, phone numbers, and email addresses have been disguised
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Data Warehouse
Vincent Smith Developer, FedEx Office 901-818-7500 first.last@fedex.com
Enterprise Data Architect,
Ehimen Smith FedEx Office 901-818-7500 first.last@fedex.com
Managing Director, Retail
Mike Smith Systems 901-818-7500 first.last@fedex.com
Manager, Software
Pat Smith Development 901-818-7500 first.last@fedex.com
Director, Customer
Rebecca Smith Service Systems 901-818-7500 first.last@fedex.com
Data Architect, FedEx
Richard Smith Office 901-818-7500 first.last@fedex.com
Data Architect, FedEx
Dick Smith Office 901-818-7500 first.last@fedex.com
Manager IT Applications
and Architecture, FedEx
Harold Smith Express (Belgium) 901-818-7500 first.last@fedex.com
Senior Business
Tami Smith Applications Analyst 901-818-7500 first.last@fedex.com
Manager, Network
Architecture and
Information Security
Robert Smith (Belgium) 901-818-7500 first.last@fedex.com
Business Intelligence
System Analyst, FedEx
David Smith Office 901-818-7500 first.last@fedex.com
Customer Data
Management Analyst,
Sherri Smith FedEx Office 901-818-7500 first.last@fedex.com
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CORPORATE CONTACTS
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ORGANIZATIONAL STRUCTURE
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CRUSH Report® is a trademark and the property of SELIGENCE, LLC. The information contained in CRUSH Report was
compiled by SELIGENCE, LLC from public sources (“the information”). The information has not been verified by
SELIGENCE, LLC. It is understood that SELIGENCE, LLC is not responsible for the accuracy of the information. The sale of
CRUSH Report by parties other than SELIGENCE, LLC is prohibited. SELIGENCE, LLC clients may not forward or distribute
CRUSH Report to third parties.
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