12 Order Fulfillment Along the Supply Chain

CASE 12.1: UPS PROVIDES BROAD EC SERVICES

In 2013 United Parcel Service (ups.com) deliv- ered close to 17 million packages with the help of over 395,000 employees, each day, all over the globe, using a network of hundreds of planes and thousands of vans. That represents a volume of 4.3 billion packages per year, an increase of over a 4% increase in volume from the year before due in large part to increases in EC deliv- eries. UPS is the undisputed leader in packaged delivery worldwide. Towards this end, they

provide customers with tools and applications for tracking packages, examining shipping histo- ries, figuring time-in-transit, and verifying on time arrival.
In their annual financial reports UPS divides their business into three segments including
U.S. Domestic Package, International Package, and Supply Chain and Freight. For the past few years, these segments have represented around 62%, 22%, and 16%, respectively. While pack- age delivery represents the major part of their business, they also provide expertise, infrastruc- ture, and technology for managing global logis- tics services. These outsourcing services include “transportation, distribution, forwarding, ground, ocean and air freight, brokerage, and finance” (UPS 2014). In essence, for customers who uti- lize these services, UPS runs major parts of their supply chains.
A major component of their Supply Chain and Freight business segment is their worldwide net- work of distribution centers. For example, in China they have over 130 centers for supporting the distribution of goods to customers in close to
90 cities in the country. The centers manage receiving, storage, order processing, and ship- ment. The centers are also used to provide post sales services including planning, fulfillment, testing, report, refurbishing, and reverse logistics for critical parts. These latter capabilities, for example, are utilized by the manufacturers and suppliers of automobile parts.