The United Parcel Service

The United Parcel Service is a global leader in shipping and logistics. UPS was founded in 1907 as the American Messenger Company with a value proposition that still holds true today: best service and lowest rates (UPS History, 2014). After rapid growth and mergers with competition, the company became the United Parcel Service in 1919. Throughout the next decades they continued to broaden their services and horizons. In 1953 they started offering two-day air service to major cities in the United States (UPS History, 2014). Another notable event occurred in 1975 when they obtained authorization to ship freely in all 48 contiguous states. Prior to this, some packages had to be transferred between several carriers before reaching their final destination.

To compete with some of its largest competitors, UPS started their Next-Day-Air service in 1982. In the late 1980s, they streamlined their air services with the creation of UPS Airlines. This has been an important component of their supply chain, especially with the use of the Computerized Operations Monitoring, Planning and Scheduling System (COMPASS). (UPS History, 2014) During the 1980s UPS also expanded their international services. The 1990s saw more advances in technology as well as services. UPS realized that they were in a strategic position to offer supply chain solutions. The UPS Logistics Group was formed in 1995 with the purpose of providing global supply chain management solutions and consulting services (UPS History, 2014). Over the last decade, UPS has continued to implement new technology in its supply chain and is considered a leader in global supply chain

With the “push” model, the supply chain was based on a linear flow of commerce that kept some members isolated from end users. “Customer needs were only part of the equation under the push model,” and this meant that the “production cycle ended up serving suppliers every bit as much as customers” (Boulton, 1999). Considering new developments in technology and particularly e-commerce, UPS recognized that this model would not sustain them in the twenty-first century. The customer driven pull-model entailed a non-linear process, and the new supply chain “[involved] each participant scrambling to establish direct electronic connections to the party who pays – the end customer” (Boulton, 1999). This has ultimately allowed customers to have a direct voice in the supply chain, and UPS has been better able to serve is customers since this transition. A few benefits of this model have been a much more efficient supply chain, fewer inventories, faster service, lower costs and better customer response (Boulton, 1999). UPS’s ability to identify the high value of focusing on the customer through their supply chain choices has allowed them to achieve unparalleled