Heizer and Render (2011)
Describe forecasting as the art of predicting future events. In the case of UPS they used effective forecasting for present and long term by investing in advanced technology that would enhance their business process. Failure to implement this information system would not have allowed them to be a global enterprise with 400000 employees, 96000 vehicles and being the world’s ninth largest airline.UPS applied business forecasting that entails profits, costs, prices, interest rates and prediction of sale due to the nature of business ensuring high level of customer service and maintain low costs.
I will discuss further how the SCOR Model assist companies with customer demand and their business processes ensuring a competitive advantage against their rivals. This tool is applied to address, improve and communicate supply chain management in decisions in a company as well as the suppliers and customers of the company. The SCOR model allows companies to analyse their supply chain and understand how advance it is.
The five-part Supply Chain Operation Reference (SCOR) model comprise of:
Plan: demand/supply planning and management
• UPS plan was to start a company and provide best service at lowest rate and they maintained that formula by becoming successful for more than a century, 1 billion is used each year to ensure this milestone.
• They invested heavily in advanced technology that would enhance their business processes and meet their customer demand.
• This technology enables customers to download and print their own label using software provided by UPS, customers can access their website.
• The preparation for demand is the responsibility of the marketing or sales department instead operations.
• Communication throughout entire supply chain has been pivotal to UPS planning process and implementation.
Source: identify, select, manage and assess sources
• UPS purchased information technology ensuring the collaboration of both supply chain and distribution side of the supply chain that would make decision that benefit the whole channel.
• An excellent sourcing tactics is a well logistic plan and active management of the distribution network forging a firm link in the chain.
• UPS ensured just that with their advance technology eg. It started with the scanable bar code label attached to the package, that contains detailed information about the sender, destination and when the package should arrive and all this is embedded in their central data base ensuring efficiency in their service.
Make: manage production execution, testing and packaging
• UPS has ensured that their production is executed from the onset when the package (input) arrives to their company, captured (processed) onto their information system and dispatched/ transferred (output) to the final destination which is the recipient of the package.
• With UPS expertise managing their global delivery network they manage logistics and supply chain activities for other companies.
• They have created UPS Supply Chain Solutions division that provides a complete standardised service to subscribing companies at a fraction of what it would cost to build their own systems and infrastructure.
Deliver: invoice, warehouse, transport and install
• UPS has a number of warehouses around the world that act as a distribution channel enabling customers packages are transported to their final destinations.
• UPS installed sensors in its delivery vehicles that capture the trucks speed and location all this data is loaded onto the UPS central computer and analysed.
• It has reduced fuel consumption by 8.4 million and cut 8.5 million miles off its routes.
• UPS drivers use a delivery information wireless cell phone network, this captures customers signature, pickup and delivery information and transmitted to UPS computer network storage and processing.
• This automated package system has enabled UPS to monitor even re-route packages throughout the delivery process.
• Tools such as Cisco enables customers to track and do cost calculations for their packages.
• OMS manages global service orders and inventory.
Return: finished goods
• UPS advanced information system has ensured that the supply chain worked optimally to meet the customers demand ensuring that finished good is received by the end user.
• Their exceptional business process has allowed them to maintain good business practise with all their stakeholders.
Heizer and Render (2011)