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TRUCKING MARKET * UPS - Big Brown's Logistics Business Flowing Black
Almost everyone in the logistics business knows that United Parcel Service does a lot more than ship packages these days
New York,NY,USA -Forbes, by Ruthie Ackerman -6 June 2008: -- ... When a Toshiba customer needs his or her laptop fixed, UPS employees are the ones who repair the machine, cutting turnaround time from two weeks or more to just one to two days. And when online customers or retail stores order footwear from Birkenstock Distribution USA, UPS fills and ships the orders from its warehouse in Hebron, Ky... Less known: Brown's logistics business is finally flowing black to the bottom line... In contrast to rival FedEx, UPS moved beyond shipping a decade ago, jumping into bed with customers to manage all sorts of operations that come after manufacturing but before delivery. It wanted to be the warehouse company, the distribution company and even the repair company for corporations... UPS believed supply-chain and logistics management was a way to "feed the core,"--its central business of delivering small packages--and they bet big on the program, losing money for years. Now, UPS is starting to see the pay off. The delivery business is still more profitable, providing roughly 18 cents of income for each dollar of sales, compared with barely a nickel in logistics, but things are changing. UPS expects its logistics and supply-chain business to become its fastest-growing segment. And the dream is quickly becoming a reality... By taking on what Sunil Chopra, the IBM distinguished professor of operation management at the Kellogg School at Northwestern University in Illinois, calls "commodity repairs," such as the basic repairs on laptops, UPS adds value for customers who don't have to wait very long for their computers to come home and to the manufacturer, which doesn't have to deal with the paperwork on the returns. "It's a win-win situation," said Chopra. "And we'll definitely see this happening more and more."...
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