Assignment 1 - Select a company (Courier Company) and explain how it applies the five (5) performance PDF

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Select a company (Courier Company) and explain how it applies the five (5) performance objectives. A company should be concerned to satisfy its customers’ requirements for fast and dependable services at reasonable prices, as well as helping its own suppliers to improve services they offer. There ar...

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ACKNOWLEDGEMENT

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Table of Contents ACKNOWLEDGEMENT.........................................................................................................2 1.0 Introduction......................................................................................................................4 2.0 Performance Objectives....................................................................................................5 2.1 Quality..........................................................................................................................5 2.2 Speed.............................................................................................................................6 2.3 Dependability................................................................................................................6 2.4 Flexibility......................................................................................................................7 2.5 Cost...............................................................................................................................7 3.0 Functions..........................................................................................................................8 3.1 Core Functions..............................................................................................................8 3.2 Support Functions.......................................................................................................10 4.0 Conclusion......................................................................................................................11 REFERENCES.........................................................................................................................12 APPENDIX..............................................................................................................................14

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1.0 Introduction The FedEx Corporation is one of the world’s leading courier delivery services company. FedEx is well-known for their post-delivery, express mail, freight forwarding, third-party logistics and overnight shipping services. They were also the pioneers of the modern-day package tracking system which allows us to view real-time status of a package. FedEx originated from the United States of America, and is currently headquartered in Memphis, Tennessee. The FedEx Corporation was founded in 1971 at Little Rock, Arkansas by Frederick W.Smith. During that time, they were known as the Federal Express Corporation. The company officially started operating in 1973 with 389 employees. Although the company did not see much profits during 1975, however they were already the leader in air-cargo deregulation. FedEx was only considered to be well-established during the 1980s, they were compounding at around 40 percent of growth rate and they made their first billion-dollar revenue in 1983. FedEx’s current mission statement is “FedEx Corporation will produce superior financial returns for its shareowners by providing high value-added logistics, transportation and related business services through focused operating companies.” FedEx’s vision statement is “being a dynamic and progressive courier services firm that leverages of technology and impact the lives of all people.” FedEx’s core values comprise “flexibility, honesty and value for money.”

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Picture 1: FedEx Corporation company logo

2.0 Performance Objectives The performance objectives are used to measure the performance of a company, it also includes the areas that a company tries to improve, these objectives are first identified, measured and accomplished based on the company’s strategy (LaMarco, 2019). There are five performance objectives, which are quality, speed, dependability, flexibility and cost. The following elaborates the performance objectives of the FedEx Corporation.

2.1 Quality This objective is measured by considering on how well a product conforms to its specifications, it also measures on how desirable, reliable, durable, serviceable, functionable and valuable the product can be (Neely, 2019). FedEx’s quality of service revolves around certain criteria’s, and these are timeliness, accuracy of order, quality of information, quality of personnel, client services, client communications, commitment to search for solutions, lack of delivery damage, compliments, service quality, reliability, responsiveness, assurance, tangibility and customer grievances (Gulc, 2017). FedEx has developed its own Quality Driven Management (QDM) that assists them to deliver great outcomes. The system is uniquely set up to server two critical goals, which is to deliver the superior experiences that customers expect; and to deliver superior business performance, while improving safety and eliminating waste, cost and effort. This system is designed based on the best quality assurance concepts and practices, it assists to reduce errors, improves safety and focuses on delivering the best customer experience. 5

2.2 Speed This objective is measured on how fast a company delivers its products or services, this includes the time spent for research and development, then time spent on manufacturing and delivery (LaMarco, 2019). FedEx’s nature of business doesn’t require them to research and develop products. As it’s a well-established courier services company, its operations infrastructure is solid enough to deliver their services as required. FedEx only needs to perform improvements on their current services and be better of their competitions. However, this may apply to FedEx’s supply chain that tailor’s services according to business needs. FedEx’s supply chain ensures that insightful planning is done to be well executed, it has the expertise to quickly research and develop solutions for businesses that has complex logistic challenges, within the time frame agreed by the customer. Their supply chain is efficient, flexible, adaptable, resourceful and is capable of consistently meeting demands.

2.3 Dependability This objective is measured is on how dependable the company can be, in terms of delivering their services in a timely manner, based on agreed arrangements and costs (Min and Joo, 2006). FedEx’s business is based on guaranteeing dependability, their reliability is essentially similar to a currency in which any courier services trades. FedEx constantly needs to ensure that they deliver within their own capabilities, punctually and within budget. So that, they can reassure their customers that they’re the leading professionals in courier services and is just as vested in delivering their parcels to wherever is required. 6

Therefore, FedEx has developed a complex network and infrastructure that can meet the demand for extremely fast and reliable courier services. This dependability is what FedEx’s values comprises of, which is then used to promote their highly efficient delivery chain.

2.4 Flexibility This objective is used to measure the company’s ability to adjust its services to deal with changes, this also includes the company’s ability to produce different quality product varieties and to adapt its operations to suit different market conditions (Bhattacharjee, 2013). FedEx’s rival, UPS was offering services that allows customers to select from a range of options to schedule dates, locations and times of delivery. Therefore, FedEx adjusted its strategies and developed new measures to adapt to these new conditions, they started offering free services that allows their customers to receive notifications on regards to their parcels, they could also track and manage deliveries without a tracking number (Bhattacharjee, 2013). FedEx has also developed more flexible ways for customers to manage their return shipping’s. This shipping solution provides retailers the ability to manage their customer’s return experience, this includes editable return labels, customs documentations and flexible return destinations. This type of flexibility allows shippers to create their own return labels at the same time as an outbound shipment, they’re also flexible enough to assist customers with their customs documentations.

2.5 Cost This objective is directly related to the rest four performance objectives. If high quality, high speed, high dependability and high flexibility is maintained, it can directly save the operational cost of a company (Slack, 2001). 7

Based on FedEx’s financial statements, their annual operating expenses for 2018 was $ 61.178 billion, it was a 9.73% increase from the previous year’s $55.753 billion (Zacks, 2019). Despite the fact that FedEx is delivering their service with high performance objectives, their operational cost is increasing because FedEx is becoming more competitive and are optimistic with their strategies. Although the expenditure is high, the base rates are also much higher. Due to the demand of their services, they had to increase the volume and favourable net impact of fuel at every transportation segment (Zacks, 2019). They have also increased employee’s wages to partially offset benefits. Thus, the increase in operational cost is considered as healthy and is not impacting the business’s overall revenue.

3.0 Functions The FedEx Corporation provides their customers and businesses with integrated business solutions through their sub-divisions that operates collaboratively. The following elaborates about FedEx’s core and support functions.

3.1 Core Functions FedEx’s main core function is logistics management, and it also serves as a key function in FedEx’s supply chain services. Logistics management is FedEx’s primary element, it ensures that FedEx delivers the right product to the right place at the right time. It involves three main processes, which are strategy, planning and implementation. This core function has six key areas, which are inventory planning and management, warehousing, goods and services procurement, packaging, storage, and transportation. FedEx’s logistics management are based on five characteristics, which are reliability, responsiveness, agility, cost and assets (Myerson, 8

2012). There’re three parts in FedEx’s logistics management and the first is procurement logistics, which ensures the cost of purchasing is low and the integrity of the supply process is maintained; the second is logistics coordination, it ensures that deliveries are expedited with the best method possible; and lastly is distribution logistics, it stores and distributes parcels to intermediate storage locations prior to customer delivery in the most efficient, reliable and timely manner (Bass, 2019). FedEx’s second core function is information technology, and it’s all based on speed and efficiency. FedEx’s technology capability gives them the ability to obtain accurate information 24/7. FedEx’s technological innovation is widely applied across the whole organization. They even pioneered several technological advancements in the courier services industry since the very beginning, they invested significantly in their technological systems, just so that they can provide their customers the ability to track their packages on real-time (Zhang, Yue and Wang, 2006). FedEx also caters innovative, efficient, safe and secure technological solutions to their customers, such as computer assisted vehicles, artificial intelligence, robotics, drones, etc. FedEx realized this aspect earlier and implemented it into their core functions, thus giving them the competitive advantage in meeting their customer’s needs. FedEx’s third core function is human resources, and its mostly about how FedEx empowers their employees to assist them in meeting their organizational goals. FedEx has always believed in people, the empowerment of employees has led to entrepreneurial behaviour among most of its employees (Schindehutte, Morris & Kocak, 2008). Hence, the reason why FedEx has been able to quickly adapt to its market changes and always updated about the development of its business. By constantly empowering their employees, FedEx is able to rely on them to ensure their service levels are always up to expectations. Via FedEx’s human resource management, employees are constantly focused in providing the best ethical and 9

professional services to their customers. FedEx is always focused in its employee’s wellbeing, performance and productivity, which is the reason why it has won many HRM awards and is recognized as one of the best workplaces in the world (Goh, 2005).

3.2 Support Functions FedEx’s first main support function is customer service, this function plays an important role in supporting FedEx’s core business. Customer service doesn’t only handle customer inquiries, refund processes, grievances, escalations, etc., they’re also responsible of providing a personalize experience and building relationships with its customers. FedEx’s customer service is also involved in its logistics management, they mainly focus on distribution of goods, coordination, tracking and expedite (Matuszczak and Chrąchol-Barczyk, 2016). Their customer service meets service level expectations by keeping up with customer preferences, customer experiences and customer satisfactions. FedEx believes in retaining loyal and satisfied customers as that’s where most of their revenue comes from, returning customers. The customer service also ensures that delivery times are met as promised, products availability in warehouses are met with standards, flexibility with supplies are maintained, delivery accuracy is achieved and resource reliability is sustained (Matuszczak and ChrącholBarczyk, 2016). The second main support function of FedEx is marketing. FedEx’s marketing has been responsible of many successful strategies, such as modernizing their air fleets, focusing on retail accounts and ensuring strategic business units work collectively (Bhasin, 2018). They have assisted the company is expanding its network in all major cities around the world. They also develop better strategies for FedEx to serve its customers with various services at around the clock. They’re the reason behind on why FedEx adopted the premium pricing policy, as it

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was based on the constant quality improved services. They’re responsible of FedEx’s slogan designs, advertisement campaigns, brand image and popularity, public relations and online marketing services. FedEx’s marketing professionals helps to promote their business with the most convenient and affordable advertising ways, they assist in determining which products and services is most suitable for their customers, and assists in developing effective business solutions for their customers (Joyce, 2018).

4.0 Conclusion FedEx originated the modern ground air express industry, they invented the concept of expedited deliveries, and were the first to implement the barcode tagging in freight services (Pratap, 2019). Yet, they’re continuously improving, developing and pioneering newer and more efficient ways to serve their customers. FedEx has managed to become one of the most admired company in the world, their workplace is greatly recognized and most sought after by talents. Their business strategies and models are constantly enhanced to adapt to newer changes and continues to grow within its highly competitive industry (Bhattacharjee, 2013). FedEx believes that growth derives from anticipating and meeting customer needs in a competitively differentiated way (Zacks, 2019). And by achieving this constant growth, the FedEx Corporation is sure to one day lead their customers, investors, employees and communities to greater excellence.

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REFERENCES

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APPENDIX

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