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FedEx Corporation

Management Information System

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Table of Contents

ORGANIZATIONAL OVERVIEW ......................................................................................... 1

FEDEX E-COMMERCE SOLUTION .................................................................................................. 6 BASIC E-COMMERCE PROCESS ....................................................................................................... 9 TECHNOLOGIES AND FEATURES ................................................................................................ 10 IMPORTANCE TO ENTERPRISE ................................................................................................. 13


FedEx Corporation was founded in 1973 by entrepreneur Fred Smith. Today, with a fully integrated physical and virtual infrastructure, FedExs business model supports 2448 hour delivery to anywhere in the world. FedEx operates one of the worlds busiest dataprocessing centres, handling over 100 million in-formation requests per day from more than 3,000 databases and more than 500,000 archive les. It operates one of the largest real-time, online client/server networks in the world. The core competencies of FedEx are now in express transportation and in e-solutions.

FedEx Corporation
To understand the corporate level strategy of FedEx it is necessary to first know what industries they currently compete in, as well as where they stand within those industries. Currently FedEx is made up of six independent business units: FedEx Express, FedEx Ground, FedEx Freight, FedEx Custom Critical, FedEx Trade Networks, and FedEx Services, each compete in different sectors of the transportation industry in order to tailor the entire FedEx service to best fit each customers needs. Its parent company is the FedEx Corporation, which offers all of the strategic leadership, as well as the financial accountability for all of the business units. The business model that is followed at FedEx Corporation is Operate independently, compete collectively. Figure 1 lays out the decision making tree at FedEx Corporation.


Fred Smith, CEO, Chairman

T. Michael Glenn, VP Corporate Communications

Alan B. Graf, CFO

Robert Carter, Chief Information Officer

Kenneth Masterson, General Counsel Secretary

The board of Directors sits in conjunction with the vice presidents and is responsible for an array of activities such as auditing, executive compensation, information technology oversight, and governance. Although FedEx Corporation is a the parent company of the six independent business units, FedEx Corporation offers strategic leadership at a corporate level and the operate on their own and are therefore solely responsible for their decisions and ultimate success. The top two performing companies, as well as the most widely known FedEx companies are FedEx Express and FedEx Ground.


The first of the six independent units is FedEx Express. The president and CEO, David J. Bronczek heads this unit. FedEx Express is the worlds largest express transportation firm. It has three subsections of U.S., International, and Freight. Offering guaranteed service to 120 different countries for packages from 1- 2,200 lbs. FedEx Express accounts for over one-half of FedExs revenue.


FedEx Ground is the next business unit, headed up by Daniel J. Sullivan, president and CEO. FedEx Ground guarantees delivery to every business address in the U.S., Canada, and Puerto Rico. It currently accounts for a little over $3 billion in revenue.


FedEx is a very large company that occupies a large portion of market share in the express delivery sector as well as the ground sector.We have concluded that FedEx does not so much possess distinctive competencies, as it has strong existing competencies that allow it to compete competitively with industry leader UPS. These competencies include a very timely customer response time, cutting-edge technology and innovation. Its most recent endeavour, characterized as a diversification from its usual product offering of actual shipment of goods, is the newer service offering of consultation. Labelled FedEx Trade Networks, this newest division of the FedEx offerings showcases the companys vast competence of international shipping knowledge to an array of customers.

These customers are provided value creation with the knowledge that can greatly increase efficiencies through the supply chain. FedEx Trade Networks offers a full range of international support services, including customs clearance, freight forwarding, Trade & Customs Advisory Services (TCAS) and trade technology solutions.

THE PROBLEM/OPPORTUNITY Initially, FedEx grew out of pressures from mounting ination and global competition. These pressures gave rise to greater demands on businesses to expedite deliveries at a low cost and to improve customer services. FedEx didnt have a business problem per se but, rather, has endeavoured to stay ahead of the com-petition by looking ahead at every stage for opportunities to meet customers needs for fast, reliable, and affordable overnight deliveries. Lately, the Internet has provided an inexpensive and accessible platform upon which FedEx has seen further opportunities to expand its business scope, both geographically and in terms of service offerings. FedEx is attempting to fulll two of its major goals simultaneously: 100 percent customer service and 0 percent downtime.

THE IT SOLUTION A prime software application used by FedEx is e-Shipping Tools, a Web-based shipping application that allows customers to check the status of shipments through the companys Web page. FedEx is also providing integrated solutions to address the entire selling and supply chain needs of its customers. Its e-Commerce Solutionsprovide a full suite of services that allow businesses to integrate FedExs transportation and information systems seamlessly into their own operations. These solutions have taken FedEx well beyond a shipping company. FedEx markets several e-commerce hardware/software solutions: FedExPowerShipMC (a multicarrier hardware/software system), FedEx Ship Manager Server (a hardware/software system providing high-speed transactions and superior reliability, allowing an average of eight transactions per second), FedExShipAPI (an Internet-based application that allows customization, eliminating redundant programming), and FedEx NetReturn(a Web-based item-return management system). This infrastructure is now known as FedEx Direct Link. It enables business-to-business electronic commerce through combinations of global virtual private network (VPN) connectivity, Internet connectivity, leased-line connectivity, and VAN (value-added network) connectivity. Below provides an example of one of FedExs e-commerce solutions. It shows how FedEx customers can tap into a network of systems through the Internet. When a customer places an online order, the order is sent to a FedExWeb server. Information about the order and the customer is then sent to the merchants PC, and a message is sent to the customer to conrm receipt of the order. After the order is received and acknowledged, the FedEx Web server sends


COMPONENTS OF THE E-COMMERCE SOLUTION According to me some information systems/processes involved Order Management System Inventory Management System Supply Chain Management system Warehouse Management Payment ProcessingSystem (from client) Payroll Management System (for internal employees and vendors) Reporting Systems for sales (area wise/product wise) A Customer Relationship Management on the client side

Every customers order will be managed and details will be logged and maintainedAndan individual order will act as mini system in itself.


Radio frequency identification devices (RFID) are low-cost tags that assist in the tracking of goods and vehicles. These devices are placed on individual items and can either be active, i.e., constantly emitting a radio frequency signal; or passive, i.e., only emitting a signal when queried by an outside source. In order to track goods, readers (either hand-held or fixed) need to be installed to track and record the numbers from the RFID devices affixed to each product or container. Installation of these readers, however, adds addit ional costs which would be assumed by the shipper or passed along to the consumer/end user. RFID tags are limited in the number that can be screened by each reader at one time. For large numbers of loose goods, individually tagging each good is not an efficient use of resources. Tagging the unit containing these loose goods is a more practical solution. RFID tags may not be practical for all applications, including tracking liquids and items wrapped in metal or foil, as these environments can create interference. The RFID tags only serve as a tracking Cargo and vehicle tracking is the ability to trace goods, their containers, and their conveyances from the point of origin to their destination. Tracking is increasingly associated with information transfer using smarter tools such as radio frequency identification devices and global positioning systems. The RFID tags only serve as a tracking mechanism; they do not possess any effective security applications. To work properly, specific frequencies will need to be designated for RFID use only. Government assistance and cooperation is needed in order to prevent interference with other existing devices and applications. While RFID development is progressing rapidly, three issues could limit its spread in the near future. First, there is an ongoing intellectual property dispute regarding parts of the specifications related to commercializing the electronic product code (EPC) technology. Second, EPCGlobal, the nonprofit organization charged with commercializing the EPC technology, and the International Standardization Organization (ISO) differ on the specification dealing with the numbering systems to which RFID tags relate. Finally, many of the products being sold are not fully upgradeable to the next generation of RFID technology that will be released shortly. Authentication/Legitimization of Customs Procedures Tracking can help verify the identity and contents of a vehicle or cargo container, and its usecoupled with risk management techniquesmake some of the current customs procedures redundant. Elimination of those redundant procedures would expedite the customs examination process and increase the assurance that the vehicle or cargo container is safe and originates from an authorized or legitimate shipper.

RFID uses radio waves to automatically identify an object, often by storing a serial number (and any additional information up to 2 MB) on an antenna. A receiver emits a short-range alert when the integrity of the bulk has been compromised. Some RFID tags also monitor environmental conditions. Tracking automates the customs clearance system, thus minimizing the opportunity for corruption through bribery of customs personnel. Barcode scanning simplifies the tracking process by identifying the cargo and conveyance through an individual code and a fixed reader and transmitting that information to a central point.

CARGO AND VEHICLE TRACKING SATELLITE SYSTEMS USING GPS & GPRS Global Positioning System (GPS) tracking utilizes satellites to monitor fleets of vehicles or cargo containers, thereby ensuring there are no unplanned stops and that a pre-planned route is followed. Geostationary Earth Orbit (GEO) satellite systems use satellites that orbit the earth in order to continuously monitor a particular area continuously. These satellite mapping areas can be as large as North America or Australia, yet can identify individual containers and vehicles. Networks of multiple satellites that sweep the globe and monitor activity all over the world comprise Low Earth Orbit (LEO) systems. This category includes voice-capable big LEOs and lower cost, data-only systems dubbed little LEOs. Satellite systems are only viable options for tracking when the transmitter located on the vehicle or cargo has a direct line of sight to the satellite. They are consequently impractical when utilized on double-stacked railcars, in the holds of vessels, and in the stacks at container yards. GPRS is utilized to send the information to and fro from a GPS enable device in the remote areas. GPRS also helpful in integrating and sending information on additional units like sensors and other functionalities based on the requirements.


PROCESS In 1995 FedEx began to offer Internet Services which allowed the customers to track their shipments online by means of a reference number that they keyed into the web front end of theonline tracking system. FedEx Internet ship now offers onscreen preparation and printing out of air-shipment documents to the customer, storage of address books on the FedEx server and management of shipping history information. FedEx Virtual order helps business to get online by giving them software which enables them to set up online catalogue that resides on a FedEx secure server. This user interface links into a FedEx offer-handling system that registers online customerorders and assigns confirmation numbers, then passes the order to the software at the customer or the merchant. The merchant then packs the order possibly with automatic inventory updating and the merchant software generates shipping labels for the shipment by FedEx.



The value chain for FedEx Express can be seen as starting with the pick-up of the packages. FedEx employees gather the packages from various locations such as drop boxes, businesses and residences. Value is created for the customers by making package pick-ups possible just about anywhere or anytime. FedEx has a money back guarantee for those people whose packages do not arrive on time, therefore creating value by assuring timely delivery of the packages.

After the packages are initially picked up, they must then be transported to a hub. The hub is a central location where packages are sorted according to their destinations. The packages will likely pass through many hands before reaching their final destination. The packages stay at the hub until they are picked up and shipped either by truck or plane.

The package delivery is probably the greatest value creation activity for Fedex Express. The drivers of the planes and trucks must perform their activities efficiently to increase the perceived value of the service. The drivers must absolutely no matter what, get the packages to their destinations on time, and they do a good job in doing so. By meeting and exceeding the customers expectations value is increased with each positive result.

The final primary activity is customer service. This function is to provide after sales service and support, however, FedEx provides customer service during the use of the service by letting customers track their package while its in route. This creates extreme value for customers because they are able to check the status of their package at any given moment for an increased sense of security.

Each of the primary activities is able to take place due to support activities such as company infrastructure, which is planes, buildings, trucks etc. Information systems, another support activity, allow the customers to track their products and place orders on-line. Materials management and human resources are additional support activities. Materials management can also be referred to as logistics, or the flow of goods or services through production into distribution. Overall, the support activities allow the primary activities to take place and function correctly.

FedEx has a competitive advantage with their information systems and possibly company infrastructure. Their advanced information systems allow for precise package tracking, which few other companies offer. The customers can track their package by way of the Internet, without having to contact someone from customer service, which can be very time consuming. Other companies provide tracking numbers for packages but often times it is a hassle to track down a package.

The massive fleet of airplanes, automobiles, and employees add up to an enormous company infrastructure. This infrastructure allows FedEx to have a very reliable delivery service. FedEx is very confident with their time restricting package delivery service, they guarantee their packages arrive on time when the customer wants it delivered.

B. PRODUCT TECHNOLOGY FedEx Corporations main businesses in the transportation industry are the FedEx Express and FedEx Ground. As found in our previous research, FedEx Express and FedEx Ground account for over $14 billion in revenues. While some technologies are specific to these two business units, FedExs dominant product technology adheres to all businesses in the transportation industry in which FedEx operates. The dominant product technology used by FedEx for managing operations of all business units in the transportation industry is the internet. FedEx has always been a technology trailblazer, and the success of is testament to that. The company was one of the first to harness the power of the Internet, launching its Web site in 1994 with a bold new package tracking application one of the first true corporate Web services. Soon after, FedEx became the first transportation company with Web site features that allowed customers to generate their own unique bar-coded shipping labels and request couriers to pick up shipments.

Today, hosts more than 6.3 million unique visitors per month and handles on average over 2.4 million package tracking requests daily. More than 2.3 million customers connect with the company electronically everyday, and electronic transactions account for almost two-thirds of the more than five million shipments FedEx delivers daily. The Web site is widely recognized for its speed, ease of use and customer-focused features. The Web Marketing Association praised as the "Best Transportation Web Site" and eWeek saluted it as a top e-business innovator.

In addition to the Internet, FedEx also uses technologies specific to its FedEx Express and FedEx Ground businesses. Example of these technologies is the FedEx Solutions. In short, FedEx Solutions is a variety of electronic tools, applications and online interfaces for customers to integrate into their processes to shorten response time, reduce inventory costs and generate better returns and to simplify their shipping.i For example, Global Trade Manager is a comprehensive online resource to help identify the documents needed for international shipping.

Technical standard is a set of technical specifications that producers adhere to when making the product or a component of it. An example of technical standard that FedEx adheres to in its FedEx Ground business is an IEEE 802.11b. This wireless LAN standard, ratified in late 1999, lets data fly through the air at Ethernet-level speeds: up to 11Mbps. FedEx Ground is taking advantage of that start by expediting the movement of shipping information from delivery workers' terminals to a central database. Wireless LAN technology lets FedEx Ground give its customers faster delivery confirmations, including signed proof of delivery. Last fall, the company began deploying wireless LANs at each of its more than 400 local pickup and delivery centers as part of an $80 million technology upgrade project. As the vans return home, the LAN automatically moves package data from drivers' portable computers to the database. As mentioned in the article Wireless LAN technology was designed to be open. This suggests that the standard is accessible to anyone and is therefore in the public domain. In my understanding, this standard was set by the IEEE P802.15 Working Group for Wireless Personal Area Networks (WPANs)


With the application of E-commerce, Transtec has noticed an increase in turnover, improvement in customer and supplier relationships and in productivity. Other benefits have been that it attracts new customers and has improved its image and market reputation. The Internet is now comprehensively integrated into the company's bussinessprocesses andsupports the employees in their daily activities.

CUSTOMER BENEFITS Imagine the speed and simplicity of accessing FedEx transportation services and all your transportation needs through a single system. A system offering a FedEx Compatible Solution* can make it happen. These fee-based solutions combine FedEx quality with the efficiency of a single-source shipping solution, so you enjoy the following:


One streamlined system eliminates redundancies of separate terminals for different transportation carriers. Evaluate shipping options and rating information for FedEx and other carriers from a single touch-point. Automate document preparation such as shipping manifests and customs documents. Integrate with your host system for seamless information transfer.


Check where you are in the delivery process at any time via centralized tracking. Direct technical questions through one automation expert who knows your shipping system.


Manage your company's shipping expenses more easily and accurately. Minimize costly employee training by focusing on a single shipping system - initially and with each system upgrade., 2003. About FedEx Automated Solutions, October 26.