Aug 9, 2019 in Economics

Under the pressure of technological advancement and opportunities for globalized economy logistics operators are responsible for successfully integrating information technology into the IT services concerning supply chain management. For this work, the two cases of UPS Logistics and Schneider Logistics in the context of their SCM services will be discussed. Each company has their websites which describe the services the companies provide and other opportunities for their customers. Critical evaluation through comparison of the two systems is necessary to provide data on which services and of which provider a firm can consider resolving its SCM needs. 

The Integration of IT Capabilities to Enhance SCM

In general, IT can be used in three major elements of SCM: network structure, business processes and supply chain management elements. United Parcel Service offers a number of services which involve IT. For distribution, UPS suggests using the systems and networks they developed, so that the customer avoids investment of time and capital into the development of these facilities. Optimization is highly important, and UPS offers advanced IT solutions to use broader access to information to optimize product inventory and shipments. For post sales supply chain UPS offers UPS Supply Chain Solutions Network and Parts Planning integration to plan inventory, sit and stock rebalancing, which is highly important for strategic goals. Another important service is Flex Global View™, which gives tools for tracking and managing freight and packages all over the globe. UPS My Choice is a tracking service that has extremely important features like smartphone alerts, online “signing”, delivery online calendar, location guidelines specification etc which all can be used for competitive advantage of a firm. With the help of those tools customers are more likely to be satisfied with their deliveries. Schneider, on the other hand, provides a service that helps to manage bids. The software specifically helps in such activities as bid preparation, lane definition and mileage validation, package bidding, information and distance analysis, as well as scenario analysis. The company also offers supply chain design and optimization service, however, the emphasis is on project teams that perform tasks (likely to be using certain IT), not the customer. Therefore, comparing the two companies, UPS is certainly allowing the customer to be more involved in the supply chain management process than Schneider. Such situation can be explained by the differences in customer segments. From a strategic point of view it will depend on the customer whose service to use, while the capabilities, resources and needs will vary. In any case, UPS is more open about the technological side of their services - a factor adding to brand equity in a fast moving world.   

The Benefits of Companies’ Websites for SCM

A clear distinction between the two websites is the amount of information that each company provides for free and services that can be used online without charging website visitors. For example, Schneider’s website has a button, which redirects the customer to a page with used trucks for sale. The page has a table with all the trucks available, their descriptions and prices – something that can be interesting for the customer. Knowledge Hub section contains case studies, best practices, position papers, presentations, webinars etc. presenting content to customers. Such strategy is what this company prefers to offer, while this drives traffic to their website. On the other hand, this decision is rooted in the lack of software with free access, so this scarcity of online tools is compensated by the stronger side, which is research and data. 

 

UPS is far more advanced in online services for customers. On the website it is possible to track a delivery, create a shipment, calculate time and cost, schedule a pick up, find locations and order supplies. Though the website is more performance oriented than Schneider, the company manages to educate the consumers. The character of the content is different however. The company does not produce free useful content, but rather educates on the benefits of their services. The open source strategic implication is the website itself – the existence of possibility to complete a number of tasks for free online is viewed as a benefit for the customer. In fact, the more automated the system, the more cost cutting and time saving it allows. In both cases, the system allows only registered users to access any online opportunities, which makes it more secure for companies and provides necessary metrics as well. UPS users can keep updated on the supply chain processes by using the tracking and planning services, while a Schneider’s client would be able to first realize the needs and then consult with the specialists, if needed (something Schneider Logistics is ready to help with). 

UPS versus Schneider: a Better Service Provider

By comparing the two companies and their services one can draw conclusions for decision making in terms of which of the two will be more effective for one’s business. The peculiarities of the supply chain management vary greatly from one business to another even within the same industry. To satisfy the needs of a great number of companies, the service provider needs to be flexible enough to serve a greater number of customers – a task, which is complicated even for established firms. In fact, the larger the size of a company, the more difficult it is to attend to all the needs. When it comes to B2B business models, where revenues are highly dependent on quality service, brand equity and word-of-mouth marketing, customers want concrete results with little place for deviations, while the logistics service provider is taking the responsibility of adding to the value, which is developed along the supply chain. Such a load of responsibility can be delegated only to a trustworthy company, the one that has experience. Cost reduction is a priority for every business; therefore, if a company can deliver such value it will have legacy of charging certain amounts of payments for their services. 

 

Schneider can be regarded as a consultancy for large businesses, while UPS will be more suitable for small businesses. The benefits of the technological superiority of UPS before Schneider allows firms to be more involved in the processes of a supply chain. Clients with larger enterprises might also be willing to engage more in the process, while learning from them is a valuable intangible asset. In fact, no one knows one’s company better than the company executives, and customer satisfaction, in the long run, will be dependent on the overall performance of all elements of the supply chain. The delegation of supply chain planning and execution might seem valuable for those companies, who can afford it financially, but are they willing to? Buying such services is buying time – something which smaller businesses possess (relatively). Thus, UPS, with their more advanced technologies will be attractive for small and big businesses, as well as individual clients. A greater involvement of customers in supply chain management processes is what customers might prefer more.

 

Thus, the dilemma is rooted not within the technological aspect – obviously information technologies have taken over businesses with automation and numerous tools which provide information – it is in the customer demand. While some companies prefer time saving, while their strategy is based on high pace, other companies would rather have control over the processes since this approach allows opportunities for learning. Knowledge and experience are assets that pay off in long-term execution. The level of time saving provided by technologies is already at a high level. What UPS offers is already an engagement system for customers, and the higher the involvement the greater the degree of control. Logistic companies are not about themselves – they are about the sender and the receiver and the goods they transport.

 

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