FedEx: Competitive Advantage through IT


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Case Details:

Case Code : BSTA063
Case Length : 18 Pages
Period : 1970 - 2003
Organization : FedEx, UPS
Pub Date : 2003
Teaching Note :Not Available
Countries : Global
Industry : Transportation Services

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Please note:

This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Excerpts

Background Note

During the late 1960s, Frederick Smith (Smith) chanced upon an idea to start an airline courier company. During this period, it was common practice to send packages as cargo on commercial carriers like American, United or Delta Airlines. This practice had a number of drawbacks because passenger airlines usually operated during the daytime and were grounded at night. In addition, freight forwarders (the company responsible for carrying the packages from the airport to the destination address) usually did not offer home delivery. Smith felt the need to start an airline courier company that would address all these problems...

Leveraging Information Technology

In the late 1970s, FedEx saw a great benefit in using IT to simplify its business processes. Smith had very early on understood that speed, reliability and customer service was an essential factor for success in the global transportation industry...

Using the Internet

The widespread use of the Internet from the early 1990s threw open significant opportunities for FedEx. Since the company already had an EDI based system on which it had spent a lot of money, FedEx decided to use a combination of Internet and the EDI.

One example was the implementation done for the purchasing of products. FedEx purchased a product from a company called Ariba. Ariba was a requisitioning system that was housed on the FedEx intranet. The system was set up so that suppliers could maintain a database of catalogs that could be accessed by any FedEx employee...

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