Operating Strategies Case Study

Case Title:

FedEx: The Cutting Edge

Abstract:
Federal Express (FedEx), globally the second largest express delivery company was one of the most admired company in the US. The company involved in connecting 39 hubs across the globe, operating 677 planes and 90,000 vehicles, monitoring 200,000 employees and delivering six million (mn) packages daily in 220 countries where every second was important. This was the ‘FEDEX EDGE’, for which the company was known for. Since its inception in 1971 by Fredrick W. Smith FedEx pioneered the express delivery industry. The company focused on the core business of express delivery and provided overnight delivery services to the customers globally. However, the transformation of businesses and customers from old economy to the new economy forced FedEx to reposition itself from ‘overnight delivery service’ to a ‘one-stop-shop’ for the entire logistics requirement of the business. The company became the logistics service provider of leading organisations, like, General Motors. In the 21st century FedEx transformed both customer and business transportation model with higher speed, reliability, application of information technology, improved material handling system and streamlined logistics network. The company popularised the concepts of ‘just-in-time’ and ‘build-to-order’ which reduced customer’s lead time and increased productivity. Apart from venturing into ‘logistics solution provider’ the company was able to maintain its leadership position in small package and light freight market through its unique ‘hub and spoke’ model. The case gave a detailed description of the operational efficiency of FedEx, the way the company operates and the trends in global express delivery industry.

Pedagogical Objectives:

• To discuss the global express delivery industry, trends and patterns, major players and market share
• To discuss the concept of multi modal transport operators and third party logistics service providers
• To discuss how logistics operators gradually move up the value chain
• To discuss the operational aspect of companies from express delivery industry
• To discuss the evolution of companies like FedEx from a courier company to third party logistics service providers
• The B2B marketing and B2C marketing and different aspect of these two types of marketing
• The two different operational aspect, hub and spoke model and point to point operational model.

Keywords :  Operating Strategies Case Study; Federal Express (FedEx); TNT; DHL; Express delivery industry; Hub and spoke model; Just-in-time; Build-to-order; Point-to-point; Information technology (IT); Operation management; Package delivery industry; United Parcel Service (UPS); Third party logistics service provider; Strategic hubs; Information technology service