UPS Supply Chain Management Report: Strategies and Innovations

This report provides a comprehensive analysis of UPS Supply Chain Solutions, examining its background, services, and strategic goals. It delves into the company's supply chain operations, highlighting strengths such as improved efficiency, proper coordination, and a lack of bottlenecks, while also addressing weaknesses like business disruptions and potential operational shutdowns. The report explores the metrics UPS utilizes to measure its supply chain performance, including revenue growth, inventory turns, and peer reviews. Furthermore, it identifies supply chain initiatives and innovations implemented by UPS, such as outsourcing and vendor-managed inventory, and suggests potential future improvements like tie-ups and online distribution. The report concludes by emphasizing the importance of adapting to maintain its market position.

Running head: UPS SUPPLY CHAIN MANAGEMENT 1
Logistics and Operations Management
Student
Institution
Date

UPS SUPPLY CHAIN MANAGEMENT 2
Introduction/Background Information
UPS Supply Chain Solutions is an American logistics company headquartered at Atlanta.
UPS operates in the supply chain industry and provides a diverse range of products and services
transportation, warehousing, custom brokerage, freight forwarding, inventory and packaging
management, supply chain consulting, and distributing. The company has over 11760 locally and
approximately 481,000 employees worldwide; it operates in 175 countries. Also, UPS provides
consultancy services for industrial manufacturing, automotive, and healthcare industries all over
the world. In the 2018/19 financial year, UPS reported $2.352 billion in profits and now ranks as
the second world’s largest logistics firm after XPO logistics Inc.
How does this supply chain support the company’s strategic goals?
UPS Supply Chain solutions has diverse resources for managing all aspects of global
supply chain, including transportation, logistics, LTL, distribution, air freight, and others (Rolf,
2018). In particular, UPS uses lean inventory tools, warehousing management, demand
forecasting, and specialized freight handling approaches to ensure effectiveness in supply chain
management (Rolf, 2018). Supply chain planning and supply chain execution systems are the
two forms of SCM used by UPS. This makes it easier for the clients of UPS to access its
expanding range of logistics, consulting, freight, and transportation services hence improving its
global supply chain efficiency.
What are the strengths of this supply chain?
Improves efficiency: UPS supply chain helps the company minimize losses and
maximize profits in its transportation and logistics services across all countries where it operates
(Rolf, 2018)

UPS SUPPLY CHAIN MANAGEMENT 3
Proper coordination and customer loyalty: The use of agile supply chain in UPS helps
offer better customer service and ensure timely delivery of raw materials (Elrod, Murray, &
Bande, 2013). With customer loyalty, the company enjoys customer retention and improved
sales for its products.
No bottlenecks with agile supply chain: UPS has thrived when it comes to ordering and
shipment of products for there are no bottlenecks; no idle or extra labor, unhappy customers, and
lost sales (Elrod, Murray, & Bande, 2013). When customers are happy, the business maintains it
position for transport and logistics industry in the market.
What are the weaknesses of this supply chain?
Business disruption: In agile supply chain, UPS Supply Chain Solutions outsources part
of its supply chain operations, for instance production, materials, shipping, and sales; this leaves
a room for vendor disruptions either accidentally, via struggle, or delay of pay confirmations
(Kim & Lee, 2015).
Operations shut down: In this supply chain, only one part of UPS’s supply chain is
needed to break down the company’s ability to deliver products and make money (Milena,
Jarrod, & Matthias, 2020). For instance, when it does not get supplies, the website crushes, there
is a machine break down, or the company is unable to locate any suitable warehouse, or a
delivery lorry breaks down; then all supply chain operations get shut down.
What metrics does the company utilize for its supply chain?
In order to measure its supply chain, UPS uses various metrics namely peer reviews,
inventory turns and return on assets, resilience, and growth in revenue.

UPS SUPPLY CHAIN MANAGEMENT 4
Revenue growth: In UPS, this metric is used by comparing net revenue of different
financial periods. In UPS, extremely innovative and efficient supply chain systems are used in its
execution (Elrod, Murray, & Bande, 2013).
Inventory turns and return on assets: UPS makes valid measures of supply chain
excellence based on the competing firms (Milena, Jarrod, & Matthias, 2020). This gives UPS
competitive advantage over the rival firms.
Peer reviews: UPS incorporates supply chain expertise views including analysts and
practitioners into rankings as perfectly acceptable in the study (Southard, 2017).
What supply chain initiatives and innovations has it implemented?
UPS Supply Chain Solutions has implemented a number of supply chain initiatives and
innovations in attempts to improve supply chain efficiency and effectiveness (Power, Sohal, &
Rahman, 2017). These include:
Outsourcing: UPS outsources its services to other transport and logistic agencies in order
to ensure optimal delivery of products and services to their predestined customers (Power, Sohal,
& Rahman, 2017).
Vendor managed inventory: In UPS, this is used in monitoring suppliers and their
inbound shipments in order to validate inventory prior to production execution; here the
company uses the JIT delivery (Southard, 2017).
What supply chain initiatives and innovations should it consider?
Tie-ups: UPS Supply Chain Solutions should seek to ensure global expansion of its
transport, logistics, distribution, and delivery services through tie ups (Power, Sohal, & Rahman,

UPS SUPPLY CHAIN MANAGEMENT 5
2017). This will greatly help UPS improve its logistics and transport services efficiency hence
making it a reliable distributor across the globe.
Online distribution and shopping: In order to increase efficiency in its supply chain
management, UPS Supply Chain Solutions should invest more to online shopping and
distribution (Rolf, 2018). With the current rate of technological integration into business, UPS
will win more customer base and segments hence improving its profitability and competitive
position in the market.
What should be the next step be to improve the supply chain?
In order to improve UPS’s supply chain, the company should deregulate its trucking
industry. Trucks have been subject to delays and hence delays in sales (Rolf, 2018). With this
doing, the company will enjoy an advanced supply chain and cover a vast network worldwide in
all countries it operates.
Conclusion
UPS operations in the transport and logistics sector, an industry where competition is
stiff. As a recognized package and freight delivery firm in the world, UPS should adopt the best
supply chain network and tactics in order to maintain its position and reputation in the market.
There is need for UPS to ensure global expansion through tie-ups, ensure efficient outsourcing,
deregulate its trucking system, and invest more in online shopping.

UPS SUPPLY CHAIN MANAGEMENT 6
References
Elrod, C., Murray, S., & Bande, S. (2013). A review of performance metrics for supply chain
management. Engineering Management Journal, 25(3), 39-50.
Kim, K. H., & Lee, J. H. (2015). A Study on the Transportation Demand Management Policy
Using AHP Analysis-Domestic and Foreign Policy Comparison of Importantance
Measurement. Journal of the Korean Society of Civil Engineers, 35(4), 7-20.
Milena, J., Jarrod, G., & Matthias, W. (2020). Innovation Strategies: Time to modernize supply
chain design. Supply Chain Management Review, 10-14.
Power, D. J., Sohal, A. S., & Rahman, S. U. (2017). Critical success factors in agile supply chain
management‐An empirical study. International journal of physical distribution &
logistics management, 5(3), 1-18.
Rolf, B. (2018). The Top 50 Largest Logistics Companies in the US 2018. Supply Chain
Management, 5-8.
Southard, J. (2017). 5 Metrics Every Supply Chain Professional Should Track. Process in
Practice, 4-6.