This paper describes the progress of UPS strategic plan keeping concentration on its developed scenario plan as well as other critical elements of the process. It also discusses the development of the company charter, strategic planning, strategic decision making and implementations. It also identifies the strategic problem involved in implementing in the process.
UPS was started as a small company in by a teen age boy Jim Casey to delivering message in Seattle. It was transformed several times and became a largest public logistics company in 1999. It is a world’s largest couriers company with specialize in transportation and logistics support services. UPS has $ 37 billion net worth in 2005 and interested to expand their business by leveraging of its resources. By acquisition of Mail Box Etc UPS had 3500 outlets with a 384000 staff. In 2002 Mike Eskew became a ninth CEO. The organization is centralized, hierarchal with traditional structure. At the top where senior management set direction priorities budgets and initiatives. In regional level UPS does tactical plan and lower level of indecency at the regional level is also observed. UPS got threat from private company (DHL, TNT) and government support agency (Deutsche Post).
To remain on largest logistic company and to avoid the threaten by the rival UPS change its vision and mission. From 1907 to 1990 it was run by peace meal approach. To compete the industries they change the vision statement with “the enablers of global e-commerce”. To achieve the vision they continuous change and improve their involving needs, becoming sustaining a strong employed owned with time and motion. To achieve the new mission enabler of global commerce In 1997 strategic plan was reviewed and bring tong term approaches. They hired consaltant to make a scenario planning.
Axes of uncertain
Participants, primarily UPS managers representing different functions and generally reporting to a Management Committee member, went through several hours of discussion over driving forces and critical uncertainness and found two axis. The vertical axis-Demand Characteristics
Horizontal Axis-Market Environment market
And it should be focused on low cost and quality. Management of UPS needs to take action towards these approaches and these actions have transpired into tangible and non tangible potential outcomes for the company. (Garvin Levesque, 2006) Scenario planning conference helps UPS management help to define several themes for the UPS future and these themes included * A proactive shift directly to the end of the consumer, eliminating usage barriers * Leveraging this end consumer positioning to win additional business to business customers within the demand chain. * A focus on customer solutions that integrated goods movement financial services * Identification of opportunities to be selectively captured across entire demand chain with integrated solutions between companies * The maintenance of a global perspective.
UPS implements four strategic plans to sustain the competitive industries. * Winning team- they are attracting highly motivate, diverse and aligned global staff. It has low rate of staff turnover. * Value added solution- UPS provide customer with value added services with combining movement of goods information and funds. * Customer focus- they focus on customer loyalty and expanding their service worldwide. * Enterprise excellence- UPS creating high quality environment and serve customer with best.
Also they set four scenarios for the future.
* Tangled path- In this scenario competition business environment is high, strong regional and national regulation and consumer desire more different ion in product or service. It is not favorable for the producer. * Regressive world- This scenario also has strong regional regulation as well as more traditional supply chain competitive landscape and set of customer. * Global scare prevails- In this scenario market is stable new technology adaption is slow and has more traditional consumer and industries consolidation. * Brave new world- In this scenario business can go up. There is deregulated global market place, mass and different kind of service and product is available for proactive customer and there is huge thereat and competition from the existing competitor and new comer
UPS faces following problems to implement the strategic.
* It has threatened from private and government supported agency. * It is hard to implement the scenario planning * No one can predict the axis of uncertainty and hard to tackle * It is difficult to set the scenario for future strategic planning * It may face problem to manage the strategic road map and applying the centennial plan. * Implementation of new technology and infrastructure and managing employee in global and regional level. * Most of the senior level staff are concerned with company goal and focus on strategic plan. They fell uncomfortable to keep in mind for hypothetical scenario planning * Solving strategic Integration responsibility may be difficult.
UPS changed its structure according to the context. It is transferred with time and motion. In 1999 they bring UPS charter and re define the vision and mission. Because of the new mission and purpose they moved to leadership in package distribution to enabler of global commerce. They bring centennial plan and made themes and set direction. They set a strategic road map to implement the centennial plan. In 2004 horizon 2017 scenario planning was introduce with three kind of variation. On the other hand, presentation of the scenario planning is bias on one scenario ‘brave new world ‘and chance to think of other alternative is low. The planning is highly influence by the CEO because improvement of result is in decentralized planning structure. Employee commitment to the purpose of scenario planning is also low because some felt that the exercise lacked realism.
UPS transferred itself several times according to market environment and time.UPS also restructures their organization to centralized, hierarchal from functional based structure. They figured out how to deliverer the service to the customer with maximum leveraging their resources. They made a strategic plan as well as scenario plan to achieve the company goal and ready to stand for uncommon change.
Garvin, David A, Levesque, Lynne C. (2006,June 19). Strategic planning at united parcel Waddell, Cummings, Worley (2007), Organization Development & Change, Melbourne south Victoria, Thomson