Systems that Transformed How the Organization Operates Essay
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This paper details how UPS was able to stay relevant in the shipping and distribution world by updating old practices with new and proven technology. By spending some of their profits on a newer and more efficient way of doing things, UPS was able to stay ahead of their competition while receiving great reviews and profits from their customers. Specifics of who was impacted, how they were impacted, and what results occurred have been discussed in this paper. Mainly the workers, the business leaders, and the consumers have been affected by this change.
When we look back at certain advancements that companies have made, what seems to be the common factor? Technology. Anytime a company rolls out new technology it is not because they want to waste their hard earned profits on something that might make their business business more competitive or increase their profit margin. They spend the money on the new technology because they know they will be more competitive and make higher profits than had they not.
In any type of industry we can see examples of this being true, from the automotive, to the postal, and even the medical industry, the use of new technology has mostly lead to benefits that make companies stand out from the rest.
One of the companies that has profited the most from new technology or the advancement of technology is UPS. UPS is known in the world as one of the largest parcel and freight delivery companies. Their main competition comes from companies like FedEx, DHL, and USPS (United States Postal Service. The big wigs as UPS came together because they noticed customer ratings and efficiency rates were down and steadily decreasing year after year. After examining certain sectors of their business, they realized where the mistake was being made. Customer ratings were declining because of packages that were shipped to the wrong address, delivered at the wrong house, or lost in the may lay at UPS’s packaging warehouses and distribution centers all over the world. The way the company decided to rectify this problem was by purchasing and utilizing automated package sorters. They called it package flow technology and basically what it involves is the automatic and rapid sorting of packages to guarantee efficient and accurate shipments.
The tradition of relying on human sorters to memorize hundreds of streets and back roads in particular communities leads to a small share of parcels that either are loaded on the wrong truck or misplaced among other customers’ packages, said Dan McMackin, a UPS spokesman in Atlanta. While the company still relies on people to load customers’ packages, UPS is investing heavily in technology to make the labor-intensive work more efficient. (Bennett, 2005) This change from people to machine did not sit well with employees who became laid off or switched to a different department, but after seeing the company rebound it was recognized as being the right choice and solution to their problem. The problem UPS did not recognize sooner was humans make mistakes and unfortunately too many were made and the company was placed in the public spotlight which caused this solution to come about. While it is true that often time’s companies choose new technology or manual labor, the results heavily favor the new technology.
Nobody wants people to be laid off or lose their jobs to a machine, but in this day and age companies have to spend the big dollars in order to remain relevant and successful in today’s economy. The cost for this technology for UPS was not cheap by any means, in fact the upgrade from manual labor to automated machines cost an estimated six hundred million dollars. (Bennett, 2005) Besides the expense for rolling out this new system to all its distribution warehouses, UPS has the potential to still come out on top of this deal. When they devoted themselves to this newer way of doing things the results were less training time for employees and the ability to shift employees into areas that were lacking personnel or that demanded more personnel. The savings though in the year after this upgrade might even be greater than the initial cost and put the company further ahead. UPS expects to gain immensely from the new system. Between now and 2007, when the system is fully installed, the delivery company expects to save $500 million to $600 million through a combination of less miles driven, less fuel consumption and less delivery miscues (Bennett, 2005)
The people who were greatly affected by this change in procedure were the UPS drivers. Instead of going through their trucks looking for packages, the packages are loaded into specific areas of the truck and that information is transferred to the handheld scan tools the drivers use. The drivers seem impressed with the new technology and somewhat relieved that they can do their job no without the added stress of locating mislabeled or lost packages buried in their trucks. The future for this technology is not well known because it has seemed to rectify and solve all the problems that existed before. After all machines can do one thing that humans cannot, and that is do what it is programmed and instructed to do. The fact that a company is willing to spend this kind of money to hone their craft should speak volumes. At the beginning people were pessimistic but as the numbers started turning around and customer ratings increase, the company knew they made a wise choice. This was a turning point for UPS and the only thing they became concerned about was why they did not make the switch earlier.
Bennett, D. (2005). Package-flow technology delivers results for UPS. Crain’s Cleveland Business, 26(29), 8. Retrieved from http://search.proquest.com/docview/198625167?accountid=458