1. Logistics and
Supply Chain
Management
UPS and its Supply
Chain End Term Paper
Anshuman Jaiswal G09051

2. XLRI GMP 2009-10 Anshuman Jaiswal G09051
Table of Contents
About UPS ..................................................................................................................................................... 3
UPS Consulting .......................................................................................................................................... 3
How UPS helped a Pharmaceutical company? ............................................................................................. 4
Problem ..................................................................................................................................................... 4
Solution: .................................................................................................................................................... 4
UPS Global Freight Services .......................................................................................................................... 4
Air Freight ................................................................................................................................................. 4
LTL and Truck Load.................................................................................................................................... 5
Ocean freight ............................................................................................................................................ 5
Global Trade Servcies ................................................................................................................................ 5
A direct to Store Approach ....................................................................................................................... 5
Single-source management ...................................................................................................................... 5
Shipping and customs consolidation ........................................................................................................ 5
End-to-end tracking/visibility .................................................................................................................... 5
Finding new business opportunities ......................................................................................................... 5
How Dr Reddys stay ready with Flexible Supply chain ................................................................................. 6
Speed Combined with Effective Order Fulfillment ................................................................................... 6
Customer Satisfaction Drives Results ....................................................................................................... 6
Tools in use by UPS Supply chain Solutions .................................................................................................. 7
Flex Global View ........................................................................................................................................ 7
Gemini ....................................................................................................................................................... 7
Order Processing ................................................................................................................................... 7
Productivity Tools ................................................................................................................................. 7
My Freight (Air and Ocean) ....................................................................................................................... 8
Global Footwear supply chain....................................................................................................................... 8
References .................................................................................................................................................. 10
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3. XLRI GMP 2009-10 Anshuman Jaiswal G09051
About UPS
Founded in 1907 as a messenger company in the United States, UPS has grown into a $49.7
billion corporation by clearly focusing on the goal of enabling commerce around the globe.
Today, UPS is a global company with one of the most recognized and admired brands in the
world. UPS had world's largest package delivery company and a leading global provider of
specialized transportation and logistics services. Every day, UPS manages flow of goods, funds,
and information in more than 200 countries and territories worldwide. It employs 408,000
Worldwide (340,000 U.S.; 68,000 International). It delivers 15.1 million packages per day and
delivered 3.8 billion packages in 2009. IT has 7.9 million daily (1.8 million pick-ups, 6.1 million
deliveries). It operates delivery fleet of 96,105 package cars, vans, tractors, motorcycles,
including 1,883 alternative-fuel vehicles and a Fleet of 212 UPS Jets in service (267 aircraft total;
among Top 9th in the world) It provides Logistics and distribution; transportation and freight
(air, sea, ground, rail); freight forwarding; international trade management, and customs
brokerage and Specialty Services: Service parts logistics; technical repair and configuration;
supply chain design and planning; returns management.
UPS Consulting:
UPS consulting helps customers align their supply chain strategies to business strategies using
Demand Responsive supply chain model.
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4. XLRI GMP 2009-10 Anshuman Jaiswal G09051
How UPS helped a Pharmaceutical company?
Problem
As company grew with complex line of products, its supply chain became suboptimal and
complex. Lack of visibility across of key stages of process, so tracking inventory became
cumbersome. Company maintained 330 days of inventory versus 250 days of industry average.
Solution:
Targeted immediate ways to improve invoice and warehouse operations
• Highlighted need for strategic sourcing
• Developed plan to reduce days on hand inventory by 10 percent worth $24 mn
• Identified improvements could generate up to $32 million in savings
• Focused attention on key aspects of supply chain for long-term planning
• Introduced possibility of new network distribution model
UPS Global Freight Services
Air Freight
Offers time sensitive or high value shipments
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5. XLRI GMP 2009-10 Anshuman Jaiswal G09051
LTL and Truck Load
Offers regional, intraregional and long haul LTL and Truck Load services
Ocean freight
Offers Full container and less than full container load services
Global Trade Servcies
Utilizing the breadth and reliability of the UPS global network, UPS Trade Direct® provides
consolidation of international freight with air, ocean, and ground transportation, customs
clearance, and direct delivery to multiple addresses within a destination country--all through a
single source. UPS also provides customs clearances, import/export compliance services.
A direct to Store Approach
Bypassing distributor and directly delivering from manufacturer to directly to customer or
retailer. This eliminates distributors and reduces warehousing cost and inventory cost. UPS as a 3
PL offers a multimodal, International, direct to store service called UPS Trade Direct that
provides shipment and custom consolidation with visibility across supply chain.
Single-source management
UPS acts as single point of contact between manufacturer and end customer and hence the
entire shipping cycle is under management of one logistics provider.
Shipping and customs consolidation
UPS picks the shipments and consolidates shipments for each end customer and generates a
single custom invoice thus simplifying the custom clearances and corresponding cost and saving
substantial time. The shipments are deconsolidated in destination country and in UPS facility
and placed in UPS package delivery or LTL system.
End-to-end tracking/visibility
Trade Direct customers can track the movement of shipments down to the item/SKU level with a
UPS software visibility tool called Flex® Global View. The tool provides 24x7 visibility across
borders, across third-party transportation providers and across transport modes.
Finding new business opportunities
UPS reexamined the relationships with different customers. UPS analyzed the data and found
out that UPS can deliver the packages faster if suppliers enter data into UPS system. This way,
UPS involved suppliers do more and achieve efficiency in delivery by reducing the ground
delivery time by 1 day.
As customers enter PLD (package level information) data into UPS’s order entry system, the GIS
assigns resources to pick up, sort, and deliver the packages. UPS drivers are equipped with a
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6. XLRI GMP 2009-10 Anshuman Jaiswal G09051
handheld computer known as the Delivery Information Acquisition Device (DIAD)—which
generates an electronic manifest before the start of a driver’s work day. Further, GIS helped UPS
remap the routes of delivery trucks to minimize left turn to cut 28 million miles from truck
routes in 2006 saving roughly 3 million gallons of fuel.
How Dr Reddys stay ready with Flexible Supply chain
Dr Reddys has to face this constant challenge of making the generic drugs available the very
next day the branded ones get off patent. Sometimes these dates are not known in advance as
FDA approval comes sometimes as late as the patent expiry date. In this scenario Dr Reddy has
to ensure quick and efficient response and make sure that drugs are made available fast as
possible. Compounding the issues of efficient and quick SCM, are distances between distributors
and retailers based in US and its manufacturing locations
Speed Combined with Effective Order Fulfillment
UPS handles all of its domestic prescription and over-the-counter drug distribution using a
combination of UPS package and UPS Freight LTL services. Dr. Reddy's utilizes approximately
15,000 square feet of distribution space in UPS's Healthcare Logistics Center in Louisville,
Kentucky. There, more than 800,000 sq. ft. of dedicated space is FDA registered and compliant
to meet storage, information management, temperature control with applicable regulations and
security requirements.
The distribution process begins when UPS receives EDI orders from Dr. Reddy's customers into
its order management system.
UPS then picks packs and ships products and sends shipment confirmation to Dr. Reddy's.
UPS also provides special services such as inserting product information.
Expedited shipments can be processed to leverage the strategic logistics campus location near
UPS Worldport®, the company's international package express and air freight hub nearby.
Managing new product launches is a key component of the UPS solution for Dr. Reddy's.
Before products are ready for market release, UPS quarantines them at its facility, where they
can be stored in the controlled environment.
As soon as FDA approval is secured, UPS can begin shipping with products arriving on customer
shelves much faster than before.
Customer Satisfaction Drives Results
Dr Reddy achieved speed to market. Orders processing that used to take two to three days were
streamlined to same-day fulfillment. UPS also helped Dr. Reddy's strengthen its relationships
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7. XLRI GMP 2009-10 Anshuman Jaiswal G09051
with retailers and pharmacies by making generic drugs that were previously sold only as
branded drugs, immediately available to customers.
Dr Reddys also achieved a 20 percent cost savings for transportation and distribution-related
expenses over its previous operations.
Tools in use by UPS Supply chain Solutions
Flex Global View
It is an event management and visibility tool - provides an integrated view into the supply chain.
Flex Global View allows customers to focus on vital shipment details along the supply chain.
Updated continuously by carriers and UPS SCS’s global operating systems, Flex Global View
provides the information customers need to stay nimble, make critical decisions and improve
results.
Gemini
Gemini is a PC-based freight system that creates the labels, documents and manifests required
to move freight. It also retains shipment history and provides several types of reports and data
export functions. Gemini functionality falls into two major categories: order processing and
productivity tools.
Order Processing
 Consolidates orders into freight shipments
 Produces shipping documents to accompany freight
 Produces manifest for driver at freight pickup time
 Creates bar-coded labels to facilitate shipping and tracking within UPS network
 Accepts data from electronic scales
 Uploads shipment data to UPS’s freight management system
Productivity Tools
 Stores default user settings for faster data entry
 Maintains recurring consignee files
 Stores and runs distribution lists
 Provides rate estimates for shipments
 Produces various shipment summary reports
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8. XLRI GMP 2009-10 Anshuman Jaiswal G09051
My Freight (Air and Ocean)
My Freight offers online air/ocean freight shipment initiation, rate quotes, tracking, event
notification, and reporting capabilities to help customers manage their business. My Freight
provides customers a secure Web site with a wide range of features to manage freight
shipments.
Global Footwear supply chain
The Global Supply chain consists of many functions and in order to minimize the costs these
functions need to work in a coordinated manner. International Trade needs to be managed as
goods cross international boundaries. Various modes of transport are used including Ocean and
Air Freight and finally customer service management is used.
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9. XLRI GMP 2009-10 Anshuman Jaiswal G09051
Manufacturers, Distributors and Retailers are involved in Global Foot wear supply chain. There
are four parts to the Supply chain. Suppliers supply components to Manufacturers are
Production stage. Manufacturers take care of warehousing end product from which they supply
to Distributors. They are two types of Distributors: Retail and wholesale. They supply goods to
Retailers, Superstores and directly to customers.
The Footwear supply chain juggles with efficiency and responsiveness tradeoff. A High Margin
Merchandise has small shelf life and hence needs to be transportation in minimum time to
retailers. For the customer is ready and retailers can’t afford to ignore customer needs. For
replenishment Merchandise, Shelf life longer and it is typically low margin merchandise and
hence transportation mode can be judiciously chosen.
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10. XLRI GMP 2009-10 Anshuman Jaiswal G09051
UPS Supply Chain solutions provide an integrated multi modal solution for transporting goods
from Suppliers to end customers. UPS picks and consolidates Shipments based on consignee
details. Shipments going to same country are typically consolidated for faster customs and lower
costs.
UPS then work with Customs to process customs clearance. Freight then moves via LTL and is
deconsolidated and put on UPS network for Shipping across the country. From UPS
consolidation warehouse it transported via UPS delivery fleet to end customers.
Suppliers as well as customers have full view of each stage of delivery and this helps in creating
faster, transparent and efficient supply chain
References
http://www.ups-scs.com/solutions/case_studies/cs_pharma1.pdf
http://www.ups.com/freightdemo/
David Zamsky, a senior director of marketing for UPS Inventory in Montion White paper by UPS Supply
chain Solutions
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11. XLRI GMP 2009-10 Anshuman Jaiswal G09051
Innovating To Create IT-Based New Business Opportunities at United Parcel Service, MIS Quarterly
Executive, Rajiv Kohli, College of William and Mary
http://www.slideshare.net/wjzondag/parcel-shipping-by-geoff-light
http://healthcare.ups.com/resources/case-study-dr-reddy.html
http://www.boeing.com/news/releases/2007/q1/070215c_pr.html
http://flatspot.com/wordpress/wp-content/uploads/ups_logo.gif
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