FEDEX - Organisational Change

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Presented By - Aayushi ChhabraShraddha KhandelwalSonali DabasTanul KhoraniaVishal Mishra

TAPMI School of Business


CoverageBrief HistoryOld Supply ChainAbout FedExNew Supply ChainMission and GoalsCompetitionWhat Is FedExs Business ModelSuccess MantraServices & SegmentsSWOT AnalysisChangeRisk Taking

FedEx: A Concept that Blossomed into an IndustryFedEx (FDX) was the brainchild of Frederick Wallace Smith in 1965. An economics student at Yale University, Smith wrote a term paper in which he came up with the idea for an overnight delivery service.

About FedExFounded by Frederick Wallace Smith in 1971.Headquarters located in Memphis, Tennessee.Daily Volume of more than 7.5 million shipmentsWorkforce of more than 4,00,000 team members worldwideFinancial Year 2016 Revenue: $50.4 billionCountries and Territories Served:More than 220

CEOFrederick Wallace Smith

Missions & GoalsFedEx Corporation will produce superior financial returns for its shareowners by providing high value-added logistics, transportation and related business services through focused operating companies.Customer requirements will be met in the highest quality manner appropriate to each market segment served. FedEx will strive to develop mutually rewarding relationships with its employees, partners and suppliers.Safety will be the first consideration in all operations. Corporate activities will be conducted to the highest ethical and professional standards.

What Is FedExs Business Model?FedEx creates value by offering high-value added package delivery to over 220 countries. The business model can best be summed-up in the companys early slogan: When it absolutely, positively has to get there overnight. With 652 aircraft (the worlds largest freight airline) moving over 4 million packages per day, FedEx guarantees speed with a reliability of greater than 99%.

Cont...FedEx provides a portfolio of transportation, e-commerce, and business services through wholly owned subsidiaries. Fortune ranked the company 12th for the worlds most admired companies for the 14th consecutive year.

Services & SegmentsFedEx Office It provides reliable service and access to printing and shipping. Services include copying and digital printing, professional finishing, signs, computer rental, and corporate print solutions.TNT - The company offers road and air delivery services in Europe, the Middle East and Africa, Asia-Pacific and the Americas. FedEx and TNT coming together to connect people to more opportunities.FedEx Supply Chain It provides integrated solutions to help supply chain management become a competitive advantage for customers.FedEx Trade Networks It provides a full suite of integrated air and ocean freight forwarding solutions tailored to customers needs.

FedEx Cross border - An international shopper who wants to purchase from websites that don't offer global shipping, FedEx Cross Border has the solution for that shopper.FedEx Ground It gives customers dependable business-to-business delivery or convenient residential service through FedEx Home Deliveryand FedEx Smart Post.GENCO - A FedEx Company is a leading supply chain solution provider specializing in Product Lifecycle Logistics. It was founded in 1898. A leader inreverse logisticswith millions of returned items processed annually.FedEx Custom Critical It provides time-specific, door-to-door, same-day, and next-day delivery of critical shipments, including urgent freight, valuable items, and hazardous goods, via air and surface expedited services and truckload brokerage.

Change Change happens, but managing change to your advantage is another matter. "A capacity to change is indispensable. Equally indispensable is the capacity to hold fast to that which is good," noted cold warrior John Foster Dulles. Since it began operations in 1973, Memphis, Tenn.-based FedEx has shown an ability to change without losing touch with its essential mission. External conditions such as technology and competition have shifted enormously during that 28-year period, yet FedEx has been able to accommodate them all, introducing new services and systems alike without the wild fluctuations in growth, profitability, efficiency or employee morale that have afflicted most companies.

The most significant recent change at FedEx was a massive reorganization announced Jan. 19, 2000.The company consolidated four of its five operating subsidiaries under the FedEx brand name and moved most of its IT, sales and marketing staff into a new company, FedEx Corporate. At the same time, FedEx realigned the relationships of these companies to one another, aiming to provide customers with a single point of access to sales, customer service, billing and automation systems.

Old Supply Chain

New Supply Chain

ServiceReview and analysis of supply chainOrder administrationShipment planning and managementFreight bill audit and paymentInvoice and report generation


UPS HistoryStarted in 1907 by 19 year-old Jim Casey then called American Messenger Company. Became Unite Parcel Service of America in 1929 and began shipping packages on commercial airliners.

FedEx50,000 Delivery Trucks625 Cargo Planes$47.45 Billion USD Apple use FedEx for handling its e-commerce shipments.UPS88,000 Ground Trucks583 Planes58.36 billion USDAmazon uses UPS much more frequently then FedEx.

The CompetitionPrice competitionInformation TechnologyService ExpansionLogistic Services

Success MantraCOSMOS -It is a computerized package tracking system that monitors every phase of delivery cycle at Federal Express.

Hub & SpokeIt is a centralized integrated logistics system designed to keep cost down. Hub and Spoke distribution centers receive products from many different origins, consolidated the products and send them directly to destination.

GOCC - Global Operation Control CenterFedEx has control centers in London, Paris, Toronto & Hong Kong but much of the action happens in GOC of Memphis, Tennessee.24 hours a day, 365 days in a year they monitor system for potential disruption any problems from a jet fuel supply issues in Asia to a volcano in the Alaskan Island to earthquake in Europe.In urgent situation the GOC has the authority to act fast & make crucial decision.

SWOTStrengthNetwork in more than 220 countries and more than 4,00,000 employees worldwide.Best use of technologyDependable knowledge in the delivery business.High investment in IT systemsMore than three decades of experience in logistics services

WeaknessMore dependence on US marketSince this is a competitive segment, the market share growth is limitedLess competitive ground shipping

OpportunitiesTo use cooperative strategies Challenging competitors through mergers and acquisitionsLocal competitors with poor service & productsAcquire smaller companies to increase market shareThreatsRising fuel prices could impact companys profitVarying market demandVulnerable to increasing reach by major competitors.

RISK TAKING In the 1970s FedEx was loosing one million per month because of fuel costs. Fedrick. Wallace Smith gambled the companys last $5000 on a game of black jack and literally against all odds he won.Smith stashed his winnings $32,000 in the companys bank account which bought the company some time to recover form the debt. Over the next few days he secured 11 million in investment capital.Some have the view that he did nothing groundbreaking and he just got lucky. But in another sense, luck plays a role in the beginning of so many companies. That luck could be getting new investors (which Smith also did) or hiring someone who turns out to be a rising star. In that sense every business owner takes a gamble at one point or the other.