UPS is a leading provider of supply chain solutions, such as freight forwarding, customs brokerage, fulfillment, returns, financial transaction and less-than-truckload transportation services. Hence its vision now encompasses a broader view of logistics – ‘to synchronize the world of commerce, managing the complexities of our customers’ supply chain needs’.
Central to its recent growth has been an innovation model that is used for many strategic decisions. This differentiates new business and product concepts along two dimensions – internally versus externally focused opportunities and innovations to be driven through existing businesses versus entrepreneurial ventures. Each area within the model has different criteria, different approaches for delivery and different organisational and financial requirements that guide a wide range of innovation activities. On one side, these include internal product development focused on new services for customers, where UPS was recognised as a leader by Business Week, as well as other ‘can’t fail’ external opportunities that impact operations. On the other side, UPS has been pursuing a ‘can fail fast’ strategy with more entrepreneurial innovations and also established a strategic enterprise fund that invests in such opportunities as tagging and fuel-cell technologies.
A recent example of UPS innovation is a new service - UPS Paperless Invoice and International UPS Returns which was launched in January 2008. UPS are the first package carrier to offer customers a paperless international shipping option as well as a package return capability. The majority of the small packages UPS ships internationally - everything besides a letter or document - require a commercial invoice. UPS Paperless Invoice allows shipments to clear customs using electronic data in lieu of these error-prone forms. Moreover, because information is stored electronically, customers reduce their chance of making mistakes when filling out customs documentation.
Other enhancements have included the expansion of Worldport, the main air hub in Louisville, Kentucky, which now has a European counterpart in Cologne, and another is being built in Shanghai, making UPS the first US airline to open an international air hub in China. Asia has been a primary growth target for some time and, over the past five years, UPS has invested about $600 million in China and, in 2007, also announced significant expandion of its services in India. As UPS delivers 15.8m items a day and applies a rigourous approach to innovation-driven growth, its position, its leadership is strong and well-supported.
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