If you work for eg. FedEx (I do) and are looking for strategic secrets - this is not the book. However, it still provides an excellent history and overview of an impressive company.
Readers begin by learning that UPS handles some 15 million packages/day, using 8,000 hubs, distribution centers, and package sorting facilities. Of this, about 900,000 go by air. Its founder early on decided to distinguish the firm through high standards (trucks are cleaned every night; drivers cannot smoke, are paid considerably better than average and encouraged to buy stock at a discount, and are inspected for neatness each day). Retention is further encouraged through promotion from within, and a ban on favoritism. Excellence is pushed through extensive industrial engineering and standards, benchmarking (Sears and Marshall Fields were early contributors), and a climate of continuous improvement.
An early strategic decision was to shift from providing messenger service to delivering packages from local Seattle department stores to their customers. This differentiated UPS from its competitors.
UPS tried air service early on - however, its timing was poor (just as the stock market crashed in 1929) and the venture soon folded.
UPS lost over half its volume during and shortly after WWII as an initial combination of conservation, followed by increasing auto ownership led to most department store customers taking home their own packages. UPS then strategically redirected itself to wholesale deliveries INTO the stores, using the increasing volume of highways and trucks, and taking advantage of the decline of railroad service. The "bad" news associated with this was it created considerable resistance from trucking and bus companies, as well as innumerable ICC hurdles. Thus, its 1954 goal of providing wholesale deliveries nationwide within 10 years actually took almost 30.
UPS now operates the world's 8th largest airline. This effort was restarted in 1953 via leasing space on commercial airplanes; however, it was of limited value until the operation was revamped after FedEx's 1973 entry, and combined with a hub and spoke system and increased advertising.
UPS continued to innovate by going international. Again, the expansion was not easy, impeded by cultural and regulatory problems, and inconsistent IT and culture in overseas acquired companies.
IT has been another major area of UPS innovation - again, thanks to prodding by FedEx. UPS now has the largest IBM relational database, and is the biggest user of cell phone minutes in the world. Not content with current abilities, it invests about $1 billion/year in this area, and employs 4,000 some software engineers.
Clearly its employees find much to like. Turnover among managers runs 8% (INCLUDING retirements), and 5% among drivers (again, INCLUDING retirement). The 1997 strike is largely blamed by the authors on a renegade Teamster leader whose election was since overturned and he has been banned for life from the Teamsters.
A 1999 IPO raised $5.5 billion (a record up until then).
UPS' latest initiatives focus on providing warehouse and other services - ideally, in a manner that reduces total shipping costs. Example: A typical truckload consists of 52 pallets with about 100 cases/pallet. At LTL rates, those sending 15 or more pallets pay the costs of an entire truckload. Thus, UPS can consolidate shipments and achieve shipping savings. "Martrac" is another initiative - refrigerated UPS feeder trucks carrying California fruits and vegetables move East after bringing small packages to the West Coast. "End of runway" storage at Louisville is another initiative, allowing last minute shipment to customers each evening, as well as expedited repairs, and even modification of eg. Hitachi hard drives prior to shipment.
Bottom Line: A great story about a great company!
