Telecommunication FedEx Is a Logistics Term Paper

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Receipt of information is not typically confirmed, either by internal or external users. For the most part, the people uploading new information do not need to know whether or not the information has been received. There are exceptions -- customer service staff updating an order will want to know that the updated information has been received. They will typically see a note (subset information accessed via the bar code) on their computer screens that confirms that the new information has been received centrally. But because end users (especially external ones like receivers) have no direct connection with the sender of the information (pick-up couriers, package handles), and the latter group only holds the package for a few seconds or hours, there is no need for receipt to be confirmed.

In general, the information is relayed via wireless towers to the centralized information center. It is unlikely that there would be significant weather interference, but there may be issues with the electronic equipment that is used to transmit the information. The handheld devices that scan the information in the first place are subject to malfunction, and any hardware issue along the information pathway would naturally disrupt the flow of information. A transmission tower going down, for example, would take out remote transmissions for an entire city, leaving just the station's transmitting capabilities. In general, thick walls are not an issue, though with any over-the-air transmission of information underground areas can be a problem.

Communications at FedEx is supported by its own operating unit. The CIO heads a unit with a budget of $1.5 billion per year and 5000 employees, as of ten years ago (Dubie, 2002). In general, there are few constraints for this division, largely because FedEx relies so heavily on its information transmission capabilities. The company was a pioneer in the use of wireless information transfer, and has used it as a source of competitive advantage since the company was founded.

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All of FedEx's competitors have needed to play catch-up and none have really been able to match what FedEx is capable of, in terms of information transmission to the customer. The IT department does have a budget, but major projects are financed if they will add value to the company, because of the need for FedEx to maintain industry leadership in information technology.

For the most part, the information that FedEx transmits is proprietary and is not subject to regulatory oversight. The company pioneered the systems that are in use, and while these systems may be imitated by competitors, FedEx's information is entirely its own and its systems for organizing that information are also proprietary.

FedEx gains competitive advantage from its information systems in a number of ways. The first is with respect to customer service. Because the packages can be tracked throughout the system, the customers always know where their shipment is. This provides a level of security in the system, and the customers respond well to having this information at their fingertips. In addition, internal customer service staff also benefit from this information, as they are better able to handle exceptional cases -- they can take a package out of the system at any point, because they always know where the package is.

In addition, the information allows FedEx to operate with a higher level of efficiency. Managers can make better decisions with respect to scheduling of employees and asset usage such as airplane and truck usage decisions, and decisions with respect to building new stations. Employees are managed using this data as well, as routes are organized based on demand conditions, and those are understood using analysis of number pieces of freight and the weight of that freight. This allows the company to manage its efficiency at the individual employee level, delivering savings that compound as they work their way up the system to all 259,000 employees......

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