FedEx: The Supply Chain Management Solutions Provider

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Case Details:

Case Code : OPER029
Case Length : 17 Pages
Period : 1971 - 2003
Organization : FedEx
Pub Date : 2004
Teaching Note :Not Available
Countries : USA
Industry : Logistics

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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"FedEx is a supply chain company. We are very cognizant of trying to make our customers' supply chain more efficient. But, at the same time, we became very focused on our internal supply chain."¹

- Edith Kelly-Green, Vice President and Chief Sourcing Officer, FedEx Corporation.

"FedEx's Supply Chain Services represents the best of the best and the organization has set an example ... for other companies to follow."²

- Bo Anderson, Executive in Charge of Worldwide Purchasing, GM.

Introduction

In April 2003, GM³ selected FedEx Supply Chain Services (FSCS), a group company of FedEx Corporation⁴ (FedEx) as the 'Supplier of the Year'⁵ for offering excellent logistics and supply chain management (SCM) services. This was the fifth consecutive year FSCS received this distinction.

Commenting on the occasion, Bo Anderson, Vice President, GM Worldwide Purchasing Production Control & Logistics said, "FSCS performance and contributions have been critical in helping GM to become the industry's low-cost producer of high-quality vehicles. They serve as a role model for other suppliers."⁶

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In August 2002, Logistics Management rated FSCS as the best third party logistics provider in the US (Refer Exhibit I).

FedEx started offering SCM services to its customers on a very small scale in 1974. With increasing demand for services such as inventory and warehouse management, in 1989 FedEx established FedEx Logistics Services, a group company specifically focusing on managing the supply chain of corporate customers. Soon, FedEx started building upon its technology intensive SCM service offerings.

By offering world-class SCM services and solving the customers' supply chain problems by customizing its SCM solution according to their specific requirements, FedEx earned significant appreciation from all customers.

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1] "E-Procurement delivers for FedEx," Susan Avery, Purchasing, November 18, 2001.

2] As quoted in the article, "FedEx powers supply chains through synchronized reality," posted on www.ascet.com

3] GM is the world's largest manufacturer of cars and trucks. The company's leading brands include Buick, Cadillac, Chevrolet, Pontiac, Saab and Vauxhall. For the fiscal year ended December 2003, the company reported revenues of $185.5 billion and a net income of $3.8 billion.

4] US based FedEx Corporation is one of the leading supply chain management solutions provider in the world. FedEx's group companies like FedEx Express, FedEx Ground, FedEx Freight, FedEx Custom Critical and FedEx Trade Networks operate independently but compete collectively under the FedEx brand worldwide. FedEx operating companies deliver around five million shipments every business day.

5] The GM 'Supplier of the Year' award began as a global program in 1992. Award-winners are selected by a worldwide team of executives from purchasing, engineering, manufacturing and logistics who base their decisions on supplier performance in quality, service, technology and price.

6] "General Motors named FedEx Supply Chain Services 'Supplier of the Year' Fifth Consecutive Time for Top Award; FSCS Manages Inbound Transportation Suppliers for GM," Business Wire, April 21, 2003, posted on www.fedex.com.