UPS: Delivering the Total Package in Customer Service In 1907 there was a great need in the United States for private messenger and delivery services. The U.S. Postal Service was not yet offering parcel delivery, and few offices and private homes had telephones, so messages had to be delivered by hand and packages by courier. To help meet customers’ communication needs, an energetic 19-year-old, James (Jim) E. Casey, started the American Messenger Company in Seattle. Although the company began with a small staff and faced stiff competition, it did fairly well, primarily because of Casey’s strict policies. He built his business on four principles: customer courtesy, reliability, around-the clock service, and low rates. Casey’s company eventually became United Parcel Service, or UPS. The name United Parcel Service was chosen to draw attention to the words United , to emphasize the fact that shipments were consolidated to increase efficiency, and Service , because the company recognized that service was all it had to sell. UPS grew quickly through the years and became well known for its chocolate-colored delivery vans and courteous drivers. The public also liked UPS’s business concept. It was convenient to send packages by UPS, and people trusted UPS to deliver packages safely to their destinations. All kinds of people and businesses used UPS’s services, from pharmaceutical companies that shipped lifesaving drugs across country to grandparents who sent their grandchildren birthday presents and boxes of candy at Christmas.
Although UPS has always been a friendly company, until the mid-1980s it relied primarily on technology to maintain efficiency, keep prices low, and provide new services. A major internal change took place at UPS in the mid-1980s when the company decided to shift its emphasis from technology to satisfying customer needs. This shift represented a recognition that UPS customers were becoming more sophisticated and had a variety of needs the company was uniquely equipped to satisfy. Paramount among these were an increased need for information, a desire to move packages even more quickly and efficiently, tremendous competitive pressure from Federal Express, and a demand for customized prices and services.
UPS moved quickly to satisfy its customers’ needs by developing new service products. For example, Total Track, which is available at UPS’s Web site, can instantly provide customers with tracking information on all bar-coded UPS packages. This service helps vendors know when their buyers have received their shipments. Inventory Express is a contract logistics management service in which UPS stores a customer’s merchandise and then ships it when it is needed, often on a just-in-time basis. UPS also has improved its basic package pickup and delivery services. Customers with urgent shipments can telephone UPS to take advantage of On-Call Air Pick Up, which provides fast pick up at the customer’s home and overnight delivery of packages. To accommodate customers who ship to sparsely populated areas in the United States and abroad, UPS has improved its geographic reach to every address in the United States and locations in more than 185 countries and territories.
1. Based on the description of UPS, what do you believe are UPS’s strengths and weaknesses?
2. How has UPS used technology in its design of quality services? Make your answer as substantive as possible.
3. Describe a positive or negative experience that you have had with UPS (or one of its competitors such as FedEx or the U.S. Postal Service). If the experience was positive, reflect on whether the experience is consistent with UPS’s new emphasis on customer needs. If the experience was negative, what could UPS have done to better satisfy your needs?