KCB ID: 14508, UoW ID: 1092227299339 – Tolga KOYMEN                   University of Wales             (Kensington Collage ...
KCB ID: 14508, UoW ID: 1092227299339 – Tolga KOYMENTable of Contents1. Introduction ... 21.1. Package Delivery and Logisti...
KCB ID: 14508, UoW ID: 1092227299339 – Tolga KOYMENQuestion:Case study about UPS related to MIS.For this report you are re...
KCB ID: 14508, UoW ID: 1092227299339 – Tolga KOYMENThe company’s package tracking systems technology -which was firstly se...
KCB ID: 14508, UoW ID: 1092227299339 – Tolga KOYMENsystems simultaneously with UPS. But the goals and the future prospects...
KCB ID: 14508, UoW ID: 1092227299339 – Tolga KOYMEN    2.3. Enterprise Content Management (ECM)Enterprise Content Manageme...
KCB ID: 14508, UoW ID: 1092227299339 – Tolga KOYMENThe UPS Package Tracking Systems are able to monitoring performance, to...
KCB ID: 14508, UoW ID: 1092227299339 – Tolga KOYMENconditions. The ash cloud disaster on 2010 uncovered the gap of the sec...
KCB ID: 14508, UoW ID: 1092227299339 – Tolga KOYMENReferencesAIIM. What is Enterprise Content Management (ECM)? Associatio...
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MANAGING INFORMATION SYSTEMS - Critically evaluation of using of the Managing Information Systems at UPS

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Logistics Industry manages the movement of the valuable things and services between the starting point and the usage point for providing the requirements of individuals and corporations. The industry includes the reliable mixture of the elements of raw materials and goods handling, transportation, inventories, storage, packaging, information systems, and security. The main expectations of the stake holders of this industry are “best service” and “lowest costs and rates”.
Suitable, reliable, appropriate and correct usage of the information systems on logistics industry can be one of the main drivers to meet the expectations of the stake holders. The targets of the logistics industry, such as realizing of the short delivery times, lowering the inventories level, making higher of the capacity usage and reliability, can be provided by the integration of the information systems at all level of the logistics services business activities.
Creation of the information systems for making more efficient and more flexible industry’s core business activities, has made the industry a technology driven industry. It has given new business opportunities and also focusing on emerging business areas.

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MANAGING INFORMATION SYSTEMS - Critically evaluation of using of the Managing Information Systems at UPS

  1. 1. KCB ID: 14508, UoW ID: 1092227299339 – Tolga KOYMEN University of Wales (Kensington Collage of Business) MBAMODULE TITLE: MANAGING INFORMATION SYSTEMS ASSINGMENT TITLE: Critically evaluation of using of the Managing Information Systems at UPS LECTURER NAME: ATHAR NAQVI Tolga KOYMEN KCB ID: 14508 UoW ID: 1092227299339 DATE OF SUBMISSION: 30/09/2011 – 3pm 0
  2. 2. KCB ID: 14508, UoW ID: 1092227299339 – Tolga KOYMENTable of Contents1. Introduction ... 21.1. Package Delivery and Logistics Services Industry and Information Systems ... 21.2. United Parcel Service Inc and Information Systems ... 21.3. Supply Chain Management Solutions for Other Companies ... 32. Literature Review ... 32.1. Managing Information Systems ... 42.2. Strategic Information Systems (SIS) and Competitive Advantage ... 42.3. Enterprise Content Management (ECM) ... 52.4. Cloud Computing and Web based Interactive Session ... 53. Analysis ... 53.1. Technology used by UPS ... 54. Recommendation ... 64.1. Industry Based Problems ... 64.2. Solutions for Problems ... 75. Conclusion ... 7References ... 8Bibliography ... 8 1
  3. 3. KCB ID: 14508, UoW ID: 1092227299339 – Tolga KOYMENQuestion:Case study about UPS related to MIS.For this report you are required to draw on your knowledge how information systems has helpedbusinesses use synergies, core competencies, and network based strategies to achieve a competitiveadvantage?In addition to that conclude your discussion with detailed recommendations (1000 – 1500 words) byexplaining the challenges posed by strategic information systems and how they should beaddressed. 1. Introduction 1.1. Package Delivery and Logistics Services Industry and Information SystemsLogistics Industry manages the movement of the valuable things and services between the startingpoint and the usage point for providing the requirements of individuals and corporations. Theindustry includes the reliable mixture of the elements of raw materials and goods handling,transportation, inventories, storage, packaging, information systems, and security. The mainexpectations of the stake holders of this industry are “best service” and “lowest costs and rates”.Suitable, reliable, appropriate and correct usage of the information systems on logistics industry canbe one of the main drivers to meet the expectations of the stake holders. The targets of the logisticsindustry, such as realizing of the short delivery times, lowering the inventories level, making higherof the capacity usage and reliability, can be provided by the integration of the information systemsat all level of the logistics services business activities.Creation of the information systems for making more efficient and more flexible industry’s corebusiness activities, has made the industry a technology driven industry. It has given new businessopportunities and also focusing on emerging business areas. 1.2. United Parcel Service Inc and Information SystemsUPS (United Parcel Service Inc) is the biggest worldwide organization in the packages and the freightdelivery services, the specialized transportation services and the logistics services industry.According to the Fortune Magazine at Fortune 500 - 2011 ranking list, the Atlanta - USA basedcompany is the 48th biggest company in USA by generating $ 49,545 million revenues and $ 3,488million profits. Also United Parcel Service Inc is the 166th biggest company all over the world.(Fortune, 2011)The company has 400,600 employees, 91,196 motor vehicles and 225 aircrafts to operate itsbusiness successfully. Its daily worldwide packages and documents delivery volume is 15.6 million inthe service area for over 220 countries and territories. In 2010, United Parcel Service Inc delivered3.94 million packages and documents. The company services daily 8.5 million customers and it facesdaily 26.2 million online tracking requests. The company’s operation is based on 12 air hubs, 1801operating facilities, over 20.000 retail points of access and 40.000 drop boxes.In the recent two decades, as the company implements its worldwide operations in package deliveryand logistics services, specialized transportation and supply chain management, there is a hugetechnology behind its business operations. The growing demand of the short time delivery servicesforced the 1907 established company to develop its technology for maintaining its efficiency,reducing its costs, providing new customers, and keeping its prices competitive. 2
  4. 4. KCB ID: 14508, UoW ID: 1092227299339 – Tolga KOYMENThe company’s package tracking systems technology -which was firstly set up on 1992 by attaching ascannable bar-coded label to the packages for electronic tracking- includes handheld devices,specially designed vehicles, global computer and communication systems, networks, datamanagement processors, worldwide web site and user friendly softwares.Based on its information systems technology, UPS can record, upload, and monitor the detaileddelivery information immediately. And the customers can also receive real time information abouttheir deliveries through the UPS web site by using their own computers. It’s the successfulimplementation of the cloud computing on logistics industry. The detailed information on theelectronic label is transmitted to company’s computer centres by using the handheld devices -Delivery Information Acquisition Device (DIAD). Then the information is processed and stored forusing when it would be used. The electronic labels and the handheld devices are also used forcreating the most efficient route, keeping distance from traffic and weather conditions, efficientlyarranging the changed collection schedules etc.However UPS spent tens of billions of dollars to develop its information systems technology, itbenefits from its information systems technology investment. The electronic label -which can also becreated and printed by customers online- gives the opportunity to the company to create the mostefficient routes even before the delivery pick up. According to UPS’s estimation, the company savesapproximately 28 million miles and millions of gallons of fuel every year. 1.3. Supply Chain Management Solutions for Other CompaniesIn the late 1990s the UPS management discerned that the company’s expertise in despatching andtracking can be used to manage logistics and supply chain activities of the other companies insteadof building their own logistic services. In 1995, The UPS Logistics Group was formed, and thecompany began to offer supply chain management solutions and consultancy to the othercompanies. This solution helps the companies to provide their logistics activities, package deliveryand freight activities, financial, and mail services to increase their business activities and developtheir worldwide supply chains. In the year of 2010, UPS made $ 8.7 billion net revenues from supplychain management and freight activities. It’s almost one in five of the total annual revenues. Andalso UPS acts as the consultant of the logistics services activities for thousands of major enterprisesin globe. The expertises in logistics give the opportunity to UPS to be the default dispatcher ofgrowing e-commerce businesses.In 2000s, UPS launched its Supply Chain Management (SCM) software -UPS Road Net TransportationSuite- which offers distributor companies independently planning their own delivery routes daily.The software -which based on the expertise of UPS- provides the opportunity to distributorcompanies reducing their distribution costs and fleet miles, increasing resource utilization, knowingthe actual cost per stop, setting and checking drivers’ standards, decreasing routing time,contingency planning and reporting that evaluate companies’ successes.The other service of UPS is UPS Document Exchange, an internet based system, allows overthousands of businesses to securely deliver their critical and important documents, files andsoftwares in the interactive virtual area. United Parcel Service Inc makes alliances with leadingtechnological companies to prepare itself for the beyond and for taking necessary steps to continueits industry dominancy and growth. 2. Literature ReviewAs it is said before in heading 1.1, UPS is the world’s largest company in transportation and logisticsindustry. The rivals in this industry, such as FedEx, US Postal Service, Airborne Express – DHL, CHRobinson Worldwide Inc., TNT and others, force UPS to improve its business activities efficiently bydeveloping its managing information systems. The rivals have improved their managing information 3
  5. 5. KCB ID: 14508, UoW ID: 1092227299339 – Tolga KOYMENsystems simultaneously with UPS. But the goals and the future prospects of the United Parcel Inc willleverage the company’s position. As the package delivery, freight and logistics services industrycontinues to grow there is no obstacle that UPS will not continue to be the industry’s dominantleader with its wide range of divisions and company’s managing information systems technologydevelopments. 2.1. Managing Information SystemsThe mandatory of the sustainability of the company beyond the random and chaotic business worldand the stiff competition with rivals, has shown the importance of the improvement of theManaging Information Systems to making decisions prudently and reasonably. ManagingInformation Systems (MIS) -as a mixture of the elements that collect, process, store and distributeinformation to help decision making and control- supports decision makers, staffs and customers tocoordinate, control, analyze, and visualize issues while the business activities are being realized.(Laudon, 2007)Managing Information Systems (MIS) refers to providing data, collecting in a systematic way,processing, storing, widening and enhancing of the information to execute the activities in aneffective way and profitably. It objectives to facilitating the decision making, providing the essentialinformation from entire sections, emphasizing the critical points, making reasonable decisions.(Laudon, 2007) The Managing Information Systems (MIS), ultimately goals the optimization, has tohave the characteristics of providing relevant information for all levels of management from top todown, directing actively by the management, covering all the functions of the organization, havingthe common data flow to avoid the overlapping and reiteration, being in a long term planning atleast 3 to 5 years, flexible and user friendly. It must not be forgotten that the well quality of theinputting data, well designing of the process and the system, and well managing of the processingsystem directly affect the quality of the necessary information which enables the organization tobecome productive and profitable.It’s must not be confused that MIS and Information systems are the same term. The informationsystems don’t include the decision making systems. MIS is widely used to totalize the informationbased management systems. These are Supply Chain Management (SCM), Customer RelationshipManagement (CRM), Enterprise Resource Planning (ERP), Decision Support Systems (DCS), ProjectManagement, Knowledge Management and Executive Support Systems. (O`Brien, 1999)The technology of MIS is based on Hardware/Software, Data Capturing and ManagementTechnology, Networking and Telecommunications Technology. MIS plays a significant role all level ofthe pyramid of business activities such as operational, management or strategic (decision makingand executive) levels. (Laudon, 2007) 2.2. Strategic Information Systems (SIS) and Competitive AdvantageSIS is developed to implement business strategies by using information systems and computersystems simultaneously in response for adding businesses initiative. The objectives may be lowercost, differentiation, focusing on a nishe market, innovation, new product, new services or newbusiness models, customer and supplier intimacy. The companies which use effectively SIS may havesignificant competitive advantage.SIS is the systems such as Decision Support Systems (DCS) which customize the information fromdatabases to fix the problem and make decision, or Executive Support Systems (ESS) which quicklyreports to executives for all levels of the organization. 4
  6. 6. KCB ID: 14508, UoW ID: 1092227299339 – Tolga KOYMEN 2.3. Enterprise Content Management (ECM)Enterprise Content Management is a process which the MIS based on it. It is the strategies, methodsand tools that used for capturing, storing, managing, keeping and delivering contents anddocuments related to the organizational processes. Its components are capturing, managing,storing, keeping, and delivering. (AIIM, 2010) 2.4. Cloud Computing and Web based Interactive SessionCloud computing is the delivery of computing as a service whereby resources, softwares andinformation are provided to computers and other devices, such as smart phones or PDAs, as a utilityover a network. (Gruman, 2008)Web based interactive session is the permanent interactive interchange, dialogue, meeting orconversation in a particular network, between a computer and a user. Sessions use cookies andcryptic technology for security and storing as much data on the server. This process must guaranteedconfidentiality, data integrity and authenticity. 3. AnalysisIn the early 1990s, the sensitivity of the customers about ‘package tracking’ caused the companieson package delivery and logistics industry to make investments on tracking capability. Before theseinvestments all the companies, as well UPS, hired a few employees on their IT departments tosupport their urgent IT needs. Now, UPS hired over 5000 IT employees, and the most importantly allthe employees from top to down use information systems technologies on their daily businessactivities. 3.1. Technology used by UPSThe technology used by UPS is based on computers, hardwares, softwares, Data Capturing andManagement Technology, Networking and Telecommunications Technology and IT Infrastructure.These are drivers’ handheld devices -Delivery Information Acquisition Device (DIAD)-, smart barcoded labels, barcode recognition devices which is integrated with handheld devices, wirednetworks, wireless networks, cellular phone networks, individual computers, central computers,data storage and backup technology, softwares that manage the enterprise closed circle data,softwares that using by customers, web based tracking system and so on.Known as the industry’s most comprehensive handheld device, DIAD, contains data capturing,collecting and transmitting technologies, as well digital signiture capturing. The smart bar code labelincludes the information of sender, destination and arrival time. Once the label is recognized and thesigniture captured by DIAD, it takes 60 seconds the information available on the UPS web site. Theinputs such as receiver’s signiture, package data, and billing are processing in the central computerand then become outputs for customers. The hand held device uses cellular phone network totransmit the data to UPS’s central computer. The technology on this enterprise contentmanagement process has known as Bar Code Recognition Technology. All the vehicles such as trucks,aircrafts, trains and ships are tracking by GPS technology, The DIAD and GPS technology are usedduring the process of package transportation and the customer tracks the package movement.According to a study at UPS IT Department, the capturing data by DIAD, saves 30 minutes per day onper driver. If it’s thought about over 70.000 drivers, it is a huge amount of savings for the company.Since UPS launched its world wide web site -www.ups.com- the company has improved its internetbased technology from static situation to ‘click-and-mortal’ interactive session situation. In 2011, thecustomers are able to track their package real time in virtual area. The layers of customer,application, platform, infrastructure and server of cloud computing makes possible to get the realtime information about their deliveries for customers. 5
  7. 7. KCB ID: 14508, UoW ID: 1092227299339 – Tolga KOYMENThe UPS Package Tracking Systems are able to monitoring performance, to speeding customersdelivery actions, to tracking the deliveries of each steps of the movement, to estimating the cost ofthe delivery, and so on. 4. RecommendationThe stiff competition on the package delivery services and logistics industry is still based on focusingon the research for quicker and safer delivery methods. And the customers still demand moreexpectations on package tracking. The technological developments either cope with the needs ofcostumers or leverage customer expectations. 4.1. Industry Based ProblemsThe industry’s core element is the packages which need to deliver from the first point to the usagepoint quickly and safely. The target must be treating each package like it’s the only one package thatmust be delivered.The problems are still mainly based on the package tracking. They are caused by lost packages,damaged packages, stolen packages (even by the staffs), return packages, wrong or incompletedestination addresses, unavailability of receiver, return packages, unexpected delays accordingweather, natural disaster and traffic conditions, and uncollected payments. Especially lost packages,damaged packages, and stolen packages cause companies to pay huge amount of compensations.Also the reputation of the company badly affects by these problems. Even if the companies hugelyinvests package tracking systems, they still spend huge amount of their budgets for compensationand fixing their reputation. Even if the hand held devices are so clever or the labels on the packagesare smart, the package tracking system is still based on bar code capturing. As the delivery processruns, If any of the hand held device does not capture the bar coded label, actually the package is notunder control.On the other hand, the senders generally don’t care about declaring the exact destination address,even if they are very sensitive about their packages. The receivers often arent informed about thepackage delivery by senders. This problem caused companies spending huge amount of theirbudgets to cope with return packages. For the deliveries except US and UK, once a destinationaddress identify by the sender, it is not be verified. Especially return packages for the internationaldestination deliveries, which are relatively costs more, causes to spend huge amount of budgets forthe companies. Although the package tracking system is focused on giving real time information tothe senders, there is a gap to inform the receivers. The international destination address verificationand the interactive package tracking system from the enterprise to receiver are still the gaps of theinformation systems of the industry.When it’s searched on web, it can be observed that the large portion of the complaints about theindustry comes from the receivers. The receivers widely complaint about the lack of the exactdelivery times. The companies generally offer daily 9am to 5pm for US and UK deliveries, and weeklyMonday to Friday for deliveries except US and UK. It should be considered that it’s inconveniencedfor the receivers for wasting their time to wait their deliveries. There must be an information systemthat available to interactively inform the receivers for the range of the reasonable delivery times inreasonable times. The unexpected delivery times for the deliveries based on the unexpected weather, traffic jams anddisaster conditions are the other problems for the companies. The expectations of the customers areso spoiled that they don’t care about any natural disaster on any side of the globe. The customersare in the expectation of being have a secondary emergency plan for all unexpected conditions.Existing delivery and tracking systems are not available to cope with the really unexpected 6
  8. 8. KCB ID: 14508, UoW ID: 1092227299339 – Tolga KOYMENconditions. The ash cloud disaster on 2010 uncovered the gap of the secondary plans of the industrycompanies.As the years of 2000s, the global terrorism affected all industries, as well package delivery andlogistics industry. The industry is one of the most mouth watering channels for the global terroristorganizations. Finally a global terrorist organization tried to use the industry for attacking its target.In the early 2010, a delivery from Middle Africa territory to US via Europe, contained an explosive ina printer machine. Fortunately the explosive deactivated, before it is burst. The package delivery andlogistics companies dont actually know about the consisting of the packages. The companies don’thave any technology based strict security control for the packages which they run for delivering. 4.2. Solutions for ProblemsIt is recommended that the bar coded capturing system, which the package tracking system is basedon it, can be changed with RFID (radio frequency identification) capturing system. The radio wavesare used to transmitting data even from several meters. While the delivery is in progress, thepackages can be track by using the RFID label on the packages. The lost or stolen packages problemcan be prevented by this technology’s simultaneously check. Once a package embedded with anyvehicle or a warehouse by using the RFID technology, the package will be kept in safe there.The address verification system for the declared destination addresses except US and UK addressescan prevent the return delivery problems. This system can be related with automated messageservice for receivers. The unavailability of the receiver can be partially prevented by thisimprovement. Also the wide range of the expected delivery time intervals can be minimized. Theelectronic security checking systems can be adapted on the delivery systems to prevent of partialillegal goods delivery. 5. ConclusionUPS is the biggest package delivery and logistics service firm of the industry for a long time becauseof its differentiation on managing information systems. The differentiation on MIS helps UPS for itscore competencies, using synergy, giving opportunity to entering new emerging markets, andachieving a competitive advantage.Total word count excluding Cover Page, Question and References: 3067 7
  9. 9. KCB ID: 14508, UoW ID: 1092227299339 – Tolga KOYMENReferencesAIIM. What is Enterprise Content Management (ECM)? Association for Information and ImageManagement. [online]. Available at:<URL: http://www.aiim.org/What-is-ECM-Enterprise-Content-Management.aspx>[Accessed: 27th September 2011]Fortune Magazine, 2011. Global 500 Ranking 2011 Full List. Fortune. [online]. Available at:<URL:http://money.cnn.com/magazines/fortune/global500/2011/full_list/>[Accessed: 27th September 2011]Gruman, G., 2008. What cloud computing really means. InfoWorld. [online]. Available at:<URL:http://www.infoworld.com/d/cloud-computing/what-cloud-computing-really-means-031>[Accessed: 27th September 2011]Laudon, J. and Laudon, K., 2007. Management Information Systems: Managing Digital Firm andMultimedia: Pearson Education.O`Brien, J.A., 1999. Management Information Systems – Managing Information Technology in theInternetworked Enterprise: Irwin McGraw-Hill.BibliographyAdewoye J.O. and Somuyiwa, A.O., 2010. Managing Logistics Information System: TheoreticalUnderpinning: Asian Journal of Business Management 2(2): 41-47, 2010. ISSN: 2041-8752Anderson, D.L. and Post, G.V., 2006. Management Information Systems: Solving Business Problemswith Information Technology 4th ed.: Irwin McGraw-Hill.McLeod, R. and Schell, G.P., 2007. Management Information Systems 10th ed.: Pearson EducationRoss, J., 2001. United Parcel Service: Delivering Packages and E-Commerce Solutions. MIT SloanSchool of Management.[online]. Available at:<URL:http://dspace.mit.edu/bitstream/handle/1721.1/1572/United+Parcel+Service+4356-01.pdf?sequence=1>[Accessed: 27th September 2011]Official Web SitesUPS [online]. Available at:<URL: http://www.ups.com >[Accessed: 27th September 2011]FEDEX [online]. Available at:<URL: http://www.fedex.com/gb/ >[Accessed: 27th September 2011] 8

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