Last year, there was a very well-known fiasco due to an increased amount of purchases on the internet. It was such an unforeseen forecast that it is now infamous and glued to UPS’ reputation. The harsh winter across the country and the spike in online orders, as opposed to brick and mortar stores where delivery is likely sufficient in absenteeism, are the two most cited reasons as to why there was such a failure in operations. The Christmas deadline guarantee is such an important concept to consumers who do not want to miss out on that magical Christmas morning that failing to abide by such explicit guarantees is harmful for business. Personally, I have not used UPS since this inexcusable fiasco caused multiple packages to be delivered after Christmas. Thankfully, out of coincidental luck, the one package that was late was to someone who was Jewish.
Now, online ordering is expected to grow even more. With the increased presence of mobile ordering through smart phones and tablets, online ordering is even easier and more accessible across the country. Amazon even offers a bar code scanner to instantly price check and of course purchase the scanned item when a customer is in a store. Often, Amazon can win these price wars; instead of a customer buying something in the store and bringing it home themselves this causes another package that must be delivered across the country. Amazon’s presence is so large in the online marketplace that about half of UPS’ packages have that familiar smile box.
The article claims that shippers are bracing for an even busier season: USPS is expecting to deliver 15.1 billion parcels which is the high end of the estimates. As we learned in class, forecasts are rarely accurate. However, there are certain reliability factors that UPS and FedEx have used to differentiate themselves from a more economical service (USPS). Shouldn’t there be a higher standard when reliability is such an importance in the business component?
In addition to forecasting errors last year, there was a misattribution of efficiency. There was not enough workers to load the trucks, and it caused a severe backload of packages. This year, UPS has determined they need an additional 95,000 seasonal workers in the hopes this will be sufficient to combat demand.
Forecasting a holiday season is hard enough in such a fast-evolving marketplace, but adding in the operations component of worker efficiency, inventory management (they can’t have too many packages at one shipping hub or they won’t have enough room), and the unpredictability of the winter season it is almost an amazement they have been so reliable throughout the years.
Were you affected last year by the UPS fiasco?
Do you now trust UPS less due to their mistakes of the past?
Do you tend to purchase your products online or at a traditional store?