UPS: The Industry Leader in Quality?

            The United Parcel Service (UPS) has been recognized as an industry leader when it comes to quality for quite some time. In fact, in 2010 they were recognized in the third spot of 10 for top companies for quality only behind Disney and Intel. [1] They have always been concerned with being the best in the industry of their product, which is actually a service that is delivering packaged goods across the globe. UPS delivers 16.3 packages daily only losing less than 1% of those packages yearly.[2] UPS was one of the first companies to have tracking on their packages and more recently with the ever-growing use of smartphones was the first to have an app that allows senders and receivers to track their packages through their app, a first for the industry. With its excellent track record overall especially for on time deliveries one would think UPS has quality under control. Recently, however; the Federal Aviation Administration (FAA) fined UPS $4 Million for failing to make required repairs on their aircraft, maintaining proper records, and flying unsafe aircraft (due to the failed repairs.)

One would think a company that has such a great track record for delivering goods on time and in good condition would have every aspect of their business including the quality and condition of their fleet on trucks, cars, and aircraft. Clearly the FAA does not think UPS is doing such a great job in that department. In thinking about the reasons why they may not be maintaining their aircraft, a few ideas come to mind. First, aircraft repairs take time and money. With profits of 5.8 billion dollars last year, it is safe to assume cost was not the issue.[3] Time is the single biggest thing UPS has to deal with. When providing their service, shipping, they are guaranteeing that package will arrive its destination at a particular time. If an aircraft is being repaired, it cannot fly. If it is not flying, packages are not being delivered. Packages, those are not delivered or not delivered on time is simply bad for business. It is easy to see the domino effect that ensues thereafter. Perhaps there has been a cutback in mechanics and/or inspectors and so there were many oversights. It is also possible that they did make repairs but failed to keep adequate records, which is also alleged by the FAA. Finally, maybe this is all a big misunderstanding.

A spokesperson for UPS states they will defend themselves for this “unreasonable and unwarranted fine.” He says, “UPS has a long history of operating a safe, compliant airline, there was never a safety issue.” Apparently, this fine is stemming from only 9 repairs out of the thousands of repairs they make. Overall UPS has a pretty good safety record. According to the Safety and Fitness Electronic Records System (SAFER), for the last 24 months UPS has had 0 air accidents and 0 fatalities. [4] Maybe this is just a big misunderstanding and poor reporting. I find it hard to believe that UPS would not properly maintain the very things that drive their business. Aircraft are the very thing that delivers the packages. Without them, UPS has no business. It will be interesting to see how UPS defends themselves. What do you guys think? Can you see a company overlooking the quality of their fleet in order to save time? Do you know of any other companies that actually do this?  Let’s hear them in the comments!

Source of Main Article. 




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Inventory Management: The New Approach

After researching inventory management more extensively, I came across an article that was based on a Q&A session with senior director, Meeta Kratz, at Grainger, an industrial supply company. Meeta says that she has noticed that more and more manufacturers are switching to “just in time” inventory to reduce extra costs associated with holding excess inventory. She says that this is an important shift because companies are now learning that switching to “just in time” inventory is allowing them to be more efficient with their inventory management systems and taking excess costs out completely out improving their profit.

While I understand the approach that “just in time” inventory helps to reduce costs associated with excess inventory if a company were to have good data to make good forecasts this problem would exist. The problem with “just in time” inventory is the need for a strong supply chain to make sure that you will receive the products just in time but on time. Failure to have strong suppliers will make a company’s customers unhappy due to their shortage or late shipments due to the original suppliers. This problem would be eliminated by taking the time to analyze the previous data and make accurate forecasts for future orders. Relying on “just in time” inventory, while can be effective” is risky if a company’s supply chain is weak and has no experience dealing with this kind of inventory system before.
When asked about the elements of a good inventory management system, Meeta responded, “Customer-centric, Based on actual usage data, Flexible, Supported by Experts.” These key elements simply cannot be achieved effectively with “just in time” inventory. If you want to be customer-centric you must be able to be flexible with your customers needs. Different customers may have different needs. The fact that actual usage data should be used in a good inventory management system shows that forecasting is essential to good inventory management. If you use data appropriately you can make sure you have enough products in stock at any time without extreme costs.

While I understand that some companies, such as Dell, have great success using “just in time” inventory I still believe that switching to this type of inventory puts a company at risk for not being able to supply their customers with the products they need and risk having shortages and losing customers. Looking at element four, “supported by experts,” this proves that if you have experts looking at your data and double checking forecasts then having “just in time” inventory is less effective and riskier than having a regular inventory replenished frequently.

Do you guys think “just in time” inventory is a good system to move to, just to reduce costs? What are the risks associated with it?

Business Degrees a MUST for Project Managers

It was just a short time ago we talked about project management and even did an in class activity, “The Sky’s the Limit,” to give us the general ideas regarding project management. After researching project management a bit more online I read an article by Jennifer Mateyaschuk from Information Newsweek. As we all know, it is very important for a business project manager to have relative experience in managing a project due to the in depth processes needed to complete projects. Ron Schevlin, who is a analyst for a research company said it best, “The project manager doesn’t necessarily direct the picture, but he or she makes sure the funding is there, the right skills are used in the right places at the right times, and the projects are completed on time and within budget.”

These key ideas, “right skills, right places, right times and staying within budget,” are the key parts of a project manager’s responsibility. His/her job is to use the resources given to them most efficiently and at the lowest cost. This is why people with excellent time management and budgeting skills are some of the best candidate for this position. However, relative business skills are needed in order to effectively be in this position. This may be why a number of project managers are attending business conferences or going back to school to specialize in a particular department.

This is important when it comes to understanding the needs of customers but also listening to employees, co-workers, and other managers. Personally speaking, I would not want to be a project manager in the start of my career in a new industry because my lack of experience will negatively impact the company. I noticed when looking for jobs, any job title that has the words “project manager” will have required qualifications of at least 5 years of relative industry experience and preferred qualifications will have MBA in some business related category, listed. A lot of credit goes out to project managers as they have the weight of the company on their shoulders at all times. They are directly responsible for making sure the company remains profitable and maximizes profits. Projects that are over budget and/or completed late means lost profit for the company. Loss of profit could mean loss of jobs for employees/workers and even ultimately mean firing of the project manager. For these reasons, projects managers are usually compensated pretty well.

How many of you would like to be a project manager? I know I would, but only after having experience to manage large projects!

Mateyaschuk, Jennfier. “Project Managers Learn Value Of Business Skills.”Informationweek. N.p., 7 Dec. 1998. Web. 25 June 2012. <>.