FedEx's Operations Management

Operations Management
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Operations Management
Introduction
FedEx is a global leader in the logistics and transportation industry, with significant operations around the globe. Founded in 1971, FedEx has been critical in the way people do commerce bringing innovative ways for other businesses. FedEx has made efforts to become a customer-centric business, creating a reputation as a trustworthy partner. With the vast network across the world, businesses and individual clients are assured that they will receive their packages conveniently. FedEx has been at the forefront of ensuring innovation through the implementation of technological solutions. The business has embraced technological solutions that have improved its efficiency. While undertaking these activities, the business remains conscious of the importance of environmental sustainability. This report explores FedEx's operations to gain insight into how the business can provide better services to its clients.
Operations Strategy and Process Design
FedEx uses a differentiation strategy to distinguish itself from its competitors in the market. The business has invested in improving its efficiency, which has attracted more customers who want to receive their packages conveniently. Another strategy is efficiency where the business has invested in ways that enhance how it operates. Customers are looking for efficient businesses. FedEx has ensured a high level of efficiency to attract and retain existing clients. In addition to the operational strategies, the business has made process designs to ensure smooth operations. It has done this by integrating technology into its operations. For instance, route optimization software allows the business to identify the most appropriate route for delivering packages. The business has also optimized its workflow processes to remove unnecessary bottlenecks. Streamlining processes has made it possible for the business to meet the needs of the clients. FedEx also makes continuous improvements to its processes to ensure that it adapts to market requirements. The improvement is important in ensuring that FedEx remains relevant to the needs of the consumers.
Supply Chain Management Process
FedEx is a world leader in supply chain mismanagement due to its sophisticated logistics network that ensures that products move quickly and efficiently across the globe. The supply chain can be broken down into four main stages. The first stage is pick up where packages are collected from clients. The collected packages are taken to a sorting facility where they will be sorted. The second stage entails scanning and sorting the packages. The scanning identifies the destination of the packages, then a sorting is later done based on the locations. The warehouses are located strategically worldwide with the state of the art warehouse facilities. The third stage is transportation where the packages move from the sorting facility to their destination. Transpiration can be done in different ways depending on the urgency of the package. The last stage is delivery, where the packages reach the final client, usually at the doorstep or any nearby FedEx facility.
FedEx optimizes the supply chain using different approaches. Firstly, the entire chain makes use of data and analytics to improve the process. FedEx uses advanced technologies to obtain real-time data on the condition of the packages throughout the supply chain. The analysis of the data is done to identify any areas that have challenges and need improvement. The tracking and tracing capabilities allow clients to monitor the progress of their packages, which provides them with a transparent experience. Secondly, the business collaborates with other players in the industry to innovate in the supply chain space. Through supply chain integration, FedEx undertakes joint development programs with other businesses to enhance the experience of its clients. Moreover, FedEx has been working towards enhancing sustainability in its supply chain by reducing its carbon footprint. The business is working towards using fuel-efficient vehicles and promoting more sustainable packaging practices to minimize pollution.
Seasonality of Demand
There are two examples of seasonality in demand for FedEx. The first example is when there are peak holiday seasons like Christmas. During such times, the demand for sending packages increases significantly. During a holiday season like Christmas, relatives want to send gifts to their loved ones. It is also during such holiday seasons that individuals purchase products in large quantities. The sudden surge in demand stretches the capacity of FedEx and forces it to employ different strategies to deal with the problem. Firstly, FedEx hires more temporary staff to assist the permanent staff in dealing with the increasing load. The increased workforce makes it easy to deal with the high demand for packaging, loading and unloading products. The second approach optimizing the routes where the business uses technology to identify the most efficient route for the packages.
The second example of seasonality in demand is when there are major retail events like Black Friday. Such events are responsible for an increase in the number of orders, especially for clients making online orders. Online retailers rely on FedEx to fulfill their delivery commitments, significantly increasing the volume of packages. During such times, the business strains to meet the increasing demand for its services forcing it to address the issue as follows. Firstly, the business plans in advance for such events. Before say a Black Friday, FedEx puts measures in place to anticipate the increased demand for its services. Prior planning allows FedEx to allocate the necessary resources needed to deal with increasing volumes. Additionally, the business agrees with the retailers regarding their expectations. This allows it to plan accordingly how to deal with the increasing load.
Eliminating Waste in Lean Operations
FedEx can suffer from unnecessary transportation of packages. The wastage can occur if the business does not plan its routes well, hence making unnecessary trips when it could do with fewer of them. Addressing the issue requires the business to make use of technology, where algorithms are used in designing the most appropriate routes. This serves to reduce the distance travelled while increasing the load capacity. The business also addresses the problem through the consolidation centers where packages are sorted before they are transported. This ensures that products going the same route are identified in advance and put together.
There is also the possibility of having inventory idling in the storage facilities. This can occur if the business takes in more inventory and fails to plan for its delivery, causing it to remain under storage longer. FedEx uses the following lean strategies to address the problem. Firstly, the business employs just-in-time inventory. Here, FedEx receives inventory just in time and then proceeds to deliver it to the clients. Secondly, FedEx addresses the problem of tracking the inventory to identify when inventory levels increase. As a result, the busi...