UPS versus FedEx Head-to-Head on Wireless Essay Example

UPS versus FedEx Head-to-Head on Wireless Essay FedEx and UPS are prime examples of war in the market place. Both are always seeking a competitive edge over one another and stay short at nothing. As the two companies are encroaching on each others primary businesses (UPS on overnight delivery and FedEx on ground delivery), they are concurrently stepping up their wireless deployments as well in their own unique ways of doing business. FedEx deploys new technologies as soon as it can justify the cost and demonstrate improved efficiencies and customer benefit. UPS however refreshes its technology base roughly every five to seven years, when it rolls out a unified system in stages that it synchronizes with the life span of the older system. Both are looking ahead to potential applications of radio frequency identification and GPS wireless technologies.UPS and FedEx have used various forms of wireless technology since the late 1980s, usually proprietary processes developed with vendors. But in recent years, both have switched to standa rds-based technologies such as 802.11b wireless LANs, Bluetooth short-range wireless links and general packet radio service (GPRS) cellular networks that provide lower development and maintenance costs, greater throughput and security, and lower acquisition and deployment costs.Both UPS and FedEx rely on near-real-time data to manage their operations, and the only way for the companies to get this near-real-time information is through the use of wireless technology in the field and in their facilities. Both have tens of thousands of couriers roaming the world to pick up and deliver packages, making millions of stops per day. Their challenge is to use wireless to speed up the process to improve customer service. FedEx’s new PowerPad device uses a Bluetooth radio to send package information—scanned during pickup—and frees the courier from having to dock the handheld in order to activate the data transfer, which shaves off about 10 seconds per stop. The PowerPad al one will save the company $20 million per year among the 40,000 couriers. A new handheld, the Delivery Information Acquisition Device (DIAD) IV, is UPSs counterpart to FedExs PowerPad. Functionally, the DIAD IV is analogous to the PowerPad, except the 70,000 handhelds transmit the data directly to UPS using a digital cellular connection. The business challenge for both companies is to reduce the cost of sorting. In the sorting facilities, both companies use a device called a ring scanner, which is a bar code reader mounted on two fingers and wired to a terminal strapped to the forearm. As they move onto new wireless platforms, both companies are also changing their approaches to network security.Outside of the two delivery companies major package scanning retooling efforts, FedEx and UPS continue to investigate what business benefits they might gain from other wireless technologies. Two have gained particular attention: RFID tags, which could replace bar code scanners, and GPS, whic h can precisely locate field units.Although few companies have the scale of UPS and FedEx, they can adopt many of the wireless technologies scaled to their size and use devices and network components that fit their operations.