Lessons From Ups Beating A Bad Economy

Lessons From Ups Beating A Bad Economy



The economy is​ declining but companies like the​ United Parcel Service are making ends meet and​ exceeding expectations. They have utilized the​ growth in​ the​ global economy, better supply chain management techniques and​ customers attempting to​ reduce costs by sending low priced packages. UPS has become a​ victor in​ an​ arena of​ losers precisely because it​ has implemented a​ winning strategy.

UPS has experienced two major upswings in​ the​ past few years. in​ the​ third quarter of​ 2018 they had an​ increase of​ net income of​ $1.08 billion dollars and​ over a​ year ago they had a​ $1.04 billion dollar upswing. This was after their 46 million dollar restructuring program in​ France to​ improve their supply chain. Other companies are not having nearly the​ same upswing or​ growth which makes UPS unique.

UPS Chief Executive Mike Eskew state with some happiness, “UPS turned in​ a​ solid performance in​ the​ face of​ a​ slower U.S. economy”. This proves that diligent American companies have an​ opportunity to​ increase profits and​ continue to​ grow despite many of​ the​ difficulties that American companies face.

UPS has a​ number of​ strategies that it​ is​ using to​ achieve success that many businesses would be wise to​ pay attention to. These strategies are in​ the​ field of​ global expansion, reduction of​ cost, flexible labor costs and​ efficient supply chain management. the​ concepts make sense and​ are grounded in​ very basic principles of​ understanding what their main objective is​ (increasing shareholder wealth).

Strategy Concepts:

Global Expansion: UPS has been tapping into world markers much more successfully then many other organizations. They have their own aircraft division that delivers packages; they are spreading out throughout Europe and​ beginning to​ move into Asia. They are growing and​ beating out small competitors. When the​ global economy is​ expanding it​ is​ important for​ American businesses to​ get out there and​ conquer the​ market before others.

Reduction of​ Costs: UPS continually is​ looking for​ methods of​ reducing costs. They track fuel efficiency, labor costs, and​ other overhead to​ ensure they are reducing these expenses as​ much as​ possible. Every organization should be focusing on both long-term and​ short-term costs.

Flexible Labor Costs: in​ the​ United States labor costs can be a​ huge factor in​ whether or​ not a​ company is​ profitable. the​ automotive industry has been hit hard by unreasonable labor and​ benefit costs. UPS is​ utilizing flexible or​ seasonal labor that is​ hired for​ peak periods. 60,000 employees will be added in​ the​ United States to​ help with holiday packages.

Supply Chain Management: in​ the​ transportation industry supply chain management is​ of​ crucial important. if​ packages are shipped via long routes, old machinery, inability to​ track, etc… there is​ a​ good chance that costs will raise and​ profits will decline. When companies investing in​ their supply chain as​ UPS did in​ France they often are able to​ save millions of​ dollars while increasing efficiency.

UPS should be set as​ a​ standard of​ how companies can beat the​ declining economy problems of​ the​ U.S. When other companies are laying off workers UPS is​ putting more people to​ work. While business is​ becoming more difficult to​ conduct in​ the​ U.S., companies like UPS are creating more efficiency and​ are reaping the​ rewards. Companies have the​ opportunity to​ learn from UPS and​ develop their own growth strategies.




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