Fedex Logistics
FedEx is a leading provider of supply chain management to corporate customers on a global perspective. FedEx is made up of six independent business units; FedEx Express, FedEx Ground, FedEx Freight, FedEx Custom Critical, FedEx Trade Networks and FedEx Services which all complete each in the different sectors of the transportation industry so that they can tailor FedEx services as a whole to fit its customers needs in the best way possible. It boasts of a fleet of aircraft and may motor vehicles and trailers. As a means of complementing its express delivery business, FedEx ground has provision for small packages ground delivery, less-than-truckload (LTL) carrier FedEx freight hauls larger shipment. There are various strategies that FedEx uses in its business operations, this paper will therefore give a highlight on the strategies that FedEx applies when it comes to its distribution that ensures its success in distribution. It will look at why FedEx has control of most of the distribution channels for their services (FedEx, 2012).
First it is important to note that FedEx provides a variety of different services, their facilities are well organized around the different services that FedEx offers. Their office stores are not set up for receiving the large freight of mail like a FedEx hub. Rather their office stores are set up like retail stores since most of their business is from the provision of document related and other business services. The office store is setup as a retail hub for other FedEx units. Their freight hauls are designed and set up in a way that enables the shipping and receiving of larger shipments and has a warehouse look as opposed to a retail look. Their product flow varies in amounts at different times of the day and on different days.
FedEx distribution system is a direct one, this came into being after the replacement of the maze of multiple distribution channels. It therefore offers a single-source, flexible and fast moving way of distribution. From the manufacturing facility, there is consolidation of multiple packages or freight into a single shipment. These goods are then transported internationally through air, surface or even ocean. The customs are then cleared as a single shipment. When the packages have been deconsolidated, FedEx then delivers the packages and freights directly to the vast customers and retailers. FedEx uses distribution centers, when their ground packages are picked, the company forwards them to the nearest distribution centers where they are sorted and processed (Evans, 2012). They have almost two dozen distribution centers located strategically like near hospitals and business centers. The packages that arrive at these centers are removed from the incoming trucks and later introduced on automated conveyor belts to the facility. There is also an automated bar code scanning technology that has been put up those routes the package on the basis of the label that was applied when shipping the package. The packages destined to same geographical locations are then grouped together loaded into trucks for their delivery or their transport to other distribution centers. Some packages that are travelling long way may have to pass through several distribution centers before they reach their final destination. The same scanning technology is applicable n each distribution centre and the packages grouped according to their destination. In most locations, there is use of proprietary staging process that ensures the proper routing and grouping of packages with similar destination. The loading of packages on trucks is based on their delivery destinations, those that are ready for delivery are loaded in trucks destined for delivery route while those heading for other centers are staged for and loaded in trucks that are headed for next centre on their way to their destination (Evans, 2012).
The FedEx distribution centers provide fulfillment system that is scalable and combines the best of technology with physical facilities that are optimally located. They are synchronized with FedEx transportation hubs, a combination that offers an end-to-end, modular and turnkey portfolio of fulfillment of services that are dynamic which incorporate a value added single point of contact. This allows for the improvement of supply chain performance by customers, the minimization of capital investment and risk. It also allows the precise planning, insight, redeployment of assets and the resources to core activities. FedEx fulfillment system also provides a centralized, multi-client distribution centers that are global. Their warehouses are scalable with order management capabilities. The integration of FedEx fulfillment services to an organization or business ensures that they get services that are seamless, and also provide late order cut-off times which extend to service day and the end to end supply that is designed to meet specific needs of a business (Scarpati, (2011).
FedEx also uses contractors as opposed to its competitors. This outsourced transportation solution ensures transportation within FedEx is end-to-end transportation managed; it is optimized, multi-modal and door-to door. FedEx relies on drivers that are contracted and not company employees to transport their cargo across the country. This ensures that the operation efficiencies and customer service for FedEx is improved. This enables FedEx to reduce on the company’s liability and lowering their payroll expenses since the independent contractors are not eligible to company benefits like vacations and even medical insurance.
FedEx has a critical inventory logistic that include a centralized, a multi-customer fulfillment centre, a forward stocking logistics network and a centre command that is central. This is integrated tightly with the FedEx global network that ensures that the management of critical products of FedEx is done (Scarpati, 2011).
References
Scarpati, K. (2011).FedEx talks supply chain logistics. Retrieved November 27, 2012 from http://www.supplychaindigital.com/global_logistics/fedex-talks-supply-chain-logisticsEvans, K. (2012).How does FedEx ground shipping work? Retrieved November 27, 2012 from http://www.ehow.com/how-does_5085552_fedex-ground-shipping-work.htmlFedEx. (2012).FedEx critical inventory logistics. Retrieved November 27, 2012 from http://www.fedex.com/us/supply-chain/
