Surprise! It's those dudes in brown. UPS's new supply-chain arm lets companies outsource
everything from cell-phone repairs to customer call centers. And yes, they do deliver.
Issue 79 February 2004, Page 62
Going the Extra Mile,"
a Web Exclusive about UPS' latest breakthrough technology.
They call it the "end of the runway," although technically speaking, it's on the wrong side of the fence
surrounding Louisville International Airport. And it's across the street. But close enough. This is prime real
estate for companies, as advantageous as rail position at Churchill Downs. The closer they are to the airport, the
closer they are to customers. Got a last-minute order? Not a problem. Throw it on a plane.
Naturally, UPS has a sprawling campus here. No surprise there. But what is surprising is what the world's
largest delivery company is doing for customers inside the six unmarked, off-white monolithic buildings.
April Bell, who used to load packages for UPS, works in an emergency room for electronics in Building One.
Her specialty is repairing printers. A few desks over, Jason Bennett is diagnosing digital projectors. Other
technicians are rescuing faulty laptops and cell phones. In another building, Shana Phillips, who used to drive a
UPS truck, is supervising distribution of sports apparel. Her team puts shirts and jackets on hangers, attaches
labels, rearranges cartons of basketball shoes by size or style. And in yet another building, UPS is packaging
Nikon digital cameras with a CD-ROM, camera strap, and operating instructions.
Where are the brown trucks? The snappy brown uniforms? Not here. This is a little-known subsidiary of the
giant delivery company. It goes by the unwieldy name of UPS Supply Chain Solutions, and it performs what
are, for UPS, some very peculiar functions--everything from fixing busted electronics to answering customer
phone calls to issuing corporate credit cards. Although SCS, as it is sometimes referred to in company
shorthand, is largely invisible--which suits many of its customers just fine--it represents the company's
aggressive play for new business and deeper, more lucrative relationships with companies. For those
companies, it offers ways to become faster, more efficient, more competitive.
UPS is tapping into a powerful trend. For years, Peter Drucker and other management gurus have argued that
companies are better off focusing on the front office and leaving the back office and similar functions to
someone else who specializes in those areas. In other words, find a company whose front office is your back
office. By offering to take on many of the various tasks known as the "supply chain"--which can encompass
every step in producing a product or service and getting it to customers--UPS is trying to be that company.
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