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With almost $48 billion in revenues and 246,000 employees in 200 countries and territories, United Parcel Service (UPS) is the world’s largest package distribution company. Fortune magazine rates UPS as one of the most admired companies in the country. The company grew from a small bicycle messenger service in 1907 to today’s mammoth delivery service in part by dictating every task for its employees. Drivers are required to step out of their trucks with their right foot, fold their money face up, and carry packages under their left arm. If a driver is considered slow, a supervisor rides along, prodding the driver with stopwatches and clipboards. To improve productivity to meet increased competition from other delivery services, UPS added 20 new services that required more skill. Drivers had to learn an assortment of new codes and billing systems and deliver an increasing number of time-sensitive packages that have special-handling requirements.
Drivers have long accepted such work requirements, taking comfort in good wages, generous benefits, and an attractive profit-sharing plan. All of this pressure, however, has taken its toll. Many UPS drivers have suffered from anxiety, phobias, or back strain, and at one point UPS had twice the injury rate of other delivery companies. UPS has spent nearly $1.5 billion since 1995 on improving health and safety programs. The total of days lost to disability has been on the decline.
To maintain its competitive advantage, UPS is using new technologies and better planning to achieve greater productivity without overloading employees. Competition from companies such as FedEx (where workers earn 30 to 50% less than UPS workers) also requires greater efficiency.
In the early 2000s, United Parcel Service spent $30 million to make its tracking and delivery system more efficient. One surprise finding: right turns improve efficiency. Now left turns are discouraged. Steve Goodrich, UPS Community Relations Mgr.: “One, they waste time. Two, it wastes fuel as we idle, waiting for those left turns to happen. And three, left turns are not as safe to make as right turns.”
It starts with the label on the package. Computer programs and GPS technology know where every package is and where they’re going. When it comes to the individual driver’s route, the computer plots which streets he’ll drive on. UPS can’t eliminate left turns entirely, but routing software is reducing the number as much as possible.
Question: Do you think eliminating left turns will really make a difference? Can you think of another company that is still using scientific management?
1. More personal, in depth understanding of the concepts.
2. Experience applying concepts to real world problems.
3. A more pleasant course experience for both students and instructor.
To participate, you must contribute to the on-line discussion forums by reading the material
before participating. Each student will post one initial comment on each of the seven discussion
questions. The definition of participation for this part is: thoughtful answers, responses, or
comments of at least 300 words for each of the discussion questions or statements.
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