What exactly is UPS Supply Chain Solutions?

[Dutch Dawg]

The other evening a UPS Supply Chain Solutions tractor trailer was observed inbounding at a package hub for at least unload and possibly more. I overheard several persons discussing this and one remarked 'There go more UPS jobs' in a cynical sort of way. Another was heard to say' Naw, he's just here doing that zone skip stuff.' Then another chimed in 'How do you know it's actually zone skip?'

I gotta tell you UPS SCS's role was never really clear to me before, but now I'm even more confused after listening to these fellows discussion. Perhaps someone could shed some light?

 

[Sammie]

The other evening a UPS Supply Chain Solutions tractor trailer was observed inbounding at a package hub for at least unload and possibly more. I overheard several persons discussing this and one remarked 'There go more UPS jobs' in a cynical sort of way. Another was heard to say' Naw, he's just here doing that zone skip stuff.' Then another chimed in 'How do you know it's actually zone skip?'

I gotta tell you UPS SCS's role was never really clear to me before, but now I'm even more confused after listening to these fellows discussion. Perhaps someone could shed some light?

If you were to start your own business, the UPS Supply Chain Solutions, for a fee, will get you up and running. They can design your warehouse, set up your computers, even provide same day delivery for your product. That trailer in your hub was a UPSer working with whatever company needed our help.

More on this at:

Welcome to UPS Supply Chain Solutions

 

[Dutch Dawg]

If you were to start your own business, the UPS Supply Chain Solutions, for a fee, will get you up and running. They can design your warehouse, set up your computers, even provide same day delivery for your product. That trailer in your hub was a UPSer working with whatever company needed our help.

More on this at:
Welcome to UPS Supply Chain Solutions

Hmmm...the driver didn't appear to be wearing any type of uniform and the fancy tractor he was driving with the magnetic sign on the door didn't look like anything I've ever seen in any of UPS's fleets. Are you sure he was a UPSer? Or weren't you referring to the driver?

 

[Sammie]

Hmmm...the driver didn't appear to be wearing any type of uniform and the fancy tractor he was driving with the magnetic sign on the door didn't look like anything I've ever seen in any of UPS's fleets. Are you sure he was a UPSer? Or weren't you referring to the driver?

Well, shut MY mouth...

In a dept. I worked in, my understanding was that Supply Chain Solutions is a service UPS offers, like Next Day Air.

But in searching further for your answer,

"Leverage our multi-carrier capabilities. UPS Supply Chain Solutions can help you match the right carriers with the right service at the right cost, enabling your company to reach customers efficiently around the country or around the world."

I doubt this would impact the UPS jobs you mentioned. For instance, if you produced vaccines that would spoil in 3 days,
this would be a special way to deliver them...

 

[constructively dissatisfi]

Well, shut MY mouth...

In a dept. I worked in, my understanding was that Supply Chain Solutions is a service UPS offers, like Next Day Air.

But in searching further for your answer,

"Leverage our multi-carrier capabilities. UPS Supply Chain Solutions can help you match the right carriers with the right service at the right cost, enabling your company to reach customers efficiently around the country or around the world."

I doubt this would impact the UPS jobs you mentioned. For instance, if you produced vaccines that would spoil in 3 days,
this would be a special way to deliver them...

Way more than that. Just look at the SCS website to read all you want about what they do.

Welcome to UPS Supply Chain Solutions

 

[Salesguy]

Ocean freight is so 1990...

 

[Deeohem]

SCS could be all sorts of things. Menlo Air Freight became Supply Chain Solutions. Fritz (ocean freight) became Supply Chain Solutions. SCS does warehousing for the likes of IBM and HP. SCS has a huge electronics repair facility is Louisville (all UPS computer equipment goes there for repair, we use part of the smallest of 7 buildings) SCS also handles electronic waste recycling.

 

[Dutch Dawg]

This same driver/vehicle combination has been observed at the same hub location during the same hour of the day for four consecutive weeknights thus far. Some believe he is currently transporting zone skip parcels on a daily basis. Zone skip is nothing new around here. However the use of another UPS division to actually zone skip parcels is.

Some have suggested the use of another UPS division such as SCS to zone skip (if that is indeed occuring) could accelerate customer participation causing a loss of feeder volume. Because UPS would be more inclined to push zone skip with UPS now getting a portion of revenue from that step.

While that might have nominal implication today, perhaps a few years down the road, the impact felt could be significant with regard to feeder jobs. Some might believe this to be speculation or conjecture, however it's still something to think about.

From what has been observed of the daily time table and point of origin for this SCS driver, I'm not convinced UPS feeders could not meet the same schedule. I do believe in all probability it would cost the customer more and there you have the crux of the situtation. One UPS division undercutting another.

Then again this could all be just one big misunderstanding.

 

[tieguy]

This same driver/vehicle combination has been observed at the same hub location during the same hour of the day for four consecutive weeknights thus far. Some believe he is currently transporting zone skip parcels on a daily basis. Zone skip is nothing new around these parts. However the use of another UPS division to actually zone skip parcels is. Some have suggested the use of another UPS owned division such as SCS to zone skip (if that is indeed occuring) will accelerate participation of zone skip as UPS would be more aggressively promoting the idea now that they would still get a portion of the revenue from that step. While that might have nominal implication today, perhaps a few years down the road, the impact felt could be significant with regard to feeder jobs. Some might believe this to be speculation or conjecture, however it's still something to think about. From what I've observed of the daily time table and point of origin for this SCS driver, I'm not convinced UPS feeders could not meet the same schedule. I do believe in all probability it would cost the customer more and there you have the crux of the situtation. One UPS division undercutting another.

Zone skip is one issue that requires a high degree of flexibility and understanding on the part of the teamsters.

You have to understand that the customer is already inclined to skip zones to save money. If an outside customer that specializes in this business guides them then there is a chance that we would not see any of those packages since they could also guide them to skip zones in a competitors network. By getting into the zone skip business in this case we end up handling those packages once that trailer arrives to your building. teamsters unloading those packages, teamsters sorting them, teamsters loading them, teamster feeder drivers moving them to the next building and teamsters delivering them. its a win for us and for the teamsters since those packages are moving in our system once the customer has skipped his zones. Thats the benifit of SCS and the whole logistics concept. We integrate our business with the customer and help steer those packages we were losing into our system.

 

[Dutch Dawg]

I can see both sides to this situtation. To me while this might be a concern it's not so much about preserving the jobs of my teamster brothers and sisters as preventing the core business from being erroded away.

Allow me to get a bit carried away for a moment if I haven't already. Hypothetically speaking say that ABC company specialized in presorting and transporting client's packages for zone skipping. ABC company was so good at this using cheap labor that they could in fact take a package to it's destination center to be sorted by UPS teamsters, loaded onto package cars by UPS teamsters, and delivered by UPS teamsters to the consignee's address. UPS in turn purchased ABC company and carried on what ABC had started. I realize this is a far cry from what was previously discussed. But would you still describe this as a win win situtation?

 

[constructively dissatisfi]

We integrate our business with the customer and help steer those packages we were losing into our system.

Not really. SCS is all about increasing non-package revenue. Many SCS customers are current or potential package customers but many are not. Most SCS business doesn't really have much to do with package. It's mostly Air Freight, Ocean Freight (both using other carriers extensively) and distribution services where SCS runs warehouses for customers.

 

[User]

What is going to cost us more jobs: SCS zone skips? or losing business to a non-Union competitor???? You can keep your eye on that truck with the magnetic SCS sticker pulling up to your hub, but behind you is an orange and purple feeder pulling away with your job...

 

[tieguy]

Not really. SCS is all about increasing non-package revenue. Many SCS customers are current or potential package customers but many are not. Most SCS business doesn't really have much to do with package. It's mostly Air Freight, Ocean Freight (both using other carriers extensively) and distribution services where SCS runs warehouses for customers.

Then your point would be that we stole air frieght and ocean frieght from teamster work? The examples you give are clearly new business that we did not have before. The customer makes the final decision on who handles the packages but by integrating our logistics capabilities with the customer we have the opportunity to more easily convince the customer to use ups systems for those packages.

 

[Dutch Dawg]

What is going to cost us more jobs: SCS zone skips? or losing business to a non-Union competitor???? You can keep your eye on that truck with the magnetic SCS sticker pulling up to your hub, but behind you is an orange and purple feeder pulling away with your job...

Oh there is no doubt that Fed-X, DHL, and the Postal System to name a few are factors in the current business climate. I believe what I was attempting to convey in this thread was that some in Brown now percieve a new threat coming from within the very company they work so hard for every day.

 

[tieguy]

Oh there is no doubt that Fed-X, DHL, and the Postal System to name a few are factors in the current business climate. I believe what I was attempting to convey in this thread was that some in Brown now percieve a new threat coming from within the very company they work so hard for every day.

I definitely understand where you're coming from. The company has to be prepared to sell these new avenues to business so that our teamster workforce feels comfortable with it.

 

[constructively dissatisfi]

Then your point would be that we stole air frieght and ocean frieght from teamster work? The examples you give are clearly new business that we did not have before. The customer makes the final decision on who handles the packages but by integrating our logistics capabilities with the customer we have the opportunity to more easily convince the customer to use ups systems for those packages.

I don't understand what you mean by "stole air freight and ocean freight from teamster work". Since the 1997 strike the company has moved aggressively away from having all of our eggs in one basket that has Teamsters stomping around near the basket. SCS does generate a relatively small amount of Package volume but that is NOT the primary purpose of SCS. SCS is an $8B chuck of UPS' $48B revenue. Trust me. I know a whole lot more than you do about what SCS does and doesn't do and how it relates to the Package business.

 

[tieguy]

I don't understand what you mean by "stole air freight and ocean freight from teamster work". Since the 1997 strike the company has moved aggressively away from having all of our eggs in one basket that has Teamsters stomping around near the basket. SCS does generate a relatively small amount of Package volume but that is NOT the primary purpose of SCS. SCS is an $8B chuck of UPS' $48B revenue. Trust me. I know a whole lot more than you do about what SCS does and doesn't do and how it relates to the Package business.

Never said it was the primary purpose of scs, never said SCS generated 100 percent of ups volume. Just address the points I did make. When you integrated SCS into a customers site where we warehouse and ship for them does that not give us greater influence on where the small package volume goes? When we help a customer zone skip does that not keep us in the door where we can influence who the customer ships his small package volume with?

 

[constructively dissatisfi]

Never said it was the primary purpose of scs, never said SCS generated 100 percent of ups volume. Just address the points I did make. When you integrated SCS into a customers site where we warehouse and ship for them does that not give us greater influence on where the small package volume goes? When we help a customer zone skip does that not keep us in the door where we can influence who the customer ships his small package volume with?

You clearly don't understand the services SCS provides. Your statements don't make any sense. What do you mean by "integrated SCS into a customers site"? Maybe you could explain how SCS "helps customers zone skip". I'd be glad to respond to your questions if I had any idea what in the wide, wide world of sports you're talking about.

 

[Dfigtree]

The other evening a UPS Supply Chain Solutions tractor trailer was observed inbounding at a package hub for at least unload and possibly more. I overheard several persons discussing this and one remarked 'There go more UPS jobs' in a cynical sort of way. Another was heard to say' Naw, he's just here doing that zone skip stuff.' Then another chimed in 'How do you know it's actually zone skip?'

I gotta tell you UPS SCS's role was never really clear to me before, but now I'm even more confused after listening to these fellows discussion. Perhaps someone could shed some light?

And it should be noted that UPS wentpublic to have currency to make acquisitions such as Menlo ... "Operating profit for the Supply Chain & Freight segment decreased by $34 million for the quarter, largely due to lost sales at our forwarding and logistics unit and continued integration costs associated with the Menlo Worldwide Forwarding acquisition."

From UPS 10Q on March 10, 2006 ...

Operating Profit

The following table sets forth information showing the change in operating
profit, both in dollars (in millions) and in percentage terms, as well as the
operating margin for each reporting segment:



Three Months Ended
March 31, Change
2006 2005 $ %
Reporting Segment
U.S. Domestic Package $ 1,185 $ 1,028 $ 157 15.3 %
International Package 395 348 47 13.5
Supply Chain & Freight (25 ) 9 (34 ) (377.8 )

Consolidated Operating Profit $ 1,555 $ 1,385 $ 170 12.3 %


Three Months Ended
March 31,
2006 2005
Reporting Segment
U.S. Domestic Package 15.9 % 15.1 %
International Package 18.3 % 18.9 %
Supply Chain & Freight (1.3 %) 0.7 %
Consolidated Operating Margin 13.5 % 14.0 %




Supply Chain & Freight Operations Supply Chain & Freight revenue increased $664 million, or 53.9%, for the quarter. UPS Freight, formerly known as Overnite Corp. (acquired August 2005), provided $477 million or 38.7% of the increase in revenues. UPS Freight offers a variety of less-than-truckload (LTL) and truckload services to customers in North America. The results of operations have been included in the Supply Chain & Freight reporting segment since the August 5, 2005 acquisition date. UPS Freight generally reported improvements in its operating performance measures in the post-acquisition period versus the same period a year ago when it was not a part of UPS, including improvements in average daily LTL shipments and average LTL revenue per LTL hundredweight.
Forwarding and logistics revenue increased 16.1% for the quarter, largely due to ongoing changes in the business model for this unit. The forwarding and logistics business is continuing to move towards a model that places more transactional ownership risk on UPS including increased utilization of UPS-owned assets. This has the effect of increasing revenue as well as purchased transportation expense. The increased revenue associated with these forwarding transactions was offset by lost sales due to customer turnover. In addition, revenue decreased by $22 million during the quarter due to currency fluctuations.
The other businesses within Supply Chain & Freight, which include our retail franchising business and our financial business, increased revenue by 1.3% during the quarter. This revenue growth was primarily due to increased revenue at our financial services unit.
Operating profit for the Supply Chain & Freight segment decreased by $34 million for the quarter, largely due to lost sales at our forwarding and logistics unit and continued integration costs associated with the Menlo Worldwide Forwarding acquisition. This decrease was partially offset by the operating profits generated by UPS Freight. Currency fluctuations did not affect operating profit during the quarter.

 

[tieguy]

You clearly don't understand the services SCS provides. Your statements don't make any sense. What do you mean by "integrated SCS into a customers site"? Maybe you could explain how SCS "helps customers zone skip". I'd be glad to respond to your questions if I had any idea what in the wide, wide world of sports you're talking about.

I'm sorry I didn't do a better job of explaining scs to you. Take one of the many companies we warehouse and ship for. If I am a customer who uses ups to pickup and deliver its real easy to tell ups to stop coming to my door and to tell someone else to make the pickup and delivery. When ups controls the entire process from warehousing to packing, shipping , pickup and delivery then we integrate into their business and make it much more difficult for them to throw us out. This I know is one example of SCS helping or benifiting us. I know there are many other factions to scs that have nothing to do with small package I was not referring to them in this case.