a).
UPS is one of the largest shipping companies in the world, manages and delivers over 15 million packages on a daily basis. Innovative practices such as RFID and equipment tracking have been critical in the organization’s reverse logistics model (Medhat & Awadalla, 2018). The company’s RFID efforts are revealed through their investment in two RFID companies Impinj In a supplier of chips and tags and Savi Technology which provides software for creating RFID supply chain networks. UPS uses RFID in two programs in Atlanta. In the first program UPS places tags on reusable containers used to ship small shaped items. In addition, UPS places RFID tags on vehicles to monitor activities at control points as they enter or leave a facility. In addition to the RFID, UPS also uses equipment tracking through particular barcodes that enable the system to track the location of parcels at any given point all over the world.
b)
The innovative practices have proved to be valuable to UPS and their implementation has given the company a competitive advantage. Although there have been considerable costs in innovative practices in reverse logistics, opportunities are numerous that have to profitability. If the innovative practices were not implemented, the reverse logistics model would suffer in a number of ways. First, there would be an open-loop for competitive advantage. With the increased demand for free shipping innovative practices is crucial to delight customers while giving discounts on costs involved. Secondly, there would be a lack of smart tagging and trace operations yet the connection of products throughout their life-time cycle is the backbone of digitalized innovative practices (Soysal & Bloemhof- Ruwaard, 2017).
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c)
Basically, the drivers of reverse logistics are customers, costs, competitors, and compliance with environmental regulation. Therefore the innovative practices at UPS have been able to effectively manage the supply chain leading to improved margins, customer satisfaction, and improved compliance to regulations governing the environment (Reyes, Worthington & Collins, 2015). Today, the logistic process is controlled by customers. Innovative practices have enabled improved profits which in turn allow customers to drop off return packages at convenient locations, which are then tracked either by RFID or tracking equipment and processed. To grant customers more satisfaction, the company came up with the UPS Returns flexible access that has accelerates return of shipped goods without the hassle of shipping labels for customers or additional manpower to do the job. Most importantly the warehouses of UPS are equipped with RFID tags and smart tracking equipment enabling safer, faster, and cost-efficient operations.
d)
With the implementation of innovative practices UPS has realized that both costs are reduced as well as increase revenue. According to the Reverse Logistics Association, the volume of returns from UPS is estimated to be between $15 and $20 billion at cost (Soysal & Bloemhof- Ruwaard, 2017). This presents a significant fraction of the GDP of the annual sales of an organization. The UPS innovative practices in reverse logistics also give visibility into the anticipated returns volume. This prepares the company on how to handle the returned goods. Sequentially the company is aware of warehouse staffing which cuts on costs of having extra members when the returns volume is low. In addition the company minimizes the costs of carbon footprint, especially for spare parts. With innovative practices UPS is able to detect defective parts that are then sent to the manufacturer for repair instead of being shipped to the client for sorting and then returned. The innovative practices efficiently cut a leg of transportation providing a more suitable and cost-effective way for the company to sustain logistics. Through cost-saving roles, the fiscal bottom line of UPS benefits.
References
Medhat, H., & Awadalla, A. (2018). Real-Time Shipment Tracking System Using RFID. INTERNATIONAL JOURNAL OF COMPUTERS & TECHNOLOGY, 17(1), 7163-7180.
Reyes, P. M., Worthington, W. J., & Collins, J. D. (2015). Knowledge management enterprise and RFID systems: Adoption to supply chain performance. Management Research Review, 38(1), 44-66.
Soysal, M., & Bloemhof-Ruwaard, J. M. (2017). Toward sustainable logistics. In Sustainable Logistics and Transportation (pp. 1-17). Springer, Cham.
