UPS Logistics Group
Atlanta, Georgia USA
May 18, 2001
Key Personnel:
Dan DiMaggio, CEO
Lynette McIntyre, Marketing Director
Dan Silvernale, Investor Relations Manager
Dan DiMaggio is upbeat about UPSL's prospects. He should be! UPSL has
made a series of key purchases that fill geographical and operational
holes.
Burnham's critical parts addition is one of several UPSL has made as
it develops its strategic advantage in this large and profitable global
sector. Livingston not only adds coverage in Canada but provides competency
in the high value health care sector. Fritz will be an important synergistic,
sister company.
And then, there is the advantage of just being UPS. Tremendous brand
recognition, a universe of customers and a host of parent company plusses
like capital and IT can't hurt. The affable DiMaggio is a prototypical
UPS exec. He's smart, hard working and he earned the job. He is an ex
UPS industrial engineer who is committed to not overselling the business.
Work measurement and activity-based costing are being quickly developed
and added for major accounts. Within two to three years, UPS will excel
in knowing its operating costs and have superior modeling capabilities
similar to its brown-shirted parent.
The emphasis at UPSL will be on Value-added Transportation Management,
not warehousing. UPSL has made huge investments in IT to make this happen.
Not only does it have i2's TMS software, but it has a host of in-house
developed systems.
To handle the Ford finished auto business, UPSL has its own system, Car
Tracker™ which grew out of its standard track and trace code. For transportation
management, Global Track Master provides the coverage. Site selection
is done primarily with an optimzer developed off of Road Net technology.
Purchased transportation is about 20% of UPSL's current $1 billion in
gross revenue. Growth will be more than 20% for 2001. About half will
come from existing business - half from new accounts. Profitability should
be restored in 2001 as IT costs are covered. Margins should improve steadily
thereafter.
No wonder DiMaggio smiles more quickly and often these days.
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