Quality Report On FedEx Company

Overview

In our project, we chose to talk about the service providing company, FedEx. We will be giving a little background on the organization. Furthermore, we will be discussing the SWOT analysis that we have interpreted, as well as the assessment of the quality practices and assessment methods that the organization uses In terms of quality. Apart from that, we will be highlighting our analysis of the service design and the service process of the organization. And finally concluding with our recommendation for the company.

Company Profile

FedEx is an American multinational courier delivery service company that serves worldwide. It had its headquarters in Memphis, Tennessee, US. FedEx is a publicly owned company. It was founded in 1972 (about 47 years ago).

Their services include: Post-delivery, express mail, freight forwarding and third-party logisticFedEx is an abbreviation for FEDeral ExpressThe FedEx strategy is to independently operate and compete to provide a competitive advantage for their company. Their variety in portfolio allows them to meet the needs on their customers and users. Most of which are those who use 2 or more of their services.

FedEx Corp provides customers and businesses worldwide with a broad portfolio of transportation, e-commerce and business services. Consistently ranked among the world's most admired and trusted employers, FedEx inspires its more than 425, 000 team members to remain focused on safety, the highest ethical and professional standards and the needs of their customers and communities.

Goals

FedEx Corporation will produce superior financial returns for its shareowners by providing high value-added logistics, transportation and related business services through focused operating companies. Customer requirements will be met in the highest quality manner appropriate to each market segment served. FedEx will strive to develop mutually rewarding relationships with its team members, partners and suppliers. Safety will be the first consideration in all operations. Corporate activities will be conducted to the highest ethical and professional standards.

ISO certification

Quality is a tradition at FedEx. In 1990, FedEx became the first service company to win the Malcolm Baldrige National Quality Award. In 1994, it became the first transportation company to receive worldwide ISO 9001 certification. This tradition continues with QDM, as they drive their quality performance levels even higher.

SWOT Analysis of the Company

Strengths

Huge network – Fedex is one of the biggest organizations as far as labor utilized and it stands ninth on the planet for the quantity of labor. It has near 350, 000 workers compensating for one of the broadest circulation systems. Other than workers, it has nearness in 220 nations, incalculable warehousing stops and stores.

Economies of scale – One reason that little organizations are not ready to win high edges are a result of Economies of scale. In the event that a FedEx truck needs to move from indicate A point B, at that point it will be in an ideal situation conveying 1000 bundles instead of conveying only 200. This is on account of the expense of petroleum and the lease of the truck are settled. The truck is moving at any rate. So the economies of scale sets in when there are numerous bundles moving in a solitary bearing in this way diminishing the settled expense and expanding the edges earned. FedEx has immense economies of scale because of its well-known brand and because of getting gigantic dispatches in this manner lessening settled expense.

Competitive rates – Due to economies of scale, FedEx can stand to give a decent aggressive rate. Its real rivalry is with BlueDart, UPS and a few provincial players. Notwithstanding, FedEx has outstanding amongst other rates in the market where coordination’s is concerned.

First mover advantage because of technology – of course there were numerous organizations which were existing before FedEx. Be that as it may, It was FedEx which began a framework 2 decades ago where you could actually track your bundle and where it currently was. In the multi-billion dollar transport industry, this was critical to numerous enterprises and this helped a great deal in light of the fact that FedEx procured numerous customers who tied up with Fedex in view of their following framework. Today, all organizations utilize these following tracking system.

Time commitments – One of the major advantages of Fedex is its time commitment. It has delivered on this aspect again and again over the years. In Fedex, if you do an overnight delivery, then the package will definitely be delivered the other day on your doorstep. That is for sure. Fedex operations are managed so well that timely deliver becomes the essence of the brand.

Marketing – One of the most famous product placements comes in movie Cast Away. The movie was based on a Fedex employee who gets lost on an island and stays there for years surviving in the wild. Besides this, there have been many smart product placements by FedEx over the years making it a smart marketer. It also sponsors several teams and sporting events and also has some creative ads.

Brand equity – As per Forbes, FedEx is ranked 83th as per its brand equity and it has a brand valuation of a whopping $7. 5 billion. The company spends $400 million a year on advertising and building a brand.

Weaknesses

Transport damages – One of the major problems facing any transport industry especially in developing nations is the damages caused during transport. This affects the bottom-line of the company directly because the company has to honor the claims.

Claim policies – Even though transport damages are a reality, FedEx policies with regards to claims is known to be loose and the claims are hardly honored. As we are moving to an E-commerce economy, this becomes more and more important.

Dependence on US – US is the major revenue driver for FedEx and though this is not a bad thing per se, but dependence on any 1 thing for majority of the revenue is always a risky business proposition. FedEx smartly recognizes this and is trying to expand faster.

Saturation – A major problem of a service business is that differentiation becomes difficult because all services adopt the differentiation points very fast. Although FedEx is a top brand and consistency is its competitive advantage, but the market is completely divided and saturated between brands.

Opportunities

Ecommerce boom – One of the major advantages FedEx has especially in developing economies is that the E-commerce boom is catching up and transportation is in huge demand. As a result, there are so many packages flowing in daily that there is full capacity utilization. Fedex already has the assets to cover this boom in E-commerce and it has a good and competitive rate to become a market leader.

Making systems faster – A core opportunity to any service is to make their systems faster which in turn will result in better customer satisfaction.

Strategic tie ups – FedEx already has strategic tie ups in place with all E-commerce companies. However, the exposure is lesser in developing countries because of regional competition. As a result, more strategic tie ups with more companies will mean a higher market share. Therefore the corporate push and pushing more customer acquisition is important for the company right now.

Mergers and acquisitions – FedEx had a fantastic acquisition in the form of TNT express and Europe is the playing field for FedEx right now. Similar acquisitions across the market will help FedEx increase the overall presence in the market.

Threats

Price wars – One of the major threats in the SWOT analysis of FedEx is the market saturation and the price war ensuing from it. FedEx is now immune to new entrants in the market but nonetheless margins are under pressure because of the huge expenditure and the competition from the other top 3 brands. This price war therefore affects the bottom-line more than the topline.

External business environment – One of the major elements in external business environment is the current fuel cost in the country. The higher the fuel cost the more it affects the bottom-line. Similarly, availability of space and manpower is another factor affecting the company. Government intervention and labor and transport policies of the nation affect the brand too. Hence the brand has to adjust its own operations depending on the external environment in each country.

Capacity vs Demand management – It is always difficult for a logistics brand to balance capacity and demand. If the capacity is too much and the demand is not that high then the company is suffering loss due to fixed costs. On the other hand, if the demand is too high and the capacity does not support then the company is facing opportunity loss. As a result, total capacity vs demand management always is challenging to any brand especially to FedEx.

Assessment of the FedEx’s Quality Practices

FedEx is never satisfied when it comes to Quality. And no matter how good it maybe, they always seek to improve it and do better for their customers. Although FedEx is already renowned for its quality, it uses an approach called QDM (Quality Driven Management), which it has built over decades of experience. It uses the ideas and practices of the best philosophies (six sigma, lean and total quality management). QDM is a unique quality philosophy and methodology, one built by FedEx for FedEx that’s based on a belief deeply embedded in their culture – that customers define quality.

The internal practices of the organization include the following key aspects:

• Regular training to ensure the effective use of quality related tools at all the levels of the organization
• The use statistical software tools to enable a precise analysis and use of data that Is related to quality issues
• Regular weekly provisions of resources to managers, to assist them as well as their teams to effectively use QDM for improving quality daily
• The active use of systems and practices enabling employees to understand customer needs completely and allows them to develop effective quality solutions.

To monitor the progress, QDM includes an enterprise wide system of metrics called the FedEx Service Quality Index that keeps the company focused on things that matter the most to customers. FedEx developed a service quality indicator with 12 important components. Each of which describes work or process failures internally that cause customer dissatisfaction. The SQI includes a few of the following indicators that are most important:

• Wrong day late service failures
• Complaints reopened by customers
• Missed pick-ups
• Lost packages
• Damaged packages.

To solve this issue and meet standards, FedEx used automated tracking systems to gather and track data. The SQI reports are transmitted to workers at all FedEx sites. Apart from that Quality Action Teams understand and do an overview of the data to identify the root causes of the problems that were determined in the SQI. Another way in which FedEx ensures standards are met is through performance support. FedEx encourages its employees to make decisions and be more innovative that are beyond the goals given to them and also provide the employees with the IT that they need to improve. The company also considers employee satisfaction and safety, as part of their quality standards.

They have various safety procedures and policies in place as they keep their employees first. They also focus on recognition programs and try to reward employees when certain standards are met or crossed, at the same time empowering them to do better.

Finally, while the SQI can measure the internal process performance and conformance with standards, FedEx relies on customer satisfaction surveys to measure satisfaction from the customer’s perspective. The survey can not only capture aspects of the service quality does not include but also captures the change in expectations of the customers. This enables FedEx to recheck the requirements of the customers and their perceptions and decrease the GAP to update their measures accordingly.

The customer satisfaction survey consists of a quarterly telephone survey, a targeted customer survey, FedEx comment cards, a customer automation survey, and a Canadian customer survey.