INDUSTRY 4 0 AND IT’S IMPACT ON LOGISTIC PROCESS IN UPS COMPANY managing operations and the supply chain

Mostly taking advantage from Information and communication technologies in business process, UPS has formed a smart system which provide the best efficient service to customer in reducing cost and time of distribution and logistic progress. This application would be the result of the concept of Industry 4.0, which might require technological changes in integrity control and transparency in supply chain. This paper tries to shed some light to debate about Industry 4.0 and its impact in logistic industry, as well as how it changed UPS company while doing business in this era of technology.

Student Name:

NGO THI HONG TRUC

Student ID:

17453180

BSOM046 Title of Module:

Managing Operations and the Supply

Assignment 1:

INDUSTRY 4.0 AND IT’S IMPACT ON LOGISTIC PROCESS IN UPS

COMPANY

Lecturer Name:

Andrew Gough

Submission Date:

2018/06/01

1) Introduction 3

2) Literature review 4

3) Summary synthesis 6

4) Conclusions 8

References 9

1) Introduction

UPS – United Parcel Service – is a global company was found in 1907 in the United States which supplies package delivery, specialized transportation and logistics services After more than a century operating, UPS widen its business in over 200 countries and territories all around the world, managed the flow of goods, funds and informations According to 2017 Forbes Global 2017 ranking of the Wolrd’s largest transportation companies, UPS continued leading the top position which earned $61 billions in annual revenues getting from steady domestic and international growth in e-commerce trading (Forbes, 2017)

UPS provides a powerful competitive advantage using advanced technology, integrated network of physical, technological, and global resources aims to meet their customer’s need and grow their business UPS has significantly expanded its capabilities scopes primarily through industry leaders in retail shipping and business services, customs brokerage,

trucking and air freight, finance and international trade service As the result, UPS’s

customer relationships have deepened to include much more than basic transportation service

Mostly taking advantage from Information and communication technologies in business process, UPS has formed a smart system which provide the best efficient service to

customer in reducing cost and time of distribution and logistic progress This application would be the result of the concept of Industry 4.0, which might require technological changes

in integrity control and transparency in supply chain This paper tries to shed some light to debate about Industry 4.0 and its impact in logistic industry, as well as how it changed UPS company while doing business in this era of technology

2) Literature review

Industry 4.0

Industry 4.0 is the result of the Fourth Industrial revolution, which been developed from the first three revolution in the past (Kagermann et al., 2013) The first revolution occurred from

18th to 19th century with the development of the steam engine and industry of mechanization The second one is the period of using electricity, the conveyor belt and assembly line to create mass production This revolution took place before World war I (from 1870 to 1914) The third revolution refer to the massive use of electromics and advancement of information and communication technology which occurred from 1980s on going The emergence of cyber technologies in various field such as robotics, artifical intelligence, nanotechnology, quantum computing and biotechnology has contributed the Fourth industrial revolution (Natalia Szozda, 2015) Mainly characterized by advance in technology, “Industry 4.0” connect more and more people to the web, develop the efficiency of business and

regenerate the natural environment through better asset management (Klaus Schwab, 2017) Simply way to explain this term is a revised approach to manufacturing that the latest technological inventions and innovations was used (Moeuf et al., 2017)

Industry 4.0 has strong impact on two main fields, one is factories and other is distribution and procurement (Natalia Szozda, 2015) Fully automated company, mass personalization

of production and e-factories are the three possible archetypes which be applied from

Factory 4.0 Manufacturing company would be allowed to react faster to change demand in production volumes and diversity of their product through flexible production equipment and automation technology In the result, optimize their customer’s business and gain vast new potential customer The emergence of digital manufacturing was named as “Smart factory” –

is the application of information technologies including Internet of Thing, big data, cloud computing and artificial intelligence technologies (Shiyong et al., 2016)

Logistic 4.0

Due to limitation of discussion, this paper strongly focuses on the application of Industry 4.0

on logistic, which was definitely affected by Cyber-physical systems (CPS) CPS sets up an intelligent and autonomous system by using computing, communications and control

(Danda, 2016) This might contribute to the development of several new applications such as production processes, healthcare service, autonomous vehicles, transportation system, logistics services Logistic would be the most important application of Industry 4.0 while it takes many advantages from the development of technology in term of improving the speed

and better communication and cooperation in a more effective way and cost-efficient manner

of service provision and logistics by shortened production cycles, safety and security and automatically maintenance (Macaulay, J., 2015)

“Smart logistic” is defined as the technology driven approach of “Smart products” and “Smart services” which can perform tasks that normally performed by people (Uckelmann D, 2008)

“Smart logistic” helps to improve the level of customer service, the optimization of the

production and make lower prices of storage by enhancing the flexibility and the adjustment

to the market changes But the weakness of Smart logistic is the high dependency on the technology, which means it must to change accordingly to the actual technology driven Example is given to clarify how technology work on logistic process Before the appearance

of Internet, logistics is controled by simple transport process But now, all the data is

collected in mordern system and well-organized by Internet All the information is generated for enterprises and carriers which are used in the real time Everyone would find it easy to place a booking and track their goods’s delivery status since all the datas associated with physical object can be collected and monitored efficiently Meanwhile, every information is clear to avoid any mistake and delay in delivery process, ensure the best service to end-to-end customer

There are five technological implementations of Logistic 4.0

Firstly, Resource Planning would be more effective in term of increase the productivity by

CPS implemetating On the other hand, visibility and adequate forecast will substantially enhance which optimize the degree of specialization of human resources

Next, Warehouse systems easily be well-managed since the right location and arrival time of

goods have been setted up by CPS The entire supply chain can prevent unnecessary cost, meanwhile save the operating cost in warehouse management

Apply GPS technology, Transportation Management systems can locate exactly where to

ship the goods to, reduce the time and eliminate the mistake in delivery process Every data will be collected into system and give an effective way to tracking transportation information

Intelligent transportation system provides the cooperation platform for transport and

navigation systems It plays a main role in enhancing the safety, security, and reduce traffic risks For environment, it also gives a hand in reducing the carbon emissions and air

polution

Finally, in this IoT era, all information need to be strongly secured when doing business,

especially in logistic industy Information security develops the ability to protect the

information asset and IT infrastructure

3) Summary synthesis

The main business of UPS is giving supply chain solution including logistic and distribution, transportation and freight (air, ground, sail); freight forwarding to nearly 200 countries and territories; international trade management; and custom brokerage Further to key services, UPS also provide specialty services such as service parts logistics, technical repair and configuration; supply chain design and planning, return management

UPS offer IT technogy application called API - Application Programming Interfaces - are programming instructions and standards allowing customer to access and integrate UPS functionality directly into enterprise system and website These advance technologies are designed to maximum flexibility for their customers during integrating process By integrating UPS transportation functionality like Rating, Shipping or Tracking directly into customer’s business system, it makes the user experience an efficient and save-cost process in delivery and shipping term

Whether it’s making logistic processes faster for customer or giving online shoppers

information they need to make the decisions, API smooth the way without any toggling between customers’s systems API can help boost both productivity and sale by incorporate functionality

There are various functions provided by API

The first one is The Address Validation which can check a customer’s address Whenever

discovered an error, it provides suggested alternatives to customer for easy checking This function can help to catch errors before they catch up with customer, meanwhile reduce operating costs and improve customer service

Secondly, Rating API lets customer compare the cost, rate them and select shipping service

based on their need and budget Some customers want their packages right away who can choose express services or other choose standard services when they have more time for delivery to save cost No hiden information exist while customer can know the exact

schedule their package will arrive, how much shipping will cost and whether it is the best price or not

Next, API can provide consistent, up-to-date shipping information based on the origin and

Getting close to company’s business needs, Shipping API customise the delivery into

isystem without any addition of expensive hardware or software Creating greater

efficiencies in the mailroom to lower overall costs and implement better controls over

shipping activities

The API Tracking let online shopper track their shipment right from e-commerce site using

customer’s reference or order number They return to customer site to track their shipment status, in the meantime, blend seamlessly with the look of site By offering end-to-end tracking order service, customers also lengthen the amount of time spending on their

website and drive additional traffic

The UPS TradeAbility API works with customer’s business applications seamlessly once

intergrated to give the information and services managing international trade processes All the information regarding to latest export license requirement or any country-specific trade relations, procedures and restriction before importing would be easily connect from a signle web interface This function is a suite of API which adds a new level of customer service and functionality to their enterprise or e-commerce website

And the most important fuction letting UPS become the most reliable logistic company in the

world is Paperless document API Customer enables to upload customised trade documents

for customs clearance to the UPS documents repository called “Forms History” It would make international shipments more efficiently by linking the document image to the shipment identification number by manifesting system All the process could be based on Paperless Document API upload process Paperless document API issues the E-Invoice to customer, which reduce the paper’s use comsumption, save the energy and reduce the pollution This

is a sustainable development strategy based on “green technology” of UPS which create competitive advance in logistic industry

Higher level of interating UPS technology is Worldship which gives customer several options

for getting the information required to generate shipping labels It would be perfect for a big company who wants to pull complete shipment information one order at a time or as a batch When setting up data into and out of Worldship, it can help to streamline order entry,

customer service, accounting, procurement, and billing processes

4) Conclusions

“Having the right product at the right time at the right place and in the right condition – these are the well-known requiments for logistics and transportation in general” (Uckelmann D.,2008)

The advance of technology is driving appoaches the growing operational demands and the complexity in fulfilling customer requirement Adaptability and proactivity would become more and more important to achieve new technology integration The highly demand logistic markets and complexity of logistic networks have created the significant change from

traditional supply chains to open supply networks which require new methods, products and services The smart logistic provides greater accuracy and efficiency in logistic operation by using the advantage from Internet revolution (Amy J C Trappey, 2017)

The evolution of Information and Communication technology in Industry 4.0 era is becoming avoidable Maximum applying technology in logistic and transportation, UPS offer the API program to customise customer’s business system Every single customer of UPS will enjoy the depth of UPS service and capabilities, reduce operating cost, smooth the business processes and better controls over the shipping activities As the result, satisfying

customer’s need is one of the most important factor in building the sustainable development

of UPS in future, helping to gain more and more customers as well as profitability

Furthermore, in this uncertainty world, everything changes fast and rapidly day by day No one can say that Industry 4.0 revolution is the last revolution in the world Always be ready for the change, company can able to catch any new technology or new revolution, adapt and take advantage from them to maximize customer’s satisfying and keep business moving higher

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