FedEx - The E-procurement Journey

            
 
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Case Details:

Case Code : ITSY016
Case Length : 10 Pages
Period : 1999-2001
Pub Date : 2002
Teaching Note : Available
Organization : FedEx
Industry : Service
Countries : USA

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.



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"Ariba Buyer enables FedEx to lower costs by simplifying internal procurement processes, reducing purchasing cycle times, and decreasing costs. By creating greater purchasing efficiencies for many of our commodity products - such as PCs, office supplies, and vehicle parts - we are able to better serve our internal customers while lowering our overall costs."

- Chris Cawein, Manager (Business Systems), FedEx, in 2000.

Background Note

The history of Federal Express, the leading transportation, logistics and supply chain management company dates back to 1971, when Frederick W. Smith (Smith) felt the need for an airfreight system to facilitate quick delivery of documents.

The company was incorporated in June 1971 at Memphis as Federal Express and started operations in 1973.

After reporting its first profits in July 1975, Federal Express very soon emerged a trendsetter in the express delivery industry.

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By the early 1980s, Federal Express was well established and its growth rate compounded at about 40% per year and the company crossed the $1 billion revenue mark in 1983. The following year, FedEx began its overseas operations with services to Europe and Asia.

In 1985, the company started its regular scheduled flight to Europe. In 1988, the first direct scheduled cargo service to Japan was started. In the late 1980s, Federal Express acquired Tiger International Inc. in February 1989, which helped the company become the world's largest full service all-cargo airline.

In 1994, the company adopted FedEx as its primary brand name as part of a corporate identity updation exercise. In 1995, the company acquired Evergreen International Airlines, Inc.'s all-cargo route authority that enabled it to enter China. FedEx became the sole US-based all-cargo carrier with aviation rights to China. In 1998, FedEx acquired Caliber System Inc.

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