Consolidation and relocation project

Running head: FedSlo Inc. 1

FedSlo Inc. Business Proposal 6

FedSlo Inc. Business Proposal

Candy Marvin, David Magge, Manuel Pacheco, Bryan Miller, Robert Morony

Embry-Riddle Aeronautical University

Authors’ notes:

This paper was written in MGMT 420, Production & Operations Management, for Professor Maggie Rivers and submitted on 04 July, 2014.

Table of Contents Mission 3 Vision 3 Company Description 3 Project Organizational Structure 3 Current Market Issue 4 Proposed Method to Mitigate Issue 4 References 5

Mission

To increase our market share to 75% through serving the American general public by providing real-time package tracking to our consumers and revitalization of our company methods through technology integration at every level while maintaining a 97% successful delivery rate and a 95% consumer satisfaction rate.

Vision

To enable exceptionally fast transport, redefining the transportation industry for all humankind.

Company Description

FedSlo Incorporated is a market leader as a package delivery company specialized in single package and less-than-truckload (LTL) freight services operating inside the continental United States of America. In conjunction with regional freight and package trucking services, FedSlo Inc. also utilizes domestic airlines and third-party air transport services to expedite freight and package transport.

Project Organizational Structure

Candy Marvin: Logistics Management

David Magge: Budget Management

Manuel Pacheco: Support Services Management

Bryan Miller: Third-party Relations Management

Robert Morony: Operational Strategizing

Current Market Issue

Our first issue involves several small to medium sized regional transportation companies have eroded our current market share in the United States from 51% to less than 35%. One way these regional companies have achieved a combined 16% market share is through relative low overhead costs, thus being able to offer comparable services at a lower price point.

Our second issue relates to general market conditions and increased consumer product performance demand. We face numerous transportation challenges, including rising fuel costs, new regulatory mandates, and higher levels of lead-time variability. According to Schulz (2013), “trucks that cost $80,000 five years ago are now $125,000. Fuel is staying stubbornly near $4 a gallon, while drivers remain scarce and are costing more than ever to train and retain.” Additionally, our customers have increasing demands for transportation performance, higher on-time delivery and reduced damage-in-transit. They expect transportation providers to be flexible and quickly adapt to order changes as well as a need for freight visibility and control. All of these factors have aided in the rapid erosion of our market share.

Proposed Method to Mitigate Issue

Leverage Advances in Technology to Improve CRM –

To better understand customer needs, wants, and behavior trends, a customer relationship management (CRM) program enhanced by advances in technology is required. CRM will help build customer relationships, strengthen loyalty, and ultimately support the growth of revenue by seizing back a greater portion of the market share which has been eroded by competition (Collier & Evans, 2012). FedSlo Inc’s new CRM gateway will be a completely redesigned website which will be equipped with an interactive suite of company services and enable a single portal for our customers to shop for their shipping needs. Development of the website will target high scalability as one of the primary success criteria. As Collier & Evans (p.94) stated, “Scalability is a measure of the contribution margin (revenue minus variable costs) required to deliver a good or service as the business grows and volumes increase.” The new customer website will enable the management of large numbers of new customers while also feeding data back into the company demand and forecasting tools to plan for future growth and expansion. Data mining of customer information and shipping trends will enable segmentation of markets based on regional customer behaviors and characteristics. Some of these trends include the seasonal shipping sales trends and relative effectiveness any regional marketing or advertising is having on customer demand. This will ultimately enable the targeting of marketing strategies in regions or markets most likely to show a favorable response. Perhaps most importantly, the browsing trends on the new website can help feedback data on what services are most attractive to customers as well as provide the basis for future enhancements to the website based on the demonstrated voice of the customer.

Specific requirements of the new website will drive what additional technology is needed to meet the stated objectives. Real time tracking of package deliveries, including estimated pickup and delivery times will require GPS tracking systems on vehicles as well as Unique Identification Numbers (UID) to be affixed to each package which will enable manual and automated scanning through the transportation process. Tracking of packages and vehicles through the deliver process will also enable real time guidance be available to employees for traffic and/or significant weather issues which may effect on time delivery metrics. Planning of delivery routes will also be optimized through real time and historic traffic patterns. These on time delivery and real time tracking improvements will enable higher levels of customer satisfaction, thereby enabling higher revenue through business growth.

The second phase of improved CRM through technology will be the development of functional mobile device applications which will enable the customer to achieve their shipping needs or check the status on in-transit packages through popular mobile platforms. One significant object will be to enable direct payment through a customer mobile device for point of sale customer pickups. This will require system compatibility with mobile device technologies such as Near Field Communication (NFC) which will enable ‘tap to pay’ services directly through an account on the customer’s mobile device.

Beyond CRM, the new company website will also enable Enterprise Resource Planning (ERP). Enabling both the customer front end of the system as well as the company intranet to be linked through the back end of the system will enable a single unified system for conducting all business operations. Sales demand, tracking of all packages currently in the system, forecasting, human resources, accounting, and account data will be integrated through a single system which is linked directly to benefiting CRM.

1. Completed_ Magge

2. Consolidation and relocation of our distribution centers to better target specific customer demographics.

3. Seek out grants and subsidies to introduce ‘green’ technologies and alleviate regulatory mandates.

a. Solar panel grants for rooftops of distribution centers.

b. LPG trucks.

4. Work with our third-party air carriers to increase efficiency and reduce cost through technology integration.

5. Conduct cost reduction analysis and develop competitive price points for our consumers.

References

Collier, D. A., & Evans, J. R. (2012). OM3. Mason, OH: South-Western Cengage Learning.

Schulz, J.D. (2013). Top 50 trucking companies: Tough at the top. Retrieved from http://www.logisticsmgmt.com/article/top_50_trucking_companies_tough_at_the_top/D2