FedEx Corporation was founded in 1973 by entrepreneur Fred Smith. Today,Â with a fully integrated physical and virtual Â infrastructure, FedExâ€™s businessÂ model supports 24â€“48 hour delivery to anywhere in the world. FedEx operatesÂ one of the worldâ€™s busiest data-processing centers, handling over 100 million informationÂ requests per day from more than 3,000 databases and more thanÂ 500,000 archive files. It operates one of the largest real-time, online client/serverÂ networks in the world. The core competencies of FedEx are now in expressÂ transportation and in e-solutions.
Initially, FedEx grew out of pressures from mounting inflation and global competition.Â These pressures gave rise to greater demands on businesses to expediteÂ deliveries at a low cost and to improve customer services. FedEx didnâ€™t have aÂ business problem per se but, rather, has endeavored to stay ahead of the competitionÂ by looking ahead at every stage for opportunities to meet customersâ€™Â needs for fast, reliable, and affordable overnight deliveries. Lately, the InternetÂ has provided an inexpensive and accessible platform upon which FedEx has seenÂ further opportunities to expand its business scope, both geographically and Â inÂ terms of service offerings. FedEx is attempting to fulfill two of its major goalsÂ simultaneously: 100 percent customer service and 0 percent downtime.
A prime software application used by FedEx is e-Shipping Tools, a Web-basedÂ shipping application that allows customers to Â check the status of shipmentsÂ through the companyâ€™s Web page. FedEx is also providing integrated solutions toÂ address the entire selling and supply chain needs of its customers. Its e-CommerceÂ Solutions provides a full suite of services that allow Â businesses to integrate FedExâ€™sÂ transportation and information systems seamlessly into their own operations.Â These solutions have taken FedEx well beyond a shipping company.
FedEx markets several e-commerce hardware/software solutions: FedEx PowerShipMC (a multicarrier hardware/software system), FedEx Ship ManagerÂ Server (a hardware/software system providing high-speed transactions and superiorÂ reliability, allowing an average of eight transactions per second), FedExÂ ShipAPIâ„¢ (an Internet-based application that allows Â customization, eliminatingÂ redundant programming), and FedEx Net-ReturnÂ® (a Web-based item-returnÂ management system). This infrastructure is now known as FedEx Direct Link. ItÂ enables business-to-business electronic commerce through combinations of globalÂ virtual private network (VPN) connectivity, Internet connectivity, leased-lineÂ connectivity, and VAN (value-added network) connectivity.
How FedEx customers can tap into a network of systems through theÂ Internet
When a customer places an online order, the order is sent to a FedExÂ Web server. Information about the order and the customer is then sent to theÂ merchantâ€™s PC, and a message is sent to the customer to confirm receipt of theÂ order. After the order is received and acknowledged, the FedEx Web server sends a message to the merchantâ€™s bank to obtain credit approval. At the same time, theÂ order is sent via electronic data interchange (EDI) to a FedEx mainframe that activatesÂ the warehouse management system. The order is processed (goods are picked and packed), the warehouse inventory system is updated, and the shipping processÂ is activated. Information regarding the processing of the order is accessible at theÂ three remote electronic data centers (EDCs) located in the United States, the Europe/Mediterranean (EMEA) region, and the Asia Pacific (APAC) region. DuringÂ the entire process the customer, the merchant, and FedEx employees may track atÂ any time the status of the order and its fulfillment via the Web.
The new e-commerce-based FedEx business model creates value for its customersÂ in a number of ways: It facilitates better communication and collaborationÂ between the various parties along the selling and supply chains. It promotesÂ efficiency gains by reducing costs and speeding up the order cycle. It encouragesÂ customers not only to use FedEx as a shipper but also to outsource to FedEx allÂ their logistics activities. It also provides FedEx a competitive edge and increasedÂ revenue and profits. Thus, FedEx has changed from an old-economy shippingÂ company to an e-business logistics enterprise.
In the digital economy, how well companies transform themselves from traditionalÂ modes of operation to e-business will depend on how well they can adaptÂ their structure and processes to take advantage of emerging technologies and
what architecture and infrastructure they use. FedEx has transformed itself intoÂ an e-business by integrating physical and virtual infrastructures across informationÂ systems, business processes, and organizational bounds. FedExâ€™s experience
in building an e-business shows how a company can successfully apply its informationÂ technology expertise in order to pioneer â€œcustomercentricâ€ innovationsÂ with sweeping structural and strategic impacts. It also shows the role ofÂ outsourcing, which frees companies to concentrate on their core business.