Freight Delivery System in Malaysia and Fedex

As Fedex launched its courier service which incorporates the use of technology from dispatch to delivery, its service became very efficient. The core idea behind the strategic planning of Fedex’s convenient methods of delivery has to do with time. Since time has power to make a difference between an average company or a dominant company like Fedex, Fedex invested in time. By doing so, Fedex ensures its customers that the company is a trustworthy company which can be reliable from personal to business level. However, exploiting the limited time does not magically takes place.

Many companies invest in the human capital for daily operations. The risk with people is that people are unpredictable. They can feel ill, quit, be absent and many other issues. With technology, operations can be fulfilled more accurately with minimum fault. Thus, the key behind Fedex’s IT strategy is the investment of IT over human dependency. Not necessarily allowing the handle of all work through robots, but allowing robots to become an important tool for decision making. For example, a driver may know a city very well and can have a good planning method, but when you use Zodiac systems to maneuver through alleys and streets, the driver saved plenty of time. Thus, when that time the driver saved is multiplied multiply, one gets an enormous amount of money and time saved (Hemmatfar, 2010).

Therefore, in order for Malaysian-owned Freight Delivery Service Companies to compete or follow along the path of Fedex, they must be able to adopt a culture in which they believe that the decision making of robots are just as important as an employee’s. By doing so, they can enter the dialogue of the specifications for the necessary technology.

According the Washington Post’s columnist, Lydia Depillis, Fedex strategizes on the outsourcing of companies to lower the cost of the operations and have specialized sectors which can autonomously work. Although a company as big as Fedex can work efficiently, it lacks the decentralized management to function to its best potential. Therefore, they partner with transportation systems such as The Ride on Trucking to ensure that they specialize in all sectors. The concept is not merely a finance idea, it pertains the value that when Fedex acknowledges it is not a specifically a trucking/transportation business (although trucking/transportation is a large part of their business) it can partner with a company that can handle the job better than Fedex can, because ultimately The Ride on Trucking is solely a trucking/transportation business so it is only natural that they are the best at what they do (Depillis, 2014).

Thus, if Malaysia can adopt a similar culture of business interdependence and specialization, they become a step closer towards differentiation.

Transforming Malaysian Electronic-based Business

Behind every great company that is dependent on tools and technology to run their daily operation, is a great supplier running the show from behind the curtains. Meaning that in order for Fedex to progress over time, they will need local partners who are capable of taking up newer challenges. The Malaysian Electronic-based Businesses are constantly searching for opportunities to show case their ability and potential. The ideas and plans within those companies exist, but there are not necessarily companies like Fedex who feel the need to incorporate such innovative technology to their business. However, since that is not true and that Fedex is a company which enjoys a culture of creativity and improvement, it can create the necessary environment for the Malaysian Electronic-based Businesses to flourish.

IT/IS Build Bariers to Entry

On one of the paragraphs in the Fedex: Differentiation by Technology case study, it specifically addresses the issue with barriers created against other companies who want to join the same industry as Fedex. The paragraph is called Fedex IS Strategy and in the last sentence of the paragraph, it states “100,000 desktop packed with Fedex software, which is designed to link and lock thousands of customers to its ordering and tracking systems.” This means that as IT/IS became the main reason for the loyalty of customer towards Fedex, it makes it challenging for new companies to use and adopt a similar strategy, for two main reasons.

Primarily, the IT/IS Fedex uses is unique and synchronized with the specific operations of the company. Thus, a company which will want to adopt that system will have to go through deep research on Fedex and try to get the tiniest bits of insight they can to get only an idea of Fedex’s methods and strategies. Even if they do get information on how Fedex operates, they would not have the vision and mission Fedex adapts to its IT/IS culture.

On the other hand, new companies will be disadvantaged by time, finance, and effective management. In order for small businesses enter the industry, let alone compete with Fedex, they will need time to engage and develop their IT sector. Also, they will need special management which can have assertive qualities to take on a giant like Fedex. Thus, as IT/IS evolve and Fedex adopts to it, it makes it difficult for other companies to pace with Fedex from many levels including experience. Even if these companies succeed in creating an efficient IT/IS system for their operations, Fedex’s customers are loyal and are satisfied with the IT/IS system. Since developing new IT/IS requires adaption, not only from the company but from the customers as well, the barriers to deeply enter the industry make it more challenging. Since developing new IT/IS requires adaption, not only from the company but from the customers as well, the barriers to deeply enter the industry make it more challenging (Kitchen, 1999).

IT/IS Costs

Companies which want to enter the industry and compete with Fedex will have to deal with an important and unchanging reality, finance. In Fedex, the IT/IS system it operates on is costly. It took Fedex a long time to include the technical support they use currently and that is customer friendly. They did not purchase all IT systems overnight and make it work. As technology evolves and is created over time, Fedex acquires studies and implements the innovative IT in order to accommodate their customers effectively. Such procedure involves research, a strong accounting sector and time. The commodities are costly and Fedex has an advantage to maneuver around such commodities better than other company, let alone a start-up. Thus, Fedex analyzed their strength and weaknesses and they made profit as they grew and changed. Such commodities give Fedex an upper hand in the industry due to their research and improvement in the IT sector.

Even companies which have the financial capability or potential will have to keep in mind an important factor, unforeseen costs. The investors which will want to buy shares of companies that want to compete with Fedex will need to have a reliable forecast of what their investement returns will look like. They do not want to be updated constantly on how the company may need new money for new expenses which are the result of competing in the IT result with a giant in the game. They will need a lot of unforeseen money to back new IT/IS ventures even if they want to copy the Fedex model, let alone create their own.

IT/IS and Competition

Fedex laid out their ground work vision from an IT/IS perspective. As explained in their website “This is the best possible foundation upon which to grow an integrated global network.” They understand that in a globalized world, the integration of communication and transportation is vital to the survival of the company. Thus, IT/IS changed the nature of Fedex’s basic competition by investing in transportation system that is not just convenient for individual orders, but a more important sector: business-to-business (B2B). Fedex’s involvement in E-commerce allowed it to set pivot in the emerging business world. They purchased expensive aircrafts to ensure reliability within the global e-commerce community. By doing so, they differentiate themselves from other companies who are a part of the transportation and communication industry, but the core of their work does not involve creating a friendly environment in which businesses can depend in order to process transactions and transport goods (Depillis, 2014).

IT/IS Products and Services

In a world where problems arise constantly, Fedex presents the opportunity for not only Fedex to tackle the problem, but the user can become a part of the solution. In Fedex, they developed what they call a Web Service. A Web Service is simply a service in the internet which allows a user to develop and create IS that is convenient for both Fedex and the user. As it proclaims in the website, “applications can be combined to create more powerful services. For example, a user could choose to combine FedEx Web Services with Web services from other organizations to create unique, customized solutions.” Therefore, this partnership effect Fedex has with its customers expands the potential of what the relationship can evolve into. Through the generation of such services, users can integrate the functions and workflow of Fedex’s service to the businesses (FedEx Web Services, 2018).

Not only is the engagement with the customer solely based on creating internet interfaces, but more importantly, the release of new products. Fedex launches products which are influenced by the IT/IS innovation. Fedex lauches products such as power supplies, packaging supplies, and other office essentials to create an environment for businesses which can be conducive to Fedex’s operational goals (Office Supplies, 2018).

IT/IS and Customer Intimacy

Through the usage of special IT/IS services, Fedex evolved its customer service, services. Which means that Fedex equips its technical advisory team, billing team, and other important sectors responsible for the engagement with the customer during the customer’s time in need. As the customer calls Fedex for queries, Fedex manages the initiation of the call until the query is resolved through a very smooth and effective procedure.

Not only will Fedex handle its interaction with its customers through a convenient up-to-date system, but it will use similar systems to interact with its close partners and suppliers. By doing so, Fedex is able to secure a cheap method which can bring down its costs when they have a good relationship with its suppliers. Therefore, the balance of power shifts from the supplier and customer to Fedex, and Fedex alone.