Supply chain management (SCM) is the management of a network of interconnected businesses involved in the ultimate provision of product and

service packages required by end customers (Harland, 1996).[2] Supply chain management spans all movement and storage of raw materials, work-in-process inventory, and finished goods from point of origin to point of consumption (supply chain)

The case discusses how FedEx Corporation (FedEx) emerged as the leading global provider of supply chain management (SCM) services to corporate customers. The case discusses in detail the SCM services offered by FedEx and its infrastructure facilities that enabled the company to offer these services. The operations at the Memphis hub of FedEx are described in detail. Finally, the case provides real-life examples of how FedEx solved the supply chain problems of Fujitsu (US) and Cisco Systems by offering a customized SCM solution.

"FedEx is a supply chain company. We are very cognizant of trying to make our customers' supply chain more efficient. But, at the same time, we became very focused on our internal supply chain."1 - Edith Kelly-Green, Vice President and Chief Sourcing Officer, FedEx Corporation. "FedEx's Supply Chain Services represents the best of the best and the organization has set an example ... for other companies to follow."2 - Bo Anderson, Executive in Charge of Worldwide Purchasing, GM. In August 2002, Logistics Management rated FSCS as the best third party logistics provider in the US (Refer Exhibit I).

The Supply Chain Management Services

FedEx offered a wide range of supply chain management services to its customers. This included general services such as order fulfillment and transportation and unique ones such as customs clearance and returns management program. FedEx customized its supply chain services according to the requirements of corporate customers as well as the industry in which its customers operated. According to David Cunningham, FedEx's Regional Vice President South Pacific, "Customizing is absolutely essential because a solution that works for one company may not necessarily work for another. Each company has different products and different markets they do business with.".

Managing the Customers' Supply Chain FUJITSU Corporation

In the late 1990s, California headquartered Fujitsu PC (FPC), a subsidiary of Fujitsu Corporation of Japan, was encountering several problems relating to inventory mismanagement and nonadherence to time schedules for delivering its notebook computers. In spite of having sufficient inventory, FPC took ten days to deliver a notebook computer to the customers in the US, whereas its competitors were delivering it in lesser time. FPC's assembling facility was located in Portland, US. The company received components from Japan, which were shipped to the US by Nippon Express . Once the components reached US, they were brought by air to the Portland facility by Circle Air Freight (CAF)... The components were assembled at the facility and then the notebook computers were shipped to various states/cities in the US by CAF. FPC was facing problems mainly due to the lack of coordination between the two freight forwarders (Nippon Express & CAF). Shipments from Japan, in few cases, even went to the wrong place. To add to the problem, the Portland facility was not functioning at an optimum efficiency and was not strategically located to serve the 48 states in the US. In its efforts to overcome these problems, in April 1999, FPC decided to avail FedEx's third party logistics services...

The New Service

For the fiscal year 2002-03, FedEx reported revenues of $22.5 billion and a net income of $830 million. The company keeps on adding new and innovative services to its supply chain management services portfolio. One of the recent additions is the 'consolidated returns' service under the returns management services category. Launched in June 2003, the 'consolidated returns' service primarily targeted at web-retailers and catalogers, to enable them to manage their returns better. In order to use this service, the retailers/catalogers are required to pay a subscription fee every month...