Re-engineering the way services are delivered is critical
to both business and government .

 By Burke Campbell and Murray Conron
Financial Post
June 18, 2001

Today, as companies ride out global economic storms, they struggle to stay competitive in a shifting market with shifting customer demands. Businesses must continually reappraise and restructure their operations, deploying their resources more efficiently.

For some, this re-engineering process is another word for downsizing, as the company shifts gears to run lean and mean with new technologies. More often, re-engineering leads to increased efficiency and higher profitability, growth in market share and an increase in the workforce.

The transport industry provides a classic illustration of a successful business metamorphosis and the driving forces behind it. "Business globalization and new technologies are the two main reasons we re-engineer," says Amgad Shehata, director of marketing for UPS Canada Ltd. "In today's marketplace, businesses must have connecting and integrated mechanisms for the prompt exchange of goods and services."

United Parcel Service (UPS) is the shipping firm with the signature Pullman brown delivery trucks. It is based in Atlanta, Ga., and now earns revenue of more than US$30-billion. Fortune magazine says the trucking company with technology has become the "technology company with trucks."

Over the past 15 years, UPS has spent US$10-billion on technology to assist in the delivery of 13 million parcels daily, 70% of this volume in North America.

UPS has mastered the flow of freight, information and funds --the boxes, bytes and bucks -- for e-commerce. Using integrated software and the Web, UPS customers can track their parcels. Furthermore, upon delivery, the corporate customer's accounting department gets the nod to invoice the delivered goods.

Ninety-four years ago, UPS started out with a few delivery trucks. Today, it operates more than 152,000 vehicles and a vast fleet of all-cargo jet aircraft. To stay at the forefront of express delivery, UPS has fused e-commerce, transportation, logistics, supply chain management, border brokerage and international trade.

This infrastructure includes a worldwide communications network and new business units to provide logistical and financial services.

UPS offers this global expertise to its customers as an added service, eliminating complications. Canada is the United States' largest trading partner and Ontario accounts for 85% of our exports there. To expedite trade, UPS will ship, then store, Canadian goods in its own U.S. facilities, permitting Canadian firms to sell handily from a U.S. address. If desired, UPS also brokers the goods, customs, duties, taxes and funds exchange.

Forrester Research predicts that by 2003 e-commerce will account for 6% of the North American economy. Shipments across borders without delays fulfill the promise of e-commerce. It is no accident that UPS moves nearly one-half the goods bought over the Internet, and often facilitates servicing after the sale. Order a pair of running shoes from Nike's Web site and UPS ships the purchase directly from a warehouse to the buyer's door. UPS also handles any exchanges and returns.

UPS maintains its leadership in integrated point-and-click e-commerce by investing in R&D. Its think-tank development centre near Atlanta, called Innoplex, attracts the continent's best software designers and knowledge workers.

To handle up to 13 million packages a day (about 140 a second) UPS is spending US$1.1-billion to open the "hub of the future" in May, 2002, at the International Airport in Louisville, Ky., already the site of a colossal sorting plant.

The hub has proven itself in prototype. UPS cargo planes dock with the massive centre. Parcels are unloaded automatically and hurtle down miles of conveyor belts. Simultaneously, overhead scanners read the smart stickers and shunt the parcels over to the designated departure plane, destined for delivery by dawn. As a bonus, the new hub is creating 6,000 new jobs.

UPS re-engineering efforts have attracted other businesses into using its delivery services. Clearwater Fine Foods Inc. of Bedford, N.S., wanted to deliver the freshest possible lobsters to global markets. Clearwater had to guarantee delivery within 24 hours after dry packing. So it set up a storage centre next to the UPS hub in Louisville. Here, up to 23,000 kilograms of lobsters lie dormant in cold saline water until ordered and packed. Clearwater maintains top quality by tracking the catch date, operation, storage history and region. As a result of this re-engineering, the lobsters have become a new delicacy in all parts of the globe.

Computer maker Hewlett-Packard is also exploring ways to re-engineer itself by nurturing business ecosystems. In turn, these carefully tended alliances spawn new products as well as new markets. Now, under the banner of HP Invent, Hewlett-Packard oversees the Mobile e-Services Bazaar, a community of HP customers, application developers, technology partners (including Nortel), content providers and venture capitalists to develop and promote mobile e-services.

Accessible through centres around the globe on an online portal, the bazaar is a centre of mobile innovation. Here, complementary partnerships with companies, fledgling or established, create winning applications. HP then promotes these to its own large clients, giving the products an instant market presence.

Government, like business, is under pressure to provide public service quickly. Ontario alone registers about 120,000 new businesses annually, and the manual process often takes six weeks for mailed forms. Today, with Ontario Business Connects (OBC), it takes 20 minutes electronically. OBC handles more than 60% of the total registrants, with satisfaction running high at 96%.

Even health and retail sales tax permits for new businesses can now be processed conveniently from OBC's Web site (www.ccr.gov.on.ca/obcon/welcome.htm).

Frank Klees, the government whip and MPP for Ontario's Oak Ridges riding, which includes the technology-rich areas of Richmond Hill and Markham, expects momentous changes to sweep government.

He foresees the day when citizens will be teleconferenced into government standing committees and play a greater role in shaping public policy. Further, when new rules so permit, such teleconferencing could mean remote voting by MPPs in transit.

In the Legislative Assembly, he believes House members will have access to laws and statutes from desktop monitors, even during debates. Such technology already served the U.S. Supreme Court hearings on Microsoft Corp.

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