Hewlett-Packard has hired UPS to manage its service parts logistics.
UPS Logistics, the contract logistics division of United Parcel Service (UPS), has signed a contract with Hewlett-Packard for the logistics operations of its service parts activities. UPS Logistics will manage parts inventory, transportation, information systems and returns for HP’s Commercial Support Services Organization.
This new contract should strengthen UPS Logistics’ service parts customer base. This part of the business is already strong – the firm has recently bought four service parts logistics companies. Its large network allows it to provide urgent delivery to businesses based on windows up to four hours and strategic stocking of critical parts. The company estimates that it can currently deliver parts to 88% of US businesses within two hours.
However, the spotlight of UPS’ investment in resources and services has recently been on its B2C fulfillment operations. It has been claimed that UPS delivered approximately 55% of items bought online in the US during the last two holiday seasons. While the company has carved a leading position in this home delivery sector, its operations are still strongest in the B2B market. The higher volumes and fewer drop-off points associated with B2B deliveries are more suited to UPS’ expertise and coverage across the supply chain than the widespread single deliveries characteristic of B2C fulfillment.
Nonetheless, building B2C operations is in no sense a waste of time. UPS has managed to create leading operations in both sectors; the success of one should not come at the expense of the other. In fact, UPS’ unique selling proposition may well prove to be its integrated supply chain solution, both online and offline, which it should continue to juggle with greater prowess than other worldwide operators seeking to dabble in both B2B and B2C operations.
