Structural Transformation Through e-Business Pauling Ng and Ali R Farhoomand
The University of Hong Kong
FedEx has built superior physical, virtual, and people networks not just to prepare for change, but to shape change on a global scale. to change the way we all connect with each other in the new Network Economy.
FedEx is not only reorganizing its internal operations around a more flexible network computing architecture, but it's also pulling-in and in many cases locking-in customers with an unprecedented level of technological integration.
Since its inception in 1973, Federal Express Corporation had transformed itself from an express delivery company to a global logistics and supply-chain management company.
Over the years, the Company had invested heavily in IT systems, and with the launch of the Internet in 1994, the potential for further integration of systems to provide services throughout its customers' supply-chains became enormous. With all the investment in the systems infrastructure over the years and the US$88 million acquisition of Caliber
Systems, Inc., in 1998, the Company had built a powerful technical architecture that had the potential to pioneer in Internet commerce. However despite having all the ingredients for the makings of a successful e-business, the Company's logistics and supply-chain operations were struggling to shine through the historical image of the Company as simply an express delivery business. Furthermore competition in the transportation/express delivery industry was intense and there were reports that FedEx transportation volume growth was slowing down, even though they were poised to take advantage of the surge in traffic that e-tailing and electronic commerce (EC) were supposed to generate. Hence, on 19 January; 2000, FedEx announced major reorganizations; in the Group's operations in the hope of making it easier to do business with the entire FedEx family. The mode of operation for