Fedex - Management Case Study
Absolutely, Positively Operations Research: The Federal Express Story
RICHARD O . MASON Edwin L. COX school of Business
Southern Methodist University Dallas, Texas 75275
JAMES L . M C K E N N E Y
Harvard Business School Soldiers Field Boston, Massachusetts 02163 216 west miton Drive Bolder Creek, California 95006 School of Business Administration University of Western Ontario London, Ontario N6A 3K7 Canada
WALTER CARLSON
DUNCAN COPELAND
Federal Express Corporation has used operations research (OR) to help make its major business decisions since its overnight package delivery operations began in 1973. An early failure pointed out the need for scientific analysis. Subsequently, a successful origin-destination model followed by models to simulate operations, finances, engine use, personal assignments, and route structures influenced the conduct of business during periods of substantial growth. There were many false starts between the successes. CEO and founder Frederick W. Smith played a central role in the use of OR at the company: he established a relationship with OR and management science personnel and this relationship supported the growth and success of the company.
This company is nothing short of being the logistics arm of a whole new society that is building up in our economy—a society that isn't built around automobile and steel production, but that is built up instead around service industries and high technology endeavors in electronics and optics and medical science. It is the movement of these support items that Federal Express is all about. —Frederick W. Smith
F
rederick W. (Fred) Smith developed a vision of a business, brought together the key people who would make up his ini-
tial management team, and scraped together enough funds to buy the first aircraft for his fleet: French-made Dassault
TRANSPORTATION—AIR COMPUTERS—SYSTEM DESIGN AND OPERATION
Copyright © 1997, Institute for Operations Research and the Management
RICHARD O . MASON Edwin L. COX school of Business
Southern Methodist University Dallas, Texas 75275
JAMES L . M C K E N N E Y
Harvard Business School Soldiers Field Boston, Massachusetts 02163 216 west miton Drive Bolder Creek, California 95006 School of Business Administration University of Western Ontario London, Ontario N6A 3K7 Canada
WALTER CARLSON
DUNCAN COPELAND
Federal Express Corporation has used operations research (OR) to help make its major business decisions since its overnight package delivery operations began in 1973. An early failure pointed out the need for scientific analysis. Subsequently, a successful origin-destination model followed by models to simulate operations, finances, engine use, personal assignments, and route structures influenced the conduct of business during periods of substantial growth. There were many false starts between the successes. CEO and founder Frederick W. Smith played a central role in the use of OR at the company: he established a relationship with OR and management science personnel and this relationship supported the growth and success of the company.
This company is nothing short of being the logistics arm of a whole new society that is building up in our economy—a society that isn't built around automobile and steel production, but that is built up instead around service industries and high technology endeavors in electronics and optics and medical science. It is the movement of these support items that Federal Express is all about. —Frederick W. Smith
F
rederick W. (Fred) Smith developed a vision of a business, brought together the key people who would make up his ini-
tial management team, and scraped together enough funds to buy the first aircraft for his fleet: French-made Dassault
TRANSPORTATION—AIR COMPUTERS—SYSTEM DESIGN AND OPERATION
Copyright © 1997, Institute for Operations Research and the Management
References: Sigafoos, Robert A. and Easson, Roger R. 1988, Absolutely, Positively, Overnight! The Unofficial Corporate History of Federal Express, St. Lukes Press, Memphis, Tennessee. McKenney, James L.; Copeland, Duncan C; and Mason, Richard 0.1995, Waves of Change: Business Evolution Through Information Technology, Harvard Business School Press, Boston, Massachusetts. INTERFACES 27:2 36