Fred Smith, founder of FedEx, developed his now-ubiquitous hub-and-spoke distribution design based on a college term paper, and his experiences in Vietnam.
Mr. Smith understood the need for overnight guaranteed delivery of inventory as well as the intangible customer relief of having a valuable package safely arrive. The brand’s image is based on that guarantee.
Logistics design is the heart of the FedEx empire. With Amazon entering the shipping business, how long before the empire will be under siege?
This post is based on the Ad Week article, How FedEx’s Founder Revolutionized Shipping With a Mediocre College Term Paper, by Robert Klara, March 13, 2018. Image source: Shutterstock / Lightspring.
1. Describe the hub-and-spoke supply chain network that FedEx pioneered.
Guidance: Students should review logistics, transportation, and location material. It may be helpful for students to research FedEx to find all the “hubs”. This could lead to a discussion of the utility of the center-of-gravity method to determine the next “hub”.
2. Identify the service package that FedEx created.
Guidance: Students should review service packages, service blueprint, service-profit chain. They should easily identify the tangible aspects of the service package, Continue reading