When I started my Supply Corps career 15 years ago, I couldn’t imagine being fortunate enough to take a yearlong journey with FedEx. I soon realized that the Supply Corps prepared me for this challenge with my previous responsibilities as a division officer on USS Princeton (CG 59), services officer at Commander Naval Air Forces, aide to the Commander at Naval Supply Systems Command (NAVSUP), fire control and detection equipment weapon systems officer at NAVSUP Weapon Systems Support, supply officer on USS Hue City
(CG 66), graduate student at Pennsylvania State University, and readiness officer at Commander Task Force 63 (CTF 63).
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Lt. Cmdr. Jamie O’Leary with the first FedEx van. A 1972 Ford Econoline used for everything from moving company mail, shuttling students or pilots to training, and, of course, pick-up and delivery of customer packages. Even FedEx founder, Fred Smith, drove this van. It was restored in the early 1980s by Ford Motor Company.
Leadership roles in the Supply Corps prepared me for the opportunities I faced at FedEx. FedEx, like the Supply Corps, must continuously evolve in order to meet current and future market demands by strategically evaluating its operations to harvest numerous efficiencies. FedEx operates as a three-headed transportation enterprise: FedEx Express, FedEx Ground, and FedEx Freight operating companies. From a corporate perspective, financials are solid, with continued revenue growth, market share and rising stock price. However, customer shipping patterns have shifted from overnight delivery to more cost-effective deferred methods. This shift has negatively affected revenue from FedEx Express, which has much higher margins compared with economical FedEx Ground and FedEx Freight, but greater operating cost. For this, FedEx Express initiated an intense program to control or cut costs.
The military has witnessed similar requirements in order to maintain readiness levels, albeit as a response to reductions in the defense budget. Some responses include deploying numerous life cycle management and modernization programs, lean initiatives, and quality driven management action teams. FedEx constantly chips away at operating costs to achieve their $1.6 billion savings goal by FY 16. Whether through their fuel management program where they saved over $150 million last fiscal year, or “doing more with less” by reducing headcount, they are looking at all ways to break the status quo, focus on measurable change, and eliminate waste. They have many of the same challenges we face and have implemented similar programs to stay in front of the challenges.
Ultimately, FedEx takes a strategic approach to its long-term success by focusing on its most valuable resource – people. It is continuously ranked as a Fortune magazine most-admired company and best company to work for, and FedEx relies on a People-Service-Profit (PSP) philosophy. FedEx believes that when these PSP elements are in balance, the elements work together and support one another. People provide outstanding service to meet the highest customer expectations. This gives FedEx the edge for more business and profitability that funds growth and allows the company to reward its people. The PSP backbone is the “Purple Promise: I will make every FedEx experience outstanding.” Whether your customer is internal or external, the Purple Promise applies. To take the PSP philosophy further, strategic goals from the corporate to departmental level are aligned to PSP. You cannot achieve change in one area without focusing on all three elements.
Within the Supply Corps Community, PSP or the “Purple Promise” also applies. If we give our teams the resources, tools, and leadership they require, we can meet or exceed our customers’ expectations. This may not equate to profit, but it does link to readiness. With readiness we ensure future success and prove our worth, which builds a Supply Corps brand that flourishes in any environment.
It is one thing to talk about culture, but it’s another to see it in action. The way I found to best observe FedEx’s culture was by understanding operations and seeing it firsthand. FedEx operates a global logistics network with over 10 million packages moving within the network daily. Having unfettered access to numerous operation control centers, network forecasting and planning teams, global distribution operations, internal repair facilities, domestic ground operations, senior leadership meetings, operations and leadership training events, etc., gave me insight to better understand how this $44 billion a year company operates. Not only from FedEx Express, with its 600 plus aircraft and 45,000 truck network, but also the less-than truckload (LTL) business at FedEx Freight and the small parcel operation at FedEx Ground. In addition, I was able to enhance my learning further by latching on to FedEx Express’ supply chain logistics organization. This allowed me to contribute, support, and evolve a cost savings initiative to uncover possible opportunities where a real-time location system (RTLS) solution could increase efficiencies and readiness. Our team’s purpose was to deploy scalable automation to identify and process aircraft spare parts inventory in order to enhance operational productivity, materiel movement proficiency and achieve inventory positive chain of control.
The TWI experience is all about access to processes and information used in executive-level decision making. FedEx has provided me with numerous behind-the-scene opportunities to see this in action, including observing and tracking 150 aircraft arriving into FedEx’s World Hub for the night sort, watching the FedEx team download, process, and upload over 600,000 packages, and then watching those same planes take off for their intended markets all within a six hour period. I’ve even loaded packages into universal loading devices (ULD) and those same ULDs into a plane destined for Phoenix, Arizona. I visited FedEx Ground and compared its operating model to FedEx Express as it processed 7,500 packages per hour with each package only being handled twice from inbound to outbound using a fully automated sort system. Then FedEx Express allowed me to fly around in a new Boeing 767 doing touch-n-go landings as they tested its Heads up Display and Enhanced Vision System (HUD-EVS) for Federal Aviation Administration (FAA) certification. I also learned to appreciate the criticality that customer interaction plays as I participated in a ride-along with a FedEx courier making residential and commercial deliveries throughout Memphis, Tennessee. In addition, and most importantly, I attended numerous leadership courses and meetings which taught me more about FedEx’s workforce challenges and culture, and allowed me to share perspective on how we tackle similar issues in the Supply Corps today.
In the end, I am surprised to see how many similarities there are between FedEx and the military. Perhaps this is not too surprising since we are both heavily regulated industries. As Fred Smith, FedEx CEO and chairman, will admit, when he created FedEx he applied many aspects of what he learned while serving in the United States Marine Corps. Like the military, FedEx constantly has to change and adapt to global demands and external forces to remain relevant. The company must operate efficiently and, as the purse strings tighten, must be better at eliminating waste and streamlining operations. At the end of the day, FedEx knows that taking care of its people is top priority to ensure future success and longevity.
In closing, people always ask me what I’ve learned. I don’t expect to fully appreciate or recognize what I’ve learned for years to come. As I depart FedEx and head to U.S. Transportation Command, I look forward to reflecting on the great multitude of experiences here at FedEx and having the opportunity to share these experiences and put what I learned to action. I couldn’t be more thankful to the Navy and FedEx for providing this tremendous opportunity.
By Lt. Cmdr. James O’Leary, SC, USN