FedEx - Frederick Smith
It would be dream of any entrepreneur to see his product/company so popular that it will be known as a synonym of something. For example, Xerox Inc. has made the Xerox Copier so popular that the process of Copying is now better known as Xeroxing. Another recent example could be Google. The story goes that Larry Page and Sergey Brin had named their company as “Googol” - a huge number (10100) but the Venture Capitalist misspell it to “Google”. Today, Google has become a synonym to “Search”. How delighted the founders would be to see their companies so popular!
Today’s Gyan is about another such company which is almost an equivalent for “To Courier”. Yes, it’s FedEx! (Funny, MS Word didn’t throw spell-check error for “Xeroxing” or for “FedEx”)
Born in 1944, Frederick Smith had innovative business ideas right in his genes. His father had started Dixie Greyhound Bus Line and the Toddle House chain of fast-food restaurants. Even, today the Greyhound buses are running across the cities in US and are very popular.
Fred got admitted in Yale University for his B.A. For his final year thesis on business idea, He wrote about a courier service having a Hub situated at say, Memphis where all the parcels from around the US would arrive first, would be sorted out according to their destinations and would be delivered overnight. In spite of the innovative concept, the professor wasn’t much enthused to see this as a practical Business idea and Fred got a “C.” Fred graduated in 1966 and joined the Marine Corps to serve in Vietnam. He fought with valor and received a “Purple Heart”. Even while serving in the Army till 1970, Fred hadn’t parted with his lifelong dream of founding the ultimate courier service.
So finally after quitting the Marine Corps, Frederick Smith founded Federal Express Inc. in 1971 – better known as FedEx. He managed to raise an initial capital of $ 70 millions. The USP for FedEx was the overnight delivery coast to coast. On the company’s first night of operations, its 389 employees and fleet of 14 small jets delivered 186 packages (“Half of which, I think, were actually sent by our own sales force,” according to Smith) In the first year itself, the company showed a loss of $ 27 Million. The year of 1975 had to dawn for the company to see some profit. But Lieutenant Fred knows how to fight and he fought…against all odds.
Slowly but surely, the company started growing. Of course, it wasn’t a cakewalk. Many a times, the cost of running the company would run so high that Fred would be left with no money to pay the salaries. All he had was a lot of passion and tenacity that inspired his fellow colleagues to work harder and harder…even without pay at times. During the oil crisis, company was in real dire straits. There was no money to buy the much needed oil to run the trucks…to fly the planes. Truck drivers sold their watches just to see the truck and the company running. What a commitment of the employees towards their job! All credit goes to Frederick for inspiring the employees to reach beyond the call of duty.
A story goes that, during the oil crisis, the company was on the brink of bankruptcy. Fred was on his way to Memphis to declare his bankruptcy…with everything almost lost. Waiting at the airport, for some reason, he caught the flight going towards Las Vegas instead of Memphis. There, he visited a casino and surprisingly, won a few thousands. He thought, “Well, not everything is lost yet!” This incident inspired him to spring back again. After returning to Memphis, he regrouped his people and resumed with his fight again.
Today, FedEx owns a staggering 600 jets, 40,000 trucks and has a headcount of 200,000. FedEx delivers almost three-quarters of a billion packages! It has also won a lot of accolades for its work like the first service company to win the Malcolm Baldrige National Quality Award (1990). Additionally, FedEx has consistently been ranked on FORTUNE Magazine's industry lists, including "World's Most Admired Companies" (No. 8, 2005), "America's Most Admired Companies" (No. 6, 2005), No. 1 on the Delivery Industry list (2005), and is on the "Hall of Fame" for claiming a spot on the "100 Best Companies to Work For" list since its inception (1998-2005).
From the operations point of view, FedEx Inc. comprises of FedEx Express, FedEx Ground, FedEx Freight, and FedEx Kinko's. It has pioneered the usage of high end technology to track the couriers and has made Memphis and Tennessee two big hubs of International import – exports. Almost 40% of the US Industry works on the “Just in Time” principle and it wouldn’t have been possible if it’s not for the “Overnight Delivery” by FedEx.
Frederick Smith himself has a personal fortune of $700 million dollars and serves on board of many companies. He is a self described “Forrest Gump” of our times. I wonder what would have happened if he would have believed his professor!
And today regardless of how you send a package or document overnight, most people say: “FedEx IT!!!” What an organization and what a leader!
Regards,
Abhishek
Today’s Gyan is about another such company which is almost an equivalent for “To Courier”. Yes, it’s FedEx! (Funny, MS Word didn’t throw spell-check error for “Xeroxing” or for “FedEx”)
Born in 1944, Frederick Smith had innovative business ideas right in his genes. His father had started Dixie Greyhound Bus Line and the Toddle House chain of fast-food restaurants. Even, today the Greyhound buses are running across the cities in US and are very popular.
Fred got admitted in Yale University for his B.A. For his final year thesis on business idea, He wrote about a courier service having a Hub situated at say, Memphis where all the parcels from around the US would arrive first, would be sorted out according to their destinations and would be delivered overnight. In spite of the innovative concept, the professor wasn’t much enthused to see this as a practical Business idea and Fred got a “C.” Fred graduated in 1966 and joined the Marine Corps to serve in Vietnam. He fought with valor and received a “Purple Heart”. Even while serving in the Army till 1970, Fred hadn’t parted with his lifelong dream of founding the ultimate courier service.
So finally after quitting the Marine Corps, Frederick Smith founded Federal Express Inc. in 1971 – better known as FedEx. He managed to raise an initial capital of $ 70 millions. The USP for FedEx was the overnight delivery coast to coast. On the company’s first night of operations, its 389 employees and fleet of 14 small jets delivered 186 packages (“Half of which, I think, were actually sent by our own sales force,” according to Smith) In the first year itself, the company showed a loss of $ 27 Million. The year of 1975 had to dawn for the company to see some profit. But Lieutenant Fred knows how to fight and he fought…against all odds.
Slowly but surely, the company started growing. Of course, it wasn’t a cakewalk. Many a times, the cost of running the company would run so high that Fred would be left with no money to pay the salaries. All he had was a lot of passion and tenacity that inspired his fellow colleagues to work harder and harder…even without pay at times. During the oil crisis, company was in real dire straits. There was no money to buy the much needed oil to run the trucks…to fly the planes. Truck drivers sold their watches just to see the truck and the company running. What a commitment of the employees towards their job! All credit goes to Frederick for inspiring the employees to reach beyond the call of duty.
A story goes that, during the oil crisis, the company was on the brink of bankruptcy. Fred was on his way to Memphis to declare his bankruptcy…with everything almost lost. Waiting at the airport, for some reason, he caught the flight going towards Las Vegas instead of Memphis. There, he visited a casino and surprisingly, won a few thousands. He thought, “Well, not everything is lost yet!” This incident inspired him to spring back again. After returning to Memphis, he regrouped his people and resumed with his fight again.
Today, FedEx owns a staggering 600 jets, 40,000 trucks and has a headcount of 200,000. FedEx delivers almost three-quarters of a billion packages! It has also won a lot of accolades for its work like the first service company to win the Malcolm Baldrige National Quality Award (1990). Additionally, FedEx has consistently been ranked on FORTUNE Magazine's industry lists, including "World's Most Admired Companies" (No. 8, 2005), "America's Most Admired Companies" (No. 6, 2005), No. 1 on the Delivery Industry list (2005), and is on the "Hall of Fame" for claiming a spot on the "100 Best Companies to Work For" list since its inception (1998-2005).
From the operations point of view, FedEx Inc. comprises of FedEx Express, FedEx Ground, FedEx Freight, and FedEx Kinko's. It has pioneered the usage of high end technology to track the couriers and has made Memphis and Tennessee two big hubs of International import – exports. Almost 40% of the US Industry works on the “Just in Time” principle and it wouldn’t have been possible if it’s not for the “Overnight Delivery” by FedEx.
Frederick Smith himself has a personal fortune of $700 million dollars and serves on board of many companies. He is a self described “Forrest Gump” of our times. I wonder what would have happened if he would have believed his professor!
And today regardless of how you send a package or document overnight, most people say: “FedEx IT!!!” What an organization and what a leader!
Regards,
Abhishek
posted by Gyan for the Day! | 5:10 am
1 Comments:
We had a case on FedEx today in the strategy class and i thought of going through this again and i must say its brilliantly written!
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