Before I start, I just want to make clear, I'm NOT trying to defend FedEx's moves in any way. I'm merely trying to give insight into the rationales for what FedEx is doing. The "big picture" comes into play, and looking at things solely from the perspective of trying to get a particular location profitable, misses the whole direction FedEx is going in the long term.
When it comes to Office, one must remember that FedEx wrote off about $600 million in goodwill (Fred paid too damn much for what he ended up getting - and couldn't toss enough "glitter" at the mess to make it sparkle). So with that context...
My original point was that FedEx Office is failing and desperately needs to be completely overhauled. Obviously, having cheap labor and inexpensive locations is the way they are going. However, dropping ad dollars on a company in chaos makes no sense.
It actually makes perfect sense...
Right now, FedEx wants people to learn that Office exists and that it is a place where they can not only make copies and have print jobs done, BUT they can also ship with Ground and Express, and ALSO choose to receive their shipments at Office locations too. Look at the "UPS Stores", but add in a print capability - that is what FedEx wants people to think of Office.
If FedEx spends a few million in getting people to just come in a make a few copies or ship a package - that fits within their goal, the people will learn where the Office location is, and when they have a FedEx package come in that needs a signature, they will have knowledge of where to direct it so they can pick it up at their leisure.
Take a look at the signage in Express locations (service counter), and you will see advertising directing people to get their shipments diverted to Office locations for pickup. You will also get Express CSAs telling customers they won't do packaging for them, but they can go to Office and get it done.
After FedEx tossed $600 million in the garbage in the Kinko's deal, spending another few million on advertising their future face of FedEx is nothing - it is chump change.
Once this company is transitioned to what you outlined, it's a huge win.
For the shareholders of FedEx and executive management, yes, For the wage employees of Express, no. Even for some of the salaried employees of Express, it will be a losing deal.
In the meantime, advertising copies in centers that have no one to do them is a horrendous decision.
I think you are using a local/metro area condition (inability to hire and retain staff), to generalize to the nationwide status of Office. There are a couple of Office locations I do occasionally go into (one has a VERY good source of info for me), and both are well staffed for the traffic they have. Staffing has been trimmed, but I haven't noticed any real problems. There has been issues of new employees not being trained, but again - a minor issue. I haven't heard of any issues relating to a nationwide issue of inability to recruit staff.
As they rightsize it, the model will work fine. Of course, you will have to release all the overpaid managers and high paid managers.
And do you think that will be a problem for FedEx?? You did read the posts by the Memphoid looking for a scoop on her future, did you not? Tossing overpaid salaried types won't be any problem at all for FedEx Corporation. They are all scrambling now trying to make themselves look important enough, to be "passed over" by the angel that comes at night...
Office store managers recently went from being salaried to wage employees... That should tell you something right there. Step one, convert from salaried to wage, step two, restrict hours to no more than 40, step 3, restrict hours to something much less - possibly even make store managers part-time with a greater role for "area" managers. Maybe even have the "assistant managers" do day to day management of a location, then have a single "Manager" keep an eye over multiple stores - increase the "span of control" of base level "managers" and cut out an entire level of managment... Express likes to have at least 10, preferably 15 wage employees under a single operations manager - no reason to NOT believe that the same span of control will be introduced into Office in the future.
I have no information that this will indeed happen, but the "dots do lineup" when taken into context of how FedEx is looking to restructure.
As far as Cheetah goes, it's a mess. I hope it becomes functional because it's current function doesn't work.
I have no doubt that it is. Dynamic Route Assignment (DRA) within Express is also a mess. It functions quite similiarly to how Cheetah is supposed to function in how software is supposed to take over all the thinking and just have drivers operate a vehicle and follow dots on a map.
DRA is GOING to be the future of Express - it WILL happen. UPS already uses a similar system to DRA, Express is playing catch-up in this regard. Once the issues with the software assigning routing and prioritizing stops is worked out, Cheetah will become a major revenue component of Office. In addition, FedEx is anticipating about 10% of its total volume which constitues "intra-metro market" shipments that currently run through Express, to be shifted over to Office running same day pickup and deliveries at a price lower than Express Standard Overnight service - with a greater final margin. This is NOT speculation on my part.
We can all see where it's going from a global perspective, small shipping terminals with cheap help. FedEx needs to wipe out expensive Express and Kinko's employees so they can get as many team members on food stamps as possible.
You just received an "A" on your final from the Fred S School of Business Management.
