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Q2 2014 Earnings

July 29, 2014
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Cost Savings Through Capacity Building

Abstract:

Through a range of innovative global programs, The UPS Foundation, the philanthropic arm of UPS, has developed a multi-sector commitment to urgent humanitarian relief, allowing the company to leverage its immense logistics and supply chain knowledge to help organizations better respond to disaster.

Through a range of innovative global programs, The UPS Foundation, the philanthropic arm of UPS, has developed a multi-sector commitment to urgent humanitarian relief, allowing the company to leverage its immense logistics and supply chain knowledge to help organizations better respond to disaster.

UPS delivers three key components to disaster relief efforts – time (volunteerism), talent (skills and knowledge of UPS employees) and treasure (financial support). These programs are designed to have a global impact, reach disproportionately underserved populations, minimize human suffering and speed economic recovery when disasters strike by supporting innovative NGOs.

UPS works with numerous non-profits to increase their capacity and efficiency by sharing expertise, business best practices and resources.

Key Considerations for Non-Profits Working in Urgent Humanitarian Relief:

  • The disaster relief lifecycle has three distinct phases: preparedness, response and recovery. Non-profits are placing a larger emphasis on the recovery phase, which includes rebuilding. This does not negate the importance of the other phases, but highlights the immense resources needed post-disaster. 
  • Skills-based volunteerism continues to be desirable to both non-profits and businesses as businesses prefer partnerships where their skills and resources can be leveraged to help drive the organizations' missions. Non-profits are able to realize operational and cost-saving improvements by leveraging the business-based skills of volunteers.
  • Business and disaster relief non-profits are continually looking for ways to better work together. Some key challenges include: relationship building pre-disaster; the need for better metrics around impact and contributions; and aligning the timing and quantities of volunteers and in-kind donations.

Examples in Partnership Relief Efforts:

  • Horn of Africa Drought - Working with CARE USA, UPS donated the shipment of 136 metric tons of vegetable oil from Kenya to Ethiopia. CARE's Ethiopia drought response program relies on the fortified vegetable oil as an important nutritional component of the food CARE distributes to drought-affected people. With the famine persisting, the delivery of ongoing aid is a huge cost burden on non-profits' limited resources. This has provided an opportunity for UPS to leverage its logistics expertise to help CARE address the needs of those in the Horn of Africa.
  • Hurricane Pre-Positioning Project - UPS and the American Red Cross worked together to preposition trailers of relief supplies around the gulf coast prior to hurricane season. This project included transporting 18 trailers of cots, blankets and comfort kits from Atlanta and Hattiesburg, Mississippi to warehouses in Zephyrhills, Florida and Alexandria, Louisiana. By working with UPS to preposition supplies, the American Red Cross was better prepared to quickly address the needs of those affected by hurricanes.
  • The Mosquito Net Campaign - UPS worked with UNICEF to provide in-kind trucking solutions to transport much-needed Long Lasting Insecticidal Nets (LLINs) from Tanzania to the Democratic Republic of Congo to help combat the spread of malaria. UPS delivered 21 trucks to a UPS sponsored warehouse in the Uvira region of the Democratic Republic of Congo, helping UNICEF to deliver lifesaving protection.
  • Connecting Donors and Non-Government Organizations (NGOs) - Aidmatrix connects donors to the needs of relief agencies who respond to disasters. However the transportation costs of the donated items are sometimes prohibitive. UPS donates the transportation of relief supplies. UPS also worked with the organization to improve its supply chain technology, providing greater visibility into non-profit needs.

Capacity Building Efforts in Warehousing and Supply Chain Management:

  • CARE and Its Supply Chain – Through UPS's ongoing relationship with CARE , Dale Herzog, director of humanitarian logistics, provided his logistics expertise making 25 capacity building project recommendations to increase efficiency in CARE's supply chain program. UPS shared both operational and cultural changes. UPS also assisted procurement by creating process maps to increase efficiencies that save time and money.
  • American Red Cross - By sharing its logistics and warehouse expertise, UPS helped increase the American Red Cross' warehouse pallet capacity from 4,900 pallets to 9,500 pallets all while using 17 percent less space. UPS worked to reduce the warehouse aisle width from more than 13 feet to 10 feet, easily accommodating forklifts and creating additional space. By maximizing space in current facilities, the American Red Cross eliminated its need for additional warehouse space, ultimately saving valuable dollars.
  • Salvation Army in Haiti - Understanding that the long-term renting of warehouse space was extremely expensive following the January 2010 Haiti earthquake, the Salvation Army decided to build a warehouse in Haiti to reduce its need for rented space.  The organization looked to UPS to provide plans to accommodate both near-term and long term warehousing needs. UPS provided the Salvation Army with layouts, drawings and recommended specifications regarding door dock heights, turning radiuses, pallet storing and fork lift clearances, among other best practices for this new warehouse. UPS's expertise on warehouse optimization and supply chain management will help the Salvation Army design and operate a warehouse that will allow the organization to respond to the long-term needs of Haitian citizens.

For more information, contact:

404-828-4393

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