UPS makes deliveries today, but will the arrival of 3D printing change all of this?

UPS makes deliveries today, but will the arrival of 3D printing change all of this?
Image Credit: Ken Teegardin

When someone mentions UPS to you, what do you generally think of? Probably one of their brown trucks that we see everywhere or perhaps it is one of their delivery employees dressed head-to-toe in their traditional brown uniform. However, this may all be changing. The product managers at UPS believe that they have seen the future and it’s all about 3D printing.

What 3D Printing Means To UPS

As I suspect that we all know, UPS is in the business of delivering packages from one location to another as quickly as possible. That is exactly why the product managers at UPS became so alarmed when 3D printers first started showing up. If you are not familiar with 3D printers, they are machines that use a digital image of a solid object that someone wants to make and then slices that image up into thousands of layers. The printer then proceeds to print each of those layers one-at-a-time in sequence. The actual printing can be done in plastic, metal, or some other material.

The 3D printing technology burst on the scene just a little while ago. Since then it has been growing at an amazing rate: 34% per year for the past three years. The reason that 3D printers caught the attention of the UPS product managers was because they saw it as a potential threat that could upset their product development definition. If people can print what they need, be it a spare part or a complete system, then there would be no reason to have to order something that would have to be shipped. 3D printing is still very new, so nobody yet knows how all of this is going to work out.

UPS is not the only package delivery service that is taking a close look at 3D printing. The other major package delivery service, FedEx has admitted that it is carefully studying the technology in order to determine how it will be impacted by it Additionally Amazon has already filed some patents regarding how they would use 3D printing to shorten the delivery time of some of their products to their customers. The UPS product managers believe that more and more companies are going to start to adopt 3D printing as a part of their manufacturing processes.

How UPS Is Preparing For The Future

Although a future in which you and I could just walk out to our garage, turn on the 3D printer and have anything that we wanted made before our eyes is probably unrealistic, 3D printers have the potential to change UPS’ business. One analysis has taken a look at products that are being shipped from China to Europe and has decided that only 2% – 3% could be 3D printed today. However, that is still a great deal of packages that could go away almost overnight.

The UPS product managers are not taking the arrival of this new technology sitting down. Instead, what they are planning on doing is meeting it head on. They have installed 100 industrial grade 3D printers at their distribution hub in Louisville, Ky. What the product managers want to find out is if the use of the 3D printers can result in supply chains becoming shorter and the need for shipping services decreasing.

The question that the product managers are trying to find an answer to is if UPS should feel threatened by the arrival of 3D printing technology or if they should see it as a new opportunity that they need to find a way to capitalize on. They are betting big on their experiment: the plan is to expand their 3D printing capability by adding another 900 3D printers next year. Depending on how things turn out, UPS may open similar 3D printing facilities outside of the U.S. in the future. There are a number of issues that still have to be worked out. Printing speed is fairly slow and the lawyers will have to determine who bears liability for the products that are printed.

What All Of This Means For You

UPS is currently a very successful package delivery company. However, the UPS product managers have detected that there is a disruptive technology now on the market, 3D printing, that may decrease or eliminate the need to ship packages. They are taking steps to learn more about 3D printing.

3D printing is a very new technology and has only been around for a few years. It allows someone to create a drawing of a solid object and then print it out in a sequence of thousands of stacked layers. Other shipping companies like FedEx see this threat also and are keeping a close eye on the technology. UPS has installed 100 3D printers in one of its hubs in order to closely study how businesses are going to go about using this new technology. They will grow their facility next year and may even expand internationally.

The UPS product managers are showing some real initiative here that will look good on their product manager resume. 3D printing is brand new and right now does not represent a threat to UPS. However, they are already taking steps to study just what the impact of this new technology is going to be on the products that they are offering today just like their product manager job description tells them to do. What they learn from this investigation is going to help them to prepare the company for what is certainly to come as the 3D printing technology matures over time.

– Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Product Management Skills™

Question For You: Do you think UPS is doing the right thing or are they moving too fast because 3D printing is still so immature?

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What We’ll Be Talking About Next Time

Have you ever been broke? I mean really, really broke? If you have, then you know what you have to do when you need to buy something. It could be something as simple as toilet paper, or coins to do your laundry. You need money and you have none. When this happens, you go on a search – you turn over everything in your home in order to find those few coins that may have gotten away from you. The sofa is a great place to look – you always know that you’ll find something that has slid between the cushions. As product managers, sometimes there is not enough money to do what we know needs to be done according to our product development definition. When this happens, we’ve got to go and check out the sofa…

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Hostess product managers are back from the brink, now what?

Hostess product managers are back from the brink, now what?
Image Credit: Christian Cable

So how do you feel about the snack foods made by the Hostess company: Twinkies, Ho Hos, Ding Dongs, etc.? I must confess that these days I get a little overwhelmed when I think about just how rich they are; however, in my childhood I suspect that I ate more than my fair share! The Hostess company has had a rough few years, but now they are back. Their product managers have the task of trying to figure out where the company needs to go now.

The Fall And Rise Of Hostess

You would think that a company that makes foods that we all love to eat would never have any financial problems. However, you’d be wrong. The Hostess company fell in to some very serious financial problems back in 2013 and ended up being bought out by a private equity firm. At the time Hostess employed 19,000 workers and ran a large number of bakeries that were spread all over the place. It was an inefficient and poorly run company.

Its new owners started things out by shutting everything down and dismissing all of the company’s employees. They then restructured how they wanted to go about making Hostess products. The company now operates three bakeries which are located in Indianapolis, IN; Columbus, GA; and Emporia, KS. Everything that they make is then shipped to a central warehouse that is located in Chicago, IL.

The new Hostess now employees only 1,000 workers They have been able to grow their sales volume back to just about where it used to be at US$1.3B. Hostess today sells only Twinkies, Ho Hos, and other snack foods. The old Hostess sold other lines that were purchased by other companies when Hostess was sold. The product managers at the company have been very successful in getting their products into new locations that they’ve never been in before such as Carl Jr’s restaurants and movie theaters.

Next Steps For Hostess

The Hostess product managers have been thinking about what they can do next. Sure, bringing the company back from the edge is good, but now what? They need to find new markets and rethink their product development definition so that this company can enter them in order to continue to grow the bottom line. They have a very clear idea of what the company does – they are a baker. Now the only real question that they are facing is just exactly what should they add to the line of products that they are baking?

It turns out that the Hostess customers had the answer. When Hostess took surveys of their customers, what they discovered is that their customers thought that they had a bread product. Hostess has never created a Hostess-branded bread. However, the customer is never wrong, right? When Hostess talked with their convenience and drug store customers about providing them with bread, they got a lot of interest. The reason was because these customers wanted one brand to provide them with both bread and other baked goods. They currently were not getting very good service from their local bread companies because these stores don’t sell a lot of bread and so it’s hard for bread company drivers to justify making a stop at them. If the Hostess product managers can meet this need, then they’ll have something to put on their product manager resume.

The product managers studied the market for bread. Currently the major bread companies provide direct-to-store deliveries of their bread and their drivers then stock it on the store’s shelves. The Hostess product managers decided to do things differently. The first thing that they got rid of was the direct to store model. Instead, they now bake the bread in their three bakeries and ship it to their warehouse in Chicago. In the warehouse, the bread is then bundled with each retailer’s full order of the complete line of Hostess products. This complete package is then sent to the retailer’s distribution center to then be sent to individual stores. One key advantage of the Hostess product is that it is replacing frozen bread and it does not have to be thawed before being put on display.

What All Of This Means For You

The product managers at Hostess have been through a lot in the past few years. Their company ran into financial problems, various product lines were sold off, and eventually the entire company switched owners and was shut down. Now the company has come back as a more streamlined firm and they’ve been able to regain the level of sales that they had. However, the pressure is now on the product managers to do what their product manager job description says they can do– find the answer to the question what’s next?

It turns out that the answer to that question has been provided by the customers that Hostess serves. They’ve told Hostess that they thought that they already made bread and that they’d be willing to buy it from Hostess in order to streamline their purchasing. The Hostess product managers have now started to make white and wheat bread as well as buns for hotdogs and hamburgers. They won’t be shipping directly to individual stores, instead they’ll send their bread to a retailer’s centralized distribution center along with other Hostess products.

The strategy of expanding from their home market of indulgent treats does carry some risk for the Hostess product managers. They need to make sure that they don’t end up confusing their customers about just exactly what types of products they are offering – treats or staples. As long as they can make life easier for their customers, they can expect that they’ll keep ordering their bread from Hostess.

– Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Product Management Skills™

Question For You: After bread, what product do you think that the product managers at Hostess should introduce next?

Click here to get automatic updates when
The Accidental Product Manager Blog is updated.

P.S.: Free subscriptions to The Accidental Product Manager Newsletter are now available. It’s your product – it’s your career. Subscribe now: Click Here!

What We’ll Be Talking About Next Time

When someone mentions UPS to you, what do you generally think of? Probably one of their brown trucks that we see everywhere or perhaps it is one of their delivery employees dressed head-to-toe in their traditional brown uniform. However, this may all be changing. The product managers at UPS believe that they have seen the future and it’s all about 3D printing.

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