UPS Launches Consulting Subsidiary

United Parcel Service Inc. has launched a consulting subsidiary designed to offer supply-chain management strategies that go beyond basic order fulfillment and distribution to include product design, sales and marketing, procurement, production, and cash management. Gene Long, formerly the global director of supply-chain consulting for Ernst & Young, will be president of the new business.

The subsidiary, UPS Consulting, has landed a large manufacturer and a consumer-products company as its first customers, says a spokeswoman, who declined to name the customers. In order to ensure that recommended strategies are unbiased, the senior principals will not include UPS personnel, she adds. "Recommendations will be for best-of-class providers that will include UPS, but are not restricted to UPS."

The decision to launch a business now may raise a few eyebrows, given the economic slump and decreasing shipping demands. But those factors really don't affect the consulting subsidiary as much as it would the shipping or logistics divisions, the spokeswoman says, adding that the results UPS Consulting will deliver in terms of helping businesses achieve higher levels of efficiency and reducing inventory and cycle times, are long-term investments that won't be seen right away.

Bruce Culbert, global practice leader of KPMG Consulting's supply-chain solutions, says UPS Consulting doesn't pose a threat to supply-chain consulting practices such as KPMG's or Accenture's. "A lot of their customers look at UPS as logistics and supply-chain experts," he says. But, he adds, other businesses that aren't already using UPS services might not look at them objectively. "At the end of the day, UPS wants to drive demand for their core business."