Architecting the Enterprise

A TOGAF Services Provider

ZExpress
Case Study Brief

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ZExpress Case Study Brief

Copyright Architecting the Enterprise Ltd. 2014

July 2014
Page 1

Background
In the face of major changes in market conditions, one US based package delivery company, ZExpress, based in
Atlanta, has decided to acquire and merge with a number of European and Asian delivery companies. They wish to
create a major force in the distribution and logistics markets and use their brand name and marketing capability,
recognised as the best in the industry, to create a single worldwide distribution company, and to seek major new
business opportunities.
Similarly Pacific Rim Logistics and Home and Colonial Carriers had already decided to merge to form a single new
United Package Express for exactly the same reason. This merger has yet to be formally completed.
The major drivers for these market mergers are major changes in market conditions:
The market leader Global Express Deliveries threatens the survival of these smaller companies
A fourfold increase in the price of oil has changed the fundamental economics of the package delivery
market
An expected requirement to develop plans to minimise or mitigate CO2 and other greenhouse gas emissions.
The characteristics of the market leader, Global Express Deliveries, are:

Totally global coverage. Ability either directly or through local partnerships to deliver a package to any
location on earth.
Sophisticated tracking capabilities so that the sender and recipient can track a parcel from origin to
destination.
A dedicated airline and trucking fleet.
Broad market presence.
Strategic partnerships with a number of major companies to provide full logistics support to their supply
chains.

However, as a large company, with a dominant market share, Global Express Deliveries is beginning to show signs of
complacency and a lack of agility.
ZExpress has proposed to the newly forming United Package Express that they merge together to become one
distribution and logistics company and exploit the ZExpress marketing reach.
The Chief Operating Officer of Global Express Delivery has been recruited as the new CEO of ZExpress. He recently
resigned from Global Express Deliveries following a difference of opinion with the CEO over corporate strategy. He is
tasked with bringing the three companies together to create a single organisation under the ZExpress banner.
Pacific Rim Logistics and Home and Colonial Carriers are very keen to do this too. Their plans and investment are
already underway to merge with each other and they recognised that there are significant areas of weakness still
that a merger with ZExpress would resolve. The management and shareholders have agreed to merge the businesses
and leverage the best of each.
Each of the existing business will take initially assume responsibility for one of the three geographic regions.

Pacific and Asia

Europe and Africa
North and South America

ZExpress Case Study Brief

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July 2014
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ZEXPRESS
ZExpress is currently a successful company. It has a good US base and has built its business by being agile and
operating only in lucrative markets.
Its Executives were formerly business and marketing executives at Global Express Deliveries who found their way
blocked by senior management. They have focussed on opening up the US and South American markets.
They have been able to build on their inside US market knowledge but they have limited knowledge and capability
for expanding outside their American facilities and diversifying further. They see this as a major obstacle to business
growth. They are an enthusiastic team and want to spread their wings.
However, Global Express Deliveries is increasing its dominance and the recent four-fold increase in the price of oil
means that the company is now on the verge of reporting a loss-making quarter for the first time in its history.
UNITED PACKAGE EXPRESS
Currently consists of two companies:

Pacific Rim Logistics - Headquarters in Sydney, Australia. Service all of the major territories around the
Pacific Rim, including the major industrialised areas of Asia and North America. Pacific Rim Logistics is
currently losing money. It has cash reserves to continue losing money at its current rate for no more than 18
months.

Home and Colonial Carriers - Headquarters in Chipping Sodbury. A long standing British company with
strong Commonwealth connections which has recently (last 20 years) extended to Western Europe. Home
and Colonial Carriers is barely breaking even.

Prices set by Global Express Deliveries are lower than either Pacific Rim Logistics or Home and Colonial Computers
can afford to deliver. Both companies are losing market share so their target is to combine forces and help reduce
their costs to be more competitive.
Both companies are expecting to make major redundancies in their operations as a result of their merger. Both
companies fleets are getting old and they are looking to replace all their vehicles within the next 2 years. They are
not currently planning to replace their aircraft fleet so are looking at approaches to keep them in service or
alternative services (from, for example, scheduled airlines or contracted air freight).
The merger with ZExpress will improve their business capabilities and is an opportunity to reduce costs further to be
directly competitive with Global Express Deliveries.

ZExpress Case Study Brief

Copyright Architecting the Enterprise Ltd. 2014

July 2014
Page 3

The Business Context

The new CEO of ZExpress
Before being recruited as President and CEO of ZExpress, the new CEO was Chief Operating Officer for Global
Express Deliveries, a position he took up a year ago after heading their Asia Pacific operation. Since leaving Global
Express Deliveries he has engaged in discussions regarding a strategic partnership with the Bonsai Motor
Corporation. Bonsai Motor Corporation has shown an interest in a partnership with ZExpress because they feel that
Global Express Deliveries lacks agility and does not show sufficient interest in the potential relationship.
On the announcement of the merger of all three companies, the new CEO explained his vision as follows.
I have four business goals for the new organisation
1. Increase Revenue - I believe that the combined capabilities of the three companies will enable us to offer a
much broader range of services, and enter into strategic partnerships in completely new areas of business. I
expect to increase our combined worldwide market share from 12% to 30% over the next 2 years.
2. Reduce Costs - There is considerable duplication between the companies. By eliminating duplication I expect
to reduce our costs by 30% in the same period. This will allow us to match Global Express in terms of price.
3. Improve Customer Service Simplification of our systems will enable us to invest in state-of-the-art services
to track packages from pick-up to the point of delivery. We will become the market leader in customer
service.
4. To continue to be the most exciting organization for our staff and suppliers to work for and ensure that we
retain and grow our resources worldwide to be the best distribution and logistics company there has ever
been. Our joint teams are working on an infrastructure that will enable us to be agile and responsive to our
customers business needs across the world.
This is an exciting time for the distribution and logistics business. Thank you.

The new VP Innovation for ZExpress

With the focus on providing a best in-class customer experience, the CEO has created a new post to reflect
the importance of broadening the range of services and new strategic partnerships. That this person came
from Japan is significant and reflects the importance placed by the CEO on building a relationship with
Bonsai Motor Corporation.
He is also charged with investigating strategic partnerships with 21C-COM, a 4th generation mobile
communications provider.

ZExpress Case Study Brief

Copyright Architecting the Enterprise Ltd. 2014

July 2014
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Bonsai Motor Corporation

Bonsai Motor Corporation is a wholly owned subsidiary of one of the major Japanese car makers. It has been
created to respond to a worldwide demand for a completely new approach to motoring in the light of increasing oil
prices.
The Bonsai Cron (pronounced mu-cron) is a new small lightweight three wheeler car, built in India, based on the
design of the auto-rickshaw that is ubiquitous through most of Asia. With a hybrid battery/petrol design this vehicle
will accommodate the driver and two passengers. The design has been updated to
Meet US and European emission control regulations
Meet US and European safety regulations
Provide protection to passengers against most weather conditions
The vehicle has been demonstrated to travel in excess of 120 miles on a US gallon of petrol.
Bonsai Motor Corporation is seeking a strategic partnership with a global logistics company for the distribution of
accessories and spare parts for the Cron. The logistics company will hold stocks of parts and guarantee delivery
within 24 hours to any location in the world.
The new CEO of ZExpress believes this could be the first of many such arrangements for ZExpress.
In order to get this business ZExpress must be in a position to demonstrate full global presence with a recognized
global identity within 6 months.
21st Century Telecon (21C-COM)
21C-COM is a worldwide network of 4G mobile communications providers. In common with most providers they are
struggling to pay debts associated with acquisition of 3G and 4G licenses and investment in infrastructure. They have
a great deal of spare capacity and across all of the providers cover 92% of the worlds population.
While at Global Express Deliveries, the new CEO of ZExpress had exploratory talks with 21C-COM about using their
network together with GPS enabled devices to provide a real leap forward in package tracking. Global Express
Deliveries did not feel the need to make such a service improvement. The new CEO of ZExpress wants to examine
this further as a way of leap-frogging a rather complacent market leader.

ZExpress Case Study Brief

Copyright Architecting the Enterprise Ltd. 2014

July 2014
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Existing Business Processes

Distribution Services
ZExpress use credit card services for all their payments plus call off contracts for volume customers. No cash is
accepted.
Processes are:

Delivery
o Customers order through web and call-centres.
o Collection and order management through independent local delivery teams. Each independent delivery
team has their own collection points and distribute to local customers.
o Each State has a grid reference service
o Local teams deliver to the next grid reference service for inter-state deliveries
o Inter State collection service transportation to other States, often by long-haul truck
o All movement is tracked on the web

Administration
o All accounting recovered at Regional level using local currencies. Same accounting package and
services/forms used
o All HR is done at local level most members of staff are outsourced independent operators. Most HR
work is on contract management.

Home and Colonial Carriers only accept packages from companies who have a contract with them.
Processes are:

Establish contract, which means checking the credentials of the customer and in some cases taking an initial upfront payment.
Customer phones to advise that a package is ready for collection.
Home and Colonial send a driver to collect the package.
The package is then taken to the nearest Delivery Depot and if necessary transferred to the Delivery Deport
nearest the delivery address, using whatever form of transport is appropriate. Home and Colonial have a fleet of
vans, but for air travel purchase space on commercial flights.
The package is placed on a van for local delivery and delivered. When the driver returns to the depot after
successful delivery, the status is changed to delivered.
At any stage the originator of the package may phone the call centre to find out the status which will be one of
o Collected
o In transit to destination
o Out for delivery
o Delivered

ZExpress Case Study Brief

Copyright Architecting the Enterprise Ltd. 2014

July 2014
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Pacific Rim Logistics accept packages from any company or individual, whether or not there is a contract in place.

Processes are:

Customers who have a contract may phone their local delivery depot to request collection, or in major cities post
their packages in delivery boxes placed at central locations that are checked several times per day.
Customers who do not have a contract must phone their local delivery depot to request collection. The agent
who collects the package has the ability to accept credit card payment at the point of collection.
A hub-and-spoke system is used for carriage. Packages are taken to the nearest regional centre to the point of
collection and from there transferred to the nearest regional centre to the point of delivery. Pacific Rim Logistics
runs its own fleet of planes linking its regional centres and fleets of vans for local delivery. If air transportation is
necessary between the local delivery depot and the regional centre, commercial scheduled flights are used.
The package is placed on a van for local delivery and delivered. When the driver returns to the depot after
successful delivery, the status is changed to delivered.
At any stage the originator of the package may phone the call centre to find out the status which will be one of
o Collected
o In transit to regional centre nearest collection point
o In transit to regional centre nearest delivery point
o In transit to local delivery depot
o Out for delivery
o Delivered

ZExpress Case Study Brief

Copyright Architecting the Enterprise Ltd. 2014

July 2014
Page 7

Organization Structures
ZExpress (Current)

Pacific Rim Logistics (Current)

Home and Colonial Carriers (Current)

ZExpress Case Study Brief

Copyright Architecting the Enterprise Ltd. 2014

July 2014
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ZExpress Merged Company

The organization structure of the new company is still evolving.
The new President and CEO has been appointed.
Short term responsibilities during the merger process have been assigned as follows:
VP Information and Technology (CIO)
VP Operations (COO)
General Manager North America
General Manager Pacific Rim
General Manager Europe and Africa
VP Innovation
VP Marketing (CMO)

CIO of Home and Colonial Carriers

COO of ZExpress
Ex CEO of ZExpress
Ex President Pacific Rim Logistics
Ex CEO Home and Colonial Carries
Snr VP Japan, Pacific Rim Logistics
Ex CMO of ZExpress

Scale of Business
Not all information is currently available to the architecture team.
ZExpress
Current share of worldwide package delivery market
(by value)
Packages handled per day
[Represents packages under control]
Package tracking enquiries per day (web site plus call
centres)
Number of aircraft in fleet
Number of vehicles in van fleet
Average miles per day per vehicle

12%

Home and Colonial

Carriers
5%

Pacific Rim
Logistics
4%

35,000,000

10,000,000

7,000,000

42

400,000
110
68,000
175

The lead time for purchase of a new cargo plane is around 8 years. Price is approximately $170m.
Pre-owned planes are readily available for between 25 and 50% of that price, depending on age, but fuel
consumption is typically 35% higher.
ZExpress in North America estimate that optimised routing could reduce the miles driven per day by up to 15%, but
that depends on having accurate information about packages to be collected and delivered.

ZExpress Case Study Brief

Copyright Architecting the Enterprise Ltd. 2014

July 2014
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Information Technology Context

All three companies have extensive IT systems to enable parcel tracking and general Management and a network of
distribution centres and depots to support business operations.
ZExpress
IT Development Centres

Major Data Centres

Package tracking
Transportation
management
Billing
Accounting
HR
Regional Centres
Package tracking
Transportation management

Delivery Depots
Terminal access to package
tracking system
Call Centres for Customer
Support

Home and Colonial

Carriers
Chipping Sodbury, UK
Bangalore, India

Pacific Rim Logistics

Chipping Sodbury, UK
Melbourne, Australia
Toronto, Canada

Sydney, Australia
Tokyo, Japan
Dallas, USA

Atlanta
Washington
Los Angeles
Dallas
Calgary, Canada
Toronto, Canada
Chicago
Seattle
Denver
Columbus, Ohio
Boston
Mexico City
Bogota, Colombia
Buenos Aires,
Argentina
Santiago, Chile
230 depots
worldwide

Newcastle
Frankfurt
Paris
Atlanta
Stockholm
Mumbai
Nairobi
Cape Town
Delhi
Singapore
Perth
Melbourne
New Zealand

Hong Kong
Beijing
Singapore
Pittsburgh
Auckland

300 depots worldwide

180 depots worldwide

Atlanta, US
Bangalore, India

Sheffield, UK
Bangalore, India

Mumbai, India

Atlanta, US
Rio de Janeiro,
Brazil
Atlanta, US
Toronto, Canada
Rio de Janeiro,
Brazil

ZExpress Case Study Brief

Copyright Architecting the Enterprise Ltd. 2014

Sydney, Australia

July 2014
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IT Support for Major Business Processes

Package Tracking

Transportation
Management

ZExpress
In-house Web-based
service developed by
formal Global Express
employees and small
web companies during
the late 90s.
Uses dedicated Red Hat
linux servers in global
ISPs based in New York
and Rio.
Customers can track
their packages from
immediate pick-up to
delivery via the web.
COTS package running
on IBM (AIX) servers

Home and Colonial Carriers

Bespoke systems developed in the
mid 1980s, written in PL1 and
running on a Fujitsu (IBM plugcompatible) mainframe system.
Regional data centres connected via
leased lines using proprietary
synchronous communications.
System access at regional data
centres and call centre via terminal
emulation on PCs.
Major customers have access to
package tracking via dial-up links,
also using terminal emulation.

Pacific Rim Logistics

Bespoke system developed
in 1998, written in C++ and
running on HP UNIX
servers. Regional data
centres connected via
VPNs across the internet
using IP based protocols.
Web-based front end
available at regional data
centres, call centres and to
all customers.

COTS package running on IBM (AIX)

servers

Bespoke systems written in

C++ and running on HP
UNIX servers
Heavily modified version of
Oracle ERP running on
Windows NT4 server
Heavily modified version of
Oracle ERP running on
Windows NT4 server
Heavily modified version of
Oracle ERP running on
Windows NT4 server
Several bespoke and COTS
applications running on HP
UNIX. Different national
implementations. Available
at all regional distribution
and delivery depots

Billing

COTS package running

COTS package running on IBM (AIX)
on Red Hat linux servers servers

Accounting

COTS package running

COTS package running on Windows
on Red Hat linux servers NT4 server

HR

Peoplesoft running on
Windows 2003 Server

Peoplesoft running on Windows

2003 Server

Sort Management
(Management and
operational control
of package sorting
and management of
distribution systems)

Several bespoke
applications running on
Red Hat linux servers.
Different
implementations at
regional centres and all
distribution centres.

Route Management

Interstate route
management by
bespoke system on Red
Hat linux servers,
running at each
transportation
management centre

Mostly control systems in

distribution facilities connected to
mainframe.
At newer delivery depots bespoke
applications on multiple platforms.
Selection tied to in-facility control
systems. Integrated to mainframe
system through messaging & file
transfer
Mainframe application managing
cargo space booking on commercial
carriers. Integrated with major
carriers through a variety of
communications methods.

Office Productivity

Microsoft Office 2010

Microsoft Office 2000

ZExpress Case Study Brief

Copyright Architecting the Enterprise Ltd. 2014

Heavily customized COTS

logistics application on HP
UNIX. Manages aircraft
routing.
New bespoke truck routing
application piloted in
Singapore. J2EE
environment on Solaris 10
Microsoft Office 2007

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Microsoft no longer supports NT-4.

Home and Colonial Carriers are finding it increasingly difficult to get staff skilled in the use of PL1 to maintain their
package tracking system.
The company wishes to investigate whether Cloud and SOA capabilities would improve their services and ensure
mobility of their staff and services worldwide.
They are keen to:
Adopt more best practices to make future mergers and growth plans easier to implement.
Move off the old platforms for more integrated solutions and technology that is sufficiently agile for
managing change in the business processes.
Fully understand the alignment between business and IT.

ZExpress Case Study Brief

Copyright Architecting the Enterprise Ltd. 2014

July 2014
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