Technology Powers the Magic of the Holiday Season at UPS
Nov/Dec 2012
Jack Levis

In the early 19th century, the legend of Santa Claus gained popularity in American culture, telling a magical tale of gifts delivered overnight to homes all over the world. The impossibility of this logistical feat was explained simply by magic; however, today this “magic” takes the form of advanced M2M technologies, which facilitate the successful delivery of more holiday packages to more people and places than ever before.

Last year, in the week leading up Dec. 25, 2011, UPS delivered 120 million packages worldwide, with more than 22 million packages delivered on December 22 alone. Without resources such as a flying sleigh, a bottomless sack of toys, or an army of elves, UPS turns to the next best thing to successfully pull off this holiday miracle: package flow technologies, wireless devices, fleet telematics, and advanced analytical programs.

Technology has always played an important role at UPS, encompassing every element of operations from distribution centers and warehouses, to trucks, to drivers’ handheld computers, and even down to the packages themselves. Just as Santa Claus knows the wishes of every child around the globe, UPS knows the status of every package or shipment in its care through the use of technology.

Package flow technologies

At any given moment, millions of UPS packages are on their way to a different location somewhere in the 220 coun- tries UPS serves. Not only must each package make it to the right location, it must get there on time, particularly around the holiday season when volumes reach peak levels. Package flow technologies facilitate the UPS delivery of tens of millions of shipments per day by predicting future outlook of package deliveries, planning operations based on that prediction, executing, monitoring, controlling, adjusting, and ultimately delivering each package to the right recipient at the right time.

Package flow technologies virtually encompass the entire shipping process, starting with the shipping information provided by the customer who sends the package. This information helps populate an advanced label, referred to as a “smart label” by UPS. It contains all of the information relevant to a specific delivery and helps to direct the package through UPS’s distribution network. This information is sent immediately to the UPS destination building before the package is even picked up. Dispatch supervisors then use predictive-analytics tools to help determine a balanced package load for each outbound truck and delivery route several days in advance. Planning tools analyze this information and point out routes that have too many or too few deliveries or those that are inefficient. Finally, when the package arrives at the destination building, another label, referred to as “PAL, preload assist label” by UPS, is printed telling UPS employees exactly what to do with that package, down to the shelf it will sit on inside the delivery truck.

Advanced hands-free barcode scanners are used at UPS package sorting facilities to quickly and efficiently scan the label and ensure packages are loaded onto the correct truck. In the rare instance a package is misloaded, scanners produce an audible alert notifying UPS package sorters to take corrective action.

During the holidays, technologies such as smart labels and barcode scanners are particularly important, as UPS employs a large number of seasonal workers, many of whom are in charge of routing and loading packages onto UPS delivery trucks. Thanks to package flow technologies, smart labels, and wireless barcode scanners, the training time for seasonal hires can be reduced by up to 95%, reducing the time spent memorizing codes and loading procedures.

In addition to increasing the efficiency of UPS’s seasonal workforce, package flow technologies also increase the efficiency of UPS’s overall operations. Millions of packages are flowing through the UPS system on any given day, and even a few extra seconds spent on each package could increase lead times and costs for UPS and its customers.

Technology guides UPS drivers

UPS operational technologies extend beyond package sorting and loading. With all the packages loaded, technology shifts from the hands of employees at distribution centers to the hands of the drivers on the road.

A UPS driver’s greatest tool while out on the road is his DIAD (delivery information acquisition device) handheld computer. The DIAD allows drivers to view all of the packages loaded on the truck, the package’s exact shelf location and customer preferences—without ever having to look in the truck. In addition to truck inventory, the DIAD provides the driver with that day’s delivery route. To ensure a driver’s DIAD is always providing and receiving the latest information, the DIAD V also has the ability to jump between cellular providers. One of the most advanced and flexible capabilities of the DIAD is its ability to receive two-way communication and update a driver’s delivery and pick-up schedule even after he has left the loading facility. This feature allows UPS drivers to provide an enhanced level of personalized customer service.

Even after a package has been loaded onto a truck for delivery, the package sender can still schedule a delivery intercept as needed. Through a combination of proprietary routing and tracking software and the DIAD hardware, the driver is immediately notified and the package is intercepted and redirected to return to sender, deliver to another address, reschedule delivery, or hold at will call.

The culmination of these operational technologies makes possible the newest suite of on-the-road technologies that enables the package receiver, rather than the sender, to reroute or intercept a package. The new personalized service, known as UPS My Choice, is made possible when UPS software provides a wireless update to an individual notifying her that her package is on the way and will arrive within a four-hour time window—or, for a nominal fee, within a two-hour appointment. Individuals can also notify their UPS driver if they will not be home to receive the package and can then either sign for it electronically or reroute it to a friend or neighbor’s house or to a The UPS Store location nearby. Just as package flow technologies tell preloaders exactly where to load a package onto the truck, this customer-facing service enables package recipients to tell UPS drivers exactly where to leave their package, whether on the front step, at the back door, or by the garage.

Make a list and check it twice

While package flow and wireless tech- nologies enable UPS to successfully and efficiently deliver millions of packages to millions of people in the least amount of time, they are not the only technologies operating behind the scenes at UPS. In order to ensure every day is just as efficient, if not more, than the last, UPS employs telematics solutions to continu- ously improve operations and further support the rising flow of packages every year. By installing data-collecting hardware onto UPS delivery trucks, UPS can monitor operations at a high level and then use analytics to review the data and adjust the daily routine as needed.

Telematics works by capturing data about UPS’s delivery package cars, as well as global positioning systems, serving almost as the brain of the truck and pinpointing opportunities to coach drivers to make adjustments that save fuel, optimize performance, and improve maintenance. At the end of the day, telematics hardware transmits all of the data gathered to the UPS central store where it is crunched alongside information transmitted from drivers’ DIADs.

Ultimately, a driver’s truck and his or her DIAD work together to provide a report on packages that were successfully delivered, the exact route the truck followed, how long the route and deliveries took, how much fuel was used, and more. In fact, more than 200 engine measurements are made via telematics, including speed, breaking patterns, oil pressure, and idling time. Other sensors throughout the truck monitor the use of seat belts, cargo doors, and reverse gears, among other things.

Once UPS has this data, analytics are employed to turn the data into useful information to improve operations. Since integrating telematics into its fleet, UPS has employed analytics to improve driver habits such as idling, which has been reduced by 15 minutes per driver per day and resulted in a fuel savings of 25 gallons per driver, per year. This adds up to an estimated 1.4 million gallons in fuel and cost savings each year.

To some, revealing the technologies behind the logistics of the holiday season diminishes the sense of magic and wonder surrounding this time of year. However, UPS knows that successfully delivering so many packages around the world is a holiday miracle made possible by leading-edge technologies. Delivering 22 million packages in one day would be impossible without the support of advanced operational technologies, in combination with a team dedicated to serving customers throughout the holiday season. It’s almost enough to make one wonder if Santa’s magic is perhaps a part of the equation after all ...


Jack Levis is director of process management for UPS. He can be reached at jlevis@ups.com



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