If your company employs almost 400,000 people and moves upwards of 4 billion parcels internationally each year (that’s almost 17 million daily), it makes sense that your motto would be, “We Love Logistics.” The technological hurdles such a company would face on a daily basis are astronomical.
While its physical capabilities (enormous workforce and impressive fleet) have helped make UPS an industry leader, its mobile technology has helped refine operations, improve productivity, and ultimately lead to the efficiencies that push shareholder value. Businesses can learn a ton from the decisions UPS has made throughout its lifespan, but there are three key takeaways for IT decision makers.
Budget for Innovation
UPS has refined their way to logistical superiority by investing in technology. The company’s $1 billion IT budget has given them the flexibility to develop and support the complex infrastructure at their core and move the business forward at a steady pace. In many ways, the company’s technological foresight is what made UPS a success.
One of the key pieces to UPS’ technological success has been the development of proprietary mobile technology. Each of their 100,000+ drivers is equipped with a DIAD (Delivery Information Acquisition Device). The first DIAD arrived in 1990, and digitally captured delivery information such as signatures. Subsequent generations added communication features, faster processors, and upgraded wireless capabilities.
With the advent of the DIAD, the company dove head-first into the future. The mobile device provided new possibilities for automation, paperless documentation, and most importantly, a new way to capture customer insights through data.
Their mobile platform has undergone five generations of evolution. It’s evolved from an electronic signature device to a robust content delivery system. The newest iteration features fast Wi-Fi support, on-the-fly cell carrier switching, and a high-quality color screen to deliver training videos and navigation.
All of these upgrades in technology have had huge implications for the entire supply chain. It has never been easier for shippers, drivers, and customers to make smart shipping decisions and track packages. While technology enables a smoother experience for its customers and employees, UPS also leverages its mobile tech and data collection to make sound business decisions.
Leverage Big Data
Currently, UPS is working on a project to collect and crunch a staggering amount of route data for optimizing shipping routes. UPS’ proprietary navigation system, ORION (On-Road Integrated Optimization and Navigation), uses more than 250 million address data points to deliver ideal route information to drivers throughout its network. Nearly half of all UPS routes are expected to be ORION-optimized by the end of 2014, with the remainder to be completed by 2017.
The expected results of this massive data experiment are equally massive. UPS projects a reduction of 1 mile per day per driver, which translates to roughly $50 million in savings for the company. In 2013, the company had an estimated reduction of 1.5 million gallons of fuel and 14,000 metric tons of CO2 emissions. These data-driven decisions bring savings to customers, provide value to shareholders, and also benefit the environment.
A Clear Message to Business Leaders
Investing heavily in technology and IT infrastructure can provide huge amounts of value in all aspects of your business. The UPS story is a great leverage point for IT decision makers advocating for a budget that makes room for sustained innovation. Their success also shows the competitive advantages companies can gain by embracing advances in mobile technology to foster customer relationships, and leveraging big data to guide business decisions that can add millions of dollars to the bottom line.
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