Special Delivery

UPS wraps up a multiyear project to speed package deliveries and save millions of gallons of fuel.

Neither snow nor rain nor heat nor gloom of night stays these couriers from the swift completion of their appointed rounds. But, as United Parcel Service can attest, the back-end logistics can keep them from ever getting started.

This year, the world's largest package-delivery service is expected to finish the rollout of its Package Flow Technology project, an ambitious 10-year effort to revamp the way packages are received, loaded onto delivery trucks and routed to the appropriate destinations.

UPS's old system relied on workers loading the trucks to match the address on each package to the right truck and shelf location. To do their jobs, loaders needed to memorize a list of between 50 and 2,000 addresses and map them to the associated location ID number, truck number and shelf location within the vehicle. New hires required 35 days to get up to speed; route changes involved retraining.

The new system synchronizes the dispatch planning system containing package delivery data with a database of U.S. Postal Service addresses.

UPS receives information on incoming parcels before they come in, and matches up the appropriate loading and routing data. When packages arrive, they're scanned and a sticker is affixed with the proper loading information. Loaders simply read the label.

The system also helps drivers by providing, for every stop, a more accurate list of packages and where each is located on the truck. It used to take 19 seconds to pull packages. "We reduced it a good bit," says Chuck Findora, dispatch planning supervisor at the Westchester, Pa., package center. "They're spending more time delivering and less time looking for the package."

The system also allows for far better route optimization, saving 29 million miles of travel and 3 million gallons of fuel in 2007.

Filling Trucks Faster

Package loaders are also more efficient. "Before, a loader might have been able to load two vehicles a day. Now, it's not uncommon for them to load three," says Mark Hilbush, vice president of information services.

"Unionized labor is more expensive, so the ability to manage it more efficiently -- that's important, especially when your biggest competitor is nonunion," says Donald Broughton, an analyst at Avondale Partners.

The toughest part of the project was database integration. "There were nights when I almost cried myself to sleep," says Jack Levis, director of package process management and business project manager for the package flow initiative.

To work, data had to match up exactly. It didn't. "Humans could match those up if the name 'Wal-Mart' was misspelled. For computers, that was a problem," he says. That issue has been mostly resolved.

Managing local servers and databases in hundreds of locations was also a challenge. "We created hundreds of small data centers," Levis says. While UPS initially relied on local administrators, that didn't scale. "Now we do as much management remotely as possible," he says.

Once UPS had pristine package data fully synchronized with its back-end systems, it could leverage that in new ways. "The data about the package [is] as important as the package itself," says Levis.

For example, loaders used to have to physically search for packages that customers decided to reroute or not send after all. Today, such requests can be processed through a single database update.

"The data they're using to manage assets is a marketable advantage," says Broughton.

If the response to the current system is any indicator, those changes will be well received. Findora says the 90 or so drivers in his package center can better plan their days and have fewer missed stops. "Not one of them would go back to the old way," he says.

Copyright © 2008 IDG Communications, Inc.

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