Chapter 12- IT's About Business 12.1 - United Parcels Service Uses Three Types of Analytics

Question 1

What is the United Parcels Service?
1. How many employees?
2. How many vehicles?
3. How many packages are delivered per day? How many in December?
4. How many routes in the United States?

Answer 1

A global organization with
1. 424,000 employees
2. 100,000 vehicles.
3. 21 million. It makes 120 to 175 drops per day.
4. 55 thousand

Question 2

How has an increase in e-commerce affected UPS?

Answer 2

Shifted the number of delivery stops from retailers to private residence. Half of the drops were to residences in 2021, they use to drop multiple packages at a retailer, but today they make multiple scattered drops at different homes. This makes it more time consuming and requires more routes.

Question 3

How challenge does UPS face in the business environment?

Answer 3

1. Managing a low margin business
2. Unionized workforce that is compensated highly.
3. Intense competition from Amazon’s low cost delivery, called the Delivery Partner service program.

Question 4

Why is UPS disadvantages compared to FedEx or Amazon>

Answer 4

1. FedEx is not unionized and does not have to pay its workers as much as UPS.
2. Amazon is able to have cheap service through the Delivery Partner Service Program.

Question 5

How has UPS addressed these challenges?

Answer 5

Deployed analytics applications to
- Track the real time status of each package as it moves across the UPS shipping network
- This is necessary as the UPS has complex supply chains and the customers demand to know when their packages will arrive.

Question 6

What has UPS implemented to improve its Analytics software? What is included in this solution? What is the result>?

Answer 6

• Enhanced Dynamic Global Execution (EDGE) programs which includes
  1. DAID’s,
  2. Package Placement on UPS vans
  3. Routing outbound packages
  4. Handling Undeliverable packages
  5. Package Flow Technology Systems
• Harmonized Enterprise Analytics Tool (HEAT)
• They save hundreds of millions of dollars each year.

Question 7

What has UPS’s solutions been to these inefficiencies? What do these answers? What’s the result of these additional solutions?

Answer 7

The use of descriptive, predictive, and prescriptive analytics.
Descriptive - Where are we today?
Predictive - With our current trajectories where will we be tomorrow
Prescriptive - Where should we be tomorrow.

Data needs expanded, skills of employees improved, and business impacts of analytics increased.

Question 8

What are DIAD’s

Answer 8

Hand held computers, also known as Delivery Information Acquisition Devices. They enables UPS to capture detailed data that measured the current status like driving variables in hundredths of a second. As reducing one mile per day per driver would save $50 million along the bottom line. It was implemented in the 1990’s

Question 9

Describe how package placement on delivery vans is descriptive analytics

Answer 9

In 2017 they began equipping its trucks with bluetooth receivers to reduce the number of incorrectly loaded packages. They would beep loudly if workers placed them on the wrong trucks, and give them a softer beep if they loaded it up on the right trucks. It transmits wireless signals between the scanning devices, the bluetooth devices, and the labels.

Question 10

How does the package placement device help with customer satisfaction?

Answer 10

When the drivers and employees scan it, the data is stored and it informed to the customer that the shipment is being deployed, informing them of the estimated delivery time.

Question 11

Describe Routing Outbound Packages as a descriptive analytical tool. How many employees are hired from November to January?

Answer 11

Informs seasonal workers where to direct the outbound packages that UPS vehicles pick up throughout the day and bring them too the company’s sorting facilities. 100,000 short term workers.

Question 12

What did UPS invest in during the Winter of 2018?

Answer 12

Outfitted 2,500 workers with scanning devices and $8 bluetooth headphones that would issue directions of green, red, or blue to indicate the specific conveyor belt which transports the packages to other places for further processing.

Question 13

Describe undeliverable packages as a descriptive anaytics

Answer 13

UPS makes mistakes at time, and the company has initiated a project where managers are informed about how many returned packages will arrive at the processing centre and when, so managers can assemble the right number of employees needed.

Question 14

Describe the Enhanced Dynamic Global Executions Package Flow Technologies as a predictive analytics. What was the result?

Answer 14

Drivers start the day with a DIAD that listed the packages they were to deliver and the order in which they were to deliver them. The DAID became the drivers assistant. They were able to reduce the deliver driven miles by 85 million per year and it saved 8.5 million gallons of fuel preventing 85 metric tons of carbon dioxide

Question 15

What was the purpose of the Harmonized Enterprise Analytics Tool?

Answer 15

Manage the enormous amounts of data that the DAID captures like customer, operational, and planning. It can even add new events as they occur. The company had plenty of data from the package flow DAID, but they still had to deliver the same type of service making it difficult to find optimal routes and decisions.

Question 16

What software / technology does HEAT use? What did these three technologies aid in?

Answer 16

1. Predictive analytics
2. Machine learning
3. Multi-model forecasting with seasonality forecasting.
   Forecasting, operations visibility, optimization, and reporting.

Question 17

How did HEAT help UPS during the storm in 2021?

Answer 17

Enabled UPS managers to dynamically redistribute its transportation network access to move packages to the hardest hit areas. It enabled UPS to recover quickly after the storm and to return the operations to normal.

Question 18

What prescriptive analytics does UPS take advantage of?

Answer 18

In mid 2021 they implemented the On Road Integrated Optimization and Navigation. It reorganizes a drivers route based on todays customers, needs, and packages, it designs deliveries in a very specific optimized manner. Enables UPS drivers to deliver more packages.

Question 19

What does ORION use to be successful?

Answer 19

1. UPS business rules
2. Maps
3. Times when drivers need to be at specific locations
4. Customer based preferences.
5. Up to date information about changing weather conditions and accidents.
   - Overall a continual optimization to ensure that they can read the destinations on time.

Question 20

Why did ORION switch from using publicly available maps to UPS drawn maps?

Answer 20

The public maps were not detailed enough, thus they created the maps to understand the driveway, back alleys, etc to ensure that ORION could pin point data points and maximize optimization.

Question 21

Describe the problem with being unable to predict every variable.

Answer 21

If a customer does not have a specific variable time, the system may tell the driver to go a different route each time there is a delivery, dropping it off sometimes in the morning, evening, and night which is not the greatest idea as customers generally do not like uncertainty.

Question 22

What is UPS My Choice?

Answer 22

A free system that allows residential customers to divide how, where, and when home deliveries occur. The UPS bot is integrated with UPS My Choice, and thus customers can get info as to when their package will arrive without needing to place in a tracking number.

Question 23

What is the functionality of the UPS bot?

Answer 23

It mimics human conversations, tracks packages, and provides shipping rates. The bot can be engaged with on the text, mobile deliver, social media channels, or even through Google or Alexa.

Question 24

What is the Network Planning Tool?

Answer 24

Optimizes the flow of packages in the network from loading docks too sorting to the final destination.

Question 25

What does NPT enable engineers to do?

Answer 25

1.View the activity of UPS facilities all around the world and route shipments to the ones with the most capacity.
2. They can create forecasts about package volume and weight based on an analysis of historical data.
3. Assist in grouping all outbound packages into the smallest number of trails or cargo planes.

Question 26

What does NPT enable UPS to do?

Answer 26

1. Organizes packages by destination and move them at the lowest possible cost while still meeting delivery dates.
2. Schedule truck and plane trips so that the drivers and pilots always pick up parcels on their returns trips, and do not return home with empty vehicles.

Question 26

What platform does NPT use?

Answer 26

A single cloud based platform where UPS engineers can view data and run simulations to help create their plans and schedules. The algorithms understand the distribution of all packaging in the UPS logistics system, and determine the beltway to bypass a problematic facility while meeting deadlines and not overwhelming other UPS facilities.

Question 27

What are the results of UPS initiatives?

Answer 27

1. In 2016, they won the prestigious Edelman prize for excellence in operations and analytics research for its ORION project. The ORION projects was completely deployed by the end of 2016.

Question 28

What are the financial results of ORION? What is the next step for the future of ORION?

Answer 28

1. Savings of 300 - 400 million per year in driver productivity and fuel economy.
2. Saved 100 million miles (160 million kilometres) in driving, decreasing carbon emissions by 100,000 metric tons per year.
   Make it a self autonomous driving delivery.

Question 29

How is UPS implementing drones in their delivery services?

Answer 29

Used to drop essential supplies in Rwanda and demonstrating how medicines could be delivered to islands. In rural areas where drones have the space to execute delivers and the distances between stops makes efficient deliveries challenging, drones launched from the roofs of UPS trucks have reduced costs and improve service.

Question 30

What is the UPS Flight Forward?

Answer 30

In October 1, 2019 the company was granted approval by the US Federal Aviation Admin to launch the drone airline.