Analyzing Global Package Flow Technology

Analyzing Global Package Flow Technology

By

Eric D. Crivello

A Paper Presented in Partial Fulfillment

Of the Requirements of MBA 520 Managing with Technology

January, 2012

Presented to: Professor Boyd Smith

Abstract

United Parcel Service (UPS) is a company that was founded in Seattle in 1907 by two teenagers Jim Casey and Claude Ryan, who had nothing more than a phone, two bicycles and a great idea. Since its formation, UPS has promised the best service and best rates, and it has been delivering on that promise for the past one hundred and five years. UPS is the world's largest express carrier and package Delivery Company, and is a leading commerce facilitator. The company offers an unmatched array of traditional and electronic commerce services. The company has won numerous awards for its web site and information technology infrastructure, including two Computerworld Smithsonian Awards. The now Atlanta-based company operates in more than 200 countries and territories worldwide and employs more than 425,000 people worldwide. Many people do not realize that UPS is one of the world's largest airlines, operating 600 airplanes. UPS is a global company that relies heavily on the information technology systems it has in place in order to effectively run the day to day business operations. The purpose of this paper is to analyze the information technology systems which are currently in place at UPS.

Analyzing Global Package Flow Technology

Information technology is an integral part of how companies meet business objectives and maintain a competitive advantage in any industry. The package delivery industry is no exception. In fact, in today's fast paced business environment, the use of information technology is paramount to the success of any company. The mission statement on UPS's website describes their business mindset quite clearly, "Our vision for the future is to synchronize the world of commerce, managing the complexities of our customers' supply chain needs. Our goal is to develop business solutions that create value and competitive advantages for all size customers through product differentiation, market penetration, better customer service and improved cash flow "(ups.com). When reading this description, one can clearly see that UPS views their business as ever-evolving, striving to constantly improve the services that they offer by using the information technology systems that are available to them.

The fact of the matter is that UPS does currently use quite a bit of information technology in their day to day business operations. "UPS delivers more than 15 million parcels and documents each day in the United States and more than 200 other countries and territories" (Louden pg. 23). In order to accomplish this, the company has implemented cutting edge technology at nearly every stage of their business from the time they pick up a package, during transit, and the time that they deliver the package to its final destination, UPS implements cutting edge information technology. This cutting edge technology starts with the scannable bar coded label that is attached to every package that they deliver.

This label contains detailed information about the package it is attached to, such as who the sender is, who the recipient is, where the final destination is, and when it is supposed to arrive at the final destination. This label is scanned initially when the package is first picked up by UPS, and is subsequently scanned at every interval throughout the shipping process. For example, once the UPS deliver driver who picks up the package scans it and brings it back to the local distribution center it is then offloaded from the delivery truck and scanned into the distribution center. The distribution center then knows, based on the information encoded in the label, which outbound truck it needs to be placed on in order to make it to the correct airplane and fly to the correct city. The driver of the outbound truck then scans the package at the time that it is loaded onto the delivery vehicle. That driver then scans the package again when it is delivered to the airport. The package is scanned again as it is loaded onto the plane, and scanned again as it is offloaded from the plane and loaded onto another delivery vehicle that takes the package back to another distribution center. The package is scanned again at the new distribution center, sent to the appropriate deliver vehicle, where it is scanned again as it is loaded. It is then delivered to the final destination where it is scanned one last time by the delivery driver as it is delivered to the recipient.

The entire process of delivering a package is directly tied into UPS's information technology system. Customers are able to download and print their own labels or using special software provided by UPS, or by accessing the UPS website. Before the package is even picked up information from the "smart" label is transmitted to one of UPS's computer centers, and sent to the distribution center nearest its final destination. Dispatchers who work at the distribution center download information from the label and use special software to create the most efficient delivery route for each driver that considers traffic, weather conditions, and the location of each stop (Laudon, pg. 23).

Delivery drivers at UPS start their day by logging into their handheld computer's which are called Delivery Information Acquisition Devices (DIAD) (Laudon, pg. 23). These devices can access the same wireless networks that cell phones rely. After logging onto their DIAD, deliver drivers can access their daily route with all of the deliveries and pickups. The drivers never have to plan their own routes, the information technology system that is in place does this for them automatically by utilizing the information that is stored in the "smart" labels. The DIAD the drivers use captures customer signatures, deliver information such as time and date of delivery and pick up information such as the time and date a package is picked up. The DIAD then automatically uploads all of this information to UPS's main computer network for storage and processing once the driver returns to the distribution center at the end of the day. Once this information is uploaded to the main computer network it can be accessed worldwide