People Innovation Excellence

Ready to Deliver

UPS delivery man Vinny Ambrosino was dressed for the holiday season on Tuesday as he delivered packages in New York City. Not all the things ordered for Christmas got to their destinations on time.

Picture source: http://media.npr.org
INDUSTRIAL ENGINEERING – VOLUME: 46 NUMBER: 12
by Monica Elliott

E-commerce has changed how business run. The impact of online shopping is most intense in the U.S. during the holiday season because now people tend to just order gifts from online shop and have them delivered to the destination. This surely altered how package delivery companies work.

Armed by 1,600 industrial engineers in US alone. UPS, a global-scale logistics company, focused on four key areas to plan for the 2014 peak season: forecasting, capacity, visibility and communication. Planning for December 2014 demands start as early as Dec. 26, 2013. The first step is to model demand during the holiday shopping season, which begins with cyber weekend – the weekend beginning on the Friday after Thanksgiving. The team plan for three key periods: cyber week, which is the weekend and entire week following Thanksgiving; the full week before Christmas; and the period of returns that follows the holiday.

The second step, capacity, is to plan UPS’s facilities size and workforce. In December 2014 UPS plan to hire about 95,000 people this year during peak. UPS also had 11 new facilities opening across the country, added around 6,100 package cars, 50 hub sorts and 15 pop-up mobile distribution centers.

The third step, visibility, is to ensure better visibility on the hundreds of millions of packages they will sort and deliver. UPS even created its own on-road integrated optimization and navigation system, or ORION.The idea is based on algorithms created to calculate the best routes for UPS package car drivers, and those routes rarely recommend left turns. ORION’s map data is really the engine for optimization, setting the best route for the drivers, thus reducing fuel costs and increasing efficiency.

The fourth step, communication, involves having more responsive communications to UPS’ external customers. To do so UPS enhance its website and an app called UPS My Choice. The app allows receiving customers to personalize their experience with UPS and closely track and influence their deliveries. There is also a new program called UPS Access Point, in which customer can reroute their packages to an access point and retrieve the packages themselves. All these plans are there to make sure UPS lives up to its motto: We’r   e ready to deliver.


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