In a business where shaving off a mile per day per driver can result in savings of up to $50 million per year, UPS has plenty of incentive to incorporate technology to drive efficiencies in every area of its operations. According to UPS’ Chief Technology Officer Juan Perez, “Our business drives technology at UPS.” Here are just a few of the ways UPS uses big data and artificial intelligence (AI) to prepare for the 4th Industrial Revolution.
Technology catapults UPS operations
UPS was founded in 1907 and has a history of embracing change and evolving as new technologies arise. It’s the use of big data and artificial intelligence that allows the company to operate its global logistics network in more than 220 countries and territories. On an average day, there are typically 96,000 UPS vehicles on the road handling 19 million packages. UPS invests $1 billion annually in technology to enhance efficiency, improve customer service and support the ever increasing consumer demand to have as close to immediate delivery of packages as humanly possible.
UPS developed its chatbot, UPS Bot, in house and released it for use just three months after the idea was born. This AI-enabled tool mimics human conversation and can respond to customer queries such as “Where is the nearest UPS location?” And can track packages and give out shipping rates. Customers can ask the bot questions either through text or voice commands through mobile devices, social media channels and virtual assistants such as Alexa and Google Assistant. The UPS Bot is able to recognize these requests and then takes the appropriate steps to complete them. The more “conversations” the bot has, the more learning it experiences to take the appropriate action in the future.
UPS My Choice
During its peak period, UPS provided more than 137 million UPS My Choice alerts – the free system that lets residential customers decide “how, where and when home deliveries occur.” The chatbot is integrated with the UPS My Choice system, so customers are able to obtain information about their incoming packages and deliveries without providing a tracking number.
ORION, optimizing delivery routes
Another proprietary tool UPS uses to manage its fleet system is ORION (On-road Integrated Optimization and Navigation). Its advanced algorithms create optimal routes for delivery drivers from the data supplied by customers, drivers and the vehicles and can alter the routes on the fly based on changing weather conditions or accidents. Ultimately, it will look at the deliveries that still need to be completed and continue to optimize the routes. The cost and time savings and emission reduction based on this optimization alone is extraordinary – UPS expects to reduce delivery miles by 100 million.
EDGE, optimizing internal operations
What ORION is doing for delivery routes, Enhanced Dynamic Global Execution (EDGE) is doing for UPS internal operations. Technology that’s informed by real-time data helps employees make decisions, reduce costs (expected to be hundreds of millions of dollars in savings once fully deployed in 2020), optimize operations and make the UPS logistics network smarter.
Network Planning Tools
The goal of Network Planning Tools (NPT) is to optimize the flow of packages in the UPS network from loading docks to sorting to the final destination (around 60 million packages in U.S. alone). Fueled by real-time data, artificial intelligence and analytics, NPT helps UPS employees make decisions and improve efficiencies. NPT is expected to be fully deployed by 2020, and the company hopes to realize $100-200 million in savings and cost avoidance with the intel this system will provide.
Autonomous deliveries and drones
UPS execs insist that the UPS driver is a core element to its success and the face of the company, but they have tested the use of drone deliveries for some applications including dropping essential supplies in Rwanda and demonstrating how medicine could be delivered to islands. In rural areas, where drones have open air to execute deliveries and the distance between stops makes it challenging for the drivers to be efficient, drones launched from the roofs of UPS trucks offer a solid solution to cut costs and improve service. Drones could also be deployed in UPS sorting facilities and warehouses to get items on high shelves or in remote areas.
The technology used by UPS generates a cache of data that opens up even more opportunities to become more efficient, improve the customer experience, innovate delivery solutions, and more. From optimizing the UPS network to driving operational improvements, big data and artificial intelligence are at the core of UPS’s business performance.