Submitter
Jack Levis, Senior Director of Process Management
Company
United Parcel Service
Industry
Transportation/Logistics
Business Challenge
E-commerce presents new challenges, as deliveries are less dense and customers demand personalization. In addition, the United Parcel Service (UPS) maintains a well-paid, unionized workforce. To address these challenges and maintain its industry-leading position, UPS has employed advanced analytics solutions into its operations technology systems.
The challenge is especially large when UPS’ scale is considered: 16 million packages are delivered daily by 55,000 drivers. Constraints can change by driver, geography, day and season.
Analytics Solution
UPS uses an advanced optimization system known as On-Road Integrated Optimization and Navigation (ORION). ORION uses UPS’ rich data foundation to provide an optimized manifest to its drivers, helping it meet the complex task of efficiently meeting customer needs while following all service commitments and business rules.
The key for ORION is the use of operations research and advanced analytics to identify and capitalize on small efficiencies throughout the drivers’ day. It uses the power of data and heuristics to calculate the best route for the day’s need.
ORION looks at over 200,000 different options for a given day before picking the best choice and does so in less than 10 seconds. ORION allows drivers to focus on safety and customer service rather than making every routing decision.
Impact
ORION completed deployment in 2016 and is saving 100 million miles driven annually. This equates to an annual reduction of 10 million gallons of fuel and 100,000 metric tons of carbon emissions. UPS saves between $300 million and $400 million annually because of ORION. ORION demonstrates UPS’ long-term view and commitment to innovation. The project took over a decade from conception to the completion of deployment. Ultimately, its success was due to the dedication and determination of thousands of UPSers.