UPS: Driving cost savings by eliminating left-hand turns

UPS: Driving cost savings by eliminating left-hand turns

Summary: UPS does IT on a very large scale: $1 billion in IT spending this year, nearly 5,000 IT staff, 384,000 employees, 15 mainframes, 8,700 servers, 250,000 PCs, 2,700 networked sites, 474 terabytes of storage, 500 applications, 10 million tracking requests per day, 88,000 vehicles, 90,000 handheld devices and the 9th largest airline. The massive array of technology and personnel is all focused on delivering more than 14 million packages a day across 200 countries.

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TOPICS: CXO
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UPS does IT on a very large scale: $1 billion in IT spending this year, nearly 5,000 IT staff, 384,000 employees, 15 mainframes, 8,700 servers, 250,000 PCs, 2,700 networked sites, 474 terabytes of storage, 500 applications, 10 million tracking requests per day, 88,000 vehicles, 90,000 handheld devices and the 9th largest airline. The massive array of technology and personnel is all focused on delivering more than 14 million packages a day across 200 countries. Last week I interviewed UPS CIO Dave Barnes [Watch the video] about managing IT on such a large scale and getting a return on tech investments.

 davebarnes5.jpg

UPS CIO Dave Barnes shows me the latest DIAD (Delivery Information Acquisition Device). The actual units are brown, of course. 

Barnes, a 29-year veteran of UPS who started sorting packages while in college, told me how UPS expects to save $600 million per year through package flow technologies, which will enable a reduction of 100 million travel miles in the U.S. alone, which equates to 14 million gallons of fuel, he said. The package flow optimization includes constant wireless communications via the DIADs, smart labels (including RFID in the future) and preloading vehicles and directing drivers according to advanced analytics that calculate the most efficient routes, including avoiding left-hand turns, based on the package load. 

Topic: CXO

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8 comments
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  • Avoiding left-hand turns...

    I wonder what effect that will have on their trucks' alignment & tire wear.
    johnay
  • That will explain why more packages are NOT delivered on time...

    The poor UPS drivers in most areas work their butts off right now. Just imagine what will happen when they ain't allowed to deliver packages "out-of-order" or make left hand turns. While in theory the efficiency plans fostered in a VACUUM might sound good, anyone with a clue knows that a good courier can deliver more packages without foolish perceived efficiency "rules" dreamed up by people who never worked a delivery route in their lives. It would be MUCH better for the bottomline to hire more COMPETENT couriers and FIRE a bunch of unnecessary mid-level bean counters and management types drawing fat paychecks and benefits while delivering little value to the company and ZERO value to customers.

    BTW, the same can be said of FEDEX, DHL, etc. as they all suffer from similar problems, not the least of which is FINANCIAL GREED!!! When you're raking in $750 Million to a BILLION or more profit PER fiscal quarter, and adding a 20% fuel surcharge to all shipping charges, and adding a residential surcharge, and a remote location surcharge, (more than 50 ft. from the distribution center), and then adding more surcharges on top of other surcharges, you have a pretty damn good SCAM going that allows huge salaries and Ivory towers in addition to the outrageous profits.

    Efficiency isn't the problem GREED is !
    realitycheck101
    • Simple reading facts.

      Some people are just so eager to critique everything that they don't really actually read the whole article before they formulate what nonsense they're going to write. The first thing I noticed is that the guy featured on the article has been working at UPS for 29 years, and he started as a package handler, so he knows his stuff, and he probably indeed worked the delivery route. They spent so much money and they want to see a return on the investment by saving gas.

      Mid-level beans, how you call them, with this kind of experience, are essentially looking out for the company, and most of all for the customer. Customers know their package is not the only package in the truck, and personally if you can save gas doing a different route when driving to and from work then it's worth not making some turns, right?
      macaso
      • no left turns?

        I guess UPS should get out of NASCAR then, no more "GO fast, TURN left.......
        SXBrown
    • Simple reading facts.

      Some people are just so eager to critique everything that they don't really actually read the whole article before they formulate what nonsense they're going to write. The first thing I noticed is that the guy featured on the article has been working at UPS for 29 years, and he started as a package handler, so he knows his stuff, and he probably indeed worked the delivery route. They spent so much money and they want to see a return on the investment by saving gas.

      Mid-level beans, how you call them, with this kind of experience, are essentially looking out for the company, and most of all for the customer. Customers know their package is not the only package in the truck, and personally if you can save gas doing a different route when driving to and from work then it's worth not making some turns, right?
      macaso
      • Here are the Facts

        YeahRight probably knows that a great many people in UPS management start out sorting or loading while in college. They usually only spend a couple of months doing that before switching to PT management with FT management to follow after a few years. Most management personnel do not spend more than a year, and some as little as three months driving in their career. So, while I have not seen his complete work history, I will wager he does not "know his stuff," as I have used this PAS system and found that it increases my left turns unless I deviate from it.
        BatmanBrown
        • Facts of facts

          "So, while I have not seen his complete work history"

          No, you haven't

          "as I have used this PAS system and found that it increases my left turns unless I deviate from it."

          What is it they want to get rid of again?

          Thanks for setting the point straight.
          macaso
  • Left Hand turns

    First, I spent 22 years in Transportation, so I'm not exactly ignorant of the problems. Elimination of left hand turns is actually a cost saver in the long run. First: In an urban environment, it actually takes more time and burns more gas waiting for a left hand turn than it does for a stop and go for a right. Even with a fast light you can spend a minute and a half waiting for the change. Second: more accidents are likely to happen when doing a left hand turn because you are crossing one or more lanes of on-coming traffic. A head- or side-on collision adds at least 3 to 6 hours to delivery time, assuming the packages survive; and a price tag of $30K+ per truck is not small potatoes either.
    Third: elimination of left hand turns also eliminates U-turns. Fourth: alignment, suspension, and tire-wear problems are not a major concern. U.S. Air Force flightline rules require all drivers to approach aircraft the same way - they all circle in the same direction (clock-wise iirc). While this does produce significant biased wear on tires, they overcome this problem with frequent rotation to produce even wear and full use of the tire's life expectancy.
    Dr_Zinj