For more than a century, UPS has been innovating. We’ve pioneered and adapted technologies and forged partnerships that enabled us to create an unmatched global logistics network, to improve operational efficiencies, expand, save money and serve customers.
Technology enables us to grow. Sometimes we build it ourselves. Sometimes we find partners with established technology and networks that can take us where we need to go. From mapping software to artificial intelligence, we’ve learned a thing or two about the fine art of deploying technology on a large scale to accomplish business objectives. I’d like to share three tips now for managing the complexity:
• Own that which you believe differentiates your company
At UPS, we place a premium on our in-house experience and IT talent. After all, who knows our network and our business needs better than our own people?
Consider this: In-house IT experts developed UPS’s On- Road Integrated Optimization and Navigation (ORION), which we’ve rolled out on nearly every UPS package delivery route in the United States. ORION uses expansive fleet telematics and advanced algorithms to gather and calculate vast amounts of data to provide UPS drivers with optimized routes. ORION saves UPS about 100 million miles, 10 million gallons of fuel and billions of dollars a year. It’s a shining example of the kinds of innovations that underpin our business. And it is a differentiator.
UPS IT professionals developed ORION and are planning further improvements that would enable dynamic route updates and other sophisticated functionality. And, again, we do this ourselves because we know our network and needs better than anyone.
However, when a technology is no longer a competitive differentiator but remains valuable, it’s time to consider finding an outside partner to manage the updates. Our DIAD (Delivery Information Acquisition Device) illustrates this point. The DIAD is the digital clipboard UPS drivers carry. We created the DIAD, and it revolutionized our industry. Among other things, it scans bar codes and electronically captures and uploads delivery information and signatures. Today we are on our fifth generation of the DIAD with a new version on the way. After 30 years, this project continues to earn its keep. So today we have a partner that helps us update the DIAD. And that frees up our internal talent to keep innovating technologies.
"From mapping software to artificial intelligence, we’ve learned a thing or two about the fine art of deploying technology on a large scale to accomplish business objectives"
• Collaborate to improve speed and agility
As the external environment changes, companies that innovate must recognize when it makes better sense to find partners than to go it alone.
I’ll give you an example. Powered by the rising middle class, China is the world’s fastest growing logistics market. We’ve been building out the UPS network in China for a long time, but we weren’t moving fast enough to capitalize on growing demand today. We solved this problem by entering into a joint venture with China’s largest delivery company, SF Express.
The joint offerings combine the technology and strengths of SF’s extensive Chinese network with UPS’s globally integrated network. Together we’re able to provide a depth and breadth of high-tech service that creates a competitive advantage for our customers.
•Threats can be opportunities in disguise
When you have a supply chain and logistics business that sprawls around the world like UPS does, you run into your fair share of competition–some of it from unexpected places and in surprising forms. Sometimes it’s hard to know how a potential threat is going to affect your business. You just have a strong feeling that it will. If you’re truly proactive, you can convert that threat into a game-changing opportunity.
Here’s one example that’s close to my heart. In the early days of 3D printing, when the primary use cases were design models and prototypes, many thought the technology was interesting but not necessarily a formidable one. But as printer and material quality improved, we saw its potential in manufacturing. We also realized that 3D printing could be a threat or an opportunity depending on the actions we take today.
UPS in not a manufacturer. So we invested in one, Fast Radius, and integrated its operations into ours. In Louisville near our Worldport air hub, we can now print until 1 a.m. and get the product anywhere in the United States by the next morning.
So why would UPS, a delivery company, invest in a partner that takes links out of supply chains? Isn’t that our bread and butter? Yes, it is. But 3D printing was coming whether we took action or not. We got out in front and positioned UPS to benefit from this technology that we once considered a threat. Today, we view 3D printing as a logistics solution, another tool to help customers optimize their own logistics networks.
Obviously, there’s no one clear route to successfully integrating technology into logistics. There are too many players and competing priorities for that. But, in a century of innovation at UPS, we’ve managed to establish a few crucial guideposts that have enabled us to innovate at a 21st-Century pace.