Data Juice Story #6: Package Delivery Company Ups its Fuel Efficiency

The following is an excerpt from the book, "Data Juice: 101 Real-World Stories of How Organizations Are Squeezing Value From Available Data Assets."

UPS, the world's largest package delivery company, uses data and analytics to optimize its delivery routes for reduced fuel consumption and CO2 emissions, and faster package delivery. Its fleet management system, ORION, uses telematics and advanced algorithms to create optimal routes for delivery drivers, taking into consideration changing road conditions and commitments in real time. Since its initial deployment, ORION has saved UPS about 100 million miles and 10 million gallons of fuel per year, which translates into 100,000 metric tons of reduced CO2 emissions.

ORION is a notable achievement in analytics and data science due to its scale and cost. It is estimated to have cost between $400 and $500 million. However, the large annual savings in fuel and labor costs make it worth the substantial investment. The application is also a triumph of incremental planning and capability-building. UPS has been implementing the IT systems that make ORION possible for the last twenty years, from online tracking and tracing to the creation of detailed maps including pickup and delivery locations to the universal deployment of five generations of DIADs (Delivery Information Acquisition Devices) among drivers.

But perhaps most of all, the application is a change management success. UPS worked with drivers, planners, supervisors, and other personnel to convince them that ORION would make their jobs better. The company even worked with the PBS science show NOVA to create a documentary on ORION and created various training programs. Securing the understanding and buy-in of those who will use the system is critical to success when pushing out data and analytics to the front lines.

In addition to ORION, UPS is developing a chatbot with AI capability to help customers search for information about their packages. The company continues to work on other initiatives for a smart logistics network to improve decision-making across package delivery networks.

UPS's use of data and analytics to optimize delivery routes has led to significant cost savings and reduced environmental impact. ORION is a notable achievement in analytics and data science due to its scale, cost, and incremental planning. The company's success in convincing personnel to adopt the new technology highlights the importance of securing understanding and buy-in from those who will use the system. UPS's ongoing development of a chatbot and other initiatives for a smart logistics network demonstrates its commitment to quality service and environmental sustainability.