United Parcel Service (UPS) was founded in 1907 as a messenger service. The company is now based in Oakland, California. Mukherjee (2010) indicated that by 2007 UPS was present in over 200 countries and had grown into a $42.6 billion entity. The focus of UPS is to enable commerce around the world. Mukherjee (2010) indicated that in the 1990s, UPS invested in information technology to enable customers to gain instant access to the network. Their drivers were provided with the Delivery Information Acquisition Device (DIAD) that gave customers real time access to information regarding their packages.
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Another device that contributed to the better distribution of services was the UPSnet, a satellite based communication system enabling global access. Mukherjee (2010) says that UPSnet helped linking up 1300 UPS distribution centers spread across 46 countries. The internet links sellers and buyers globally and e-commerce radically changed how UPS and its customers do business. UPS has been able to capture a large portion of their shipping associated with e-commerce. Reynolds (2009) says the company’s online presence includes www.UPS.com and a popular shipping and tracking systems such as WorldShip, Quantum View and CampusShip. These systems give customers efficient tools to process, track, and manage shipments and supply chains.
One reason for UPS’s continued dominance is its innovative information technology division. Mukherjee (2010) noted that UPS has spent $11 billion to improve its IT infrastructure since the late 1980s and continues to spend at least $1 billion more per year. Its massive IT system helps support the company tracking system, which gives customers 24 hour access to package tracking information. UPS’s web site gets an average of 9.1 million online tracking requests each day.
The UPS website provides a comprehensive access to all necessary features that customers might require. Mukherjee (2010) noted that it a customer wants to know the address of the nearest UPS service location, the website enables search using the actual address, the postal code and the city. The website also provides easy to access to the post shipping information to the registered customers. The feature integrates tracking tools enables customers to view the proof of the delivery information including the digital signature and the delivery address (Mukherjee, 2010).
The UPS Package Flow Technology is a multiyear breakthrough project to re-engineer the UPS package pickup and delivery process. Reynolds (2009) noted that the project is designed to support growth, improve productivity, reduce costs, and provide the platform for new services. The company’s package flow technologies use forecasted and historical information to create a dispatch plan for every driver working in the package distribution center (Reynolds, 2009). This technology ensures that no driver is dispatched and minimizes any last minute load changes to a driver’s delivery truck. This planning is key because UPS delvers multiple services using the same driver, unlike other carriers.
Through the use of information technology a single UPS driver delivers overnight packages, collects COD payments, and delivers ground packages to commercial and residential customers on the same route. Reynolds (2009) mentioned that the goal is to provide customers with consistent, reliable services and enable UPS to better understand each customer’s unique needs. The major aspect of this project is the printing of a preload assist label (PAL) at the package center. The label tells the package sorter which conveyor belt chute to use for transporting the package to the package car loading area.
The company has extensively tested radio frequency identification (RFID) technology as a possible replacement for the bar coding it uses to sort packages. Reynolds (2009) indicted that RFID will eliminate the need for line of sight reading, which is required for bar codes. In addition, RFID tags can be scanned at greater distance than bar codes. The RFID chips, however cannot accurately read tag information at high speeds beyond the range of RFID antennas. Reynolds (2009) also noted that the first pass accuracy rate is about 80% which is much pooere than the 95% accuracy of bar-coded packages. UPS thus continues to monitor RFID advances closely and recently invested in G2 Microsystems and an RFID chip manufacturer (Reynolds, 2009).
To better serve its worldwide customers, UPS has developed UPS Delivery Intercept, a web based service that allows customers to intercept and reroute packages before they are delivered, thus avoiding potentially costly mistakes and wasted time and costs (Bidgoli, 2011). According to Bidgoli (2011), UPS calls the technology behind this service Package Flow Technology which is also used to map efficient routes for drivers and mark packages for special handling. Information technology has enabled UPS to improve its efficiency and reduce its overall costs. Web based applications reduce UPS distribution costs dramatically. UPS has developed software called Target Search to enable United States Customs and Border Protection agents to inspect packages that pass through the Worldport international hub in Louisville. The software captures and provides information about packages so agents can be more selective in choosing packages for inspection (Bidgoli, 2011).
In conclusion, UPS is a pioneer in innovative online and electronic services. The company uses these technologies to complement its existing businesses. UPS utilizes information technology to complement its existing business. Disruptive technologies applied by UPS are tested and reapplied during research and development. For UPS as a pioneer, the risks involved in using new technological innovative equipment that are customer friendly and nonlinear technological information systems to deliver information remain enormous. The rewards, benefits and risks of using these technological instruments place UPS above its competitors.