UPS was established in 1907 and is now $49.7 billion global company. The company uses information technology to manage the delivery of more than 14 million packages every day. Bidgoli (2011) noted that UPS uses several types of networks in its operations particularly GPS and wireless networks. To better serve its customers, UPS has comeup with Delivery Intercept a web based service that allows customers to intercept and reroute packages before they are delivered. According to Bidgoli (2011), this technology avoids potentially costly mistakes and wasted time and costs. 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.
UPS lauds information technology as its means for maintaining efficiency and price competiveness and the provision of new customer services. Goudie & Cuff (2001) indicated that UPS has a global electronic data communications network that consists of 500,000 miles of communications lines and a communication satellite. The GPS network links more than 1300 distribution sites in 46 countries. Customers can also obtain instant tracking information about their bar-coded shipments through the web, E-mail or special tracking software. UPS also uses computerized flight planning, scheduling and load handling.
In addition, the contribution of information technology to globalization both directly by allowing efficient global operations and indirectly by allowing UPS to provide rapid, inexpensive global ships (Goudie & Cuff, 2001). It is important to note that UPS is a pioneer in innovative online and electronic services and it uses these technologies to complement its businesses. For UPS as a pioneer, the risks involved in using new technological innovative equipment that are customer friendly and nonlinear technological information system to deliver information remain enormous.
According to Daft (2008), UPS has been a leader in using new information technology to enhance reliability and efficiency. Drivers use a computerized clipboard called DIAD (Delivery Information Acquisition Device), to record everything from driver’s miles per galloon to data on parcel delivery. Information technology is enabling UPS to expand its services and become a global mover of knowledge and information as well as packages. Top managers at UPS know the new technology means some of UPS’s rigid procedures may have to bend.
UPS uses a nationwide cellular system called Total Track to provide information at any time, day or night on the status of a parcel. Heathcote (2005) noted that when a driver picks up a package it is immediately logged using portable hand held computer containing barcode reader for capturing the barcode identification on the package and a keyboard for entering additional information such as the destination area code. On returning to the truck the driver inserts the hand held computer into a small computer that transmits the data to the local dispatch center where it is recorded in the database. Heathcote (2005) indicated that the location data is updated automatically as the package moves through each step on the way to its destination.
The combination of information and communication technology permits UPS to know the location of every package at any time. Heathcote (2005) further says that when the package is delivered to the customer, the customer signs for it using a pen-based computer and delivery confirmation are transmitted back to UPS. The package is tracked using UPS’s OnlineTM Office software.
UPS has extensively tested radio Frequency identification (RFID) technology as a possible replacement for the bar coding it uses to sort packages. Reynolds (2009) says that RFID would eliminate the need for line-of-sight reading which is required for bar codes. Also RFID tags can be scanned at greater distance than bar codes. Package flow technologies use forecasted and historical information to create a dispatch plan for every driver working in the package distribution center. Reynolds (2009) further indicated that the plan ensures that no driver is over dispatched and minimizes any last minute load changes to a driver’s delivery truck.
The above technology is important because UPS delivers multiple services using the same driver unlike other carriers. Reynolds (2009) thus says that using the UPS Package Flow Technology, a single driver can deliver overnight packages, collects COD payments and delivers ground packages to commercial and residential customers on the route. The goal of this technology is to provide customers with a consistent, reliable service and enable UPS to better understand each customer’s unique needs.
Reynolds (2009) indicated that a key component of the project is the printing of a preload assist label (PAL) at the package center. This label tells the package sorter which conveyor belt chute to use for transporting the package to the package car loading area. Savings from this information technology project are estimated to be $750 million per year starting in 2008. The project also will increase revenue by several hundred million dollars per year by enabling further enhancements in service levels.
UPS also 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 selective in choosing packages for inspection (Reynolds, 2009).
In conclusion, the information technology organization within UPS works to define, execute and measure projects that are consistent with the firm’s missions, objectives, goals and strategies. The UPS information technology organization spends approximately $1 billion per year and is always working on hundreds of IT related projects. The company continues to grow by using internet technologies to handle logistical solutions for its customers. UPS delivers more than half of all goods ordered over the internet.