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Not Going the Extra Mile

UPS’ latest breakthrough technology is steering its loaders and drivers in the right direction.

Read “Surprise Package” to learn more about UPS’ new supply-chain arm.

When Shane Picklesimer came to work for UPS, he spent several stressful months learning what he needed to know to master his new job: loading packages onto trucks. As a pre-loader at the Roswell distribution center north of Atlanta, Picklesimer had to memorize hundreds of street addresses, so that when he picked up a package, he knew which truck delivered to the address — and where the package belonged on the vehicle. If he didn’t know, he had to stop loading packages and consult a chart.

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Last fall UPS announced it was finally replacing the system, starting with 85 centers in 2003. But Picklesimer was leery. Just read the label, his supervisor told him the morning of the change. It took Picklesimer all of five minutes to catch on. The system worked like magic, as though the boxes themselves knew where to go. In a way, they did: A new label indicated the corresponding truck and shelf. “The new hires have no idea how good they have it,” Picklesimer says, shaking his head.

UPS may be expanding its operation with its fast-growing subsidiary Supply Chain Solutions [see our story in the February issue], but the company remains obsessed with improving its core operation. Delivering packages around the world is an expensive and complicated business, and thousands of UPS industrial engineers and software engineers are devoted to eliminating every last extraneous mile, minute, and dollar. They’re forever fine-tuning, finding all sorts of ways to improve efficiency — to optimize, as they like to say. This time, they devised more than an upgrade. It’s a full-fledged breakthrough.

New package-flow technology, which was several years in the making, dramatically changes not only how pre-loaders fill trucks, but also how dispatchers route vehicles and how drivers make deliveries. It gives each group of workers information that they haven’t had before. As a result, UPS expects its trucks will log 100 million fewer miles a year, saving the company 14 million gallons of fuel (and reducing CO2 emissions by 130,000 metric tons).

When a customer arranges a delivery electronically (93 percent of all orders now occur this way), the system sends that information to the distribution center where the package will be placed in a truck to be delivered. By analyzing shipping volume and delivery times, the software formulates the most efficient dispatch plan. Before UPS actually has the package in hand, the system has already assigned it to a specific truck and even a specific shelf. The plan gets updated each night to factor in new shipments. Then the local dispatcher reviews the work load to make sure that drivers won’t be incurring overtime. The system shows how much the trucks (170 in the Roswell center) have been assigned and the range of stops each can expect to make in a day, based on its track record.

When the packages arrive at a center to be delivered, employees scan their labels, and the software generates a pre-load assist label, or PAL. This tells loaders which conveyor belt a package has been assigned to. Previously, they sorted by ZIP codes — more memorization. Picklesimer, who works from 3-7 a.m., says he now loads more than twice as much as before — with considerably less anxiety. One of the project’s goals, says Mark Hopkins, a vice president in package process management, was to make some of the hardest jobs in the delivery process easier to do. “We kept asking, how can we simplify these tasks?” he says.

It’s hard to believe that the old method worked so well for so long. Pre-loaders would tally the number of stops for the trucks, then the dispatch supervisor would determine who had too little or too much. If the sorting didn’t get straightened out at the center, it happened in the field, among the drivers. “You were like, ‘Hey, take 20 off my truck so I can have dinner with my family tonight,'” says Doug Mallchok, who has been a driver at UPS for nearly 15 years,

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Until now, the only way that drivers could tell what was in their truck was to “touch the cardboard,” as they say. Go in the back, in what Mallchok calls “my room,” and read the labels. He’d spend the first half hour at work arranging boxes in the order he planned to deliver them. He swears that he could remember more than 100 stops. He had a system.

But it was an unreliable way to run a company. “We were relying so much on the employees’ local knowledge,” says Kelly Hurst, an industrial engineer at the Roswell center. If a driver was out, the swing driver substituting for him was in trouble. The goal now is to rely more on technology that provides greater access to the most relevant information. For swing drivers, new hires, and veterans.

Theoretically, because the handheld device that all drivers carry — the delivery information acquisition device, or DIAD — contains the day’s itinerary, drivers can get in their trucks without reviewing the back compartment. Mallchok isn’t there yet. Before leaving the center one morning in late October, he double-checks on his air-service packages, which have a 10:30 deadline. The system is helpful, he says, but there’s still room for human error, even with the PAL. “If my pre-loader leaves something out or puts it in the wrong place, there goes 20 seconds or two minutes,” he says. “There goes my day.”

The DIAD displays the most efficient route for the day’s deliveries. It also tells him where the packages are located, so he no longer wastes time looking for them. Mallchok relies on the package-flow routing about 80 percent of the time now compared to just 20 percent early on.

He still thinks that no software can know the ins and outs of a route the way a driver can. The block where street numbers suddenly jump from three digits to four. Which left turns take longer than others. The least accessible houses. But the new system definitely knows a thing or two.

At 9 a.m., in the midst of “ripping” his air deliveries, the DIAD helps him out. The new software alerts him to two ground-service boxes that are going to the same address as the air envelope. “Look at that,” he says. “There are three bad boys on here. I just saved myself a stop this afternoon.”

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And saved UPS a few more miles.

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About the author

Chuck Salter is a senior editor at Fast Company and a longtime award-winning feature writer for the magazine. In addition to his print, online and video stories, he performs live reported narratives at various conferences, and he edited the Fast Company anthologies Breakthrough Leadership, Hacking Hollywood, and #Unplug.

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