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How UPS uses analytics to drive down costs (and no, it doesn't call it big data)

John Dix | Dec. 2, 2014
Network World Editor in Chief John Dix caught up with UPS Senior Director of Process Management Jack Levis for an update on their latest achievements.

Putting it in perspective, the advanced math around determining an order of delivery is incredible. If you had a 120-stop route and you plotted out how many different ways there are to deliver that 120-stop route, it would be a 199-digit number. It's so large mathematicians call it a finite number that is unimaginably large. It's in essence infinite. So our mathematicians had to come up with a method of how to come up with an order of delivery that takes into account UPS business rules, maps, what time we need to be at certain places and customer preferences. It had to be an order of delivery that a driver could actually follow to not only meet all the business needs, but with fewer miles than they're driving today. And this is on top of the 85 million miles we've already reduced. This is the ORION system that takes it to the next level of prescription and that puts us in that three percent category of companies using data for prescriptive analytics.

Where do you stand with the ORION deployment?

We started initial deployments in 2012 using a few hundred deployment people, so it was a relatively small deployment. But the results were so remarkable we sped deployment. By 2013 we had 500 people deploying and now we have 700 people full time. We're truly able to both simultaneously service our customers as they want to be serviced and reduce our miles at the same time.

How do you classify success?

We'll be announcing our expected results on full implementation soon. But in 2013 alone we saved 1.5 million gallons of fuel, and that was with only 10,000 of our 50,000 drivers.

When do you finish the rollout?

We'll complete the rollout of the current version of ORION by the end of 2016. There are some things it doesn't do in its original version. For example, when a driver leaves in the morning, the route they have in their hand-held doesn't change. It doesn't update if something goes wrong, which is the No.1 request from drivers. They ask, "Can you update this when there's a discrepancy?" So it doesn't do that yet. It doesn't take traffic into account yet. And, it doesn't take weather into account yet. In fact, our drivers don't even have the navigation system. They just have the order of delivery.

So that's the bad news. The good news is that all those things don't exist yet because we're getting all of these gains without them, and that's why this is a roadmap for the next 10 years. We'll add new features. We are developing the ability to update in real time. We'll use ORION's algorithm all over the business.

 

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