United Parcel Service (UPS)

Michael Bosl

 

 

UPS is the world’s largest air and ground package-distribution company.  Jim Casey and Claude Ryan started it in 1907 in a closet-size basement office.  They were two teenagers from Seattle with two bicycles and one phone who promised the “best service and lowest rates.”  As the company grew and expanded their services, they adapted to the many technological advances that were becoming available.  They remained successful as a business as a result of this.  This paper will take you through the history of UPS to show you what kind of top-of-the-line devices they use today that have put them and kept them at the top of the small-package delivery service.

 

 

• 1907
• Started out as a messenger service, American Messenger Company.
• Jim had strict policies that helped the company do well:  customer courtesy, reliability, round-the-clock service and low rates.

 

• 1913
• Package delivery for retail stores became the company’s focus.  Jim merged with a competitor and changed the name to Merchants Parcel Delivery.
• Pioneered the concept of consolidated delivery—combining packages addressed to a certain neighborhood onto one delivery vehicle.

 

• 1919
• The name United Parcel Service was adopted—“United” because shipments were consolidated, and “Service” because “service is all we have to offer.”

 

• 1929
• United Air Express was started, offering package delivery via airplane to major West Coast cities and as far as El Paso, Texas.
• All UPS vehicles were painted the familiar Pullman railroad brown color.

 

• 1950’s
• Decided to expand their services by acquiring “common carrier” rights to deliver packages between all addresses—for any customer, private or commercial.  This decision placed UPS in direct competition with the U.S. Postal Service.

 

• 1975
• Obtained authorization to deliver in all 48 states.

 

 

UPS resumed air service in 1953 to deal with increasing business and competitors.  They offered two-day service to major cities on the East and West coasts.  By 1978, air service was available in every state.  With growing demand for faster service, they entered the overnight air delivery business by 1985.  They also entered a new era with international air package and document service, linking the U.S. and six European nations.

 

In 1988, UPS received authorization from the Federal Aviation Administration to operate its own aircraft, thus officially becoming an airline.  They adapted well to changing and improved technology.  As a result, they became the fastest-growing airline in Federal Aviation Administration history, forming in little more than one year with all the necessary technology and support systems.  Today, UPS Airline is among the ten largest airlines in the U.S., operating more than 1,800 flight segments per day in more than 700 domestic and international airports.

 

 

 

UPS still lives up to their original promise “best service and lowest rates” today.  They deliver more than 3 billion parcels and documents each year to the United States and to more than 200 other countries and territories.  They have gone through enormous change to be able to expand their services and provide for customer needs.  They have been able to maintain their leadership in small-package delivery services in the face of stiff competition from Federal Express and Airborne Express by investing heavily in advanced information technology.  During the past decade, UPS has poured more than $11 billion into technology to boost customer service while keeping costs low and streamlining its overall operations.  They currently invest more than $1 billion every year on information technology.

 

 

            Technology at UPS

·        UPS Airline features some of the most advanced information systems in the world, like the COMPASS (Computerized Operations Monitoring, Planning and Scheduling System), which provides information for flight planning, scheduling and load handling.  The system is unique in the industry.  It can be used to plan optimum flight schedules up to six years in advance.

 

·        UPS also has an International Shipments Processing System, or ISPS.  This system notifies Customs officials in the U.S. and abroad about incoming shipments, allowing the vast majority of UPS international shipments to clear Customs before they actually arrive in the destination country.

 

·        In 1991, UPS became the first package delivery company to gather signatures electronically.  They used a handheld computer called a Delivery Information Acquisition Device (DIAD).  They currently have upgraded their system twice and are now using the DIAD III.  It is equipped with an internal packet data radio.  It sends delivery information to the UPS data repository as soon as all delivery information is entered.  Drivers simply scan the package bar code, collect the receiver’s signature, type the last name of the receiver, and push a single key to simultaneously complete the transaction and send the data.

 

The internal radio also provides DIAD III with two-way text-based communications between the driver and the dispatcher.  This has resulted in response times to pickup requests to be reduced by as much as 30 minutes.

 

DIAD III is the most comprehensive tracking device in the delivery industry, combining data collection and transmission technologies, digital signature capture (unique in the industry), extensive expandable memory, and rugged construction to withstand extreme temperatures and hard falls.

 

Features of DIAD III

·        Self-contained communication system enables immediate data transmission and two-way dispatch communications.

·        Triple telecommunications redundancy ensures real-time tracking in every environment.

·        Powerful processor acquires information faster.

·        6.5 megabytes of memory

·        Modular design easily accommodates new features and components.

·        Sign-on glass technology improves signature resolution; display “flips,” allowing signature to face driver or customer.

·        User-replaceable battery pack prevents on-road service failures.

·        International icon keys facilitate international deployment

·        Glow-in-the-dark keyboard.

 

Development

      Manufactured by Motorola.

      Internal communications powered by Motient.

 

Development Cost: $100 million

 

·        Another form of technology UPS uses is an automated package tracking system where they can monitor packages throughout the delivery process.  At various points along the route from sender to receiver, a bar code device scans shipping information on the package label.  Customer service representatives can check the status of any package from desktop computers linked to the central computers and are able to respond immediately to inquiries from customers.  UPS customers can also access this information directly from their own computers, using either the World Wide Web or special package tracking software supplied by UPS.  This package tracking system technology is helpful to customers because it allows them to check on the status of their package so they know where it is and if it arrived at the intended destination.

 

 

 

                                                                                                        

 

UPS’s vision is specifically to focus on:

• Continuing international growth;
• Deploy technology that will allow UPS to continue introducing new services;
• Electronically connect customers to UPS so even more comprehensive information about shipments is available;
• Continue creation of new services and solutions for customers that add value all along the supply chain;
• Move further into all three converging flows of commerce—the flow of goods, information and funds.

 

As you can see from above, three out of their five points they want to focus on has to do with the advancement and improvement of technology.  They have realized that in order to maintain their position in the market, they need to improve their systems as technology advances.

 

 

 

As you can see by the success of UPS, it is very important for a company to keep up with technological advancements in order to keep up with the competition and survive as a business.  UPS has used technology to their advantage to make sure they maintain their leadership in small-package delivery services.

 

 

Sources

 

http://www.ups.com

Laudon, Kenneth C. and Laudon, Jane P.  Management Information Systems, Fourth Addition.  Prentice-Hall 2001