Reference no: EM132862034

Big Brown Numbers

It's the world's largest package delivery company with the instantly recognizable trucks. Every day, United Parcel Service (UPS) transports more than 18 million packages and documents throughout the United States and to more than 220 countries and territories, including every address in North America and Europe. (Total worldwide delivery volume was 4.6 billion packages and documents in 2014.) Delivering those packages efficiently and on time is what UPS gets paid to do, and that takes a massive effort in helping drivers to make decisions about the best routes to follow.

UPS has been described as an EFFICIENCY FREAK.

Efficiency and uniformity have always been important to UPS. The importance of work rules, procedures, and analytic tools are continually stressed to drivers through training and retraining. For instance, drivers are taught to hold their keys on a pinky finger so they don't waste time fumbling in their pockets for the keys. And for safety reasons, they're taught no-left turns and no backing up. Now, however, the company has been testing and rolling out a quantum leap in its long-used business model of uniformity and efficiency. It goes by the name ORION, which stands for On-Road Integrated Optimization and Navigation. What it boils down to is helping UPS drivers shave millions of miles off their delivery routes using decision algorithms built by a team of mathematicians. Consider that each UPS driver makes an average of 120 stops per day. The efficiency challenge is deciding the best order to make all those stops (6,689,502,913,449,135 + 183 zeroes of possible alternatives)-taking into consideration "variables such as special delivery times, road regulations, and the existence of private roads that don't appear on a map?" Another description of the logistics decision challenge: There are more ways to deliver packages along an average driver's route "than there are nanoseconds that Earth has existed." Any way you look at it, that's a lot of alternatives. The human mind can't even begin to figure it out. But the ORION algorithm, which has taken 10 years and an estimated hundreds of millions of dollars to build, is the next best thing. IT experts have described ORION as the largest investment in operations research ever by any company.

So what does ORION do? Instead of searching for the one best answer, ORION is designed to refine itself over time, leading to a balance between an optimum result and consistency to help drivers make the best possible decisions about route delivery. And considering how many miles UPS drivers travel every day, saving a dollar or two here and there can add up quickly. When a driver "logs on" his delivery information acquisition device (DIAD) at the beginning of his shift each workday, what comes up are two possible ways to make the day's package deliveries: one that uses ORION and one that uses the "old" method. The driver can choose to use either one but if ORION is not chosen, the driver is asked to explain the decision. The roll-out of ORION hasn't been without challenges. Some drivers have been reluctant to give up autonomy; others have had trouble understanding ORION's logic-why deliver a package in one neighborhood in the morning and come back to the same neighborhood later in the day. But despite the challenges, the company is committed to ORION, saying that "a driver together with ORION is better than each alone."

1. Why is efficiency and safety so important to UPS?

2. Would you characterize a driver's route decisions as structured or unstructured problems? Programmed or non-programmed decisions? Explain.

3. How would ORION technology help drivers make better decisions? (Think of the steps in the decision-making process.)

4. How is UPS being a sustainable corporation?