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Package Flow Technologies: Innovation at Work

In the early 20th century, UPS pioneered the hub and spoke model for package delivery operations. In this century, UPS continues its innovative tradition with the development of package flow technologies. A suite of software and hardware designed to give the company a competitive edge, package flow technologies ensure UPS has unparalleled small package operations - optimizing the delivery of multiple services to customers (air, ground and international) out of a single delivery vehicle.

PLD: The Cornerstone of the UPS Network

At the heart of package flow technologies - and all of UPS's package operations - is Package Level Detail, or PLD. UPS realized more than a decade ago that in order to achieve the level of automation required to serve customers most efficiently, information about a customer's package would have to make the transition from paper to digital. Enter the "smart" label - the concise physical embodiment of PLD. 

The smart label contains all the detailed information UPS needs to know about a package in order to get it from Point A to B in the time frame requested by the customer. Obvious things such as the "Ship To Address" and the service level (e.g., UPS Ground, UPS Next Day Air, etc.).

But UPS doesn't call the label smart for nothing. It also contains a host of information, imbedded in bar codes and the unique UPS "maxi code," that ensure the package gets to its ultimate destination on time.

To manage their supply chains, customers need to be able to track their goods. The smart label denotes the "1Z" tracking number that enables customers to track packages online or via telephone as they move through the UPS delivery network.

So, how is the smart label generated? Customers can generate their own label via the Shipping function on or by using any one of UPS's online products. Of course, smart labels can also be applied to packages customers take to any one of UPS's 70,000 full-service and drop off locations, e.g. The UPS Store, plus 88,000 UPS drivers. Today, more than 95 percent of all the packages traveling through the UPS delivery network are "smart."

Optimizing the Delivery Network: Dispatch Planning

To optimize the "last mile" in its delivery network (the last mile being the package distribution center, including package delivery by a UPS driver), UPS developed a suite of package flow technologies and business processes that use smart labels to capture information about the package before it even gets to the center.

Using historical, forecasted and exceptions information, package flow technologies create a dispatch plan for every driver working out of the package distribution center. The system helps package center management ensure that drivers are not over-dispatched and that last minute load changes to a driver's package car are minimized. This is very important because, unlike other carriers, UPS delivers multiple services using the same driver.

A single UPS driver delivers overnight packages, collects COD payments and delivers ground packages to the commercial and residential customers on his/her route. This provides the customer with a consistent, reliable service provider and enables UPS to more fully and efficiently understand a customer's unique needs. Consequently, customer service is tied directly to UPS's ability to optimize its dispatch planning and loading plans.

Tracking a package is critical to the management of customer supply chains. Package flow technologies synchronize package information with UPS's corporate databases so that customers have the latest package tracking information available.

Can a Label Be a PAL?

The address information on the customer's package is validated and another label - called the Pre-Load Assist Label or PAL - is printed out in the package center. The label tells the package sorter which conveyor belt chute to place the package on for transport to the package car loading area. Once in the package car loading area, the PAL tells the loader the exact shelf location on the specific car where the package should be placed for optimum delivery.

Thanks to the smart label and the PLD information it contains, all the logistical details needed to determine the specific sorting and loading factors for a particular package are available before that package even gets to the center. The PAL is applied to the package when it physically enters the building.

The PAL is truly a "pal" to the UPS employee loading a package car and the UPS driver. Before the creation of the PAL, a UPS employee loading a package car had to memorize thousands of addresses. To ensure that a loader had correctly loaded the package car, a driver often had to spend valuable time "touching cardboard" - checking and rearranging packages in the back of the package car in the order he/she felt would be the most optimum for delivery.

With package flow technologies, loaders no longer need to memorize vast address lists and drivers don't have to worry about shuffling packages around. The entire process is automated. The driver knows exactly how many packages are in the back of the package car and in what order all those packages need to be delivered to ensure that all customer service levels are met.

What part of the suite of package flow technologies does this? Meet EDD.

EDD - The UPS Driver's Best Friend

In 1991, UPS equipped drivers with DIADs (Delivery Information Acquisition Devices), the now famous brown, handheld computers. The company has systematically added improvements to the wireless DIAD since its creation. With the package flow technology suite, another enhancement was added to the DIAD - and the driver got a new "best friend."

EDD (Enhanced DIAD Download) is a piece of internally-developed software that enables an electronic manifest to be downloaded into the driver's DIAD before the driver starts the work day. As a result, the driver now sees each scheduled package delivery displayed on the DIAD in the exact order of delivery needed to meet all the service requirements in the most efficient way.

But EDD goes one step further. If a driver is about to deliver a package to the wrong customer, or is forgetting to deliver one of a group of packages to a customer, the DIAD alerts the driver with an audible alarm.

It's All About the Customer

The end result of all these technology innovations is stellar customer service. While UPS has a history of excellent customer service, the company's philosophy of "constructive dissatisfaction" ensures that its daily operations are constantly evaluated to determine how technology or process changes can improve operations - and ultimately customer service. The suite of package flow technologies is evidence of this philosophy in practice.

In the case of the package flow technologies, UPS's constructive dissatisfaction will reap benefits to customers and company alike. Customers can confidently continue to enjoy the stellar customer service they've come to expect from UPS as well as ultimately take advantage of more customized service offers, such as in-transit rerouting - the ability to re-route the delivery of a shipment already on the road.

Once completely implemented, package flow technologies will reduce the mileage of package cars by millions of miles each year and is expected to save UPS millions of gallons of fuel annually.

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