Case Studies

UPS Parcel Delivery Tracking Application - updated in June 2001 When Fedex introduced a wireless network application to keep track of document and parcel shipments, UPS was pressured to respond with a similar or better service. The result was the introduction in February 1993 of a nationwide cellular-based wireless data service. This was the start of a major exploitation of wireless, Internet and supporting technologies to achieve a competitive advantage as well as to improve worker productivity.

Pre-1996 Implementation 
Through cellular technology and a broad alliance of more than 70 cellular carriers, package-delivery information is transmitted from the company’s 50,000 vehicles to the UPS mainframe repository in Mahway, NJ, thus enabling UPS to provide same-day package-tracking information for all air and ground packages. Previously, this information was not available until the next day after delivery.

With its delivery information acquisition device (or DIAD, a custom-built electronic data collector), UPS is currently the only carrier able to capture both delivery information and customers’ signatures. This data is then entered into the cellular network through Motorola-supplied cellular telephone modems. The cellular network provides the connection between UPS vehicles and UPSnet, UPS’ private telecommunications network. These systems are set up to be fail-safe, with cellular redundancies, dual access to UPSnet, and multiple connections to the data system.

Competitive Business Advantages and Benefits
UPS believes that their circuit-switched cellular data network service is the most comprehensive radio system available today. It covers a greater area and is more reliable than other mobile radio network alternatives. Key customer benefits quoted by UPS include:

• Immediate access to delivery information on more than five million UPS packages daily.

• The most extensive geographic coverage of any mobile communication alternative. (More customer shipments can be given real-time information on delivery status.)

• A high degree of reliability as a result of the service’s redundancies and backup systems

• Flexibility to accept future network technologies.

How UPS’ Delivery Status Application Works
The DIAD is inserted into a DIAD vehicle adapter (or DVA, which looks like a notebook computer docking station). The DVA in turn is connected to a cellular telephone modem (CTM) that transmits information from the UPS vehicle to the cell sites, where it is routed through the carrier’s cellular switch and special primary access equipment. This equipment directly connects to a UPSnet packet switch, which transmits the information to the UPS mainframe in Mahwah, NJ. Once the information is incorporated into the delivery-status database, it is available to the company’s customer service representatives.

UPS Delivery Information Acquisition Device (DIAD)
The DIAD is a hand-held electronic data collector that UPS drivers use to record, store, and transmit information, thereby helping UPS to keep track of packages and gather delivery information. A linchpin in UPS’ nationwide, mobile cellular network, the DIAD digitally captures customer signatures and package information — an industry first. This capability enables UPS to keep accurate, paperless delivery records. Drivers insert the DIAD into a module in their delivery vehicles to transmit information over UPS’ nationwide cellular network for immediate customer use.

Key Features of DIAD

• Contains 1.5 megabytes of RAM - old, not 1999 DIAD III

• Consolidates multiple functions into single keys — saves time and space

• Digital signature-capture is an industry first

• Built-in acoustical modem; if a driver cannot access the vehicle, data can be transmitted via telephone

• Built-in laser scanner reads package labels quickly and accurately

• "Smart" software knows driver’s next street

• Interacts with UPS cellular service

Both DIAD and DVA were custom built for UPS by Motorola. Southwestern Bell, GTE and PacTel all played key roles in putting together the cellular network consortium of more than 70 carriers. 

1999 Update to UPS Infrastructure: UPS has replaced its DIAD hardware to DIAD III - again manufactured by Motorola and are now employing Motient network - transit time for dispatch of information in real time has been reduced significantly. 

Project Costs and Benefits
UPS has estimated the total cost of the project at around $150 million. Senior executives point out that the resulting increase in market share — let alone retention of the company’s competitive edge — completely justifies the investment. In addition to the business imperative, UPS cites the following benefits from the application:

• Higher productivity of operational staff resulting from the revamping of processes and reductions in parcel-handling times.

• Improved accuracy; elimination of illegible handwritten records

• Speedier package delivery and tracking

• More information available for customer verification of package delivery and receipt

Unique Features of UPS Application

The UPS project is characterized by the following features:

• A unique implementation of analog circuit-switched cellular networks that meets UPS’ wireless and OLTP file transfer application designs. (The customer service inquiry application is based on wired networks.)

• The business justification for implementation was based on a perceived need to maintain a competitive advantage, rather than on economic considerations.

• The complete reengineering of package-handling business processes.

• A unique ability to capture signatures on hand-held, pen-based custom computers.

• Huge backend legacy systems (primarily IBM) - 15 mainframes with over 16,000 MIPS processing power and 149 terabytes of Database store - considered world's largest IBM Db2 installation.

Lessons from UPS & Fedex Projects for Courier Industry (Source - Editors of MobileInfo Site)

As mobile computing consultants, we would like to suggest the following points to other organizations investigating similar solutions:

• Most courier companies including small ones can benefit significantly from mobile computing solutions with positive ROI in 2 to 3 years. Question you should ask is not if but when,  what type of harware and network solution and how to implement.

• You need not (and should not, unless you are that big) utilize custom hardware.  There is off-the-shelf hardware available now to serve most functional needs.

• CDPD, American Mobile's Motient, Bell South Wireless Data offer attractive wireless networking solutions.   Satellite coverage is required for transportation companies, not for parcel delivery companies.  If this is a serious requirement, consider hybrid networks - contact Motient.

2000-2001 Update to UPS's Use of Wireless & Mobile Technology 
(As reported in Information week magazine - June 2001)

• UPScan - brand name of UPS's future parcel tracking application. UPS has started investigating both Bluetooth and wireless LAN technologies for local area access within its warehouses and customer drop off centers in order to automate various business processes to a greater degree than what it was able to do before. UPS says that this initiative might cost UPS over $100 million during the next five years. While this capital expenditure sounds high, UPS expects quick payback in 16 months.  This is quite significant, indeed.
• UPS will replace 9 different wireless platforms to three over the next five years.
• Currently UPS uses 200,000 RF (wireless) terminals of different flavors - 18 models from 13 different vendors. This variety of devices is expected to be reduced to a small number (may be two to three).  
• Most important wireless device is the new Delivery Information Acquisition Device (DIAD) - code named Rub.  This new device will be the fourth generation DIAD ( DIAD I was installed in 1989, DIAD II in 1992 and DIAD III was installed in 1999). y - computer tablet that the drivers will use. Vendor was not identified as of June 2001 - an RFP is expected to be issued.
• Another device that UPS is using internally in the warehouse (not in the driver's van or truck) is called Emerald - built by Symbol, equipped with a scanner attached to employee's fingers and connected to a device worn on worker's belt. As soon the information is scanned from a parcel, it is transmitted in real-time and updates UPS's backend databases. Emarald is expected to be used for other in-warehouse tasks, such as tracking hazardous materials, fuel consumption, and issuing routing instructions to forklift operators.
• Within warehouses, UPS will use wireless LANs - it will install access points in these location.
• UPS expects to install a fixed-mount wireless system called Saphire - either attached to a wall or inside a vehicle. Saphire is like a wireless access point. Within a building, Saphire is connected to either a fixed line network or a wireless LAN.  In the vehicle, it will be connected through a wide-area wireless network.
• UPS expects to reduce the number of OS platforms for devices and servers as well during the implementation of its future mobile architecture.