{"id":2621,"date":"2015-11-22T19:26:57","date_gmt":"2015-11-23T00:26:57","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-digit\/submission\/ups-leading-the-analytics-race\/"},"modified":"2015-11-23T02:16:56","modified_gmt":"2015-11-23T07:16:56","slug":"ups-leading-the-prescriptive-analytics-race","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-digit\/submission\/ups-leading-the-prescriptive-analytics-race\/","title":{"rendered":"UPS Leading the Prescriptive Analytics Race"},"content":{"rendered":"<p><a href=\"https:\/\/www.ups.com\/content\/us\/en\/index.jsx?WT.svl=BrndMrk\" target=\"_blank\">UPS<\/a> was founded in 1907 as a messenger company, and\u00a0today\u00a0has\u00a0revenues of USD 58 billion from delivering over 16 million packages per day. The company employs\u00a0over 400,000 people\u00a0globally and owns around 100,000 vehicles and 600 airplanes to send shipments in a timely manner to\u00a0its customers across the world. To enhance its operations, UPS relies on descriptive and predictive\u00a0<a href=\"http:\/\/www.networkworld.com\/article\/2850874\/big-data-business-intelligence\/how-ups-uses-analytics-to-drive-down-costs-and-no-it-doesn-t-call-it-big-data.html\" target=\"_blank\">analytics<\/a>, which considers where the company is today and where it will be in the future, with plans to tackle prescriptive\u00a0analytics\u00a0in the future, which considers\u00a0where the company\u00a0should be, making it the most complex and useful tool in business analytics.<\/p>\n<p style=\"line-height: 18.0pt\"><span style=\"font-family: 'Georgia','serif';color: #333333\">UPS creates value by analyzing the vast amount of data that it collects. This includes data from GPS devices and sensors in vehicles to track speed, location, number of stops, number of U-turns, and number of left turns. <a href=\"http:\/\/www.analytics-magazine.org\/special-articles\/919-orion-optimizes-deliveries-at-ups\" target=\"_blank\">ORION<\/a> (On-Road Integrated Optimization and Navigation), the system the company uses at\u00a0a <a href=\"https:\/\/datafloq.com\/read\/ups-spends-1-billion-big-data-annually\/273\" target=\"_blank\">cost<\/a> of USD 1 billion a year, uses fleet telematics and advanced algorithms to optimize\u00a0routes for each driver to deliver his\/her assigned packages every day as well as provide additional training to drivers who\u00a0need it. The system has over 250 million data points, indicating the sophistication of the analyses being run in a few seconds. The system breaks down the problem into smaller parts, which enable it to find answers efficiently and in a timely manner. The developed solution ensures that packages are delivered on time\u00a0and in\u00a0the\u00a0most efficient way in terms of speed and fuel consumption. Therefore, ORION helps UPS reduce its costs and save the environment by minimizing pollution from reduced fuel consumption.\u00a0Additionally, UPS\u00a0analyzes data to\u00a0identify\u00a0maintenance requirements for vehicles to minimize downtime and maximize revenues by\u00a0allowing UPS to be proactive about maintenance needs of vehicles.<\/span><\/p>\n<p style=\"line-height: 18pt;text-align: center\"><iframe loading=\"lazy\" title=\"UPS Gettysburg Orion\" width=\"640\" height=\"360\" src=\"https:\/\/www.youtube.com\/embed\/CsJRsToDI8w?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe><\/p>\n<p style=\"line-height: 18.0pt\"><span style=\"font-family: 'Georgia','serif';color: #333333\">UPS has the ability to capture most of the value created due to its scale. UPS could save up to USD 50 million annually from a reduction of one mile driven per driver per day. UPS was able to decrease the number of miles driven by 5.3 million miles, decrease vehicle idle time by 10 million minutes, saved 650,000 gallons of fuel, and decreased carbon emissions by 6,500 metric tons.<\/span><\/p>\n<p style=\"line-height: 18.0pt\"><a href=\"http:\/\/19squx2sqzlk2w3lh726rs88.wpengine.netdna-cdn.com\/wp-content\/uploads\/2015\/11\/Value-Capture.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"size-medium wp-image-2851 aligncenter\" src=\"http:\/\/19squx2sqzlk2w3lh726rs88.wpengine.netdna-cdn.com\/wp-content\/uploads\/2015\/11\/Value-Capture-300x156.jpg\" alt=\"Value Capture\" width=\"300\" height=\"156\" srcset=\"https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2015\/11\/Value-Capture-300x156.jpg 300w, https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2015\/11\/Value-Capture-1024x534.jpg 1024w, https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2015\/11\/Value-Capture-600x313.jpg 600w, https:\/\/d3.harvard.edu\/platform-digit\/wp-content\/uploads\/sites\/2\/2015\/11\/Value-Capture.jpg 1358w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\" \/><\/a><\/p>\n<p style=\"line-height: 18.0pt\"><span style=\"font-family: 'Georgia','serif';color: #333333\">UPS has additionally rolled out UPS My Choice to enable customers to specify the exact time and location of delivery on the day of delivery, which increases their satisfaction with the service and minimizes costs for UPS since it will ensure that the package will be received by the customer, avoiding unnecessary second trips due to the inability of the driver to deliver the package.<\/span><\/p>\n<p style=\"line-height: 18.0pt\">Overall, UPS has been able to create and capture a lot of value using data analytics over the past 15 years. However, data points will continue to increase and the need to\u00a0optimize solutions to perfection will increase with time. The company has thus far been able to optimize information beforehand, but still needs to enable flexibility in the system to allow drivers to change the route if something wrong happens or if\u00a0they know of some information that ORION is unaware of. UPS has started rolling out\u00a0some parts of the system, but with full roll-out and integration, the company will be able to reap more benefit and have a strong competitive advantage against its competitors.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>How UPS uses a USD 1 billion system to optimize delivery of its packages to drive costs down and save the environment<\/p>\n","protected":false},"author":104,"featured_media":2861,"comment_status":"open","ping_status":"closed","template":"","categories":[],"class_list":["post-2621","hck-submission","type-hck-submission","status-publish","has-post-thumbnail","hentry"],"connected_submission_link":"https:\/\/d3.harvard.edu\/platform-digit\/assignment\/data-driven-value-creation-value-capture-and-operating-models\/","yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>UPS Leading the Prescriptive Analytics Race - Digital Innovation and Transformation<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/d3.harvard.edu\/platform-digit\/submission\/ups-leading-the-prescriptive-analytics-race\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"UPS Leading the Prescriptive Analytics Race - 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