UPSNav: Save a minute, save $14 million

January 14, 2019
UPSNav: Save a minute, save $14 million

Known for its focus on efficiency, UPS is always on the lookout for ways to save time and offer better service to its customers.

UPSNav, due to be in place by 2020, updates United Parcel Service’s previous route optimization system for its 60,000 drivers.  The new system will recalculate routes all day long, taking traffic, remaining deliveries, and pick-up requests into account.

UPS drivers make about 125 stops per day, so shaving even seconds off each stop can result in huge savings.  For example, saving drivers one minute per day multiplies to $14.5 million in labor cost savings per year.

UPS competes in a tough market with FedEx, the U.S. Postal Service, and Amazon.  Figuring out how to make the “last mile delivery” as cost-effective as possible is a constant challenge, especially in suburban and rural areas where the stops are further apart.

Video Spotlight: A look at UPS Orion, the current UPS navigation system

This post is based on the Reuters article, New UPS navigation tool aims to save time and money with each turn, by Lisa Baertlein, December 4, 2018; and the YouTube video, UPS Orion, by lolrus15, September 6, 2017. Image source: andreypopov ©

Discussion Questions:

1. How does UPS’s new navigation system affect its productivity and operating costs?

Guidance: When UPS can save time and thus lower labor costs, its input costs decrease.  Since productivity is a ratio of output/input, this means its productivity is increased.  The cost-savings potential of the new UPSNav system can also help UPS offset rising labor costs in states like California where the minimum wage is going up by a dollar every year from 2018-2022 and businesses are scrambling to figure out ways to deal with that.

2. How does UPSNav intertwine work measurement with sustainability?

Guidance: Frederick Taylor used time and motion studies to identify wasted motion, redesign jobs, and make workers more productive.  In a similar way, UPSNav uses technology to study delivery routes, eliminate wasted driving time (via avoiding left turns, looking at traffic patterns, and optimizing the sequencing of pickups and deliveries), and build more efficient routings for its drivers.  In the process, miles are shaved off routes, UPS uses less fuel, and less pollution is created, which relate to sustainability.


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