In my opinion, one of the best companies at capturing, distilling and using information for optimizing its operations is UPS, the world’s largest package delivery company and a global leader in supply chain and freight services. Much can be learned from the company, which is one of the largest employers in the United States.
UPS employs more than 400,000 employees and operates a fleet of nearly 100,000 vehicles. The company gathers data from nearly every aspect of its operations — from the handheld computers the delivery drivers carry to record customer interactions, to computers used to scan and sort packages and to mobile devices placed on its trucks. This data is then monitored and analyzed to drill down for opportunities for operational savings.
With a fleet the size of UPS’s, even small changes in routes or in vehicle condition can reap big returns, and not just in vehicle maintenance improvements. Analyzing fleet data also pays dividends in terms of shrinking the company’s carbon footprint, improving fuel consumption and even reducing unsafe behaviors behind the wheel.
With a need for better analysis, and with help from telematics, UPS began developing “telepathic trucks.” In 2008, it launched a telematics-based initiative that uses algorithms and firmware (basically a combination of software and hardware) to analyze data collected from sensors in its delivery vans.
The technology enables insight into a vehicle’s performance and condition, and helps pinpoint opportunities to coach drivers to improve safety, customer service and efficiency. The data also is used to cut fuel consumption, emissions and maintenance costs.
Basically, UPS uses technology to “paint” a picture of the driver and the delivery van’s day by capturing data from sensors on more than 200 vehicle-related elements — everything from speed, engine rpm, oil pressure, seatbelt use, the number of times the truck is placed in reverse, how often the bulkhead door is opened and the amount of time spent idling.
Using a 900 MHz radio, the data is uploaded automatically when a driver returns to the center at the end of the day and passes under a special RF receiver. The data then is sent to UPS’s data center in Alpharetta, Ga. There, proprietary computer applications enable UPS operations personnel — from truck technicians to supervisors to managers — to analyze the data and, ultimately, draw conclusions about UPS’s vehicle-maintenance and logistics processes.
The telematics technology is allowing UPS to move from preventive maintenance to a just-in-time, condition-based maintenance platform where each truck will eventually issue its own “health report.”
In the past, like most fleets, UPS scheduled vehicle maintenance by time-dependent factors. By maintaining fleet vehicles based on the actual condition of key mechanical components, UPS has been able to use fewer resources, increase the efficiency of its maintenance operations, minimize vehicle downtime and improve vehicle repairs and maintenance. This, in turn, has advanced vehicle reliability by reducing on-road breakdowns and helped lower the cost of maintenance.
The telematics systems give technicians detailed visibility of vital mechanical and electrical functions on each vehicle daily, without having to take the vehicle out of service and bring it to the shop. This enables UPS to determine much more accurately the right time to bring trucks into the shop for repair and maintenance, and when to place a truck that is beginning to perform less efficiently on a shorter route.
The bottom line: UPS is getting more useful life out of its trucks with lowered life-cycle costs.
The telematics initiative is helping UPS reduce energy consumption and environmental impact by pinpointing ways to maximize fuel economy, and optimize dispatch planning and driver routine to reduce overall driver miles. Telematics and route planning software are combined to determine where route inefficiencies exist, help design more direct routing and group deliveries to reduce the miles driven and fuel consumed.
The new telematics systems also provide visibility into vehicle idle time. The technology has helped to reduce the amount of time spent idling by 15 minutes per driver per day.
The telematics initiative also has become a safety tool for UPS. By monitoring braking and backing patterns, as well as seat belt use, managers can help drivers adopt behaviors and habits that not only increase their efficiency but their safety as well.BI
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