How UPS Has Become the New Face of Global Transportation Logistics

The future of transportation logistics is coming to Londonderry, New Hampshire (population: 23,000).

Next year, when a 600,000-square-foot distribution center opens, workers will begin inspecting, tracking, storing, organizing, and ultimately shipping more than 270,000 parts used to assemble various Pratt & Whitney airplane engines.

But in a twist that illustrates how dramatically the modern supply chain is evolving, the workers handling those parts for commercial airliners and fighter jets will work for UPS, which also owns and operates the facility.

In recent years, the $55 billion shipping giant has been redefining not just its role but also logistics itself. UPS tapped an opportunity to do more than deliver goods such as laptops, x-ray machines, and guitars for customers. It would also tackle the jobs of repairing those laptops, installing those x-ray machines, and tuning those guitars.

These “supply-chain solutions” integrate the company more deeply into its customers’ businesses and boost revenue—now nearly $9 billion a year (including freight).

For its customers, outsourcing more of the supply chain is part of a strategy to free up real estate and resources.

Pratt & Whitney is better positioned to focus on what Rob Grossman, general manager of global distribution and logistics for Pratt & Whitney, calls a new wave of “unprecedented growth.”

A few years ago, the engine maker had one assembly plant. Today it has five.

That could easily complicate the movement of parts. Enter UPS. “We’re looking to simplify logistics,” says Grossman.

UPS has become adept at learning the intricacies of other industries, even those as demanding as health care and aerospace.

On the Pratt & Whitney solution, employees are trained to inspect parts for “air worthiness” by taking caliper measurements and consulting engineering blueprints. “They’re very complicated drawings,” says Tom Upshaw, UPS’s director of operations in high tech and aerospace. “You and I wouldn’t know what we’re looking at.”

Which is like the Londonderry center and UPS itself. There’s a lot more (logistics and supply chain) going on than you realize.

Source: HP Matter: The Transportation Issue

Related: HP Converged Infrastructure Delivers for UPS