UPS Logistics a Masterpiece of Streamlined Supply Chain Management

There’s much to admire about UPS. Nicknamed “Brown” for the trademark color of its delivery trucks, the Atlanta, Georgia-based multinational corporation often ranks high on lists of the most valuable brands and most admired companies.

For 100-plus years, United Parcel Service has been seeking ways to get things from here to there as quickly, efficiently and economically as possible.

In 2012, the company delivered more than 4 billion packages and documents to nearly 9 million daily customers in more than 220 countries and territories. That entailed a fleet of more than 96,000 cars, vans, tractors and motorcycles, as well as 230 jets, according to UPS.

Over the past century, UPS has become one of the world’s premier logistics companies. Among its notable strides are its “direct-to-store” delivery model, its forward-thinking embrace of the “cloud” as a new platform for international shipments and its dedication to ensuring that Brown also means green.

The direct-to-store delivery model is a response to the need to reduce the role of inventory in business supply chains. The model bypasses distribution centers and keeps inventory moving from manufacturer to end-customer, shrinking the fulfillment cycle and lowering inventory costs.

UPS has, in fact, become a third-party provider of direct-to-store networks with its UPS Trade Direct service, offering companies a range of shipping management and fulfillment options. Such services can streamline logistics, eliminating the need for companies to build or lease warehouses and distribution centers. They also can reduce the number of parties involved in a supply chain, decreasing the potential for system failures or slowdowns at the various links in the chain.

In a white paper titled “Inventory in Motion,” UPS highlighted its direct-to-store work for the Idea Group in speeding delivery of promotional products from manufacturers in China to multiple customers in the United States. UPS said it helped trim delivery time by up to 20% by streamlining shipping and customs requirements, and eliminating the need to stock inventory in Idea Group’s warehouse in California.

‘Cloud’ Computing a Silver Lining for Logistics
UPS also has played a leading role in utilizing technology to create efficiencies for customers, most recently with the unveiling of UPS Order Watch in November 2012.

The cloud-based platform allows for more streamlined collaboration among shippers and their international suppliers, offering cost savings through consolidated freight shipments and better utilization of containers. Order Watch also provides real-time data on shipping orders, including automated alerts when delays are encountered.

With a fleet of almost 10,000 vehicles, UPS also seeks technology-driven improvements to its own logistics operations. The company says it has been testing fossil fuel alternatives since the 1930s and now has the biggest fleet of alternative-fuel vehicles in the transportation industry. Those almost 2,700 vehicles include electric, hybrid electric, compressed natural gas, propane and liquefied natural gas.

In February 2013, UPS announced that it had purchased 100 fully electric, zero-emission delivery trucks for use in California. The vehicles will cut the company’s annual gasoline consumption by an estimated 126,000 gallons.

“We use our technology and logistics expertise to reduce emissions around the world and help test new automotive technologies,” UPS executive Myron Gray said in a statement.

UPS has also saved fuel and reduced emissions by applying its logistics know-how to route optimization, including minimizing left-hand turns for its delivery vehicles.

As UPS notes on its website, “Logistics is more than just our core business. It’s also the core of our sustainability as a company.”

Note: Original article published by the University of San Francisco