Written By James Mahone, Andres Celedon, Korin Carney

Introduction 

Artificial Intelligence utilizes machine learning systems to analyze substantial amounts of data and identify the best options to save time, improve maintenance costs, reduce labor hours, optimize inventory-picking and storage space, and better predict future outcomes that have positive effects on operational efficiencies. 

As the major delivery companies suffered lower margins and while the United Postal Service was on the verge of bankruptcy, the Global pandemic happened in 2019 making it difficult for companies like UPS to meet demand and scale as conditions changed. As a solution, UPS began integrating AI into its operations and spent $1 billion over four years addressing issues that could help manage the billions of packages delivered annually.  

Emerging Technologies

UPS’s AI solution, Orion, is flexible, scalable, and saves money. By considering weather, traffic, and customer time slots, Orion optimizes tens of thousands of delivery routes in real time, ensuring packages are delivered on time and in the best condition possible. It also predicts maintenance to avoid vehicle breakdowns, monitors package location and temperature in real time to prevent damage, and analyzes historical data to better predict and forecast demand for customers. Orion has proven to be a game-changer for UPS, and it’s only the beginning. As AI technology continues to evolve, we can expect to see even more improvements in the delivery industry.

UPS Velocity is an AI hub that uses 700 bots to optimally arrange space for inventory picking and uses rack-to-person technology developed by Geek+ which improves storage by 30% compared to other traditional sorting facilities. Also, UPS Velocity employs a Language Across Logistics program that understands 20 languages and enables UPS to collaborate with its best employees among 20 different counties.

Stakeholder Effects 

Orion improving delivery routes has a positive effect on delivery drivers by equipping them with real-time information on traffic and weather. 

Secondly, the monitoring of packages enables better customer service and offers accurate customer updates. 

Automated facilities like UPS Velocity may hurt entry-level employees due to labor hour reductions from operational efficiencies. 

SDG Indicators 

UPS drove 100 million delivery miles in 2019 less than the previous year – saving 100,000 metric tons of carbon emissions which is essential to SDG 13 for Climate Action 

The optimization of delivery routes saves on fuel and addresses SDG 13. 

One concern with UPS employees in the value chain is the reduction of the workforce and labor hours and may require greater skills to solve AI problems that could negatively impact SDG 8, Decent Work and Economic Growth, and SDG 1, No Poverty 

The Language Across Logistics program supports 20 different languages in 20 different countries which exemplifies the commitment to a diverse and inclusive workplace that addresses Decent Work and Economic Growth, SDG 8. 

Bibliography

Ethel Emmons. (2023, February 28). UPS is The Nation’s Supply Chain through AI Analytics. Artificial intelligence, Agile, Data Science, Project Management.

Garland, M. (2023, August 14). UPS uses AI Machine Learning to Match Network Capacity with Lower Volumes. Supply Chain Dive.

UPS. (2023). 5 ways UPS Velocity orchestrates industry-leading service with AI and automation. UPS.