Big Data Case Study

How UPS Use Big Data

Abstract

This report aims to provide a thorough description and analysis on the Big
Data use case about UPS. It tries to give answers about the need of doing a
big data project; challenges that UPS faced; solutions and results about this
project and what we can learn from this Big Data case study.

1.Introduction

In this Big Data era, companies spend a lot of money on Big Data projects to
optimize their business process, maintain highly competitive and provide
better service to their customers. I choose UPS as an example to explain how
UPS use Big Data to optimize their delivery routes.

2. Who do the project

I choose the world's largest package delivery company , United Parcel Service
(UPS) as an example of Big Data use cases. As we speak to UPS, its brown
delivery trucks and high delivery efficiency may first came into our mind. In
fact, the high efficiency comes from Big Data project of UPS. The ORION which
stands for On-Road Integrated Optimization and Navigation. UPS use this system
to optimize their delivery routes to achieve high efficiency.

3.The need of doing Big Data project

UPS make more than 16 million shipments to over 8.8 million customers
globally just on a daily basis. They employ in the US alone over 55,000
drivers and they have more than 100,000 vehicles globally. ( Why UPS
Spends More Than $ 1 Billion on Big Data Annually, 2014) That means the
drivers may have millions of possible routes to deliver packages. Apparently,
there is a need to choose the fastest routes to make sure so many packages
will be delivered om time. So, UPS want to choose one optimal route for each
driver on each delivery. The ORION can help UPS achieve what they want.

4.Data sources

UPS get data from many sources. One mainly data source is from customers, like
address, names, phone numbers. Besides these shipping information collected
from customers, UPS also installed advanced GPS tracking equipment and sensors
on trucks, and used online map data. The combination of these technologies and
drivers handheld mobile devices allows UPS to capture data related to
vehicle routes and performance and driver safety. (ORION Backgrounder,
2017) However, there are also some issues about the data sources, for example,
data inaccuracies, such as available maps werent accurate enough to
serve as a basis for ORION. ( Looking Under the Hood: ORION Technology
Adoption at UPS,2016). And the privacy issues, the computer virus may make
customers personal information leak out.

5. Challenges

The first challenge was to build the ORION optimization engine that could not
only meet service while reducing cost but do so while thinking like a driver.
This meant that ORION needed to balance consistency and optimality.

Maps were also a major challenge. Off-the-shelf maps were not accurate enough.
This refers to the Veracity of Big Data.

The largest challenge was about change management. By definition, optimization

tools like ORION will require people to change behavior. It is not easy to
convince drivers that ORION is more reliable than their experience.
( Zicari,2017)

6. Requirements and resources needed

Firstly, UPS need GPS tracking equipment and vehicle sensors to collect data.
Then, they need a team to do the related research. They also need software
algorithms to optimize routes.

The approximate project schedule and solutions were list below.

Big Data
project
schedule
Year Stage Solutions and purpose need
in the late Package Flow Lay the foundation
1990s Technologies (PFT) for ORION
data infrastructure.
PFT created predictive
models and a suite of
planning and execution
tools.
2003 to 2008 ORION was built on layering predictive a PhD in
PFT. Using the algorithms on top of operations
discipline of UPSs existing research, an
operations research, package and vehicle industrial
ORION created a tracking systems, but engineer, a UPS
proprietary route initial results were business
optimization engine. frustratingly manager, and
inconsistent and not several software
easily implementable engineers.
by UPS drivers.
2008 to 2012 the first model was The model was then the team had
field tested in repeated in two more expanded from
Gettysburg, operational five to
Pennsylvania. locations, and then approximately 30
in another eight people.
sites to demonstrate
consistent results.
In 2012 In the final stage of UPS developed a from 50 people
adoption scalable software at the software-
tool and then development
deployed this tool stage to more
across the than 700 people
organization to today.
inform and motivate
UPS staff across the
company to adopt this
new system.

( Looking Under the Hood: ORION Technology Adoption at UPS,2016)

7.Results and Findings

ORION is a successful Big Data project of UPS. By the end of 2016, 55,000
ORION-optimized routes have saved 10 million gallons of fuel annually, reduced
100,000 metric tons in CO2 emissions and saved an estimated $300 million to
$400 million in cost avoidance. There are also some interesting findings that
drivers should decrease left turns to enhance efficiency. From their findings,
Left turns mean going against traffic, which increases exposure to oncoming
cars and increases the time a route takes. Right turns are faster and save
fuel. (ORION: The algorithm proving that left isn't right, 2016)

8. Critique
UPS initially thought that the maps they purchased is precise enough. But
after adopting maps, they found that available maps werent accurate enough
to serve as a basis for ORION. As a result, part of any ORION deployment
involves validating maps and other supporting data. UPS also conduct ongoing
monitoring of data quality and have processes for addressing data
inaccuracies. ( Looking Under the Hood: ORION Technology Adoption at
UPS,2016)

For the future, ORION also needs to be improved. ORION creates delivery
routes before drivers leave the facility and they stay with that static route
throughout the day. So, In the future, the routes may be more dynamically
optimized when drivers complete their deliveries. ( Samuels, 2017)

9. Lessons Learned

After UPS implement ORION , the value of this Big Data project is obvious. It
helps UPS decrease the mileages and cost of fuels. In other word, this project
gives UPS more profit and high efficiency. I think two important parts we can
learn from this project. One is data accuracy. Initially, the team thought
maps that could be purchased would be accurate enough. When the optimizations
gave bad answers, the team looked at the algorithm. As it turned out, the
problem was the map data accuracy and not the algorithm. The algorithm could
not be truly tested until the data inputs were pristine. ( Zicari,2017).
We can learn how important Veracity of data is. Data is the foundation of
Big Data project, so when conducting a project, data accuracy is the first
problem we should solve. The other one is about the application of ORION.
This system must be easy for drivers to operate. UPS turn the 1000 pages
algorithm into a convenient operation system that can be used by every driver
in UPS. So, turning complexity into simpleness is also an important element
to evaluate whether a project is successful.

Explanation

ORION: On-Road Integrated Optimization and Navigation which is a route-

optimization system that analyzes a collection of data points including the
days package deliveries, pickup times, and past route performance to create
the most efficient daily route for drivers. ( Looking Under the Hood: ORION
Technology Adoption at UPS,2016)
 Reference

Why UPS Spends More Than $ 1 Billion on Big Data Annually. May 27, 2014.
Retrieved from: https://www.smartdatacollective.com/why-ups-spends-over-1-
billion-big-data-annually/

ORION Backgrounder. 2017. Retrieved from:

https://pressroom.ups.com/pressroom/ContentDetailsViewer.page?ConceptType=Fact
Sheets&id=1426321616277-282

Looking Under the Hood: ORION Technology Adoption at UPS. MAR 30, 2016.
Retrieved from : https://www.bsr.org/our-insights/case-study-view/center-for-
technology-and-sustainability-orion-technology-ups

Zicari , R. (August 1, 2017). Big Data at UPS. Interview with Jack Levis.
Retrieved from:

http://www.odbms.org/blog/2017/08/big-data-at-ups-interview-with-jack-levis/

Samuels , M ( September 28, 2017).

Big data case study: How UPS is using analytics to improve performance.
Retrieved from: http://www.zdnet.com/article/big-data-case-study-how-ups-is-
using-analytics-to-improve-performance/