InformationWeek

But at the moment, UPS is focusing on the Emerald initiative, which is intended to replace the current version of the Internal Package Level Detail, used by employees in UPS's routing and distribution centers around the country.

Built by Symbol Technologies Inc., the Emerald device consists of a bar-code scanner attached to a user's fingers that is wired to a device worn on a belt or the employee's arm. Whenever the employee scans a package to gather information on a package's routing instructions, the data is transmitted from the finger scanner to the device. From there, the data is downloaded to a transmitter connected to the warehouse network so it can be sent to either of UPS's data centers for storage and assessment. Bluetooth will replace the expandable wire connecting the bar-code scanner to the device, which often breaks. The Emerald device will also replace other devices UPS employees use to gather information on specific tasks, such as tracking hazardous materials, fuel consumption in trucks, and issuing routing instructions to forklift operators in trucking maintenance yards.

As a short-range, unlicensed communications system that UPS can manage without the need for a telecommunications carrier, 802.11b lets UPS set up access points for devices to connect with around a facility, which allows two-way processing of information between employees and the central network.

Unlike other companies that have only recently begun testing 802.11b, UPS is no stranger to the technology; the company has been testing it in its shipping yards since 1995. After all that testing, UPS says 802.11b is a solid technology.

"We used it to communicate within our transportation yards, between trailers and the dispatching office," says Salzman. "We have a special tractor called a shifter which moves trailers from door to door and parking spot to parking spot, and we needed to provide instructions to the guys driving them." The implementation of 802.11b in the UPScan project, then, is "just a refresh of this technology that we know and love," Salzman says.

Bluetooth is another story. In some ways similar to 802.11b, Bluetooth is also a short-range wireless transmission protocol. But unlike 802.11b, it operates at much shorter distances and can handle only smaller packets of data. Bluetooth also uses unlicensed spectrum and can be managed internally by a company's IT department, but it has had several setbacks in its development. That's because some companies have attempted to run it as a networking mechanism, with less-than-stellar results. Many industry experts, including Gartner's Egan, say Bluetooth, still in development, isn't ready for full-scale adoption.

Though Salzman admits Bluetooth is "new and risky," he says it's worth the risk simply because it's a nonproprietary standard. "It looks good, but it's riskier than we normally like to be. But it was important for us to have a wireless link between the ring scanner and the terminal, because we've had so much trouble with that link," says Salzman. "It was also important that we be nonproprietary, to be industry standard, so we can use third-party products. Many [vendors] make proprietary short-range radio-frequency [products], but Bluetooth was the first stab at a nonproprietary implementation."

Bluetooth should help UPS cut costs. As part of the UPScan charter, Salzman and his group intend to reduce equipment and repair costs by 30% and reduce spare equipment by 35%. "Bluetooth is a big part of that," Salzman says. "And from now on, we're starting work on our next generation of driver terminals, and that will have a Bluetooth interface. We'll use it as our standard bus between terminals and peripherals."

While Bluetooth's use as a networking transmission protocol has had its problems, it does have potential if used in the simple manner that UPS is doing, Egan says. "It's just not a network solution," he says. "But if you use it for local access like they are, adding on and replacing things like infrared and bar-code scanners, then those are all perfect and ideal solutions for Bluetooth."

The UPScan program is also slated to consolidate separate international systems used by UPS outposts around the world that operate on different communication protocols. But in Europe and elsewhere, UPS will need separately developed devices that support the GPRS telecommunications standard popular in those areas. Even in today's tough economic climate, UPScan is still a top priority, Skaggs says. That's because UPScan is intended to eliminate recurring accessory purchases, reduce equipment and repair costs, and extend the battery life of each device.

Historically, UPS has seen its IT networks and systems grow 48% year over year since 1985, while its IT budget has remained static at $1 billion per year, thanks to decreased equipment costs and a single IT organization managing the infrastructure. "We have buy-in from the CIO to consolidate and standardize," Skaggs says. "Different big units control IT in other companies, but standardization has made us successful."

UPS has also plotted a cost-cutting rollout of UPScan. For example, UPS will test Emerald devices with users through July of next year, and then deploy the final system as current devices break. When a facility is in need of an upgrade, it will be outfitted with the new IPLD system one building at a time. While this method could take up to five years to deploy and requires the company to support two systems simultaneously, it also provides a slower learning curve for employees and conserves capital, according to Salzman.

But beyond the hard-dollar benefits of adopting a standardized system of emerging wireless technology to process information more rapidly, there are intangible benefits, Salzman says. UPS will be able to contract out repair of the devices, decrease support costs, and provide a tangible return on investments.

"It just seems like the right thing to do--getting rid of all these different systems," Salzman says. "Besides, wires are evil."