Big projects to create one-to-one customer relationships keep new CIO busy
On the job for just two months, United Parcel Service Inc. CIO and senior VP David Barnes has three big projects on his plate. The overall strategy is to develop one-to-one customer relationships, while maintaining an IT infrastructure with "dial-tone reliability," Barnes says.
Job one involves delivering 38,000 fourth-generation Delivery Information Acquisition Devices to drivers in the United States and Europe this year. The latest version of UPS's handheld device, which drivers use to capture electronic signatures and keep track of customer data, supports CDMA and GPRS standards for real-time wireless communications in the field. The handheld also includes global-positioning-satellite technology to provide drivers with detailed directions and supports 128 Mbytes of memory. The extra memory will be used to provide new customer services, Barnes says. UPS will spend more than $100 million developing, manufacturing, and deploying 100,000 of the devices over the next two years.
A second project under way involves deploying "package-flow" technology in UPS's package centers, entailing a suite of custom-built software that combines operations research and mapping technology to optimize the way boxes get loaded and delivered. One goal is to cut the distance that delivery trucks travel by more than 100 million miles each year. The project is scheduled for completion by the end of 2007. The third push involves replacing ring scanners used by package movers with wireless devices. The new scanners employ Bluetooth to create what Barnes describes as wireless "personal area networks." The approach also will require the deployment of 55,000 Wi-Fi terminals.
It's all part of the company's focus on providing its 7.9 million customers with supply-chain visibility for the 14.1 million packages it ships each day in and across more than 200 countries. "What people are asking is for us to try to get end-to-end visibility, from supplier to receiver," Barnes says.
UPS's data-intensive environment is supported by the largest IBM DB2 database in the world, Barnes says, consisting of 236 terabytes of data related to its visibility tools. "Visibility is the single biggest area for database storage," Barnes says. Those tools are key as the CIO continues to push forward UPS's goal of creating one-to-one customer relationships. Its Quantum View tools let customers customize views of shipment history, get notices when a package arrives or is delayed, and more. With Quantum View, large businesses with multiple locations can "customize for locations, life cycle of movements, ... and sort the information in any order you want," Barnes says.
Among its 489 mostly custom-built applications created to enhance customer relationships, UPS has enabled online businesses to use Web services to integrate UPS tools, such as its package-tracking system, on their own Web sites. For companies with global logistics requirements, UPS this year introduced TradeAbility software to handle everything related to the movement of goods across borders.
With $36.6 billion in revenue last year, UPS spent about $1 billion on IT, approximately the spending ratio it has maintained for the past couple of years. Part of that budget goes to maintaining redundant data centers in Atlanta and Mahwah, N.J., with 14 IBM Z-series mainframes, which it's upgrading to IBM's more powerful T-Rex mainframes. "We have a very reliable global network for quality of service and a portfolio of solutions for accessibility," Barnes says. "We cater to customers on a one-to-one basis."
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