Session 9: The UPS Case

Founded in 1907 as a messenger company in the United States, Atlanta-based United Parcel Service
(UPS) has grown into a $49.7 billion corporation (in 2008) by focusing on the goal of enabling commerce
around the globe. Today UPS is a global company with one of the most recognized and admired brands
in the world and has become the world's largest package delivery company and a leading global provider
of specialized transportation and logistics services. Every day, UPS manage the flow of goods, funds,
and information in more than 200 countries and territories worldwide. Here are some useful UPS stats
from 2013:
• Daily Delivery Volume: 15.6 million packages and documents
• Service Area: More than 220 countries and territories; Every address in North America and
Europe
• Customers: 8.5 million daily
• Online Tracking: Avg 26.2 million daily tracking requests
• Operating Facilities: 1,801
• Delivery Fleet: 93,736 package cars, vans, tractors, motorcycles, including 2,596 alternative-fuel
vehicles
• UPS Aircraft Fleet: 223 in service (225 aircraft total)
• US Air Hubs: Ky. (Main US Air Hub); Pa.; Tx; Ca; Il.; S.C.
To ensure the ongoing success of the enterprise, UPS has invested heavily in information management
systems and enabling information technologies to support its core business processes. For example,
UPS recently invested over $100 million in an ambitious project that installed advanced wireless LANs,
next-generation scanners, and short-range wireless Bluetooth throughout its 2,000 worldwide
distribution centers. The project allows package sorters to move freely with cordless optical scanners to
capture data from packages. Then, this data is sent to the package-tracking system via Bluetooth and
retransmitted to the wireless LAN. The data generated within each distribution center is then integrated
with the rest of UPS’ packager tracking data worldwide. To further automate this process, the
organization has enabled each of its individual delivery personnel to capture package-level information
at each pick-up and delivery. Here the organization has employed geographical position systems and
cellular “WiFi” technologies to integrate trucking, airplane, and ship-based data with that coming from
its many distribution centers.
Two advanced wireless technologies are currently used in these projects: Bluetooth and the IEEE
802.11g wireless standard. The 802.11g standard (also known as “WiFi” for wireless fidelity”) defines the
rules used by a local area network to transmit data over the air. In a typical WiFi network, users connect
to wireless access points that are, in turn, connected to an Ethernet. Radio signals enable

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 Session 9: The UPS Case

communication over an area of several hundred feet to 1,000 feet. In addition, roaming users can move
from one access point to another like cell phone subscribers can move from cell to cell in a cellular
phone network. Bluetooth is a wireless personal area network technology developed by the Bluetooth
Special Interest Group, a consortium of companies led by Ericsson, IBM, Nokia and Toshiba. It was
conceived for short-range transmission of digital data between mobile devices (PDAs and phones) and
desktop devices.
The UPS advanced network has three inter-working design elements. In the first, network- “wearable”
computing and communication devices play a key role. A cordless optical scanner mounted on a finger
ring captures tracking numbers from the packages. Then, the wireless ring scanner transmits the data to
a package-tracking system carried on the hip of the package sorter. Bluetooth is used for this finger-to-
hip communication. The hip-mounted tracking system runs on a Windows CE operating system-based
terminal, code-named Emerald, developed by Motorola. UPS has purchased more than 50,000 Emerald
terminals as part of its distribution center project. All of the package pick-up transmissions ultimately
route to the company’s centralizing package tracking application running on a large server in the
company’s data center.
In the second part of the network solution, the Emerald terminal retransmits the data received from the
ring scanner to a wireless access point via WiFi. In the third and final part of the new network solution,
the access point transmits the data across an Ethernet LAN in the distribution center to a server-based
application that ships the data across UPS’ WAN via a network server running in conjunction with a
point-to-point, fixed lines (a.k.a. leased lines) connection between that distribution center and the
company’s data center in New Jersey. To address security concerns, UPS requires password-protected
logins from all users and has implemented encryption technology on its networks. However, because
most of the data transmitted over the wireless LAN consists of package-tracking numbers, transmission
security is not as big an issue as it could be. UPS trucks also service the company’s retail outlets where
non-corporate customers can bring their packages for delivery. In the case of UPS stores, the
organization employs their telecomm partner’s public switched digital network (PSDN) to convey pick-up
and delivery information to the centralized package tracking system. From all of these locations, the
data then flows via WAN networks to UPS’ centralized package-tracking application running on servers
in New Jersey.
Thus the UPS organization shares data over a private, secure network, running on its own privately-held
wireless/wired network typologies, as well as those networking services (both wireless and wired)
owned and operated by its telecomm partners. In addition, UPS maintains a public internet site through
which the public may track the status of their individual UPS shipments. UPS also maintains an Intranet
to coordinate internal employee activities and enterprise business processes and to share corporate
information and services with its employees worldwide. Lastly, with its larger global accounts and
business partners, UPS collaborates through Extranet-based Web services. In summary then, as a
global distribution and logistics company, UPS employs all of the different types of networking services
discussed in MISM 2301.

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