Home' Technology Review : June 2005 Contents 42 BRIEFCASE
$36.6 billion Atlanta-based
shipping behemoth, has
55,000 sorting workers at
1,700 worldwide facilities.
Their Herculean task is to scan---by hand---
the bar codes on 14.1 million parcels
every day so that UPS and its customers
know where those parcels are at all times.
Beginning in 1996, UPS sorters began us-
ing a scanner worn like a ring and linked
by a cable to a forearm-mounted termi-
nal, which wirelessly transmitted bar
code data to a facility s server.
The devices gave UPS almost-real-
time package tracking---something its cus-
tomers were beginning to demand. But
they also led to millions of dollars in un-
foreseen outlays. "You can imagine the is-
sues we ran into," says John P. Killeen,
director of global network services at UPS.
"The cables would get caught on the pack-
ages or get yanked out, and once they were
disconnected, productivity stopped." UPS
needed to buy and store spare wires and
other equipment for hundreds of world-
wide facilities, and maintenance workers
were kept constantly busy xing scanners.
So in 2001, UPS put out a call for bids
for a wireless scanning system. Symbol
Technologies, a Holtsville, NY--based
company that makes laser scanners and
builds wireless networks for companies
such as Kraft Foods, Nestlé, and DHL,
won the bid. Symbol convinced UPS to
test a new device that used Bluetooth s
short-range radio capability to relay a
parcel s bar code information from a
worker s ring scanner to a wireless re-
ceiver mounted on the worker s hip.
After an initial testing phase in 2002,
Killeen says, UPS found that Symbol s
Bluetooth-equipped Emerald ring scan-
ner, paired with the belt-worn Windows
CE-based terminal, could handle ship-
ping data at up to 60 scans per minute,
double the rate UPS was getting with the
hardwired scanners. In part, the speed in-
creased because Symbol s belt terminal
transmitted a package s tracking data to a
shipping facility s ser ver using the freshly
available 802.11b wireless standard.
The Emerald scanners and terminals,
in fact, represented the rst viable combi-
nation of Bluetooth and 802.11b technol-
ogy in one system, a combination made
di cult by the fact that both technologies
send signals across the 2.4-gigahertz radio
frequency. Another di culty was that in
shipping facilities, sorters---and thus their
electronic devices---work in close proxim-
ity to each other. Symbol therefore had to
equip its scanners and terminals with soft-
ware designed to prevent the "collision of
information packets," Killeen says.
Test results convinced UPS s informa-
tion technology division to push for im-
plementation of the scanners. This meant
asking senior management to make a
$120 million investment in a three-year
equipment rollout. Once UPS s executive
steering committee approved the plan,
55,000 of Symbol s machines were or-
dered. Deployment started in July 2003
and is to be nished by the end of 2006.
According to David Salzman, a pro-
gram manager for information services at
UPS, the new equipment will pay for itself
within 16 months of full deployment.
About a third of the savings will come from
increased productivity; the remainder will
come from reductions in equipment repair
costs and spare-equipment purchases.
Donald B. Rosen eld, director of the
Leaders for Manufacturing Fellows Pro-
gram at MIT s Sloan School of Manage-
ment, likes UPS s move but wonders
whether the company considered using
radio frequency identi cation (RFID) in-
stead of Symbol s scanners. RFID tags
transmit package data automatically to
readers mounted at shipping centers,
eliminating the need for manual sorting.
Robert Nonneman, a manager of indus-
trial engineering at UPS, says the company
has watched RFID for 15 years but doesn t
see it as an imminent solution to the prob-
lem of parcel tracking. In test r uns, he says,
RFID tags did not surpass the accuracy
rate of bar code scanners. And an RFID
rollout---including tags and a new techno-
logical infrastructure---would be costly.
"You can t simply replace optical scanners
with an RFID reader and expect an im-
proved return on investment," he says.
"There have to be process changes to le-
verage the technology."
So far, 25,000 Symbol devices are in
place at 400 UPS sites. "We ve created
one of the world s largest wireless LANs,"
Killeen says. He adds that Bluetooth and
Wi-Fi connectivity are also being incor-
porated into the handheld computers car-
ried by UPS drivers. The new electronic
clipboards, rst deployed in April, allow a
driver to receive last-minute delivery or
route changes via a truck s receiver. Previ-
ously, updates came from putting the clip-
board in a cradle inside the truck.
A modest technological improvement
can deliver nicely. UPS has received a good
thing in a small package. Tom Mashberg
THE DECISION: United Parcel Service wanted to track
packages more efficiently. But instead of switching from
bar codes to radio tags, it poured $120 million into a
groundbreaking mix of Bluetooth and Wi-Fi technology.
United Parcel Service
2004 Revenues: $36.6 billion
Daily Online Tracking Requests: 10 million
Symbol s Emerald ring
scanner is to be deployed
at all 1,700 UPS sorting
facilities by the end of 2006.
COURTESY OF UNITED PARCEL SERVICE
Briefcase One Decision
Links Archive May 2005 August 2005 Navigation Previous Page Next Page