Case Study 12-1… read the scenario & answer the three questions.

The UPS ORION (On-Road Integrated Optimization and Navigation) system reduces delivery miles and fuel and sets the stage for enhanced customer service. The system not only reduces the overall delivery cost, it is also a great move toward sustainability. At the end of 2013, according to UPS, 10,000 delivery routes were optimized by ORION and 1.5 million gallons of fuel were saved. As a result, the emission of carbon dioxide was reduced by 14,000 metric tons. ORION combines more than 250 million address data points, online map data, and an optimization algorithm to find the best routes for pickups and deliveries.

The data for the system has been collected since 2008 by using GPS systems and telematics technologies installed in delivery trucks. A prototype of the ORION system was deployed in 11 sites between 2008 and 2011. In order to challenge the system and further improve the algorithm, UPS invited its most experienced drivers to try to “beat the system.” Tim Ahn, a UPS driver says, “I get options that I would have actually never thought of before. It’s a new way of thinking to make me more efficient.”

According to Chuck Holland, vice president of Industrial Engineering at UPS, it takes about six days to train a driver to work with ORION. Typically, ORION can save six to eight miles for each driver, although some drivers still outperform the system! ORION is currently deployed throughout the United States for route planning. It has not been deployed internationally yet. Among the new features to be added to the system are allowing the route to change if conditions change during the day and providing specific navigation instructions for those situations. Allocating which delivery should be assigned to which driver is also among the future features to be added. Another algorithm used by UPS provides predictive maintenance that has helped the company reduce its vehicle maintenance expenses by approximately 15 percent.

1. What does ORION stand for?

2. What are three advantages of using ORION at UPS?

3. What are three main components of ORION?