Ups Competes Globally With Information Technology

United Parcel Service (UPS), the world's largest air and ground package-distribution company, started out in 1907 in a closet-size basement office. Jim Casey and Claude Ryan--two teenagers from Seattle with two bicycles and one phone--promised the "best service and lowest rates." UPS has used this formula successfully for more than 90 years.

Today UPS delivers more than 13 million parcels and documents daily throughout the United States and more than 200 other countries and territories. The firm has been able to maintain its leadership in small-package delivery services in the face of stiff competition from Federal Express and Airborne Express by investing heavily in advanced information technology. Over the past decade, UPS has spent more than $1 billion a year to boost customer service while keeping costs low and streamlining its overall operations.

Using a handheld computer called a Delivery Information Acquisition Device (DIAD), UPS drivers automatically capture customers' signatures along with pickup, delivery, and time-card information. The drivers then place the DIAD into their truck's vehicle adapter, an information-transmitting device that is connected to the cellular telephone network. (Drivers may also transmit and receive information using an internal radio in the DIAD.) Package tracking information is then transmitted to UPS's computer network for storage and processing in UPS's main computers in Mahwah, New Jersey, and Alpharetta, Georgia. From there, the information can be accessed worldwide to provide proof of delivery to the customer or to respond to customer queries.

Through its automated package tracking system, UPS can monitor packages throughout the delivery process. At various points along the route from sender to receiver, a bar code device scans shipping information on the package label; the information is then fed into the central computer. Customer service representatives can check the status of any package from desktop computers linked to the central computers and are able to respond immediately