Question: What challenges does the system pose for drivers and their managers?
CASE STUDY #1
EVIDENCE-BASED HRM
Analytics Drive Success at United Parcel Service (UPS)
United Parcel Service (UPS) is one of the world’s largest package-shipping companies, so saving a tiny bit of gasoline on every truck route can generate enormous savings, in both expenses and impact on the environment. For example, reducing each route by 1.6 km (1 mile) per day for a year can save the company about 162 million km (100 million miles) per year, a reduction of carbon emission of 100,000 tonnes and a cost saving of about $50 million. Thus, efficiency is a major factor in work design. UPS keeps improving its ability to gather, analyze, and apply data to making every aspect of package handling use fewer resources.
Some of its detailed requirements once included requiring drivers to hook their truck keys over one finger instead of stashing the in a pocket. This task was updated when drivers were provided with a digital-remote fob to wear on their belts. With the keyless systems, drivers stop the truck and press a button to turn off the engine and at each stop. That’s equivalent to an average of 6.5 minutes per driver per day. Besides saving time, the changes save motions by the driver, reducing fatigue.
Recently, the company began using a system called ORION (On-road Integrated Optimization and Navigation). The ORION system gathers data from customers, vehicles and drivers’ handheld mobile devices. It analyzes the data – even times for pickup and delivery when customers have special requests – and designs routes for each driver to use the minimum time and fuel, driving the minimum distance.
According to UPS, once fully implemented, ORION is expected to save the company $300 to $400 million a year. The company hopes that ORION will eventually do even more to improve outcomes – for example updating routes when accidents or construction sites cause traffic congestion. With results like these, it is easy to see why UPS invested years to develop the ORION system. The challenge for managers is to find drivers who are willing to commit to a system in which their every turn is planned by a computer and to keep those jobs engaging.
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What challenges does the system pose for drivers and their managers?
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