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UPS Optimizes Delivery Routes

Author

Listed:
  • Chuck Holland

    (UPS, Atlanta, Georgia 30328)

  • Jack Levis

    (UPS, Timonium, Maryland 21093)

  • Ranganath Nuggehalli

    (UPS, Timonium, Maryland 21093)

  • Bob Santilli

    (UPS, Timonium, Maryland 21093)

  • Jeff Winters

    (UPS, Timonium, Maryland 21093)

Abstract

UPS, the leading logistics provider in the world, and long known for its penchant for efficiency, embarked on a journey to streamline and modernize its pickup and delivery operations in 2003. This journey resulted in a suite of systems, including a meta-heuristic optimization system, which it called “On Road Integrated Optimization and Navigation” (ORION). Every day, ORION provides an optimized route for each of UPS’ 55,000 U.S. drivers based on the packages to be picked up and delivered on that day. The system creates routes that maintain the desired level of consistency from day to day. To bring this transformational system from concept to reality, UPS instituted extensive change in management practices to ensure that both users and executives would accept the system. Costing more than $295 million to build and deploy, ORION is expected to save UPS $300–$400 million annually. ORION is also contributing to the sustainability efforts of UPS by reducing its CO 2 emissions by 100,000 tons annually. By providing a foundation for a new generation of advanced planning systems, ORION is transforming the pickup and delivery operations at UPS.

Suggested Citation

  • Chuck Holland & Jack Levis & Ranganath Nuggehalli & Bob Santilli & Jeff Winters, 2017. "UPS Optimizes Delivery Routes," Interfaces, INFORMS, vol. 47(1), pages 8-23, February.
    • Handle: RePEc:inm:orinte:v:47:y:2017:i:1:p:8-23
    DOI: 10.1287/inte.2016.0875
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    References listed on IDEAS

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