Process Technology and E-commerce in UPS

ProcessTechnology and E-commerce in UPS


Table of Contents

Process Technology and E-commerce in UPS 2

Introduction 2

Process Technology and E-Business 3

Overview 3

Managing E-business 4

Macro IT Systems: Effects and Contribution 6

Tracking systems 7

Databases 8

Shipping Solutions 9

Conclusion 10

Bibliography 11

Appendices 13

ProcessTechnology and E-commerce in UPSIntroduction

United ParcelService of North America, Inc., usually denoted as UPS is apackage distribution company, which distributes parcels to more than1.1 million clients in over 220 nations (Bowen 2012). According (n.d.), the company delivers to over 7.7 millionconsignees, which makes it the largest logistics and shipment firmacross the world. The company has used innovative technology such asprocess technology and e-commerce to deliver services to a largenumber of people across the world thus, its repute as the worldlogistics company. In addition, the use of innovative technology hashelped the company’s business strategies thus, its capacity tobeat competitors such as Deutsche Post and its subsidiary DHL, FedEx,Royal Mail, United States Postal Service (USPS), Japan Post, andIndia Post through its chains of delivery such as ground parceldelivery (Clinton 2011). The company continues to use technologiessuch as Package Tracking System, GPS, Enterprise Resource Planning,Hip Mounted Systems, Bar Code Systems, Integrated Systems, extranetand intranet systems among others. In this regards, the discoursewill offer a context on the effect of e-commerce and processtechnology on the operational and logistics capability of UPS.

ProcessTechnology and E-BusinessOverview

Rushton,Croucher, and Baker (2014) and Gleghorn and Harper (2014) assert thatcurrently, UPS delivers around 17 million packages a day, whichtranslates to almost 5 billion pieces annually. In this regards, thecompany serves the international market for logistics such asdistribution, transportation, ground, forwarding, financing,brokerage, and air and ocean freight. Bowen (2012) contend that thecompany uses technology extensively to manage its operations usuallybasing its systems on a hub and spoke model where the companyoperates facilities that feed packages to hubs, which act as sortingand forwarding centers. Over the years, the company has usedtechnology broadly in sorting, forwarding, and distributing packages.On the other hand, data, infrastructure, and exclusive e-commerce orbusiness software attributes act as the foundation of UPS innovativesuccess (Clinton 2011 Trappey et al., 2011). These toolscombine to support the company’s e-logistics, which act asintegrated systems capable of integrating the complete supply chainmanagement of the company as well as easing the chain. Developed withthe partnership of Oracle, EXE technologies, andPriceWaterhouseCoopers (PWC), the e-logistics act as a completewarehousing, order fulfillment, inventory management, outbound andinbound delivery, customer call center, returns management, andmanagement reporting system.

Most analystsand studies have noted UPS for its dedicated utilization oftechnology. UPS has invested massively in transport technologyresearch, which has allowed the company to remain competitive as wellas provide quality service to its clients (Rushton et al.,2014 Gleghorn and Harper 2014). Inventions such as alternative fuelsand electric vehicles have helped the company create a new businessmodel as well as promote efficiency. In addition, the company hasdeveloped tracking systems, GPS, and other systems to streamlineshipping red tape, enhance routing approaches, and simplify packagetracking. The systems have also enabled clients to localize and tracktheir packages directly from the Internet. As such, the United ParcelService provides innovative technology to its clients who, insequence, get increased efficiency, superior regulation of theirsupply chains management, and enhanced customer experiences.Customers profit through deliveries such as: UPS Import Control, UPSQuantum View, UPS Paperless Invoice, Flex Global View, UPS My Choiceand UPS Mobile apps, which permit rapid, precise, and efficientevolutions through the supply and delivery chains. In this regards,the technology, combined with high-quality employees, forms thesubstance of UPS’s dependability as well as allows it to provideworth to its clients and returns to its shareholders.


UPS’ goals inelectronic commerce have been to enable more business and to create aproprietary presence in global business solutions. To create tighterrelations with customers UPS has developed tools embedded intocustomers’ applications such as Tracking, GPS, and ERP. To identifythe opportunities of the internet, UPS established e-Ventures, a formof e-logistics to manage logistic processes such as warehousing,inventory management, shipping, returns management, and telephonesupport (Bowen 2012 Rushton et al., 2014). The following shows howthe company has used process technology and e-business to ensureefficiency and streamlining of operations

Level of Information

Information Type

Source Information System


Eased payments and led to a reduction of costs

Real time dispensation

Mail orders such as delivery documents and mail internationally, which has allowed clients to transact seamlessly

Online Entry

Delivery, payments, controls, finances, and dispensation

Integrated System

Administration and control

Cataloguing packages and delivery services for easier delivery and ensuring a great reduction of mistakes in shipping parcels

Geographical Position systems (GPS)

Distribution information, infrastructures, networks, management processes with bar codes and databases to help clients

Package tracking system

Distribution chain management, scheduling, properties, and interaction

SCM (Supply chain management)

Resources, preparation, decisions

ERP (Enterprise Resource Planning)


Project systems


Networks, relating with clients, and sorting packages as well as identifying efficient routes

GPS systems using Bluetooth and IEEE standards

Delivery, tracking packages

Hip-mounted tracking system, Bar Code Systems, Networking such as Intranet, WLAN, Bluetooth, DIAD, and Telecommunication Systems

MacroIT Systems: Effects and Contribution

UPS has numerousdata centers across the world where it utilizes highly efficient PCs,servers, databases, telecommunication network, wireless devices,integrated systems, tracking systems, and DIADS (Data InformationAcquisition Device). The company’s website and integrated systemshelp it attain its goals and support its business portal ande-business information systems ( In 1990, the companydeveloped its first handheld DIAD, which helped employees captureclient signatures, transmit deliver information, scan bar code, andensure the systematization of several structures using digitalconnections (Clinton 2011 Rushton et al., 2014 Phan 2003).Ever since, the device has allowed the company to process packages,report on the delivery status, and conduct motion and time researchesto help the company achieve efficiency. Today, the company integratesthe device with other systems such as LANS (Local Area Networks),GPS, Databases, Tracking Systems, and Hip Mounting Systems amongothers. These systems have enabled the company to streamlineprocesses, ensure easy delivery of packages as well as ensure thatclients obtain quality services. In this regards, it is essential tolook at some of the macro IT systems that have helped the companyremain competitive and efficient despite huge competition from DHL,FedEx, and other logistics companies.


Trappey etal., (2011) and Soinio, Tanskanen, and Finne (2012) assert thatin its bid to ensure efficiency, the company has developed trackingsystems and other online systems. These systems have allowed clientsand system integrators to connect flawlessly with UPS throughinternet, extranet, and intranet databases. In addition, the systemshave allowed the reduction of costs as well as allowed clients totrack their packages. As such, the systems have eased operations andenabled the company to streamline its logistics. For example,Enhanced Tracking employed by the company allows freight trackingfrom the shipper’s E-business site using reference numbers thus,improves client service and enhance the company’s competitive edge.As such, the Enhanced Tracking permits a client to ascertain thewhereabouts of a package, which allows the provision of enhancedcustomer experience as well as supports the considered initiative ofUPS (Bowen 2012 Soinio et al., 2012). On the other hand, theUPS Signature Tracking systems allow clients to track packages andattain proof of delivery upon the end of a shipment. In this regards,clients receive the digital signature of personal recipient alongwith address, delivery reference, and amount collected thus, clientscan obtain official proof of distribution.

In addition, thecompany’s online tools available in XML and HTML enable shippingfunctionality incorporation hence, enhance flexibility and masscustomization capacities (Phan 2003). In this regards, theutilization of tracking systems has allowed the company to streamlineits logistics and operations. The ability of the clients to view,track and obtain proof of delivery for their packages means that thecompany has managed to construe a structure, which eases delivery andallows the integration of all services.


E-businesscombines innovative technologies and process involved in the supplychain management to help a company achieve its business successfactors (Phan 2003). As such, UPS has identified several processesand technologies, which have allowed the company realizeprofitability, productivity, as well as enhance its business successfactors. Researchers indicate that the company operates the mostextensive DB2 relational database internationally. Developed byIBM, the DB2 system acts as an open source databank, which undertakesall the computing needs of the company. In fact, the database hasallowed the company to realize profitability consistently as well asincrease its productivity. For example, during the 2008 financialcrisis, the company continued to offer services and efficiency at anormal pace due to the innovative nature of its processes. Thecompany uses its Atlanta Windward facility to cover all freight needswhile it uses the Ramap Ridge facility to carry out computing needs.On the other hand, the databases contained in the centers haveallowed the company to reduce redundancy and manage informationsufficiently. In addition, the databases have allowed the company toenable real time processing and access of information and packages.

The developmentof DB2 has allowed UPS to host all its information in an integratedserver, which has simplified the retrieval of information as well asaided in the security of the stored information. The database supportnested tables, maximizes efficiency, and minimize indexing as thesystem can manipulate and share information easily with othersystems. In addition, the company has developed Quantum ViewSoftware, a web-based application that permits numerous users toaccess information of a package ( In addition, theapplication presents hourly updates of parcels, billing information,and other information. In this regards, the application hassimplified the process of delivery as well as allowed clients tocheck their packages. The company has used the Quantum View Softwareand its database to provide extensive supply chain management. Forexample, UPS has reengineered Daimler Chrysler spare partsdistribution system through its database and Quantum Software. Infact, Daimler Chrysler uses UPS to deliver and track its parts fromits distribution centers to designated dealers. In addition, UPS hasallowed other companies such as Ikor (a Costa Rica based company) toconsolidate and expedite their clearance and supply chains. As such,these modes of outsourcing have allowed most companies to focus ontheir fundamental business rather than logistics, leaving UPS tohandle logistics and innovative supply chain management. In fact,studies show that the company continues to be the largest logisticscompany worldwide.


UPS CampusShipand WorldShip have allowed the company to secure its shippingstructures and manage all shipping activities efficiently andcheaply. In addition, the company has installed GPS systems in itsDIADs to track and analyze routes, which has reduced the costs ofdelivery as well as provided quality customer experience (Rushton etal., 2014 Fabbe-Costes and Roussat 2011). In fact, the GPSsystems have allowed the company to compute the shortest routes totake aSois well as allowed drivers to find the most effective routeto a new location in case a client changes an address. In fact, thecurrent DIADs used by the company communicate on all three networkplatforms i.e. infrared, Bluetooth, and cellular, which have ensuredthat the device can communicate from everywhere. In addition, thecompany utilizes WLAN, Bluetooth, RFID, and ERP to ensure efficiencyand great operations.


UPS IntegratedGlobal Network has become the most extensive ground and air networkin the industry since it is the only network that undertakes alllevels of service (ground, air, international, domestic, commercial,and residential) using a single pickup and distribution servicesystem (Fabbe-Costes and Roussat 2011). The company’s sophisticatedengineering structures allow UPS to enhance network effectiveness andasset application on a daily basis thus, this exclusive, assimilatedglobal business approach creates dependable and superior returns. Inaddition, the utilization of innovative e-business has allowed thecompany to have the most inclusive integrated delivery andinformation services selection of any carrier in the world. In fact,UPS relies on its own and local service providers’ competences tomeet its service commitments.


Bowen Jr, J. T. (2012) “A spatial analysis of FedEx and UPS: hubs,spokes, and network structure”,&nbspJournal of TransportGeography,&nbsp24, 419-431.

Clinton, S. R. (2011) “Importance Of Technology Investments In TheLogistics Service Providers: A Case Study Of UPS And Its Use OfOnline Tools”,&nbspJournal of Applied Business Research(JABR),&nbsp24(2).

Fabbe-Costes, N, and Roussat, C. (2011, September) “Supply chainintegration: views from a Logistics Service Provider”, In&nbspSupplyChain Forum: an International Journal&nbsp(Vol. 12, No. 2, pp.20-30). KEDGE Business School.

Gleghorn, G. D, and Harper, A. (2014) “Logistics and Supply ChainManagement and the Impact of Information Systems and InformationTechnology”, Technology, Innovation, and EnterpriseTransformation, 295.

Phan, D. D. (2003) “E-business development for competitiveadvantages: a case study”,&nbspInformation &ampManagement,&nbsp40(6), 581-590.

Rushton, A, Croucher, P, and Baker, P. (2014)&nbspThe Handbook ofLogistics and Distribution Management: Understanding the SupplyChain. Kogan Page Publishers.

Soinio, J, Tanskanen, K, and Finne, M. (2012) “Howlogistics-service providers can develop value-added services forSMEs: a dyadic perspective”, International Journal of LogisticsManagement, The,&nbsp23(1), 31-49.

Trappey, C. V, Lin, G. Y, Trappey, A. J, Liu, C. S, and Lee, W. T.(2011) “Deriving industrial logistics hub reference models formanufacturing based economies”,&nbspExpert Systems withApplications,&nbsp38(2), 1223-1232. (n.d.). Shipping, Freight, Logistics and Supply ChainManagement from UPS. Retrieved December 5, 2014, from


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