UPS Invests $1 Billion to Go Green United Parcel Service (UPS) will make about $1 billion in technology investments to improve the efficiency of its operations, with the goal of cutting billions more from its costs over the long term. One of its main goals is to improve the speed and efficiency of its delivery operations.
To achieve that, UPS is equipping its vans with sensors that allow it to collect data about things such as fuel consumption, chosen routes, and how much time its engines spend idling. Reducing fuel consumption will help UPS not only to cut costs, but also to be more environmentally responsible. A big portion of the company's costs comes from transporting packages by air. In fact, UPS is the world's ninth-largest airline, so it is trying to conserve aircraft fuel as well by lowering flight speeds and better planning to avoid duplication of routes.
But a lot of fuel is also burned by its trucks, and the sensors being implemented there could save the company millions of dollars. UPS is installing about 200 sensors in its vehicles-in the brakes, engine box, and on the exterior-to collect data and pinpoint opportunities where drivers can adjust their driving to maximize fuel efficiency. The company wants to reduce idle time of its delivery trucks, as each hour spent idling burns about a gallon of fuel.
The company is also installing equipment to track the routes drivers take to deliver packages. Every morning the drivers are briefed on the data captured by the sensors and how they could drive differently to save fuel. UPS wants to optimize the number of times a vehicle has to start, stop, reverse, turn, or back up. Green Data Center The company is also investing in more efficient cooling technologies at its two data centers, which are in Mahwah, New Jersey, and Alpharetta, Georgia.
During the winter, the company can shut off its chiller equipment and use outside air for cooling. The Alpharetta data center has a 650,000-gallon water tank outside for cooling and a heat exchanger to faster dissipate the heat captured in the fluid. The water flows in a circular motion around the data center, cooling the equipment, and the heat exchanger helps lower the temperature of the hot exhaust water more quickly. UPS is also investing in faster server processors, allowing it to consolidate existing servers through virtualization. That helps lower energy costs and also reduces the physical footprint of its servers. And the company has been consolidating smaller server rooms that were scattered around the world. These changes are saving UPS around $400,000 each year.
Questions
1. Why do you think UPS is embracing sustainable technologies?
2. How is UPS developing a sustainable MIS infrastructure?
3. What business benefits will UPS gain from virtualization?
4. What role does each characteristics of an agile MIS infrastructure play in helping UPS to operate its business?
5. How could UPS benefit from cloud or grid computing?
6. What types of ethical issues might UPS encounter with the tracking technology it has placed in its trucks?
7. What types of security issues might UPS encounter with the tracking technology it has placed in its trucks?