The UPS On-Road Integrated Optimization and Navigation (ORION) is revolutionizing the pickup and delivery (P&D) operations at UPS. More than 10 years in the making, ORION has become a critical component of UPS Small Package Operations. In its current phase, every morning ORION provides UPS drivers with an optimized sequence in which the (pre)assigned packages are delivered. As of December 2015, ORION is being used by more than 35,000 of 55,000 U.S. drivers. At full deployment in 2016, 55,000 UPS drivers will be relying upon ORION to serve an average of 160 customers per day. This project was named the winner of the 2016 Franz Edelman Award for Achievement in Operations Research and the Management Sciences.
Competing for the Edelman award places you and your company among the upper echelons of those within the O.R. and Analytics fields today.
ORION sits atop the innovative Package Flow Technology (PFT) foundation that UPS developed to streamline and modernize its P&D operations. Launched in 2003, PFT enabled UPS to become more flexible and introduce a host of customized services. PFT combines data from multiple sources, public as well as proprietary, and advanced analytical tools to provide UPS with unparalleled flexibility and efficiency that were necessary to meet today’s complex needs. PFT alone (excluding ORION savings) is credited with saving 8.5 million gallons of fuel, and reducing the CO2 emissions by 85,000 metric tons annually. A decade after it was deployed, InformationWeek named PFT as one of the “20 Great Ideas to Steal in 2013.” PFT combines data from multiple sources.
PFT was explicitly built to support the use of advanced optimization in planning and execution of its P&D operations. The initial route optimization algorithms that were developed by the UPS Operations Research group, though successful in laboratory settings, were not easy to implement in practice. UPS went back to the drawing board and had to rethink and relearn everything it had known about creating effective and efficient routes. It had to blend its 108-year-old practices with 21st century technology. ORION was subjected to intensive field testing with increasing number of users for about three years before a decision was made for complete deployment.
The ORION Project at full deployment is estimated to cost $250 million. As of December 2015, ORION has already saved UPS more than $320 million. At full deployment, ORION is expected to save $300–$400 million annually. By reducing the total miles driven it is also supporting the green initiatives of UPS. It is estimated to reduce the fuel consumption annually by 10 million gallons, and CO2 production by 100,000 metric tons. It should be noted that the cost and fuel savings are in addition to those already achieved by PFT. ORION savings have significantly exceeded the original estimates leading UPS to accelerate its deployment.
Plans are underway to add additional advanced optimization capabilities to other facets of its P&D operations.
Because of its sheer size and scope, Tom Davenport, author of the seminal “Competing on Analytics,” considers ORION to be “… arguably the world’s largest operations research project.”1 Its success has attracted widespread attention. It has won a number of industry awards, and has been reported on by The Wall Street Journal and several TV shows including NOVA and Bloomberg TV. ORION has become a showcase for what operations research can do.
1Tom Davenport, Analytics 3.0, Harvard Business Review, December 2013.