UPS Principal Scientist Ranganath Nuggehalli discussed holiday supply chain challenges in a new interview released by INFORMS. He also discusses what the shipping carrier is doing to anticipate and respond to the challenges.
Nuggehalli said UPS processes about 20 million packages per day on average, but during the holiday season, it jumps significantly – sometimes nearly doubling. Last year, it went up to about 34 million packages per day. “It becomes a challenge because it’s a physical network. So, you have to have enough resources, both physical capacity, people, vehicles, everything to service added capacity.”
Planning is key, Nuggehalli said, and that begins right away each January. He also said working with customers is key, especially main customers like Amazon, to collaborate and anticipate demand.
UPS meets the holiday challenge by adding significant capacity to its network – adding new aircrafts and vehicles and adding about 100,000 seasonal employees to cover the period between Thanksgiving and Christmas.
When asked how UPS was leveraging the power of technology to meet the challenges of the 2021 holiday season, Nuggehalli told the interviewer:
“First of all, advanced analytics is helping us. We are using that to anticipate where the volume is going to be, and where problems could happen and other things. And also like, we have advanced planning systems. We now have ORION, which helps our drivers to figure out how to do their daily route the best way, minimizing the time and everything else. And also we have automated sorting capacity in our automated hubs. Like we have capacity to process half million packages in one hour. And speed up the network. Technology plays a big role. Otherwise, we would not be able to manage operating at this level.”
INFORMS is an international association for professionals in operations research, analytics, management science, economics, behavioral science, statistics, artificial intelligence, data science, applied mathematics, and other relevant fields.
