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April 23, 2011 / or4green

INFORMS Analytics Conf. 2011 – UPS

I attended a few energy/environment-related talks at the INFORMS Business Analytics Conference 2011.

The first one was “UPS Delivering Sustainability Through Data and Technology” by Jack Levis, director of process management at UPS. Some of the points he made were:
– “Brown” is turning “green”
– UPS recently named a chief sustainability officer
– Their co2 emissions, including 52.8% from jet fuel and 33% from diesel, have been cut back significantly
– Fleet: lots of alternate fuel vehicles, less efficient aircraft are being retired
– Vehicle idling is being reduced
UPS is measuring everything on their trucks such as whether the seat belt is engaged, the truck is backing up, voltage draws on the battery, etc. This “telematics monitoring” is being used to steer drivers and route planning to greater efficiency. An extra mile per driver per day costs $31 million, so they try to keep routes as efficient as possible. Real-time route planning is being rolled out.

Many of the UPS sustainability improvements, such as route efficiency, also save money. But sometimes sustainability and profitability can be at odds with each other. Switching to zero emissions vehicles, for instance, could do wonders for sustainability, but it would cost a lot, probably too much for most businesses to seriously consider it. I asked about how UPS handles that balance during the Q&A. Levis’ first response was to say that “everything is a balancing act”, that UPS has made great strides in sustainability, reiterating the hiring of the sustainability officer, etc. He did go on to mention that they have some sustainability targets, e.g. emissions, that have been set. It would be interesting to hear more about these targets (so I should probably check out their CSR site), how they are set, as well as some of the O.R. techniques they are using. For some reason, the exchange reminded me of the time I irked a US Postal Service speaker by asking about junk mail (see this post). (So I guess now it’s time to bug a Fed Ex exec 😉 ) At the plenary earlier that day, UPS Vice President of Industrial Engineering (Chuck Holland) gave an entertaining presentation and part of it covered sustainability at UPS. But his main message was how to go about getting your VP’s attention: significantly increase profit, deliver on your promises, don’t deliver on your promises. Going green was not one of the ways.

Next time: talks on glass recycling and biofuels, the rise of IT in (green) O.R., and soft skills

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