How UPS Uses Artificial Intelligence to Save $200+ Million Per Year
Logistics giant UPS sets aside a billion dollars a year for cutting-edge tech investments. So it’s no surprise the company is heavily involved with artificial intelligence. In fact, UPS uses AI in a range of operations to save cash and dominate its market.
UPS Uses an AI Chatbot To Improve Customer Experiences
UPS created a chatbot powered by AI that helps customers track packages, find UPS locations, and find shipping rates. Customers chat with the bot using normal conversational language on Facebook Messenger, Amazon Alexa, Skype and UPS’ mobile app.
The result is a vastly improved customer experience across chat and voice channels that consumers use every day. It’s one practical example of a simple, yet powerful, way that AI can create real value for your customers.
ORION (On-Road Integrated Optimization and Navigation)
ORION is a highly sophisticated AI platform developed by UPS that lies at the core of the company’s operations. The platform uses advanced algorithms to plan and optimize the routes taken by UPS drivers.
UPS rigs are equipped with systems that capture logistical data. Then, AI algorithms and deep learning use that data to optimize routes and cut millions of miles off UPS routes each year. That translates into serious savings for a company that spends huge amounts each year on fuel and labor. It also improves the speed and reliability of UPS deliveries.
Enhanced Dynamic Global Execution (EDGE)
UPS’ EDGE program is a collection of dozens of projects company-wide that leverage the immense amounts of data that the company is collecting across its operations. This data is analyzed by AI to surface insights on everything from how trucks are loaded to when vehicles should be washed. According to Technology Review, “the company expects to save $200 to $300 million a year once the program is fully deployed.”
What Marketers Can Learn From UPS
Marketers might not be operating on the same scale as UPS, but there are a few lessons to take away from the company’s experiments with AI:
- Set aside a budget for tech. Many companies say that tech is a priority, but how many are investing free capital into experimenting with artificial intelligence? Setting aside even a nominal amount of budget to test AI in your business can produce outsized returns.
- Solve real problems. It sounds obvious, but it’s not. Too many companies throw money at AI without having an idea of how the technology actually solves problems. Start with the challenges faced by your company or your customers, then reverse-engineer how AI can help.
- Get your data in order now. No matter what size company you are, start getting your data collected and organized now rather than later. Data is the gas that makes AI go—to leverage AI effectively, you need to get your data right.
About Mike Kaput
Mike Kaput is the Director of Marketing AI Institute and a senior consultant at PR 20/20. He writes and speaks about how marketers can understand, adopt, and pilot artificial intelligence to increase revenue and reduce costs. Full bio.