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How UPS Uses AI to Save $200 Million a Year

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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 this post, we break down UPS' involvement with AI—and what businesses can learn from their approach.

Does UPS use AI?

UPS uses plenty of AI across its operations to save money and improve results.

These include AI chatbots that track packages, its AI-powered Enhanced Dynamic Global Execution (EDGE) platform, and the navigation system it uses to route its fleet of delivery trucks.

How does UPS use AI?

Let's dive a little deeper into how UPS uses AI...

AI chatbots

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.

AI navigation

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.

AI predictions and forecasts

Enhanced Dynamic Global Execution (EDGE) 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.”

How to get started with AI

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.

1. Set aside a budget for AI.

Many companies say that AI is a priority, but how many are investing free capital into experimenting with it? Setting aside even a nominal amount of budget to test AI in your business can produce outsized returns.

2. 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.

3. 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.

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