United Parcel Service Inc. (UPS) is exploring predictive analytics and machine learning to consolidate data in its logistics network, according to CIO Juan Perez, in an interview with The Wall Street Journal. The company has been developing the predictive tool for about eight months and will use it to analyze over 1 billion data points daily, including packages' metrics and customer data.
The company has a $20 billion capital spending plan which is getting used in part for upgrading outdated systems and opening automated facilities, according to the Journal. By using the agile software development method, UPS's own developers created the "harmonized enterprise analytic tool," which is expected to launch by the end of 2018.
Eventually UPS will integrate more artificial intelligence in the tool for better forecasting and decision-making. "Those are some of the types of decisions that today, humans make, but in the future, through AI and technology, those decisions can be automated," said Perez.
Perez took over UPS's IT in early 2016 and is seeking a future that is "autonomous everything." He has repeatedly made clear that postal company is also a technology company. In addition to its latest project, UPS is experimenting with autonomous vehicles, virtual assistants and drones.
However, the postal company is not looking to replace workers with automated solutions, but to instead augment their capabilities. Automation is all part of Perez's efforts to take employees and customers into consideration before adopting an emerging technology.
UPS is up against FedEx and Amazon when it comes to delivering parcels in an efficient and reliable manner, so Perez focuses on enhancing mobility, empowering customers and understanding where new technologies impact innovation.
To do so, the company wants to keep disrupting itself. Perez argues that if the company continued innovating in the same way it did 15 years ago, it would be out of business. Disruption is as reliant on company culture as it is on new tech. The innovation-focused philosophy of UPS is all about being "constructively dissatisfied" with the present, said Perez, speaking at MODEX this year.