How UPS is scanning and printing its way to savings

Printer technology used to streamline UPS package tracking and labelling

At first glance, UPS's warehouse workers might be mistaken for gun-toting cyborgs out of a dystopian movie. But a closer look at the stainless steel devices wrapped around employees' forearms reveal a hi-tech contraption that scans barcodes and shoots bright magenta ink--not laser beams.

"Initially, the device looks a teeny bit scary," admits Cathy Callagee, UPS vice president of information services. Fortunately, aesthetic appeal was the least of the company's goals when it teamed up with Hewlett-Packard to design a handheld device capable of scanning barcodes and printing paperless labels on packages in one fell swoop. Three years of brainstorming and countless prototypes later, the result is the HP Handheld sp400 All-in-One--a device that combines a 2-D barcode imager, inkjet printer and wireless communication. The project earned UPS a 2009 CIO 100 award.

In the past, UPS relied on the combination of a thermal printer, PC, monitor and scanner to sort, scan and generate labels instructing employees where to position packages on trucks for delivery. Today, when a package enters a UPS center for sorting, the futuristic-looking device scans the shipping label, obtains the proper sorting information from a database via a Wi-Fi network inside the facility and then prints those instructions directly onto the package using a fast-drying ink.

To learn more about UPS and other CIO 100 winners, click here.

Although handheld printing and scanning devices have been available for several years, Sahaja Sarathy, an IDC analyst, says the benefits of an all-in-one device are steadfast. "When you don't have to walk to a printing device every time you need to scan a barcode or stick a label on a package, straight away, that increases productivity," she says (IDC is a sister company to CIO's publisher).

Arming employees with cyborg-like appendages promises to boost UPS's bottom line. The company expects to cut costs by more than $US30 million over the next five years through savings in paper and ink, employee training and hardware expenditures. And by speeding up the process of sorting and labelling packages, UPS expects to realize a labor cost savings of $US16.9 million by 2013. "Because the same person scans the package and applies the label, what used to take six people can now be done with five," says Dave Barnes, UPS's CIO.

UPS has deployed 850 devices--each of which processes 1.5 million packages daily--across 55 U.S. locations, with plans for 45 more by the end of 2010.

It took a bit of tweaking, and plenty of feedback from field workers, to create a comfortable and lightweight apparatus. Because early incarnations of the device required workers to replace ink cartridges too often, HP had to redesign them, eventually increasing the number of prints per toner cartridge from 4,000 in early models to more than 6,000 prints with today's sp400. Not so scary after all.

The Break-Down

United Parcel Service

Atlanta

UPS is a $US51.5 billion package delivery company and a global provider of specialized transportation and logistics services. Its 415,000 worldwide employees route packages through more than 200 countries for nearly 8 million customers daily. How UPS Saved: By replacing a bulky scanning and printing station with an all-in-one mobile device, UPS will cut operational costs by more than $US30 million over the next five years and reduce paper consumption by 1,338 tons.

Tool Used: The HP Handheld sp400 All-in-One combines a 2-D barcode imager, inkjet printer and wireless communication.

Time Frame: UPS approached HP in June 2005 to design a mobile, handheld printer/scanner device; the final product was deployed in November of 2008. It has been rolled out to 55 U.S. locations. The company plans to deploy the device to 100 total locations by 2010.

Mobility Boosts Productivity

UPS workers used to carry packages to a stationery scanning and printing station for processing. A handheld, mobile device now lets employees go where the packages are, reducing the need for bulky hardware stations.

Don't Go It Alone

Rather than invest loads of time and money in the creation of a proprietary device, UPS partnered with HP, thereby drawing on HP's expertise in inkjet printer technology and UPS' own supply chain and logistics experience.

Cindy Waxer is a freelance writer based in Canada.

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Cindy Waxer

CIO (US)
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