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Redefining Logistics

How UPS has Become the New Face of Global Transportation Logistics

Chuck Salter | Fast Company Content Studios

This post first appeared in the Fall 2014 issue of HP Matter Online Magazine and was republished with permission.

HP Matter_logoThe future of transportation logistics is coming to Londonderry, New Hampshire (population: 23,000). Next year, when a 600,000-square-foot distribution center opens, workers will begin inspecting, tracking, storing, organizing, and ultimately shipping more than 270,000 parts used to assemble various Pratt & Whitney airplane engines.

But in a twist that illustrates how dramatically the modern supply chain is evolving, the workers handling those parts for commercial airliners and fighter jets will work for UPS, which also owns and operates the facility.

In recent years, the $55 billion shipping giant has been redefining not just its role but also logistics itself. UPS tapped an opportunity to do more than deliver goods such as laptops, x-ray machines, and guitars for customers.

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 UPS has become adept at learning the intricacies of other industries, even those as demanding as health care and
aerospace.

It would also tackle the jobs of repairing those laptops, installing those x-ray machines, and tuning those guitars. These “supply-chain solutions” integrate the company more deeply into its customers’ businesses and boost revenue—now nearly $9 billion a year (including freight).

For its customers, outsourcing more of the supply chain is part of a strategy to free up real estate and resources.

Pratt & Whitney is better positioned to focus on what Rob Grossman, general manager of global distribution and logistics for Pratt & Whitney, calls a new wave of “unprecedented growth.” A few years ago, the engine maker had one assembly plant.

Today it has five. That could easily complicate the movement of parts. Enter UPS. “We’re looking to simplify logistics,” says Grossman.

UPS has become adept at learning the intricacies of other industries, even those as demanding as health care and aerospace.

On the Pratt & Whitney solution, employees are trained to inspect parts for “air worthiness” by taking caliper measurements and consulting engineering blueprints. “They’re very complicated drawings,” says Tom Upshaw, UPS’s director of operations in high tech and aerospace. “You and I wouldn’t know what we’re looking at.”

Which is like the Londonderry center and UPS itself. There’s a lot more going on than you realize. goldbrown2

HP Matter is a digital magazine where the brightest minds in business share their perspectives on a technology-driven world. Produced by HP, in partnership Fast Company, HP Matter brings together industry notables to provide valuable insights into the major technological shifts that are changing business as we know it. UPS was featured in HP Matter’s Transportation Issue, where leaders from across the industry discuss technology’s impact on everything from car design and city planning to supply chain and space travel.

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Chuck Salter is an award-winning senior writer and multimedia storyteller at Fast Company.

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