One of the most enjoyable things about researching this book has been discovering all sorts of things happening in the world around me of which I had no clue. Nothing was more surprisingly interesting than pulling the curtain back on UPS, United Parcel Service. Yes, those folks, the ones who wear the homely brown shorts and drive those ugly brown trucks. Turns out that while I was sleeping, stodgy old UPS became a huge force flattening the world.
Once again, it was one of my Indian tutors, Nandan Nilekani, the Infosys CEO, who tipped me off to this. “FedEx and UPS should be one of your flatteners. They're not just delivering packages, they are doing logistics,” he told me on the phone from Bangalore one day. Naturally, I filed the thought away, making a note to check it out, without having any clue what he was getting at. A few months later I went to China, and while there I was afflicted with jet lag one night and was watching CNN International to pass the wee hours of the morning. At one point, a commercial came on for UPS, and its tag line was UPS's new slogan: “Your World Synchronized.”
The thought occurred to me: That must be what Nandan was talking about! UPS, I learned, was not just delivering packages anymore; it was synchronizing global supply chains for companies large and small. The next day I made an appointment to visit UPS headquarters in Atlanta. I later toured the UPS Worldport distribution hub adjacent to the Louisville International Airport, which at night is basically taken over by the UPS fleet of cargo jets, as packages are flown in from all over the world, sorted, and flown back out again a few hours later. (The UPS fleet of 270 aircraft is the eleventh largest airline in the world.) What I discovered on these visits was that this is not your father's UPS. Yes, UPS still pulls in most of its $36 billion in sales by shipping more than 13.5 million packages a day from point A to point B. But behind that innocuous facade, the company founded in Seattle in 1907 as a messenger service has reinvented itself as a dynamic supply-chain manager.
Consider this: If you own a Toshiba laptop computer that is under warranty and it breaks and you call Toshiba to have it repaired, Toshiba will tell you to drop it off at a UPS store and have it shipped it to Toshiba, and it will get repaired and then be shipped back to you. But here's what they don't tell you: UPS doesn't just pick up and deliver your Toshiba laptop. UPS actually repairs the computer in its own UPS-run workshop dedicated to computer and printer repairs at its Louisville hub. I went to tour that hub expecting to see only packages moving around, and instead I found myself dressed in a blue smock, in a special clean room, watching UPS employees replacing motherboards in broken Toshiba laptops. Toshiba had developed an image problem several years ago, with some customers concluding that its repair process for broken machines took too long. So Toshiba came to UPS and asked it to design a better system. UPS said, “Look, instead of us picking up the machine from your customers, bringing it to our hub, then flying it from our hub to your repair facility and then flying it back to our hub and then from our hub to your customer's house, let's cut out all the middle steps. We, UPS, will pick it up, repair it ourselves, and send it right back to your customer.” It is now possible to send your Toshiba laptop in one day, get it repaired the next, and have it back the third day. The UPS repairmen and -women were all certified by Toshiba, and its customer complaints went down dramatically. packages delivered or goods repaired quickly anywhere in the world, you can act really small.
In addition, by making the delivery of goods and services around the world superefficient and superfast-and in huge volumes-UPS is helping to level customs barriers and harmonize trade by getting more and more people to adopt the same rules and labels and tracking systems for transporting goods. UPS has a smart label on all its packages so that package can be tracked and traced anywhere in its network.
Working with the U.S. Customs Service, UPS designed a software program that allows customs to say to UPS, “I want to see any package moving through your Worldport hub that was sent from Cali, Colombia, to Miami by someone named Carlos.” Or, “I want to see any package sent from Germany to the United States by someone named Osama.” When the package arrives for sorting, the UPS computers will then automatically route that package to a customs officer in the UPS hub. A computerized arm will literally slide it off the conveyor belt and dump it into a bin for a closer look. It makes the inspection process more efficient and does not interrupt the general flow of packages. These efficiencies of time and scale save UPS's clients money, enabling them to recycle their capital and fund more innovation. But the level of collaboration it requires between UPS and its clients is unusual.