UPS Canada facility to tackle IT-based logistics management

BURLINGTON, ONT. – A new $80 million UPS centre is using a logistics management system that allows the company to keep track of everything in its inventory from morphine to mission-critical hardware.

On Wednesday, UPS, which will celebrate its 100th birthday next year, unveiled an 800,000 sq. ft. logistics campus in Burlington, Ont. for its supply chain solutions. This includes a 207,000 sq. ft. health care building and a 600,000 sq. ft. consumer and high-tech building, plus room to build an additional 300,000 sq. ft. building in the future.

The Burlington site, which is located 45 minutes west of Toronto, is the second largest centre of its kind in North America and is one of five like it in North America. The other locations are Louisville, Ky., Mira Loma, Calif., Roermond, Netherlands and Singapore.

Brad Mitchell, president of UPS supply chain solutions in Canada, said the opening of the campus is “another leap forward for Canadian businesses competing in a global market.” Mitchell, who grew up in Burlington, added he remembers riding his bike through the same fields that the UPS site now sits on when he was a teenager. Mitchell said the logistics centre will also allow businesses to leverage UPS’ IT network.

In the last year, UPS has invested $1 billion in technology, according to the company. IT is an integral part of UPS’ business, helping it to not only track its own inventory but to save its customers time and money, said Marvin Rosenzweig, vice-president of business development, UPS supply chain solutions. By helping its customers better manage their supply chains, UPS said customers experience a 10 to 20 per cent drop in cost, which is largely attributable to less storage space required for their inventory.

Six years ago, UPS began developing its own logistics management system (LMS) after it acquired legacy code from Cambar Solutions in 2000.

Bringing the code in-house has allowed UPS to build functionalities into its software based on customer demand such as advanced shipping notice and the ability to make changes to labels. UPS’s IT team updates the application four times per year to keep up with these changes.

The LMS is made up of five modules, including order entry, warehousing, electronic data interchange (EDI), invoices and transport management. The software also features a Web-based front end that allows UPS employees to monitor inventory internally and clients to track their shipments on a user and password-protected Web site.

The LMS system is integrated into radio frequency handheld devices that the 260 employees at the two buildings at the Burlington site use to locate where to pick up product. While the health care and consumer and high-tech buildings are supported by different versions of the system, the LMS allows UPS to easily transfer employees from one building to another.

As the health-care building is subject to government regulations set out by Health Canada, UPS is required to keep inventory, which includes blood, vaccines, and narcotics, the latter of which are stored in a vault that can only be accessed by a government-authorized employee, at a certain temperature. UPS achieves this by monitoring temperature 24-hours a day using a customized system that meets with government standards. Another system also controls the lighting in the warehouse, which saves energy by leaving an unused area dimly lit until an employee enters the aisle.

In the other building, UPS has a section that’s devoted to its technology clients like Hewlett-Packard, Avaya and NCR Canada. Here, UPS stores hardware parts that the company will asked to be shipped to a customer site in the event of a system or part failure. If the hardware is part of an organization’s mission critical system, such as a financial institution’s data centre, UPS will deliver the part using its same day service.

“This allows the technician to focus on field service rather than pick up a part,” said Rosenzweig.

As for future plans for the site, Rosenzweig said UPS is currently working on a variety of projects to prove the cost effectiveness of radio frequency identification technology but so far he said the tags are still too expensive to implement the technology on a massive scale.

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