UPS Airline Operations
While UPS created its airline in 1988, the company has been using O.R. to help plan and manage its air operation since UPS began acquiring its own aircraft in 1981. Over the years O.R. tools have been used in a variety of ways to support the air operation including developing simulator training schedules for UPS pilots to meet currency and training requirements, helping determine how many air containers need to be in position at all UPS locations to support the peak operations time between Thanksgiving and Christmas, and developing operational plans for using leased, small jet aircraft to ensure that packages still meet their service commitments in the event of delays in the UPS air system.
Currently, the airline is using the Volume, Location, Aircraft Network Optimizer (VOLCANO) to help plan the domestic U.S. next-day operation. The initial VOLCANO model was the systeM DeterMines the least-cost air networK neeDeD to Move all pacKages given the availaBle aircraFt, their operating restrictions, anD constraints on airport anD huB capacities.
Developed in conjunction with Cindy Barnhart at MIT. VOLCANO allows air planners to examine changing as much, or as little, of the air network as is needed to solve aircraft and air hub capacity problems. The system will determine the least-cost air network needed to move all packages given the available aircraft, their operating restrictions, and constraints on airport and air hub capacities. Recently the air planners have been using VOLCANO to reduce the number of aircraft that UPS needs to fly to deliver all air packages, resulting in lower costs to both UPS and its customers.
This model assumed that the package flow was fixed. Since the initial model, the O.R. group has added the capability to change the package flow while simultaneously generating aircraft routes and schedules.
Operations Research will continue to be an important factor in the success of UPS. As the company’s network and business become more and more complex, UPS will rely on operations research tools and techniques to assist it in maintaining an efficient, reliable and cost effective service.