Ecommerce Demands Push UPS To Build An IoT-Enabled Smart Hub

Shipping giant modernizes and expands its global logistics operation while identifying opportunities to drive efficiency and reduce its carbon footprint.

Forward-Looking Efficiency

On the outskirts of Atlanta, Georgia, UPS has an industry-leading Smart Hub capable of handling 104,000 packages per hour. It’s a game-changing facility, loaded with the kind of technology and capabilities transforming the entire shipping industry. What is driving the need for this massive build-out? The rapid and ongoing rise of digital demand.

“The growth of digital demand in shipping and e-commerce has given us a variation in package mix, package size, delivery demands, and customer expectations that did not exist just a few years ago,” said Joel Stenson, Vice President of Corporate Plant Engineering at UPS. “It tells us that the market is changing, and we are changing right along with it.”

Calling on a long-term relationship with Schneider Electric, the two companies collaborated to create innovative, digital solutions to improve efficiency, modernize operations, and meet customer demands.

Many companies have begun implementing the Schneider Electric Industrial Internet of Things (IIoT) in stages, but even then, changing production methods, processes and adding efficiency throughout the value chain can be difficult to understand and visualize.

The Schneider Electric IIoT platform is the digital backbone of an industrial operation. By connecting software and hardware and linking equipment through the power of sensors and secure connectivity, it unlocks trapped value in your business.

Schneider Electric EcoStruxure is Schneider Electric’s IIoT platform. It’s scalable, modular, and ready for smart manufacturing. With integrated software, it improves productivity, efficiency, sustainability, and cybersecurity for plants and machine builders.

More than a technology solution, in industrial enterprises, it is the foundation of digital transformation. From PLCs and motor drives to power protection and remote monitoring, a complete solution was created to UPS’ exacting specifications. UPS achieved increased operational insight and higher reliability. By simplifying their process through EcoStruxure, they improved efficiency, which drove a corresponding reduction in energy usage.

UPS Smart Hub at a glance:

1.5 million square feet
104,000 packages per hour capability
15 miles of conveyor belts
Fourth largest UPS facility in the world, third largest in the U.S.

Employing forward-thinking technology has always been a part of UPS’ strategy. From automation within their shipping facilities to the ORION system that helps deploy and optimize driver routes, the company constantly seeks ways to optimize their operations and increase overall efficiency.

“To be considered cutting-edge or innovative in this industry requires an open mind,” Stenson said. “You have to be willing to consider solutions that seem completely odd to you. You have to be willing to reconsider solutions that didn’t work six months ago, because technology is changing just that rapidly these days.”

Modernization efforts at UPS:

• Spending 8% of its 2018 revenue on modernization
• Committing $20B to modernization over the next five years
• Identifying opportunities to drive efficiency and reduce carbon footprint
• Reducing carbon emissions by 20% by 2020

Building On A Relationship

UPS and Schneider Electric’s shared history of innovation goes back more than 20 years. When it came time to develop the Smart Hub, the existing relationship played a vital role in UPS’ vendor decision.

“Schneider has helped us realize our vision of what automation looks like, and to take advantage of the technologies that make themselves available,” Stenson said. “It’s a relationship that has built trust over time. We believe that when Schneider says they will do something, that’s what we’ll see.”

The two companies worked very closely throughout the project. Stenson visited Schneider Electric facilities in Europe to meet with product engineers. They discussed his needs so both sides had a strong understanding of what the company hoped to achieve with the new facility. This led to modifications of some existing Schneider offers to ensure deliver of exactly what UPS required.

“When we first evaluated some of the Schneider products, they didn’t necessarily fit the spec and the vision that we had in mind,” Stenson said. “But that wasn’t the end of the conversation. Schneider took our feedback and made modifications to those designs. Now, as a result of those discussions, those products better suit our needs within the smart facility.” The dedication to collaboration and providing innovative solutions played a major part in UPS bringing on Schneider as a partner in this project.

“Schneider has always been a very good partner from a customer service perspective,” Stenson said. “They have always been able to respond to us and respond to our needs and correct problems. When we run into difficult conditions and difficult situations, we’ve always been able to find a solution. EcoStruxure’s open architecture makes it so much easier for us to realize real-time communication.”

The Complete Package

Look around the new Smart Hub facility, and chances are you’ll be looking at Schneider Electric technology. From power distribution to conveyor operations, Schneider equipment keeps the Hub running smoothly.

At the heart of it all is EcoStruxure, Schneider’s IoT-enabled, open and interoperable architecture and platform. Because UPS was already working with many Schneider solutions, bringing EcoStruxure into the picture was very easy.

“Our application of Schneider Electric EcoStruxure was really organic,” Stenson said. “It was a matter of understanding how we could best utilize the capabilities of plant floor devices, and how we could make that information more readily available to our support personnel and maintenance mechanics. EcoStruxure’s open architecture makes it so much easier for us to realize real-time communication from plant floor devices all the way up to the control system and the SCADA that runs the facility.”

Real-time information, Stenson said, is vital in a facility the size of the Smart Hub. “You want to be predictive and understand what is about to fail before it fails — to understand, as immediately as possible, what’s going wrong, where we need to send people, and what they need to be prepared to do when they get there.”

The Path Forward

Even beyond the development of their “crown jewel” facility, Stenson sees the long partnership between UPS and Schneider continuing in the future. “Over nearly three decades, we have continued to work alongside each other as partners to develop solutions, identify areas of opportunity, improve product lines, and to improve our processes. I expect the same thing to continue as we look to see how Schneider can help UPS bring greater value to our customers.”

As with any great business, the word “customer” carries a lot of weight with UPS. From package handlers to delivery drivers, the company strives to treat every package as if it were their own. It’s a point of pride, as are the 104,000 packages processed per hour at the new Smart Hub facility, and the $20 billion UPS has committed to modernization over the next five years.

“At our core, we are a service organization,” Stenson said. “Winning over the customer and exceeding customer expectations are where we create a difference between us and our competition. So, everything that we can do to understand how best to identify the needs, the desires, and the wants of the customer, that’s what we’re really here to do.”

About Schneider Electric

Schneider Electric is leading the Digital Transformation of Energy Management and Automation in Homes, Buildings, Data Centers, Infrastructure and Industries. With global presence in over 100 countries, Schneider is the undisputable leader in Power Management – Medium Voltage, Low Voltage and Secure Power, and in Automation Systems. We provide integrated efficiency solutions, combining energy, automation and software. In our global Ecosystem, we collaborate with the largest Partner, Integrator and Developer Community on our Open Platform to deliver real-time control and operational efficiency. We believe that great people and partners make Schneider a great company and that our commitment to Innovation, Diversity and Sustainability ensures that Life Is On everywhere, for everyone and at every moment.

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