Can Roadnet Deliver? United Parcel Service has been slow to modernize the business of hauling packages. But its software arm Roadnet Technologies in Timonium, is helping UPS catch up.


Roadnet Technologies Inc. might not exist at all were it not for the Traveling Salesman's Problem, a logistical puzzle that has confounded salesmen of all stripes for generations.

The problem reads like this: If you have more than a dozen stops to make in a single day, what is the most efficient route?

For a route with 16 stops, mathematicians have figured there are 21 trillion -- yes, trillion -- possible combinations. But not even the mightiest computer can say unequivocally which route is the best.

"There are a number of ways to get very good routes, but there's not a proven, optimum way to do it," observes Scott Corrigan, general manager of Timonium-based Roadnet, the software development arm of United Parcel Service.

"We have the software to get a good answer," he says, "but not the perfect answer."

If Roadnet is anything like its parent -- and most indications suggest it is -- the perfect answer may be in the cards yet.

Indeed, UPS' fastidious approach to the package delivery business is legendary. The company's reputation is derived, in part, from an endless preoccupation with time-and-motion studies to shave seconds -- even milliseconds -- off the delivery times of its 60,000 drivers.

Even the most seemingly insignificant details are studied in minutiae, as part of UPS' determination to live up to the company mantra: "We run the tightest ship in the shipping business."

Past study subjects: the ideal depth for deliverymen's pants pockets (calibrated so drivers don't waste precious seconds digging around for loose change), the desired speed for deliverymen to walk (3 feet per second) and the optimum shape for truck seats (beveled edges so drivers can slide off quickly).

"We've already figured out all the things to do conventionally in the picking up and delivery of packages," says Mr. Corrigan. "To improve on that, we're going to have to use technology."

That's been a hard lesson for UPS to learn. The company, founded 84 years ago as a local message delivery service in Seattle, handily dominated the private package delivery service for years without the technology.

In the early 1980s, UPS was still using pencil and paper to track packages and stopwatches to measure productivity gains. The only problem was, upstarts like Federal Express were using an arsenal of high-tech gizmos and slick new services to woo customers and grab market share.

Today, Federal Express has grown into a $7 billion-a-year business that dominates the overnight air express market. It has also earned a name for itself as a technology leader, walking off with numerous awards for such innovations as airbill bar coding and hand-held computers for couriers to handle daily transactions.

Now UPS, the $13 billion-a-year heavyweight of the industry, is playing an expensive game of catch-up.

George Robertson, an industry analyst with Alex. Brown & Sons, said he doesn't doubt that Big Brown will do what it has to do to improve. "UPS is a very deliberate company. They give things they do a lot of thought, but, boy, once they do decide to move and do something, you'd better get out of their way."

That's what happened in 1985, when, after watching Federal Express muscle in on its market, UPS started to fight back.

In classic UPS style, the company decided to "leapfrog" the competition in technology. The company launched a five-year, $1.4 billion technology initiative, including the purchase of Roadnet and II Morrow Inc., a computer hardware manufacturer based in Salem, Ore.

At the time, Roadnet was little more than a local software developer with one basic product: a sophisticated routing and scheduling program aimed at attacking the Traveling Salesman's Problem.

Roadnet, which has since moved into a modern suburban

high-rise near the Maryland State Fairgrounds, is still tackling that same basic problem. But its mission has changed dramatically.

Instead of concentrating on developing software for the general market, the unit is now focused on meeting the demands of its corporate parent.

And what does UPS want? No less than a way to continuously update and coordinate all its routing and scheduling. That's a huge task considering UPS has 116,000 ground vehicles and 360 aircraft, which together deliver about 12 million packages daily.

Roadnet continues to sell some generic programs to commercial clients, like Coca-Cola, but 90 percent of its work is geared around UPS.

Joining the UPS family of companies has led to other changes at Roadnet.

Formerly a freewheeling programming shop, Roadnet today mirrors UPS right down to its office policies (desktops must be cleared before workers leave each night), dress code (men must wear business suits, no beards allowed), Japanese-style work ethic (workers are encouraged to stay for life) and near-obsession with cleanliness (even the trash looks neat).

That transition was a bit of a jolt for the 22 employees of Roadnet when it was purchased by UPS in 1986, says Richard Foard, engineering manager of Roadnet.

Mr. Foard, who was with the company when it was acquired by UPS, said a "major issue" developed with corporate headquarters almost before the ink was dry on the purchase papers.

The issue: Whether to allow Roadnet employees to drink coffee at their desks.

In corporate headquarters, workers are not allowed to either eat or drink at their desks, a requirement that apparently didn't sit too well with the Roadnet employees.

The issue was resolved amicably enough -- Roadnet workers got the thumbs up to drink, but not eat, at their desks. But the incident underscored a basic tenet of UPS-dom: Policies are made to be adhered to, and any deviation, no matter how small, must be discussed. "For all practical purposes, when you step into Roadnet, you step into UPS," Mr. Foard says.

And that means adapting to the egalitarian side of UPS' corporate culture, as well.

Because UPS is a manager-owned company -- and everyone but a driver is a manager -- the atmosphere tends to be decidedly collegial. Executives aren't treated any differently than part-time hourly workers, and perks around the corporate offices are as rare as a Federal Express delivery. The use of titles is limited, and everyone is on a first-name basis.

As a recent tour of Roadnet showed, offices are Spartan (including Mr. Corrigan's) and they all bear the same nondescript nameplate. There is no executive dining room, and senior managers must compete with interns and part-time helpers for spaces in the parking lot each morning.

"Some people are uncomfortable with it at first, but after a short period of time they come to realize it's another benefit of the company," says Mr. Corrigan, an 18-year veteran of UPS.

Then there's the matter of Roadnet's creative autonomy. There is none.

As UPS' programming workhorse, Roadnet's mandate is to execute plans handed down from a technical task force in UPS' corporate headquarters in Greenwich, Conn. That means programmers don't spend time dreaming up applications, nor do they tinker with software to squeeze out new innovations.

"We're not in the business of trying to sit down and brainstorm on what UPS needs in the way of technology," Mr. Corrigan says. "That comes from strategic planning. But once it's been identified as a good project, we get involved in the development of it."

He said Roadnet employees can offer suggestions on which direction the unit should move in, but that is not a stated objective.

The technical advisory group that directs Roadnet's staff of 200 engineers and software programmers is part of a larger strategic planning group in corporate headquarters. Both panels are typically staffed with "UPSers" -- that's UPS-speak for company careerists.

Like Mr. Corrigan, most UPSers start out as drivers and work their way up. As such, technical task force members may or may not have a technical background.

That's in sharp contrast to rival Federal Express. Its award-winning technical group is composed mainly of computer and engineering experts.

Harry Dalton, vice president of strategic integrated systems for Memphis, Tenn.-based Federal Express, said the conceptual process for coming up with new technology projects is "pretty loose" at Federal Express. "Ideas can come from just about anywhere," he said.

Once those ideas are formulated, Mr. Dalton said his technical staff has turnkey responsibilities.

"That's one of the things that makes ourcreative people so responsible," says Mr. Dalton, a former UPSer who now claims red and purple as his corporate colors. "They know they have to make the darn thing work."

That's not the case at UPS, where technical staff advisers might not even know how to use a computer, much less write software for one.

"Their job is to assess different things that have the potential for UPS applications, to go out and study things, do analysis and say, 'Yeah, we think an electronic clipboard would be a good thing to have,' " Mr. Corrigan says.

That wish list, in turn, is handed over to the technical units -- Roadnet or II Morrow -- to see if it can be turned into reality.

In the case of the electronic clipboard, UPS' wish came true: Roadnet engineers developed software for use with a portable com

puter that can be used in place of a paper clipboard. The unit, which was tested last year, is being deployed throughout UPS' system at a rate of 3,000 a month.

The unit, known as the Delivery Information Acquisition Device (DIAD), allows drivers to collect information -- including customer signatures -- electronically. That information is downloaded into central units at UPS hubs and transferred to UPS' data centers in New Jersey at the end of the day. Eventually, UPS hopes to have the capability to download information directly from trucks, providing real-time data on deliveries.

The DIAD is aimed at reducing the time it takes to trace deliveries. Currently, lost or misdirected packages must be tracked by hand at UPS by flipping through reams of paper files, a process that can take days to complete.

Another project initiated by the technology committee that is in the process of being executed by Roadnet is a massive Geographical Information System (GIS). The project is aimed at developing and maintaining a complete digital map of the continental United States.

As part of that project, teams of UPSers are being dispatched daily to visually confirm every street, road and alley in the United States. Information identifying turning lanes and one-way streets also will be included.

Concurrently, Roadnet programmers are busy digitizing maps of the United States -- 15 tons' worth -- using state-of-the-art computer equipment. Eventually, longitude and latitude points will be assigned to each street address in America, information that can be used later as more sophisticated vehicle-tracking systems are developed.

The massive project, the most extensive one of its kind ever undertaken, will be continuously updated as streets are changed, subdivisions built and byways moved. The idea is to arm UPS' front-line heros -- its 60,000 drivers -- with the best information possible.

"The goal is to have every street that UPS vehicles travel in our data base," says Len Kennedy, who oversees the project for Roadnet.

The U.S. Census has already contacted UPS about gaining access to its data base once it is completed. According to Mr. Kennedy, a decision hasn't been made on whether to give Uncle Sam a peek.

Yet another project -- a patented coding system for tracking packages -- has sailed successfully through Roadnet.

This so-called "dense" code, which resembles a thumbprint, will eventually replace traditional bar codes. UPS' dense code, called the "UPSCode," can be encoded with much more information than traditional bar codes, which only relay order numbers.

The UPSCode, once it is instituted systemwide, will speed sorting and handling of packages.

Given Roadnet's successes over the past few years, Mr. Corrigan believes UPS' reputation as a technological laggard is not deserved. And he is visibly peeved at the suggestion that Big Brown has somehow been left in the dust of fleet-footed Federal Express.

"I think it's safe to say we were the best at doing what was expected," says Mr. Corrigan, a UPS-lifer who seems loathe to give Federal Express credit for jump-starting UPS' technology efforts.

Besides adapting to UPS' rather unconventional, sometimes schizoid corporate culture, there have been other growing pains: Starting with just 22 employees in 1986, Roadnet today employs almost 300 workers. That figure is expected to increase to nearly 500 by the mid-1990s.

That means Roadnet must assimilate a lot of people into the UPS way of doing things, a process that can be time-consuming.

"In the last two years, we've hired 200 people," says Mr. Corrigan. "That's a lot of people to get trained and developed in the UPS culture."

To speed that process along, all new programmers are sent out for an on-the-road experience, appropriately dubbed "the UPS Experience." For two weeks, programmers work alongside drivers, sorters, routers and deliveryman.

The idea, said Mr. Corrigan, is for new recruits to "handle some boxes, smell the cardboard, get chased by dogs, realize customers aren't always home" and become attuned to the realities of picking up and delivering packages.

Programmers aren't expected to "bleed brown," as UPSers like to say of themselves, after just two weeks out in the field. But the experience is supposed to give programmers a chance to get the fresh smell of cardboard in their lungs and get a better understanding of what UPS is all about.

And what UPS is all about, as every good UPSer knows, is this: Picking up and delivering packages better than anybody else. Like the endless search for the answer to the Traveling Salesman's Problem, it's the ideal that guides UPS every day of its corporate life.

"We are in the business of picking up and delivering packages," explains Mr. Corrigan, who well understands that notion. "Everything else that is done is done in support of that."

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