Delivering The Goods

"No man ever yet became great by imitation."
-Samuel Johnson

Maybe Dan Sullivan didn't have this specific quote in mind when he began RPS in 1985, but the spirit was certainly there. From day one, RPS has implemented new and sometimes revolutionary approaches to business: starting out completely electronic, developing proprietary systems in-house, and contracting independent delivery personnel. RPS's singular approach to the shipping industry led to what many analysts said could not be done — a successful start-up in an industry dominated by monolithic giants. RPS's strategy to make computer technology a ubiquitous presence has been by all accounts successful — it has turned the company into one of the small-package shipping giants.

RPS began humbly in a Pittsburgh hotel room where co-founders Dan Sullivan and Steve Handy hatched their business plan in 1983. By March 11, 1985, RPS was up and running; it hasn't stopped since. The company began with 500 employees and 36 facilities serving 33% of the United States. Today, RPS has 35,000 employees and contractors, and 369 facilities, offering service in the United States, Canada, and Mexico. Additionally, RPS hit gross sales of more than $1 billion in 1993. That makes RPS the fastest growing small package ground carrier in history. It also makes RPS the second largest small-package ground carrier in North America — second only to the United Parcel Service (UPS), euphemistically known at RPS as "big brown."

"We can definitely attribute our tremendous growth and success to Dan Sullivan," says Vice President of Information Technology development Mike Hmel. "Dan is a visionary. He knew that electronic data would be the future of business, and he set up RPS with that in mind. From the first day, RPS has used computer technology to drive its shipping business." In 1998 RPS became a subsidiary of the FDX Corporation, a $17 billion holding company providing transportation, logistics, and supply chain management solutions. FDX's primary operating subsidiaries are Federal Express Corp. (FedEx); Roberts Express, Inc.; Viking Freight, Inc.; and FDX Global Logistics.

In The Beginning
The use of technology for RPS began in 1985 with bar codes and SWAKing — short for the electronic process of scanning, weighing, and keying packages. Technological advancement didn't stop there, though. "We remain successful by staying half a step ahead of the competition," says Hmel. "We do that with technology — the newest and the best technology. Technology allows us to surpass our competition and maintain that half-step ahead of them. We can integrate technology faster and easier because we are smaller and have a strong technological foundation. Of the 201 systems that run RPS, we developed 191 of them in-house. We also do 50% of our transactions electronically, but we're pushing for 100% — we've developed a strategic plan to do this." Today, RPS boasts an interactive Web site, parcel processing software for customers, and cellular data communications from delivery vans. These limited examples illustrate what an integral role technology plays in all RPS operations.

RPS has particularly directed much of its technology toward the lifeblood of its business: customers. "We think we are better than our competitors at fostering intimate customer relationships," says Hmel. "There is no doubt this has also been a big reason for our success." Technology at RPS begins with the company Web site that allows shippers and consignees to trace packages with multiple reference numbers, calculate rates, schedule pickups, and learn about other RPS services.

Additionally, RPS provides multi-carrier parcel processing software to its customers. These software packages include MultiShip, a Windows-based shipping management system, RPS QuickShip, a means of offering more shipping management capabilities to PC users with lower package volumes, and RPS ACCESS, a PC-based system that links the customer's computers with the RPS database. With these hardware and software solutions, customers can print bar codes, access important shipping data, or process, rate, and trace packages from a Web browser. The premise is simple; improve business all around with efficient technology solutions, and lock that business in by providing the software for free. It's symbiosis in business.

Delivery For RPS…
The actual pickup, shipment, and delivery of a package is just as technologically advanced. When packages arrive at a local pickup and delivery terminal, they are SWAKed — scanned with Symbol scan guns, and weighed and recorded with scales, controllers, and software supplied by Metler/Toledo. This electronically links the bar-coded package ID number with the destination zip code. Customers may also provide shipping data electronically via a diskette or modem through a service called Electronic Package Data Interchange (E-PDI).

Packages are then scanned as part of a primary and secondary package sort. After this step, the packages go to an RPS hub, where they are unloaded onto a high-speed conveyor system and scanned on the five visible sides of the package by DRX technology scanners supplied by Accu-sort. Slots of shoes (automated sorting devices) gently push the packages onto another conveyor to form a train of 46 packages. Pop-up rollers steer the packages to the proper destination chutes, and into trailers. The whole process is computerized. Pickup and delivery contractors deliver the packages, record receivers' names, and use Hand Held Products' STAR scanners to capture tracking ID numbers. These contractors communicate information with RPS via on-van cellular systems (OVCs) supplied by Mobiltex Data Limited, and modems supplied by Motorola. This information is available on RPS's Web site within two hours of delivery — a scanned image of the receiver's signature is available within 24 hours.

"FDX and RPS have separate IT staffs, but we benchmark and share ideas. There are about 600 people on the IT staff right now. We've already outgrown our facility in Pittsburgh, and we're just going to keep growing in the future."

This growth includes moving from a proprietary system to an open platform system, a five year journey that RPS is 1 ½ years into. RPS plans to upgrade its entire field data collection network, including the OVCs and contractors' handheld scanners. Currently, a full-time staff of three people scans signatures to make them available on the RPS Web site. The new handheld scanners to be supplied by Symbol Technologies will capture signatures at the point of delivery (POD).

The House That Technology Built
Those unfamiliar with RPS's history might interpret Mike Hmel's initial statements as facile confidence. After all, without knowledge of RPS's pervasive, long-standing use of technology, how could one realize what a dynamic force it has been in growing the business? Those who are familiar with RPS, though, see through the veneer of these statements to the technological foundation that has supported this growth. And, it should be increasingly clear in the future, particularly for competitors, that RPS is trying relentlessly to use this technology to attain industry leadership. If RPS successfully implements these plans, Hmel's description of keeping "half a step ahead" of industry competitors might turn into running laps around them. In the words of RPS founding father Dan Sullivan, "technology is the future of business."