UPS is a global leader in logistics and package delivery, providing a wide range of solutions including transportation, distribution, and international trade management. The company earned $91 billion in revenue in 2023. With a vast and complex operational network covering over 220 countries, UPS handles millions of packages daily.

Bala Subramanian is the Chief Digital and Technology Officer of UPS, a role he has held for nearly two years. He has helped transition UPS from a traditional logistics provider to a logistics orchestrator, integrating physical and digital supply chains for enhanced operational efficiency and customer satisfaction. Subramanian has also helped foster digital and data fluency across the organization to ensure that as many people as possible can understand, contribute to, and take advantage of digital and data opportunities. He describes all of this in the above in this interview.

(This interview has been edited for length and clarity.)

Peter High: Your organization is moving from being a logistics provider to a logistics orchestrator. Could you describe the difference between those two and the broader value that being a logistics orchestrator would provide?

Bala Subramanian: During our investor analyst conference, we talked about how we will try to take share and grow our addressable market. We said in the US, our SMB penetration will be about 40%. We also talked about being the number one premium healthcare integrator and number one complex healthcare logistics provider in the world. We laid out those three declarations.

Logistic orchestration is really about how we become the premium logistics orchestrator by connecting the physical and digital supply chains end to end. To do that, we have a very deep and broad integrated network across the world. Now what we are doing is building this digital capability as a growth enabler so we can start putting digital and physical together. When you’re able to make digital decisions, you also have a physical network that can now truly make that decision come to life.

The orchestration is really the combination of making decisions digitally and actually taking action physically. An example would be, Peter, we look at visibility. We see that a customer actually has a challenge, like they can see that, oh, this product is at this place, but I want to make a decision to say, okay, instead of sending this particular shipment to place X, I want to make it go into place Y. Visibility provides you information as to when it’s going to go, where it’s going to go, and how long it’s going to take.

Physically you have to be able to intercept the package and be able to reroute it. This connection between digital and physical is what we think about as logistics orchestration, and that’s why we are really excited about connecting those things together. Now we are bringing in more real-time and making it more adaptive so that we can actually do it based on multiple variants.

High: One of your responsibilities is developing broader digital fluency. Presumably, as you think about employee experience, and its impact on customer experience, greater levels of digital fluency from the employee perspective can enhance the ability to impact those customer journeys and the digital customer experience more generally speaking. Can you talk about the way in which you have thought about developing and fostering broader digital fluency?

Subramanian: I’ve been lucky enough to be part of two digital transformations, one at BestBuy and one at AT&T. It is less about technology. It’s less about the process. It’s more about people. It’s really about the mind-shift change to go from how do you really think from a digital mind shift? A lot of kudos to Carol [B. Tomé] and others. Before I joined the company, we were partnered with Emory University, and we actually had a digital fluency program. What is it to really think from a digital mindset?

The MVPs we talk about, the lean agile investments we’re making. How do you think about the hypothesis? How do you think about the outside-in approach? We set up a class, and we had every senior leader, and then the middle managers, everybody go through this digital fluency class. You start to really say, “Okay, when you talk to people, what does the customer experience look like? What problem are we solving for the customer?” That fluency is one that I’m pretty excited about, that we are starting to bring in.

The second one, as you talk about where we are going, is we started to get the basics about how to think from a digital mindset. Now we’re adding data on top of it. Now we’re saying, “Okay, digital fluency cannot just only be about ‘digital,’ but it also has to do with data fluency. Is the data providing the information? What insights are you getting from it with respect to Gen AI?” Which is quite exciting.

You can get any answer you want. If you start asking the different questions, “Are we getting the insights? Are we getting confirmation about what you need the data to tell you?” Those are all the data fluency that we need to have and really understand what we have. That’s one of the things we’re expanding on. I’m excited about the migration from just digital fluency to now data fluency, and it’s a journey. That’s what we’re embarking on now.

High: You have what you refer to as UPS DeliveryDefense. Could you talk about how these innovations help from a defense perspective?

Subramanian: As we think about moving packages from point A to point B, we have an integrated network which helps us to do it really well. We provide one of the best service experiences for our customers. It is really good, but it is on the transportation side.

Now, how do we really start adding value beyond transportation to our customers? We have all this data. We have 20 petabytes of data about every package that goes everywhere. We have a lot of information. Our operational network almost emits about a billion signals every single day. We have over 700 million addresses because we deliver to places across 220 countries.

DeliveryDefense is one area we said we’ll take all the operational data we have to run that operational network, create use cases as a capability that we can provide to the customers that not only helps them to have the best experience in delivering a package, but one of the things is about a lot of porch piracy that’s happening, a lot of fraud that’s happening in terms of deliveries.

Now, we are looking at and saying, “Okay. This particular address, what does it do in terms of a very simple number from 1 to 10, what is the probability that this address is not a real address?” For the customer, it’s not only about the delivery cost, but they also don’t [want to] lose the product. Product cost always hides the delivery cost. It’s really important for them to be able to save their product and that’s what is extremely exciting for them.

There is one interview we actually showed during our investor day, when you’re shipping precious metals by using DeliveryDefense, you can make sure that that address that you have is not a fake address and you’re not getting scammed by someone. This is really helping our customers. Again, using the data that we have on the operational side, we are now creating value for the customers in ways that we’ve probably not done before.

Imagine that now we can do additional things on top of. We have DeliveryDefense. We also have an insurance business. We can provide better insurance as we think about high-risk products that we ship. That can extend right now. We can also provide customers— we have a sub-division, what can we do with respect to the local authorities abroad? Is it in a floodplain? What happens there as we start laying out this new development that’s coming in?

A lot of the things that we use from our operational network, we’re trying to figure out, “What use cases do we have and how do we start expanding that forward?” That’s what we’re doing. When I talk about UPS Digital, that is one of my teams, that is really thinking about 20 petabytes of data, the operational capabilities we have and creating this as a service and saying, “How can we really add additional value to our customers?”

Peter High is President of Metis Strategy, a business and IT advisory firm. He has written three bestselling books, including his latest Getting to Nimble. He also moderates the Technovation podcast series and speaks at conferences around the world. Follow him on Twitter @PeterAHigh.