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Custodial Package Tracking at
Federal Express
CARL NEHLS
Federal Express is a true American success story. Started a mere 15 years
ago, it created the door-to-door, overnight express package delivery business
and forever changed the way the United States and the world do business.
Founded by Fred Smith in 1973 with a fleet of 14 Falcon jets, Federal
Express had grown, by 1987, into an international company with $3.2 billion
in yearly revenues and more than 50,000 employees worldwide. Federal
Express picks up and delivers more than 850,000 packages each day using
a fleet of 60 Boeing 727s, 20 DC-10s, and approximately 100 Cessna 208
aircraft.
Federal Express's phenomenal growth, and the resulting articles, business
seminars, and case studies have made Fred Smith a famous man. However,
a frequently overlooked "key element" to Federal Express's success was
Fred Smith's realization that being able to provide information about a pack-
age's location, status, and movement was just as important as actually picking
up and delivering the package. If the package is so important to the customer
that he or she needs it delivered overnight, the customer is almost certain to
want to know that everything has gone according to plan.
Federal Express's information management and positive package tracking
systems were started early and quickly grew in importance as thousands of
people called to have their packages picked up and many called again the
next day to ask, "Has my package been delivered?" COSMOS IIB is the
latest in a series of information system developments that Federal Express
has undertaken to add value to its product while simultaneously improving
its operations.
57
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58
CARL NEHLS
BACKGROUND
The core of Federal Express's information system is COSMOS (Custom-
ers, Operations, and Services Master On-line System). Originally developed
in 1977, the system was rewritten to run on IBM computers in 1979. These
mainframe computers located in the Memphis, Tennessee, corporate head-
quarters were used to store customer information and rate tables. Call Center
agents accessed this information when customers called to request a pickup,
and the requests were sent to a printer in the appropriate station. Initially,
couriers used pay telephones to call in and receive their dispatches; however,
radios were soon installed in the Federal Express vans for quicker and easier
. .
communications.
During the next several years many more functions were added to COS-
MOS to facilitate the collection and distribution of customer, ZIP Code, and
operations information. By the late 1970s software applications totaling nearly
1 million lines of code were running on COSMOS. The network, comprising
a cluster of IBM 3090-class machines with thousands of terminals located
throughout the world, continues to be one of the largest IBM networks in
existence.
Additional computer systems such as FAMIS (Field Activities Manage-
ment Information System) and ORBIT (On-line Revenue Billing & Invoicing
Technology) were developed to handle the company's payroll reporting, field
reporting, and billing functions. Although these systems received limited
amounts of information from COSMOS, each system remained essentially
independent. Some standard information, such as ZIP Code and location
data, was maintained separately on each system, and in some cases signif-
icantly different conventions were followed. For example, COSMOS kept
track of stations by the three-letter abbreviations for the local airport (MIA
for Miami, Florida), whereas FAMIS used a number to identify a location.
Keeping these multiple systems synchronized was a constant problem and
would later pose a systems integration problem for COSMOS JIB.
Providing information to customers about their packages was becoming a
significant challenge as the package volume grew. Exception packages-
those held for pickup by the recipient, those delayed because of weather or
other problems had information key entered into COSMOS. However, if
a customer wished to know the status of a nonexception package, the station
had to be contacted by telephone or printer message, at which time local
employees researched the package and phoned the information back.
By 1977 bar-code technology was emerging as a reliable way of capturing
information in a very efficient manner. Federal Express began to investigate
the idea of bar coding the package number on each airbill. The concept was
to record the number of each package each time it changed hands. If that
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CUSTODIAL PACKAGE TRACKING AT FEDERAL EXPRESS
59
information was provided to COSMOS, a customer could be told the exact
status of his or her package while on the telephone. To further improve the
tracking system, additional information could be collected for each package
at certain points. For example, as the package is being delivered, the name
of the person signing for the package could be entered.
By early 1979 Federal Express was outstripping the supply of technical
people in Memphis and elected to construct a Technology Center in Colorado
Springs to help attract talented people to the company. One of the first people
in Colorado Springs was Harry Dalton, who had spent his early days with
the company as a station manager in Philadelphia and later as a district
director. Dalton, then a director reporting directly to the president, was sent
to Colorado Springs and matrixed to the Advanced Systems Group (that is,
he was assigned to the group, but he did not report through the group's chain
of command). Dalton explained his unusual placement in Colorado Springs
as a desire of executive management to "inject a dose of reality into the bits
and bytes group." In mid-1979 Dalton was given the go-ahead to conduct
a field test of the available bar-code scanning equipment.
Federal Express's first survey of the hand-held terminal technology market
revealed a small selection of available hardware. Most of the devices had
very limited keyboards for data entry and were capable of scanning just a
few types of bar code. Norand Corporation was just preparing to release its
first programmable terminal with a numeric keypad (see Figure 11. Federal
Express acquired some of the first terminals Norand could make available
and began testing these models as well as terminals from other vendors.
The plan, dubbed COSMOS II, was to supply each courier with a scanning
device for use in the station and on the road. The important tests were to
determine if hand-held devices were durable enough to use on-road, to see
whether large quantities of sequential numbers could be printed in bar code,
to determine the impact of scanning on field people's morale, and to provide
data that could be used to predict the impact of package scanning on the
entire company. The scanners would be used to scan the package-tracking
number of each package every time it changed hands from the point of pickup
to the point of delivery. The information collected by these scans would be
transmitted from bases in the station to COSMOS, where a customer service
agent could access the information from a terminal.
These. field tests showed that scanning the packages as they changed hands
was a feasible plan; however, the equipment was not sturdy enough to with-
stand the rigors of a delivery route. As a compromise the project was broken
into two parts, COSMOS IIA and COSMOS JIB. COSMOS IIA would only
involve scanning packages in the stations where the equipment could survive.
More durable equipment had to be found before the on-road scans of COS-
MOS IIB could be implemented. This type of compromise not allowing
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60
CARL NEHLS
FIGURE 1 Norand 101 XL.
"best" to get in the way of "better" was to become a common approach
to many technical challenges at Federal Express.
The equipment selected for the in-station scans was a Norand device that
was modified to incorporate an alphabetic keyboard. This special device,
later adopted as a Norand standard, was referred to as an HHT, or hand-
held terminal (see Figure 21. The software for this unit was specified by
Federal Express, written by Norand, and stored in PROMs (Programmable
Read Only Memory).
In early 1981 COSMOS IIA implementation was begun. A group of six
people crisscrossed the country installing 450 HHTs and training personnel
in 150 stations on how to scan the 100,000 nightly packages. By the summer
of 1981 Dalton had moved to a director's position responsible for Corporate
Industrial Engineering in Memphis, and began leveraging technology appli-
cations through this department. Eventually, most of the work with bar codes
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CUSTODIAL PACKAGE TRACKING AT FEDERAL EXPRESS 61
a. ~ ~
FIGURE 2 Norand 101XL Alpha 1 (HHT).
~ .
and scanning equipment was shifted to others in the group. Federal Express
engineers, particularly David Dietzel and Jim Turpin, continued to watch
for and test new scanning equipment as it hit the market, searching for the
device that could support COSMOS JIB.
The reaction of station management to the implementation of COSMOS
IIA was often less than favorable. Extra personnel were required to perform
the scanning, and station personnel thought that the scanning hampered the
speed of the morning operations. After several months of operations it became
apparent many stations were not scanning as diligently as had been hoped.
Soon compliance reports comparing the number of scans done by each station
to their package delivery counts were developed. Not long after that, the
stations' scan compliance was included in the MBO (Management by Ob-
jective) system for the station managers, thus supplying even more incentive
to make sure the scans were done properly.
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62
CARL NEHLS
Not all the plans for COSMOS IIA were made perfectly. Some of the
scans in the HHT were found to be impractical, and the need for new scans
soon developed. It was frustrating to Dalton's engineers that the software in
the HHTs could not be easily adjusted to meet the changing needs of the
field operations. Software changes to the HHT were difficult because not
only did Norand have to be contracted to make the changes, but there were
also significant logistical problems in locating all the terminals and perform-
ing a PROM swap without disrupting operations.
Despite these problems and frustrations, COSMOS IIA scanning became
a natural part of station operations and the core of Federal Express's package
tracking and tracing operations. The lessons learned in COSMOS IIA would
play a major role in the development of COSMOS JIB.
By 1979 daily pickup operations in some cities had increased to the point
that 2 to 3 dispatchers were issuing nearly 3,000 requests for pickups to more
than 100 couriers in the larger locations. Many of these dispatches occurred
just before local businesses began to close, which made the dispatch function
almost impossible to manage. Because radio frequencies were tightly reg-
ulated and in short supply, it was impractical to use multiple radio channels.
Instead, Federal Express went to the marketplace and had technology created
in the form of DADS (Digitally Assisted Dispatch System). The first DADS
system was implemented in mid-1982.
DADS was developed with a Canadian company, Mobile Data Interna-
tional, and involved having COSMOS send the request for pickup to a
computer in the station instead of to a printer. The dispatcher would confirm
which route should receive the request and would then forward the request
to a computer terminal mounted in the van (see Figure 31. Sending these
short bursts of data instead of conversation on the radio dramatically reduced
the load on the radio channel and provided a real time link between the
courier and Federal Express's computer system.
The ability to pass digitized data between the van and COSMOS opened
up an entirely new field in data communications. Dalton and Dietzel rec-
ognized that this real-time link to the computer system would allow scan
information to be immediately transmitted to COSMOS rather than waiting
until the courier returned to the station. Making the information available to
the customer service agent in a near real-time fashion would eliminate even
more traces. For example, a trace request at 10:00 A.M. without DADS would
still require a call to the station, because couriers would still be on their
delivery routes. With the real-time communications of DADS available, the
information of a 9:55 A.M. delivery could be provided at 10:00 A.M. and
prevent the call to the station.
In the early months of 1982 efforts intensified to find a COSMOS IIB
device. By late 1982 it had become quite clear that the manufacturers of bar-
code scanning equipment did not have plans to develop what the engineers
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CUSTODIAL PACKAGE TRACKING AT FEDERAL EXPRESS
~ Aft:..: l
~.~....~ ~
~ . ., ~ .
......... . .
i...] 1 1
..., !!
FIGURE 3 DADS Mobile terminal. The "shoe" for the scanner, shown
in this photograph, was added after DADS implementation.
63
of Corporate Industrial Engineering were looking for. Consequently, a Re-
quest for Proposal (REP) was issued in the spring of 1983 for a device with
no keyboard and 4K of RAM (Random Access Memory). Five thousand
devices were to be produced, and they were to be accompanied by charging
and communications boots. Six companies responded to the REP. Most of
the companies, already established in the scanning equipment industry, re-
sponded with proposals that used part of their current line of equipment. One
exception to this was a capable start-up company in North Carolina named
Hand Held Products (HHP).
During one of the REP review sessions with HHP, they were told that
they must bring back exactly what was requested. Turpin held up a large
felt-tipped pen and said the scanner must "look and feel like this." Turpin
explained to HHP that (1) the device must read Codabar, (2) the device must
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64
CARL NEHLS
fit in a shirt pocket, and (3) HHP must develop a unit for presentation to
Harry Dalton and it must work. Representatives from HHP visited Memphis
3 months after the REP went out and had with them a working prototype.
This device was nicknamed "tent peg," because of its shape. HHP had been
a dark horse, but suddenly the company had made itself a front runner.
COSMOS IIB
1974-1983 Summary
Harry Dalton and his engineers had finally found a vendor that could and
would provide a scanning device the courier could carry in his or her pocket
and use to scan packages on the road. The compromise solution of only
scanning packages as.they arrived at and departed from the station had become
standard operating procedure. The ultimate goal, first envisioned in the mid-
1970s, of collecting tracking information at each change of possession was
still there. By 1983, however, the objectives of COSMOS IIB had been
expanded. Not only was tracking required every step of the way, but the
information was desired instantly and had to be managed to identify packages
that did not appear at the next checkpoint. The DADS system was to be used
to transmit the data to COSMOS so that the information was available to
customer service agents within seconds. Computers in the stations would
generate reports of packages that did not appear at the correct destination,
thereby enabling the packages to be recovered and delivered on time.
initial Financing
Harry Dalton had been selling the project on and off over the years, always
looking for ways to enhance the project's value. Many of the benefits were
related to the courier force that would be using the device, but Dalton also
canvassed the rest of the company to identify other benefits. Marketing,
sales, and customer service departments identified savings and profit potential
that significantly added to the benefits that could be obtained from labor
savings, but most of the benefits still were not considered solid enough for
inclusion in a financial justification. Finally, after reviewing the entire project
plan in May 1984, senior management saw enough benefits to approve de-
velopment and test funds. Preliminary implementation plans called for 13,000
scanners to be rolled out by June 1985.
Initial Hardware Development
The Memphis-based engineering group spent quite a lot of time working
with HHP to develop the ultimate scanning device while a search for a station
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CUSTODIAL PACKAGE TRACKII!iG AT FEDERAL EXPRESS 65
FIGURE 4 Hand Held Products Prototype II.
processor for generating COSMOS IIB reports was centered in Colorado
Springs. Dealing with a start-up company such as Hand Held Products brought
with it a unique set of circumstances. As a small, aspiring company it carried
the vigor of youth, and the energies its employees poured out produced
speedy results and changes. The requirements for the COSMOS IIB device
quickly evolved from a simple "tent-peg" scanner to a scanner with a display
(see Figure 4), and then to a more advanced unit with the ability to make
some elementary keyboard entries (see Figure 5~. Working prototypes of all
these units were produced by HHP in less than 6 months. By July 1984 a
FIGURE 5 Micro-Wand I (Hand Held Products).
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66
If...........
: "".......
~ ~ ~ I.
CARL NEHLS
.
.
.
::::::::
::::::
::::::::
.~ ....................... ... .... ............. .. .. . ...
~ . ~ ~ ~ . ~ ~ ~ ~ ~ ~ . . . . I.
FIGURE 6 Supertracker (Hand Held Products Micro-Wand II), a subsequent model
of the Tracker.
decision was made to manufacture a scanner with a full alphanumeric key-
board, a two-line display, and 64K of memory (see Figure 61. Federal Express
eventually purchased 250 of these units for field testing. The development
and production of these units were expected to take nearly a year.
Although developing a new piece of equipment had its advantages, it also
had its disadvantages. For example, part of the unique design for the Federal
Express unit, appropriately named Tracker, was an 8-bit surface-mount pro-
cessor that had just recently been introduced. The COSMOS IIB project
required some of the first batch of these chips to meet its development
schedule. Special arrangements had to be made with the manufacturer to
secure the order to ensure that the development schedule could be maintained.
In Colorado Springs, bench tests for the station processor had been de-
veloped and computers from about a dozen vendors were evaluated. Each
station was to receive a processor. All the scan data would be fed through
this unit either through DADS, a communications and charging base in the
station, or modems connected to telephones that the couriers could call when
transmitting their data acoustically. The data would be stored locally for
report generation and then, if appropriate, sent to COSMOS for use by the
customer service agents. After much evaluation, the newly developed
MicroVAX from Digital Equipment Corporation was selected based on its
functionality and modularity. David Dietzel was named manager, and Jim
Turpin was also promoted at this time and managed a hardware design and
development group that became instrumental in the project's success.
Initial Software Development
With the hardware specification complete in July 1984, the staff in Col-
orado Springs began to write the software for the Tracker, the Station Pro
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CUSTODIAL PACKAGE TRACKING AT FEDERAL EXPRESS
67
cessor, and COSMOS that would make the system work. Because no production
Trackers were available to develop software on, a desktop computer was
connected to a prototype Micro-Wand I and used to emulate a Tracker. The
initial programs for the Tracker were very straightforward; the courier was
forced to answer the same set of questions no matter what type of situation
was being documented; no decisional branching was provided. All the soft-
ware for the Tracker was written in assembler and stored in EPROMs (Eras-
able Programmable Read Only Memory. The first version of software covering
a total of 10 different types of scans required about 24K of the 32K EPROM.
The data actually collected by the courier were stored in 32K of RAM.
Programs to extract the information from the Trackers and produce reports
were written for the station processor. These programs were written based
on the specifications for the Tracker software, but none of the programs
could be tested in anything close to a production environment until the first
hand-built Trackers were provided in March 1985.
Project Management
Through the end of 1984 all project work for COSMOS IIB had resided
entirely within the departments of Harry Dalton and Jim Tollefson, a director
in Colorado Springs. As the dates for field testing and, hopefully, imple-
mentation grew near, it was apparent that COSMOS IIB would require the
involvement of nearly every area of Federal Express to make it a successful
project. A meeting was called in January 1985 and representatives from every
department in the company were invited; nearly 150 people attended. A
briefing of COSMOS IIB was provided and task force committees were
formed to cover Field Test, Training, Policies & Procedures, Communica-
tions/Video, Software Design & Support, Logistics & Distribution, and Fi
nance.
Communications
Widespread communication within Federal Express became a major ele-
ment of COSMOS JIB, particularly between Memphis and the field person-
nel. Regular meetings were held by each task force and once a month the
leaders- of the task forces would gather to share their progress. Distribution
lists on the minutes of meetings grew each month as more and more people
became involved.
Articles were written for the employee newspaper every month and the
monthly employee and manager's videos almost always had a segment de-
scribing the operation, progress, and benefits of COSMOS JIB. A special
video showing how COSMOS IIB integrated with the many systems at Fed-
eral Express was videotaped using a wooden model of the Tracker.
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CUSTODIAL PACKAGE TRACKING AT FEDERAL EXPRESS
71
the already established and currently underutilized ZapMail network for COS-
MOS JIB. Consequently, communications and data-processing parts of the
project were redesigned based on the ZapMail network. This meant all the
programs developed for the MicroVAX station processor had to be rewritten
on Tandem computers; consequently, all the applications programmers in
Colorado Springs went into intensive Tandem training.
The decision to use the Tandem network did not totally eliminate the need
for communicating hardware in the station. Some device had to be in the
station to charge the SuperTrackers and poll the devices for uploading of
data and downloading of software. This device was termed the Smart Base.
The actual computing power and control would reside on the ZapMail net-
work. Considerable discussion occurred over the virtues of designing a unique
piece of hardware for these station functions as opposed to using an off-the-
shelf computer, but because of the limited functionality required, the cost
advantages, and the growing aversion to distributed systems, the unique
hardware solution prevailed.
Competitive Environment
Another element weighing in the COSMOS IIB decision was the changing
competitive environment. By 1985 all of Federal Express's competitors had
adopted the hub-and-spoke distribution scheme, service levels were improv-
ing, prices were being pushed down, and at least one competitor was doing
selective scanning similar to the COSMOS IIA scans. It was becoming
difficult to tell the difference between the various services and, thus, more
difficult to justify Federal Express's premium price. Besides providing better
information to the customer, collecting valuable data on the operations, and
making the distribution system more efficient, COSMOS IIB became the
lead project in a campaign to use technology as a way to differentiate Federal
Express from its competitors. (Two years later, in 1987, COSMOS, DADS,
and the SuperTracker starred in a national Federal Express advertising cam-
paign.)
Implementation Financing
The financial plan for the implementation of COSMOS IIB was revised
based on the use of the SuperTracker and the use of the ZapMail network.
Every department in the company was polled for its requirements. The fi-
nancial groups went to great lengths to eliminate duplication of resources
and built all the requests into a single package so the total impact of the
project could be easily assessed. In January 1986 the entire budget proposal
for COSMOS IIB was accepted.
This blanket endorsement of the project and unconditional support from
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CARL NElILS
upper management grew from several sources. First and foremost was still
Fred Smith's conviction that the information about the package was as im-
portant to customer satisfaction as moving the package itself. Now, however,
the burden was on the project team. Harry Dalton had been given everything
he had requested and there could be no excuses for anything short of a
complete and timely implementation.
The implementation plan now called for 27,000 SuperTrackers to cover a
nightly volume of 500,000 packages. COSMOS IIB would be implemented
in two phases. The first phase would begin in October 1986, would require
14 months for complete rollout, and would include only the delivery scans.
The pickup scans would be implemented starting in April and would be
completed by December 1987.
The reasoning for this plan was simple. The SuperTrackers would not be
available until September 1986. The delivery functions of COSMOS IIB
could be rewritten in that amount of time, but more time would be required
to redevelop the other functions. It had also become clear in the field tests
that the couriers did better if they were trained on only a limited set of scans.
Once they were familiar with the scanner, they could easily learn additional
functions without as much effect on their daily productivity.
Project Evolution
With the scanner in redesign and the applications in rewrite, the project
team's attention turned to Smart Base development, a second vendor for the
SuperTracker, and a mini-implementation.
Hand Held Products had taken all the suggestions and findings from the
field studies and built them into a finalized production device it was marketing
as a Micro-Wand II with the only difference from the Tracker being the
keyboard. Federal Express had already developed a method of collecting the
scan data and posting it to COSMOS, and the project management felt a
great deal could be learned from having 10 to 20 stations doing COSMOS
IIB scans while they waited for the new large-memory SuperTrackers. As a
result, 1,100 small-memory Trackers were purchased and in January 1986,
Federal Express began its rollout of 19 stations dispersed across the country.
The Smart Base began its own development schedule in late 1985. RFPs
were distributed and proposals were considered. Norand was finally chosen
as the Smart Base vendor. Norand was also chosen as the second source for
the SuperTracker.
With 19 stations using COSMOS IIB and implementation plans for the
rest of the country in full swing, all parts of the company were pulled into
the project. Task-force meetings were held weekly, and monthly project
reviews with Ron Ponder, senior vice president of the Information Systems
Division, of which Dalton was a part, had to be held in auditorium-size
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CUSTODIAL PACKAGE TRACKING AT FEDERAL EXPRESS
73
conference rooms to handle the number of people attending. Dalton was
regularly required to provide formal briefings to senior management and
occasionally to the board of directors. Dietzel's staff was soon doubled to
14 to help monitor the stations already on-line and to manage the continuing
development effort.
The monthly review meetings with senior vice president Ron Ponder typ-
ically lasted a half day and included reports from all areas of the company.
Although the meetings finally became so large that they had to be broken
down into submeetings, they served a vital purpose. Federal Express had
adopted the practice of developing a separate computer system for each new
project, such as billing, payroll reporting, and field reporting. These systems
had developed different ways of identifying locations and in some cases had
even begun to use the same piece of information in different ways because
the exact meaning of the information was not clear. COSMOS IIB was
designed to deliver information to all of these systems and each system had
to be made consistent with the others. Most of these systems were in the
Information Systems Division, which made it easier to see the discrepancies
and make sure that they were reconciled.
Ron Ponder was also compelled on several occasions to rally the troops
and keep the project moving. As with any project, stumbling blocks were
hit, and each group would press for a little more time to make its adjustments
before moving on. The pressure to meet the implementation date, however,
dictated that the process be kept moving. As problems arose, action plans
were created and responsible people were appointed to make sure that the
plans were implemented on time. COSMOS IIB became a top priority
throughout the Information Systems Division, and Ponder was quick to supply
whatever resources were required to keep COSMOS IIB on track.
A New Direction
By mid-1986 it had become evident to Federal Express that problems with
the ZapMail network were causing service commitment problems. Many of
the communications links were land-based telephone lines that were difficult
to get installed on time and were often not available in the capacity required
to support the ZapMail data flows. Not being able to provide top quality
service defeated the purpose of the product, and the Challenger disaster put
the ultimate solution of flying a Federal Express satellite on indefinite hold.
Top management decided that it was not in the best interest of the corporation
to further burden the network with COSMOS IIB data.
In August 1986 Ron Ponder called a special all-day meeting to review the
requirements of changing from the distributed, Tandem-based ZapMail net-
work to a centralized IBM solution using the company's IBM network. All
groups were to give a detailed synopsis of the impact to ensure that the rollout
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74
CARL NEHLS
would continue as planned. Once it was decided to move away from the
ZapMail network, the decision to use the IBM solution was fairly easy to
make. One of Federal Express's greatest strengths was the large base of IBM
expertise it had developed over the years. Many of the problems COSMOS
IIB might experience had been solved before.
Probably the largest impact of the move to the IBM solution was the
requirement to again rewrite the software for the COSMOS IIB reports. The
software development for the Tandem computers was nearly complete. All
this work was scrapped and the application programmers were sent for train-
ing on IBM's operating system.
The Smart Base also experienced significant modification because of the
decision to move to the IBM/SNA system. One of the primary functions of
the Smart Base was to communicate on the network, and the protocol it used
for this had to change entirely. Also, the local computing power to actually
control the SuperTrackers had been eliminated with the move away from
ZapMail and the centralized mainframes could not provide this function.
What had started as a power supply with a simple 10-key pad and 2-line
display used for hardware polling was turning into a full computer complete
with floppy disk drive, 750K of memory, and applications software for
loading local parameters (see Figure 71.
At this same time the SuperTracker programmers in Colorado Springs
raised an alarm that the ever-increasing demands on the software were stretch-
ing the capacity of the SuperTracker EPROM. The changes required to make
the SuperTracker easy to use and very functional had grown to over 30K
and more changes were seen on the horizon. It was recommended that the
software be written to operate in RAM instead of EPROM. This afforded
almost limitless room for applications software, but there was a risk that
static charges, voltage peaks, or magnetic fields could cause the software in
the SuperTracker to disappear. If the software was lost, the SuperTracker
would become useless until it could be returned to the Smart Base and have
the software reloaded. The benefits of unlimited space for software were
considered to vastly outweigh the unlikely occurrence of software loss. An-
other big advantage to RAM-based software was that the SuperTracker soft-
ware could be downloaded from the mainframe computers in Memphis to
the Smart Bases in the stations, and from there into the SuperTrackers all
automatically. This feature would make changes to the software very easy
to make as none of the SuperTrackers had to be specially handled.
Problems and a Delay
There were continuous problems and changes, which could not all be
solved by action plans and resources. With great reluctance, the project team
petitioned for a one-time delay to the implementation schedule. A new im
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CUSTODIAL PACKAGE TUCKING AT FEDE~E EXPRESS 75
FIGURE 7 Norand Smart Base.
plementation starting date of January 1987 was agreed to, but the imple-
mentation completion dates of December 1987 for Phase I and May 1988
for Phase II were frozen. These completion dates soon became the target. If
something needed more time to be developed, then something else had to
give up its time so the completion dates could be met.
A variety of problems were hardware related. For instance, the Super-
Tracker hardware design was often ahead of the chip manufacturers' devel-
opment schedules. As an example, the SuperTracker manufacturer was waiting
for the chip manufacturer to certify a surface mount version of their low-
power consumption static RAM for vapor-phase soldering so production
could begin. In general, most hardware delays put a strain on internal re-
sources at Federal Express as the engineers worked as hard as vendors and
suppliers to overcome the problems.
Other hardware problems also arose with the SuperTracker clone. After a
promising start with several innovative ideas, the development effort was
soon mired down in difficulties meeting Federal Express's specifications.
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CARL NElILS
The hardware configuration for the clone was essentially the same as in a
piece of existing equipment, and the changes required were a bit too excessive
to make the unit operate up to snuff. Federal Express was finally compelled
to drop the development of the SuperTracker clone.
The changing business conditions had compelled the project team to request
frequent changes in the requirements of Smart Base. Norand was having
problems fitting these changes into the original design, and the modifications
were causing significant delays to the Smart Base implementation date. These
delays caused a group in Colorado Springs to initiate a separate effort to
develop the Smart Base functions on a personal computer.
SuperTracker Implementation
Finally, in January 1987, 3~/: years after the issuance of the REP, contracts
had been modified and approvals obtained to purchase and implement 30,000
SuperTrackers to cover nightly volumes of 750,000 packages.
Training for the couriers and ground operations managers became a major
task. The couriers had been hearing for 2 years that COSMOS IIB was
coming, what it looked like, and how it would work. But, teaching 20,000
people how to operate a device even one with software so refined and
structured that it would not allow them to make a mistake-was a monumental
task. The final plan was to train professional trainers who would travel around
the country training operations management and volunteers from stations
called information coordinators. These information coordinators would then
return to the station and teach the other couriers. The information coordinators
were given a full week of training including practice on teaching skills. When
they returned to the station they gave 4-hour classes to groups of from 12
to 15 couriers at a time.
Although the rollout of COSMOS IIB had begun, the development was
far from over. Before the SuperTrackers could be installed in non-DADS
locations, the Smart Base had to work so the couriers could transmit their
scans. Smart Bases with charging capability, but no communications ability,
were developed. However, fully functional units for non-DADS locations
appeared to be a long way off. Acoustic transmission by the couriers was
seen as an alternative way to implement non-DADS locations, but the mo-
dems were still not operating properly. Soon the rollout plan was modified
to put all the non-DADS stations at the end of the implementation.
The SuperTrackers were implemented with delivery scan software residing
in EPROM for several reasons: (1) it had already been written, (2) the RAM
software had not been completed, and (3) the Smart Bases required to load
the RAM software into the SuperTrackers were not available.
Lack of a working Smart Base would have prevented RAM-based software
from being implemented in January, but the fact was that the software had
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CUSTODIAL PACKAGE TRACKING AT FEDERAL EXPRESS
77
been caught up in some changes of its own. Shortly before the first version
of RAM-based SuperTracker software was to be released, the risks associated
with total loss of software were reassessed. It was felt that having a totally
useless SuperTracker was unacceptable; a backup version of the scans had
to be kept in EPROM so that even if the RAM software were lost, the courier
could continue to carry out the basic elements of the scanning process. Several
meetings ensued and a pared-down version of the scans was agreed to as
was a new schedule. A major rewrite of the SuperTracker software was
required to accommodate the new plan.
A Smart Base Breakthrough
The Smart Base looked as though it would become the nemesis of
COSMOS JIB. Fitting the broader requirements into what had begun as a
piece of equipment with limited functions seemed nearly impossible. But, a
working Smart Base had to be available for the project to succeed.
The word was out that the group working on the PC-based "bootleg"
version of the Smart Base had achieved a very functional unit using all off-
the-shelf hardware and some already developed network protocol software.
This "PC Base," as it came to be called, had not been tested on the quality
assurance system, but it seemed to hold a lot of promise. Work on the PC
Base intensified to ensure that a solution would be available to support the
implementation schedule.
In July 1987, as the PC Base was completing its quality assurance process,
Norand successfully delivered the working Smart Bases. Federal Express
now had two working solutions, but Norand would require several months
to supply its bases in quantity and the unit would still have to go through
Federal Express's quality assurance process. Consequently, Federal Express
decided to use both solutions.
The PC Base used the same computer that the Customer Automation Group
was purchasing to use as customer meters. (A customer meter helps the
customer automate his or her shipping process by generating airbills, gen-
erating reports, and providing paperless billing information to Federal Ex-
press.) A deal was made with the Customer Automation Group to "borrow"
several hundred of their computers to use as PC Bases. When the Norand
Bases became available, the computers would be returned to the Customer
Automation Group.
Future
Table 1 presents a summary of the development of COSMOS IIB from
1977 through 1987. In early 1988 COSMOS IIB is still rolling out, is still
evolving, and is still being developed. PC Bases are in the stations and some
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TABLE 1 COSMOS IIB Timeline: 1977-1983
CARL NEW
1977 COSMOS implemented.
1978 Bar code is investigated as a way to
collect package tracking numbers.
1979 COSMOS rewritten for IBM equipment.
Dalton moves to Colorado Springs and
begins to test bar-code scanners.
Concept of terminals in vans for
dispatc~-;rng is conceived.
1980 COSMOS II is split into COSMOS IIA
and COSMOS JIB.
1981 COSMOS IIA is implemented.
1982 First DADS systems implemented.
1983 Proposals for COSMOS IIB scanner are
solicited.
1984 Funds are approved to develop and test
COSMOS JIB.
1985 Trackers are field tested.
Decision to use ZapMail network.
Smart Base planning initiated.
First pass at computerizing customer and
dispatch information.
Concept of recording package numbers
at each change of possession first
. .
envlslonec V.
Larger mainframe capacity required.
First test of concept shows information
can be collected, but better scanners
are needed.
Dispatch volumes growing and logistics
of voice becoming more difficult.
COSMOS IIA only scans packages in
the station; IIB will scan packages on
road with tougher hardware.
Norand equipment is selected and then
modified to meet Federal Express's
needs.
Packages are scanned as they arrive at
the station and as they leave the
station. Scans are sent to COSMOS to
provide customer information.
Radio channels too congested for voice
dispatching; digital messages are sent
to terminals in the vans.
Near real-time link of Federal Express
computers to courier van is
established, the more recent the
information the higher the value.
Established companies are not listening
to Federal Express's needs. Hand
Held Products agrees to build exactly
what is requested.
IIB scanning device called the Tracker.
Specifications evolve from a simple
scanner, to a scanner with an LCD
display, to a unit with a display and a
simple keyboard to a final design with
a 2-line display and a full keyboard.
Many hardware problems discovered and
solved. Software changes make the
unit much easier to use.
Station computer and developed software
are dropped. Using the established
ZapMail system provides business
synergies.
With no station computer, a separate
charging unit with hardware
controlling functions had to be
developed.
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CUSTODIAL PACKAGE TRACKING AT FEDERAL EXPRESS
TABLE 1 Continued
1985 Decision to wait for large memory
Trackers.
Plans to develop a second source for
Trackers are made.
1986 1,100 Trackers are implemented as a
major test.
Decision to stop ZapMail.
Development of the SuperTracker II is
discontinued.
1987 SuperTrackers are implemented for
delivery scans.
PC Bases are installed and Norand
provides working Smart Bases.
79
More memory allows electronic routing
that enables a more efficient
distribution system.
Federal Express's executive management
was not comfortable with the success
of the project so heavily dependent on
a single vendor.
Using small memory Trackers allowed
the system to be exercised and
provide data to develop a beuer
ultimate system.
Without the ZapMail network the
programs had to be rewritten to run
on IBM.
A second source of SuperTrackers could
not meet the specifications.
25,000 SuperTrackers are implemented
nationwide to scan packages as they
are delivered.
PC Bases, started as a bootleg project,
are used to keep the rollout moving
while Norand completes last-minute
changes to their production unit.
have already been replaced with Norand Bases. Equipment challenges still
exist with the acoustic transmission not working as reliably as desired and
with future plans to have customer meters and SuperTrackers exchange in-
formation on a daily basis. Special scan types are being developed for Federal
Express sort locations and international-customs operations. These special
scans and the accompanying reports will soon bring the benefits of COSMOS
IIB to every area of the company.
COSMOS IIB is actually a window to the future. Even before the project
is fully implemented, new products are being developed that would not be
practical without the information provided by COSMOS JIB. As the field
personnel become experienced with COSMOS JIB, they are quick to identify
new applications to help them in their day-to-day operations. Ideas never
conceived when COSMOS IIB was designed will continue to enhance the
value of the project for many years.
CONCLUSION
COSMOS IIB was driven by the concept that the information about the
package is as important as the package itself. In fact, the objective of pro-
viding real-time tracking and tracing information about the package even
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80
CARL NEHLS
tually became a requirement for long-term viability in the marketplace. Because
the vendors of bar-code scanning equipment would not provide the proper
equipment required to capture the information, Federal Express took it on
itself to have the scanners developed.
Federal Express soon discovered that developing specialized hardware with
a vendor was a skill in itself. It took 3~/: years of working with a vendor to
finally define, develop, and take delivery of a scanner that met all the needs
of the corporation. However, after acquiring the internal expertise for de-
fining, testing, and monitoring development, a similar hardware project, in
the form of the Smart Base, took only about a year to complete.
Even when the equipment was defined and being manufactured, it was a
major challenge to the project team to keep the process moving and on target.
Continually changing circumstances required multiple iterations in virtually
every aspect of the project, particularly in the writing of software. Optimism
frequently gave way to frustration as the rules changed or were reinterpreted.
The ability to react, adapt, and keep on moving became the hallmark of the
project team.
COSMOS IIA experience provided important guidelines in the confusing
maze of a constantly changing COSMOS IIB program. Complex decisions
about what to implement and how quickly to implement were always arising.
COSMOS IIA was a constant reminder that pieces of the system could be
added, but the sum of the pieces had to represent a self-sufficient system.
For example, delivery scans with only DADS to communicate the information
could be implemented, but those scans had to have management reports
before they could be integrated into the corporate package tracking and tracing
system.
Implementing pieces of the project was considered part of the "don't let
best get in the way of better" philosophy of Federal Express. These pieces
often required some reworking as later parts were added, but this was not
necessarily negative. The experience gained from each new piece helped
direct the future phases of the project to an overall better solution. Even
entire report programs that were never implemented because of a change in
the system hardware design provided new ideas for better data-base designs
and report layouts. This is not to say that the project team preferred to move
in bits-and-pieces instead of implementing a total project. However, given
the scope of the project and an environment that could not be controlled,
there was no choice but to keep what was good and implement what could
be developed in the time available.
Despite its trials and tribulations, COSMOS IIB is considered one of the
best managed technical projects ever developed at a company that has always
pushed to use technology. Federal Express has adopted a learn-as-you-go
methodology that allows the company to benefit from the mistakes as well
as the advances that it contributes to the technology it is attempting to use.
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CUSTODIAL PACKAGE TRACKING AT FEDERAL EXPRESS
81
Harry Dalton sums up this general approach in his oft-heard comment-
"The only thing we know for sure is that we won't get it quite right the first
time, but we'll come back and fix it."
ACKNOWLEDGMENTS
I would like to express my appreciation to David Dietzel, Jim Turpin, Pat
Mulvey, Chris Demos, Arun Kumtha, and Chuck Theobald for their direc-
tion, input, and support in the preparation of this chapter. My special thanks
to Harry Dalton for sharing his project management insights, his unwavering
intent to provide a factual, instructional case history, and his overall partic-
ipation in making this endeavor a success.
Representative terms from entire chapter:
cosmos iib
