GOING FOR GOLD

Logistics Insight Asia, 1/7/2008

The story of how one company is taking on the huge logistics challenge of the biggest sporting event in the world - the Beijing 2008 Olympic Games.

DANIEL CHEN

Four years ago, in 2004, the team at UPS decided to come together to begin an assessment on whether to sponsor the Beijing 2008 Olympics. Upon careful consideration and evaluation of this massive project, it was decided to go ahead with the bid.

Given that UPS had been a sponsor in previous years, it was felt that we would be the best partners for the Games, and as the highest level of sporting activity in the world, the decision to become a sponsor was an instrumental part of UPS' global operation strategies.

Aside from the confidence in our capabilities to handle the logistics, sponsoring the Beijing 2008 Olympics would fit well with UPS' long-term business strategy in China.

The Games is a showcase of China to the world, and for UPS, it is also a showcase of growth and presence, since (in 2005) it became the first company in the industry to be wholly-owned in the country.

By leveraging on Olympic sponsorship, the company contributed to enabling the success of the Atlanta (1996) and Sydney (2000) Games.

For example, in Sydney, UPS transported 120 tons of materials and equipment were by air, organized a service team made up of 140 employees, delivered films on motorcycles for more than 10,000 camera correspondents, and sent a total of 200,000 films from 34 venues to the news centre for processing.

Upon making the bid, it was on July 27, 2005, that the Beijing Organizing Committee for the Games of the XXIX Olympiad (BOCOG) announced that UPS had been selected the Official Logistics and Express Delivery Sponsor of the Beijing 2008 Olympics.

GETTING SET

After becoming the logistics and express delivery sponsor of the Beijing 2008 Olympic Games, UPS invested more in its strategy, safety and operations in China, including the development of customized logistics solutions in order to execute more effectively and efficiently logistics and express services. And the massive Olympic Logistics Centre (OLC) is UPS' largest single-customer warehouse in the world.

The Memorandum of Understanding (MOU) signed by UPS and BOCOG in 2006 specified the Logistics and Express Delivery services to be provided for the Beijing 2008 Olympic Games:

- Managing the consolidation and distribution hub for the Game's inventory storage, control and distribution in OLC.

- Overall management of this facility (OLC) and working with BOCOG to develop implementation and operation plans to support the Games.

- Providing express delivery and transportation services in all areas, including the Olympic Green, the Athletes Village and the Media Village.

There is the misconception that logistics and delivery for the Games happens only around the time of the Olympics, possibly involving high volumes of work weeks before the Games. In reality, UPS started work on logistics planning and consulting immediately after being appointed sponsor in 2005. We started work proper upon signing the MOU.

One of our first tasks was delivering the Beijing 2008 Games mascots to International Olympic Committees (IOCs) all over the world in 2006. Then teams were amassed to manage the OLC when it opened in March 2007.

UPS has also been supporting many of the Good Luck Beijing" test events, which have been running since mid-07 and aim to ensure the smooth running of the event in August.

Continuing to keep a record of all the logistics processes, routes and solutions amassed from all the test events handled, which are literally full dress rehearsals" of the actual Games, provides the opportunity to learn from experience, plan contingencies and implement specific solutions quickly and effectively.

Up until June 2008, the team provided a total of 43 venue logistics services on-site for test events, and maintained a zero-accident operation rate for logistics management.



Also set up were four drop-off stores in the Athletes Village, Media Village, Main Press Center and International Broadcast Center for athletes and media to send international shipments easily during the Olympic Games. In fact, UPS is the only international company to provide global delivery services at these locations.

Planning can include very detailed considerations. For example, establishing different routes from the OLC to the venues, and going to great lengths to get detailed information about each, such as the width and height of the road and the locations of the traffic lights. Knowledge of two or three routes for each venue helps to ensure smooth and efficient delivery for the Beijing 2008 Olympics.

MAKING CONTINGENCIES

UPS has designed a Master Delivery System (MDS) and made contingency plans for the Beijing 2008 Olympics. This is to ensure the smooth running of the Games despite potential disruptions.

The MDS aims to ensure timely delivery to the venues and control vehicles passing through the backyard entrance and security check facility to avoid traffic jams, and will automatically arrange the time of departure, security check, vehicle check and unloading of items.

This is done through comprehensive time measurement and management, with reports automatically delivered to all relevant areas. Again, this will ensure appropriate and efficient resource assignment of workforce and equipment during the Games.

The contingency plans are there for various possible crisis scenarios. Most recently, a crisis manual was developed specifically for the Games. UPS has prepared back-up plans for virtually every solution pertaining to the requirements of the Olympics logistics services.

As well as an independent express delivery system, UPS has also assigned staff from other neighbouring cities to serve as a back-up staff team. These individuals are being continually updated on the latest developments in Beijing and will be ready to step in to continue running operations smoothly should their assistance be required.

And in addition to the main official venue logistics team, UPS will have another team on stand-by to provide additional service as necessary. We have planned it such that there will always be an alternative to each contingency plan - providing options on how best to react given the situation faced.

OVERCOMING HURDLES

The whole project to handle logistics for the Games is a challenge in itself, and is inevitably very different from the needs of most of UPS' corporate customers.

Meticulous planning is needed to receive and move large volumes of inbound shipments at the OLC to the venues. After the Games, UPS will also manage reverse logistics from the venues back to the OLC and then to the countries of origin.

This requires proper planning in warehouse and transportation management. For instance, warehouse floors are designed to handle all shapes and sizes of sports equipment, e.g. boats, goalposts, scoreboards, etc, compared to most commercial customers, which have more standardized shapes and packaging.

The sheer magnitude of the Games means that each venue inevitably has different resources and environments. Therefore, previous experience can be referred to only, rather than being completely relied upon - apply different approaches to deal with different conditions. As such, the MOP (Master Operating Plan) needs to be drawn up for each venue to maximize moving in an efficient and safe manner.

To achieve maximum results, it is important to understand that the operation of logistics services requires comprehensive management that goes beyond the combined theories of IT and transportation. Other components UPS considers and includes are communication, coordination, organization, resource allocation and staff deployment.

On top of that, the sequence of the above mentioned procedures must also be well planned. This is in addition to the management of security issues, which is of utmost importance.

Potential issues and challenges in this process must be considered and dealt with. Timing must be accurately managed to ensure efficiency in transportation of goods and to avoid any possible conflict which may surface during the actual delivery.

For example, on day one of the move in to the Olympic Village, almost the entire UPS Olympics team was there, busy measuring and testing total timing for the transfer of all materials in one building, as well as checking on the exact amount of time spent going up and down stairways and through doorways.

This is a very complicated job that requires scrutiny to the largest extent and being meticulous in getting into the details, e.g. measuring the width of stairways to ensure a timely and error-free bumpin and bump-out.

A logistical challenge UPS handled was the transportation of a huge plastic cover for a baseball field during an empty time slot in the test games period. As there was no specific tool to facilitate and haul the cover, the UPS team moved the plastic cover by hand, which required seamless team work.




A TV Commercial which launched in China on June 2008 tells the story of how UPS transforms the badminton court into a gymnastics arena within just 20 hours. This is expected to happen during the actual Games and illustrates how challenging Olympic venue logistics tasks can be accomplished within very limited time frames.

BOOSTING THE BRAND

Expanding the brand as a category leader in logistics and express delivery services is a priority, and UPS does this through a variety of ways, with sponsorship being a key supporting pillar.

UPS has been steadily expanding its operational capabilities in China, and the Olympics sponsorship offers a great platform to showcase capabilities and enhance brand awareness by to strengthening UPS' reputation as a trusted business partner, and further communicating the brand in China, especially in second and third-tier cities. Through integrated and creative communication campaigns that are linked to the Games, UPS is strengthening its brand awareness in China.

As the world's leading sporting event, the Olympics allows UPS to fully engage its customers and employees, who would have an opportunity to be part of the UPS Olympic programs leading to and during the Games.

Getting clients and employees in the host country involved in the Games encourages them to be proud of experiencing the Olympics at home, and the experience that UPS offers these two very important groups of stakeholders is priceless, which in itself makes it a worthwhile investment.

And understanding the complex strategic, security and operational challenges involved with hosting the Olympics enables UPS to help the Beijing Organizing Committee for the Games of the XXIX Olympiad (BOCOG) reach its vision of One World, One Dream". Let the games begin.

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FROM BOATS TO BADGES

Handling several million shipments, the Olympic Logistics Center (OLC) is the largest of its type operated globally by UPS

For Beijing 2008, UPS handles and transports virtually anything and everything imaginable that is associated with the sporting arena. From electronic scoreboards, seats, competition boats, to equipment and computers that help to keep track of scoring, a large variety of materials and equipment you will see during the Games needs to be managed.

From its inception in March 2007 to June 2008, the Olympic Logistics Center has handled more than six million shipments units:

- Largest shipment: Boat frames (58.75 cubic meters)

- Longest shipment: Canoes (10.9 meters)

- Special-sized shipment: Trampolines (8.8 cubic meters)

- Smallest shipment: Commemorative Olympic pins, flash disks

The majority of the Games-related equipment and support materials is delivered to the OLC, with UPS receiving inbound and outbound instructions from BOCOG and arranging intra-city transportation from the OLC to venues, as well as managing all reverse logistics after the Games.

As the "central hub" of Olympic logistics, the OLC is designed to provide logistics services to 37 competition venues, 15 noncompetition venues and 72 other training venues for the Beijing 2008 Olympic Games.

The OLC consists of four warehouses and one marshalling/ security clearance yard for vehicles. With a total warehouse space of some 100,000 square meters (one million square feet), the OLC is the largest logistics centre operated by UPS in Asia and the largest single-customer warehouse in the world operated by UPS.

With greater importance placed on sustainable development, UPS is supporting a Green Olympics, with a total of 104 China IV vehicles being deployed in Beijing since March 2008.

These vehicles are expected to reduce up to 3.3 tons of hazardous emissions during the planning period and time of the Games, as a consequence of each van generating 50 percent less emissions than its predecessor, the China III van.

In terms of manpower, pre-Games, the UPS Olympics team has approximately 400-500 core employees with experiences in the different aspects of logistics and warehouse management, encompassing venue and village operations, OLC, IT, marketing, business development, HR, security and finance & administration. Currently, UPS has maintained a zero-accident operation rate.

And by August 2008, nearly 2,000 employees of the UPS Olympic team will be assigned to provide services at Beijing Olympic venues like the National Indoor Stadium, National Stadium (Bird's Nest), National Aquatics Centre (Water Cube) and Beijing Industrial University Gymnasium.



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TAKING CHARGE



Daniel Chen is the Vice President of Beijing Olympic Sponsorship and Operations for UPS Asia Pacific Region. In this China-based position, he represents UPS while providing services for the Beijing Organizing Committee for the Olympic Games (BOCOG).

Under his leadership, UPS supports BOCOG by designing, implementing, and developing all the necessary moving parts of the supply chain, including offering a high-tech transportation management plan and operates the Olympic Logistics Center (OLC). He also led the Olympic project team in designing and implementing a series of Olympic marketing initiatives and sports marketing strategies.

Prior to his current position, Chen was Managing Director of Strategic Planning & Development for UPS China, where he was responsible for UPS operations and strategic business planning in the country. Here he facilitated the UPS transition to a wholly-owned enterprise.

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