Four days before Christmas, delivery firm UPS was coping with the 14 to 15 million packages it delivers around the world each day, including two works of art being transferred from the Louvre to a museum in Atlanta, boxes of bolts and tyres to automotive manufacturers in Germany, medical supplies in France and ready-to-wear wedding dresses to shops in the UK.

One of the tasks for Nick Gray, the company’s European chief information officer (CIO), is to ensure the firm’s technology can cope with the surge in volume of packages that happens during the festive season.

At that time of year, the number of packages can increase by 50 per cent from one day to the next and the company’s technology gets pushed to its limits. ‘I am very used to technology vendors telling me: “Well, I’ve never seen that happen before”,’ he says with a smile.

Gray has been with the US-based logistics company for 17 and a half years, but has been the company’s European CIO since October 2005. The rest of his career has been spent working in the company’s IT headquarters in Mahwah, New Jersey.

He did not make the decision to come to Europe lightly. Before travelling here, he had to renew his passport, which had been out of date for a while and only ever used to travel to Mexico and Canada. ‘The biggest challenge was leaving our home and friends, essentially putting our personal life on hold,’ he says.

Despite notching up nearly two decades at the firm Gray is still a company novice compared with others – one employee has been with the company for 60 years. After nearly 20 years he still enjoys his job: ‘The people I get to work with make it worth getting up in the morning and there is always something new and challenging.’

Like other Americans living in Europe, he finds the lack of customer service frustrating at times: ‘Sometimes it seems like making money is not an objective of many shop owners,’ he says.

But the European concern for the environment and consciousness about waste and excessive personal consumption has influenced him. ‘The last time I was in the US, I could not get over the size of the car I rented – it just seemed so big,’ he says.

He grew up just outside Pittsburgh, Pennsylvania and dreamed of being an engineer, a professional golfer or racing car driver – ambitions that had more to do with his interests at that time, rather than his skills.

At university he started studying economics, but realised he preferred mathematics and ended up with a combined maths and engineering degree. He entered the IT industry almost straight after he finished university and had brief stints in IT in the telecoms industry, and banking, before starting at UPS.

The public face of UPS – its brown-liveried vans and drivers, which carry out express small package and letter deliveries – is far from a complete picture of the company’s business model. UPS also generates $5bn (£2.5bn) in revenues each year from its supply-chain business, helping companies with everything from ocean and air freight, to managing their inventory.

Corporates will often outsource all their logistic requirements to UPS so that a clothing retailer, for example, will use the company to ship the necessary materials to its manufacturers in the Far East and Turkey, transport the finished clothes to its stores in Europe and post goods out to customers that have ordered them over the internet.

Advances in technology mean that more of a customer’s supply chain can be outsourced to UPS. For example, when an order comes into a mobile phone manufacturer, UPS puts the phone in the box along with promotional material, any additional accessories the customer may have ordered, programmes the phone so that it will work as soon as it is switched on and sends the order out to the customer.

Computer manufacturers often source keyboards, screens and hard drives from different suppliers around the world, but UPS can take all of the components and merge them into one order. The system is sophisticated enough to keep track, even if the manufacturer switches suppliers from country to country because of price changes.

But Gray’s favourite example of providing exactly what the customer wants was the time UPS hired a musician to tune guitars before the instruments were dispatched from the workshop.

Most of the information is provided through bar codes on individual items. While handling packages is a manual intensive business, the company tries to automate the process as much as possible, loading items onto conveyor belts that pass through overhead barcode readers.

UPS has looked into using radio-frequency identification (RFID) to manage the millions of moving parts of the company. When attached to packages, RFID tags send out radio signals to tell a receiver where the items are in the system.

‘We carried out a number of studies into the use of radio frequency devices, but it is not profitable for us to use them at the current pricing levels,’ says Gray.

But Gray says the firm is looking into the use of ultra-thin flexible display devices, known as electronic paper. ‘Each device is the thickness of about two to three sheets of paper with embedded electronics; it is flexible and can be programmed,’ he says. ‘It could be used as a sensor to detect humidity or temperature variations or if the goods experience a sudden shock that could damage them.’

The challenge will not only be to make sure the company can afford to use such technology, but that UPS also has the right IT in place to ensure it can cope with the amount of data such devices generate, says Gray. ‘Some may want extremely detailed information about their goods where as others will just want a summary.’

Technology is the backbone of UPS, ensuring that its business operates as smoothly as possible, but its customers are also well aware that more technology means they can demand more. ‘The amount of information available on the internet means our customers have become better informed and are rightly so much more demanding about the service they require from UPS.’

The challenge for UPS is to use its technology so that it can deliver and give the best possible service to each customer, even though their needs may be dramatically different – one may be shipping only one or two packages a week and another 10,000 – while ensuring such flexibility does not cause a meltdown.

‘The key to that is ensuring we have a few core systems that can then be customised without causing chaos,’ says Gray.

Next year, UPS celebrates its centenary. While Gray will be doing everything to ensure the company’s centenary Christmas season runs as smoothly as every other year, he knows that advances in technology are not going to slow down anytime soon.

‘Maybe by the time the company is in its 120th year we will be laughing at those old-fashioned text-based systems and managing our supply chains in real-time, three-dimensional, virtual reality,’ he says.