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Corporate Flats Strategy. MTAC November 7, 2002. Presentation Overview. Background Near Term Actions (FY 2003 and 2004) Longer Term Planning (FY 2005 and beyond) Delivery Vision Summary. FY 01 Revenue From Flats: $16.1 Billion. Periodicals: Mailbox Anchor That

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corporate flats strategy

Corporate Flats Strategy

MTAC November 7, 2002

presentation overview
Presentation Overview
  • Background
  • NearTermActions(FY 2003 and 2004)
  • LongerTermPlanning(FY 2005 andbeyond)
    • Delivery Vision
  • Summary
importance of flats

FY 01 Revenue From Flats: $16.1 Billion

Periodicals: Mailbox Anchor That

Generates Other Revenue Streams

Standard Mail Revenue is

Second Only to First-Class Mail

Flats Rates Rising Faster Than Inflation

Importance of Flats
slide4

Corporate Flats Strategy

Introduced at the September 2000 Postal Forum

USPS Committed to Flats

Grow Customer’s Business

Increase Capital Investment

Maintain Affordability

Improve Processes

slide5

Corporate Flats Strategy

Distributed in July 2001

Introduced the Delivery

Vision

Focused on Improvements in the Near Term

Overviewed the Longer Term Plans

slide6

Corporate Flats Strategy

  • Drive Down Costs Through Automation
  • Improve Processing Performance

and Service

  • Create a Win-Win for Customers and the Postal Service
slide7

Last Year’s Progress

  • Completed AFSM 100 Deployment
  • Started FSM 1000 Modifications
  • Explored Mail Preparation Alternatives
    • Logs
    • Flats Feeder Assist Device
    • Fiberboard Trays
    • Pallet Movers
slide8

Near Term Actions

  • Manage the Base
  • Substitute Capital for Labor
  • Increase Customer Involvement
slide9

Manage the Base

  • Improve Operational Performance
    • Up-the-Distribution-Ladder
    • Increase Productivity
  • Reduce Mail Preparation Costs
    • Standardize Opening Units
  • Standardize Flats Distribution
  • Capture Savings
slide10

Summary

QTR 1 FY 2001

QTR 4 FY 2002

slide11

piece handlings per workhour

Qtrs. 1 to 4

Qtrs. 1 to 4

end of year FY 2000

FY 2001

FY 2002

slide12

Substitute Capital for Labor

  • Take Advantage of Latest Technology
    • Automatic Tray Handling System
    • Flats Feeder Assist Device
    • The AFSM 100 Feeder Modification
    • Pallet Movers
    • UFSM 1000
    • ID Code Sort
  • Move More Mail to Our Processing Centers to Achieve Greater Depth of Sort(i.e., from the 5-digit level to carrier route)
slide13

Increase Customer Involvement

  • Structure Rate Incentives to Support Operations Objectives
  • Match Make-up to Processing

Requirements

  • Increase Barcoded Flat Volumes
  • Improve Address & Barcode

Readability

slide14

Where We Were

  • 4 Mail Streams:
    • Automated
    • Mechanized
    • FSM 1000
    • Manual
  • Significant Piece Handling Costs
  • Increasing Mail Prep Costs
  • Increased Rates
slide15

Where We Want To Go

  • From 4 Mail Streams to 2
    • Automated
    • Manual
  • Maximize 11 Digit Barcoded Volume
  • Minimize (eliminate) Small Bundles
  • Standardize
    • Physical Characteristics
    • Address Placement
    • Make-up and Presentation

Then to 1: DPP

slide16

MTAC & USPS Working Together

How Do We Get There?

  • Optimizing Readability
  • Conducting Mail Characteristics Study
  • Developing Alternative Flats Packaging
  • Developing Mail Preparation Alternatives
  • Reducing Bundle Breakage
  • Developing Irregularity Reporting
slide17

MTAC Workgroups

Optimizing Readability

  • Address Block Location
  • Destination Address Format
  • Barcode Placement
  • Adhesive Labels
  • Extraneous Information
developed voluntary guidelines for flat mail
Developed Voluntary Guidelines for Flat Mail

MTAC Workgroups

Optimizing Readability

slide19

MTAC Workgroups

Mail Characteristics Study

Determining the Spectrum of Mail the AFSM Can Successfully Process

  • Basic size dimensions remain the same
  • Increase the maximum weight to 20 oz
slide20

MTAC Workgroups

Alternative Flats Packaging

  • Identify Cost Effective Bundle Packaging for Mailers and USPS
  • Balance Cost of Material With Package Integrity
slide21

MTAC Workgroups

Mail Preparation Alternatives

Working with Mailers through MTAC

  • Mutually Acceptable Preparation and Handling Methods

Drive Down Combined Cost

slide22

MTAC Workgroups

Mail Preparation Alternatives

  • Flats Feeder Assist Device allows operator to handle heavy loads
slide23

Solution

  • Shrink wrap
  • Double band
  • Palletize
  • Weight – 20 pound max
  • Height – 6 inch max

MTAC Workgroups

Reducing Bundle Breakage

  • Controlled Testing of Various Packaging Materials
slide25

MTAC Workgroups

Irregularity Reporting

Develop a Mechanism to Report Preparation Irregularities to Mailers and Mail Owners In a Timely Manner to Prevent Recurrence

slide26

Longer Term Plans

  • Evaluate Delivery Point Packaging
  • Prioritize Key Decision Points
  • Identify Potential Customer Impacts
slide27

Implement the Delivery Vision

  • Minimize In-Office Costs
  • Maximize Street Efficiency
slide28

Evaluate Delivery Sequencing Options

  • OPTION 1: Delivery Point Packaging

Develop a machine that will use a one-pass system to sequence both letters and flats in delivery order.

  • OPTION 2: Flats Sequencing System

Develop a machine that will use a two-pass system to sequence flats in delivery order.

slide29

Evaluate Delivery Sequencing Options

  • OPTION 1: Delivery Point Packaging

Develop a machine that will use a one-pass system to sequence both letters and flats in delivery order.

slide30

The Postal Service’s Delivery Vision

Option 1: Delivery Point Packaging

NEAR TERM

FY 2003 & FY 2004

MID TERM

FY 2005

to

FY 2006

Current Operations

DPS Letters

Direct to Street

This time period will be used for planning purposes.

Residue Letters & All Flats

Cased

Sector/Segment

Firms

Direct to Street

Walk Sequence/ Marriage Mailings

Direct to Street

Start Research & Development for DPP

slide31

The Postal Service’s Delivery Vision

Option 1: Delivery Point Packaging

NEAR TERM

FY 2003 & FY 2004

LONG TERM

FY 2007

MID TERM

FY 2005

to

FY 2006

Current Operations

Letters

(DPS Not Required)

DPS Letters

Direct to Street

Operational Planning

Residue Letters & All Flats

Cased

One Bundle

100% Letters & Flats

Direct to Street

Flats

(5 Digit Presort, No Carrier Route)

Sector/Segment

Firms

Direct to Street

Walk Sequence/ Marriage Mailings

(Entered at DPP Location)

Walk Sequence/ Marriage Mailings

Direct to Street

Start Research & Development for DPP

slide32

Evaluate Delivery Sequencing Options

  • OPTION 1: Delivery Point Packaging

Develop a machine that will use a one-pass system to sequence both letters and flats in delivery order.

  • OPTION 2: Flats Sequencing System

Develop a machine that will use a two-pass system to sequence flats in delivery order.

slide33

The Postal Service’s Delivery Vision

Option 2: Flats Sequencing System

NEAR TERM

FY 2003 & FY 2004

Current Operations

MID TERM

FY 2005

DPS Letters

Direct to Street

This time period will be used for planning purposes.

Residue Letters & All Flats

Cased

Sector/Segment

Firms

Direct to Street

Walk Sequence/ Marriage Mailings

Direct to Street

Start Research & Development for FSS

slide34

The Postal Service’s Delivery Vision

Option 2: Flats Sequencing System

NEAR TERM

FY 2003 & FY 2004

LONG TERM

FY 2006

Current Operations

MID TERM

FY 2005

DPS Letters

Direct to Street

DPS Letters

Direct to Street

Operational Planning

Residue Letters & All Flats

Cased

FSS Flats

Direct to Street

Sector/Segment

Firms

Direct to Street

Residue Letters & Flats

Walk Sequence/ Marriage Mailings

Cased

Walk Sequence/ Marriage Mailings

Direct to Street

Start Research & Development for FSS

slide35

Prioritize Key Decision Points

  • Fund Research and Development
  • Examine Competitive Prototypes
  • Evaluate Impact on Plant & Delivery Operations
slide36

Identify Potential Customer Impacts

DPP FSS

  • 11 Digit Barcode
  • Standardized Piece Design
  • ID Tag
  • Presort (For Automated Zones)
    • Carrier Route Sorting
  • Make-up and Presentation
  • Entry Point
slide37

Implement the Delivery Vision

  • Minimize In-Office Costs
    • Sequencing Letters and Flats
  • Maximize Street Efficiency
    • Sequence Letters and Flats Together
    • One Delivery Point Package (DPP)
slide38

Summary

  • Near Term (FYs 2003 & 2004):
    • Increase Equipment Utilization
    • Reduce Mail Preparation Costs
    • Manage the Base
    • Involve Customers
slide39

Summary

  • Longer Term (FY 2005 & beyond):
    • Refine the Delivery Vision
    • Evaluate DPP & FSS Options
    • Develop DPP & FSS Technologies
    • Involve Customers
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