Corporate flats strategy
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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

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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


Corporate flats strategy

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


Corporate flats strategy

Corporate Flats Strategy

Distributed in July 2001

Introduced the Delivery

Vision

Focused on Improvements in the Near Term

Overviewed the Longer Term Plans


Corporate flats strategy

Corporate Flats Strategy

  • Drive Down Costs Through Automation

  • Improve Processing Performance

    and Service

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


Corporate flats strategy

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


Corporate flats strategy

Near Term Actions

  • Manage the Base

  • Substitute Capital for Labor

  • Increase Customer Involvement


Corporate flats strategy

Manage the Base

  • Improve Operational Performance

    • Up-the-Distribution-Ladder

    • Increase Productivity

  • Reduce Mail Preparation Costs

    • Standardize Opening Units

  • Standardize Flats Distribution

  • Capture Savings


Corporate flats strategy

Summary

QTR 1 FY 2001

QTR 4 FY 2002


Corporate flats strategy

piece handlings per workhour

Qtrs. 1 to 4

Qtrs. 1 to 4

end of year FY 2000

FY 2001

FY 2002


Corporate flats strategy

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)


Corporate flats strategy

Increase Customer Involvement

  • Structure Rate Incentives to Support Operations Objectives

  • Match Make-up to Processing

    Requirements

  • Increase Barcoded Flat Volumes

  • Improve Address & Barcode

    Readability


Corporate flats strategy

Where We Were

  • 4 Mail Streams:

    • Automated

    • Mechanized

    • FSM 1000

    • Manual

  • Significant Piece Handling Costs

  • Increasing Mail Prep Costs

  • Increased Rates


Corporate flats strategy

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


Corporate flats strategy

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


Corporate flats strategy

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


Corporate flats strategy

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


Corporate flats strategy

MTAC Workgroups

Alternative Flats Packaging

  • Identify Cost Effective Bundle Packaging for Mailers and USPS

  • Balance Cost of Material With Package Integrity


Corporate flats strategy

MTAC Workgroups

Mail Preparation Alternatives

Working with Mailers through MTAC

  • Mutually Acceptable Preparation and Handling Methods

    Drive Down Combined Cost


Corporate flats strategy

MTAC Workgroups

Mail Preparation Alternatives

  • Flats Feeder Assist Device allows operator to handle heavy loads


Corporate flats strategy

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


Corporate flats strategy

Long Term Plan: NO SACKS


Corporate flats strategy

MTAC Workgroups

Irregularity Reporting

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


Corporate flats strategy

Longer Term Plans

  • Evaluate Delivery Point Packaging

  • Prioritize Key Decision Points

  • Identify Potential Customer Impacts


Corporate flats strategy

Implement the Delivery Vision

  • Minimize In-Office Costs

  • Maximize Street Efficiency


Corporate flats strategy

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.


Corporate flats strategy

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.


Corporate flats strategy

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


Corporate flats strategy

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


Corporate flats strategy

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.


Corporate flats strategy

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


Corporate flats strategy

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


Corporate flats strategy

Prioritize Key Decision Points

  • Fund Research and Development

  • Examine Competitive Prototypes

  • Evaluate Impact on Plant & Delivery Operations


Corporate flats strategy

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


Corporate flats strategy

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)


Corporate flats strategy

Summary

  • Near Term (FYs 2003 & 2004):

    • Increase Equipment Utilization

    • Reduce Mail Preparation Costs

    • Manage the Base

    • Involve Customers


Corporate flats strategy

Summary

  • Longer Term (FY 2005 & beyond):

    • Refine the Delivery Vision

    • Evaluate DPP & FSS Options

    • Develop DPP & FSS Technologies

    • Involve Customers


Corporate flats strategy1

Corporate Flats Strategy


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