USPS Product Information MTAC Jim Cochrane Vice President, Product Information February 17, 2011

1. USPS Product Information MTAC Jim Cochrane Vice President, Product Information February 17, 2011

2. Product Information – Meet the Team

3. Getting to World Class Enhance USPS Business Value One barcode per piece Capture workload by product Improves cost modeling Reduce labor costs Transportation analytics Enhances ability to offer new products and services Allows for delivery efficiencies Service analytics IMb/IMpb Product Information

4. Getting to World Class Create Customer Value Foundational for shipping: Why not mailing? Track all volume Seamless acceptance Improves customer experience Provides data to support marketing initiatives Manage business processes, service measurement and logistic providers IMb/IMpb Product Information

5. Barcode Intelligence Value of Information When you barcode a letter, you receive a discount When you barcode a package, we make you pay Core to the product or value with a charge?

6. Service Performance Measurement Full-Service Volume Testing Status 01/29/2010 - 01/28/2011

7. Service Performance Measurement Full-Service Volume Growth Full Service Volume has seen a 59% growth from Q2-FY10 to Q1-FY11

8. Service Performance Measurement Intelligent Mail vs. FS Volume Growth Q1 FY11 had marginal increase in IMb adoption from POSTNET bar code

9. Service Performance Measurement Full Service Statistics PQ1, FY 2011

10. Service Performance Measurement Full Service Production Trends May 2009 – January 2011

11. Service Performance Measurement Moving Forward Customer • Improve value for customer • Refocus on IMb, move off of SPM • Simplify start-the-clock process USPS • Stabilize Performance • Robust reporting capabilities • EXFC report-type quality (depth of failure analysis per piece level) • Increase number of Certified Mailers

12. Full Service Certification UpdateContainer Yields • Certified mailer container yield is twice that of non-certified mailers • Streamlined review checklist for standard & periodicals mailers • System Change Requests • Feb - CSA Verification Errors will be corrected to STC – Origin Yield: +20% • June - SV Unload Scans will generate STC - Drop Ship Yield: +15% Data based on Containers with Mailing Date of 1/22 – 1/28

13. Full Service AnalyticsContainer Level Mail Quality Errors Mailers continue to fail certification; BMS working with mailers to identify required updates to their software and operations to address key issues Other Errors include: MID Verification Errors and Invalid Entry Point Errors

14. Full Service Certification UpdateCertified Mailer Monitoring Certified Mailers Weekly Monitoring Strategy • Measured weekly against 8 metrics • Mailers that fail metrics related to direct inputs to STC are decertified • Decertified mailers eligible for recertification after confirming issue(s) addressed Perform Census Analysis Identify Issues/Failures Certified Mailer Monitoring Process Communicate Issuesto BMS Confirm issues are resolved

15. Start the Clock Changes • Transportation fields used in CSA association will not be used in the future • CSA Type • Recurring Appointment ID • Arrival Time • Dispatch Time • CSA Trip ID • Stronger reliance on USPS scans to Start-the- Clock • Scan all 99Ms upon arrival at USPS • Resolves pallet to FAST appointment challenges

16. Proposed CAT- CET

17. Service Performance Measurement Transportation Dest. Plant to Dispatch Orig. Plant to Dispatch P.O. to Plant Plant to P.O. P.O. to Delivery = 95.5% = 97% 99.5% 99.8% 99.5% 99.8% 98% 98% 99.5% 99.8% 99.5% 99.8% 99.5% 99.8% Lean Six Sigma Approach Using LSS to Drive Performance • Completed Value Stream Mapping of package and mail flows • On-going process capability analysis • Rolled Throughput Yield on all processes Measure All Processes

18. Full Service AnalyticsRolled Throughput Yield

19. On-Time Goal GAP AnalysisRolled Throughput Yield

20. Infrastructure Initiatives

21. Intelligent Mail Container Barcode Proposed 6-Digit Mailer ID IMcb (1) NOTE: The Serial Number field shall be padded with leading “ - “ characters or dashes (ASCII value 0045) if the mailer-defined value is less than the required 12 characters. For example, if the mailer opts for a container identifier of “123456”, a value of “------123456” should be encoded.

22. Intelligent Mail Container Barcode Proposed 9-Digit Mailer ID IMcb

23. Intelligent Mail Container Barcode Proposed IMcb Placard • Destination Facility 5-Digit ZIP • Human Readable

24. Infrastructure Initiatives Package Barcode ReaderProgram Fills the gap where MPE is not used • Flexible scanning solution • Provide enroute scans on all Priority Mail • Enhanced technology to handheld IMDs • Integration of hands-free imager (Ring Scanner) • Increases visibility, productivity, and operational efficiency

25. Barcode Intelligence Unique Barcodes Mail Preparation Total Visibility An Integrated Approach Total Visibility ElectronicMailing Information Electronic In-Process & Performance-Based Mail Verification Scan at EntryInduction Electronic AdvanceNotification Electronic Centralized Payment

26. Infrastructure Initiatives Scan Infrastructure Passive Scan Infrastructure Active Scan Infrastructure

27. Final Thoughts • Full Visibility Process Map • IMpb update • Full Service ACS challenge

28. Questions?