Bay-Valley Kim R. Fernandez District Manager Customer Service & Sales

2. Bay-ValleyKim R. FernandezDistrict Manager Customer Service & Sales

3. Bay-Valley Vision Mission Value

4. BAY-VALLEY DISTRICT VISION Be the premier provider of service and value as defined by our customers. “A great place to work, and the right place to do business”

5. BAY-VALLEY DISTRICTMISSION • Providing affordable quality services and products for our customers. • Inspire employees through clear communication to achieve breakthrough performance and profitability.

6. BAY-VALLEY DISTRICTVALUE • Excellence • Courtesy • Integrity • Trustworthiness • Efficiency

7. Bay-Valley Circle of Success

8. Bay-Valley Circle of Success Communicate Expectations Leadership Flow DM/SPM Direct Reports DLT Recognize Provide Success Opportunities Tools Training Resources Joint LLT / KOM Supervisor Meeting SOM Employee Involvement Customer Input Measure Performance & Compliance

9. Strategic/Tactic/Process/Compliance Flow Results SOM, KOM SUPERVISORS IMPLEMENTATION Local Leadership Team (LLT) Tactics District Leadership Team (DLT) Strategies

10. Bay-Valley District DLT StrategiesKim R. FernandezDistrict Manager Customer Service & Sales Rick J. BlancasSenior Plant Manager

11. Bay-Valley District Service Strategies

12. FY 09 SERVICE STRATEGIES ACHIEVE TOP 5 NATIONAL RANKING

13. SERVICE STRATEGIES SERVICE UP

14. SERVICE STRATEGIES SERVICE UP

15. SERVICE STRATEGIES – Market Dominant Products SERVICE UP

16. SERVICE STRATEGIES – Market Dominant Products SERVICE UP

17. SERVICE STRATEGIES – Market Dominant Products SERVICE UP

18. Bay-Valley District Cost Strategies

19. FY 09 COST STRATEGIES COST DOWN

20. FY 09 DISTRICT COST TACTICS COST DOWN • Achieve Non personnel plan • Travel Reduction (Line 3D, 3E, 3K) • Reducing POV • Only Necessary Travel – Utilizing Meeting Place • Limit/Eliminate Off-Site Meetings • -0.6%to Plan YTD • -10.2%to SPLY YTD • Supplies & Service ( Lines 31-39) • Monitoring by finance number – managing the sites that are overrunning • Only necessary expenditures • -2.7 %to Plan YTD • -21.6% to SPLY YTD

21. FY 09 District COST TACTICS COST DOWN Miscellaneous Expenses (Line 44) • Monitoring financial counts – manage the sites that are not in compliance • Monitoring Excess Stock Inventory – manage the sites that are not in compliance • Monitoring financial overages and shortage (AIC 247 & 647) – manage the sites that are not in compliance • -64.2% to Plan YTD • -79% to SPLY YTD

22. FY 09 District COST TACTICS COST DOWN • Higher Level • Manage Vacancies • Manage Unauthorized Details • Current Performance • Baseline PP 24 • Reduction to Baseline - 4.2%

23. Right Sizing Facilities for Operational Needs FACILITY OPTIMIZATION

24. FY 09 COST STRATEGIES COST DOWN

25. FY 09 COST STRATEGIES COST DOWN

26. Bay-Valley District Operational Strategies

27. Bay-Valley Operational Strategies • Scheduling and Staffing (All Operations) • Tour Realignment • Plants Completed • 528 People Migrated • OT Reduction • PIV Reduction • Reduce Higher Level • Bid Realignment • PVS Trip Reduction • 27 Trips South • 27 Trips North

28. Bay-Valley Operational Strategies • Scheduling and Staffing (All Operations) • Route Reduction • 157 Routes Eliminated • F2C Work hour reduction to SPLY • WK 25 -7.6% MTD -12.3% YTD -7.9 % • - 381,832 work hours to SPLY • Performance to Plan • WK 25 7.2% MTD 5.7% YTD 4.7% • Hours Per Route • WK 25 7.92 MTD 7.99 YTD 8.24

29. Bay-Valley Operational Strategies • Manual Volume Reduction • FY 08 Flats 33.03% Letters 7.72% • YTD Flats 28.19 Letters 6.83% • MTD Flats 26.32% Letters 6.59% • WK 25 Flats 26.54% Letters 6.15%

30. Bay-Valley Operational Strategies • Reduction of Collection Boxes • 173 Removed • LDC 27 -3.4% SPLY YTD • Performance To Plan -2.6% YTD • DPS Improvement • FY 08 YTD 89.53% • FY 09 YTD 92.76% • Rural Route Counts • In Progress

31. Bay-Valley District People Strategies

32. FY 09 PEOPLE STRATEGIES

33. FY 09 PEOPLE STRATEGIES • Right People In The Right Place At The Right Time • Manage ORNA • Effective Management of Productive Hours • Align Resources to Earned Workload • Use of Complement Tools – CSV, CCM, MPSOM, MPES, CSAW

34. Bay-Valley District Growth Strategies

35. FY09 GROWTH STRATEGIES

36. FY09 GROWTH STRATEGIES

37. Bay-Valley District Service People Growth Cost

38. Bay-Valley District LLT TACTICS

39. Bay-Valley TacticsBalwant Grewal, Sam Vasquez Toya Jackson, Ed KimbleLLT Co-Chair

40. Bay-Valley Service Tactics

41. SERVICE TACTICS SERVICE UP • Eliminate Last Mile Failures • Improve Flat Performance • Improve Quality • Improve Scanning Performance • Improve WTIL • Achieve Operating Plan (24-hour clock)

42. SERVICE TACTICS ELIMINATE LAST MILE FAILURES • 3M Process • Reduce Missent Volume to Delivery Offices • Perform PM Audits • Monitor Pivoting • Monitor OOS rate

43. SERVICE TACTICS IMPROVE FLAT PERFORMANCE • 2M Process • Reduce Missent Volume to Delivery Offices • Address AFSM At-Risk Volumes • Establish Flats Improvement Team

44. SERVICE TACTICS IMPROVE QUALITY • PAARC • Daily QC checks – Auto, AFSM, APPS, Manual, Containerization, Dispatch • Address – DSMART, eMIRS

45. SERVICE TACTICS IMPROVE SCANNING PERFORMANCE • Preventable Failures • Proper Scanning

46. SERVICE TACTICS Wait Time In Line (WTIL) • Staffing and Scheduling • Alert System • Alternate Access

47. Market Dominant Products NEW SERVICE MEASUREMENT • Commercial First-Class Mail • Periodicals • Standard Mail • Package Services • Includes Single Piece Parcel Post, Media Mail, Bound Printed Matter, Library Mail

48. SERVICE TACTICS COMMERCIAL FCM Treat as Collection Mail IOP Agreement with BMEU Secure BMEU hand-off procedure STANDARD MAIL Mail Flow Color Code Adherence PERIODICALS Operating plan compliance Dispatch & logistics compliance

49. Bay-Valley Cost Tactics

50. FY 09 COST TACTICS COST DOWN • FN 1 (less than 1%) • F3A (less than 1%) • F3B (less than 1%) • FN 2B (3%) • FN 4 (2%) ACHIEVE OT TARGETS