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MTE Forecasting and Tracking Workgroup #108. Ability to effectively forecast and fulfill Mail Transport Equipment needs for customers and plants. Update (Since 8/2/06). 3 Meetings: August 3, 2006 MTESC Presentation Key Industry Concerns USPS Challenges Output:

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mte forecasting and tracking workgroup 108

MTE Forecasting and TrackingWorkgroup #108

Ability to effectively forecast and fulfill Mail Transport Equipment needs for customers and plants.

update since 8 2 06
Update (Since 8/2/06)
  • 3 Meetings:
    • August 3, 2006
      • MTESC Presentation
      • Key Industry Concerns
      • USPS Challenges
      • Output:
        • Need to bridge the gap between forecasting information the Postal Service needs (3 – 6 mos) and availability of accurate information mailers can provide (8 – 14 days)
        • Laundry list of issues and suggestions
2 nd meeting
2nd Meeting
  • September 21, 2006
    • Addressed/discussed each of the suggestions raised at August 3 meeting
    • Agreed on key areas of focus and developed four subgroups:
      • Contingency Plan
      • Education/Communication
      • Forecasting Pilot
      • Standardization
      • ( Note: Rate/Automation Impact tabled for January)
3 rd meeting
3rd Meeting
  • November 1, 2006
    • 2005 IBM Forecasting Model (New Buys)
      • Methodology for determining next year’s buys
        • Physical Inventory Levels
        • Daily Demand
        • Required Days of Inventory
        • Current Year’s New Buys
      • Key Assumptions
        • Networks, operations & behaviors remain the same
        • Demand remains constant
        • Leakage, condemnation and equipment misuse are all inherently factored into the analysis
        • Days of the week weighted equally when calculating average daily volumes (7-day operation)
ibm forecasting model
IBM Forecasting Model
  • Forecasting Outputs for 2006
      • Recommended Purchase vs. Actual Purchases

Pallets 1,244,273 vs. 1,700,010

EMM Trays 0 vs. 6,440,448

MM Trays 6,693,470 vs. 0

1257 Tray 4,351,115 vs. 7,000,552

      • Pallets remain the only concern for FY’06
    • The data suggests a leakage cost for pallets in the amount of $39,650,201.50(purchases vs. inventory)
    • How do we stop this leakage?????
the downfall of the ibm forecasting model
The Downfall of the IBM Forecasting Model
  • Why didn’t the model work?
    • Based purely on historical
    • Did not consider customers future needs
    • Did not consider industry/marketing changes
    • Did not consider mail preparation changes
    • Inventory tracked does not include that in the Postal Service and mailers plants.
  • How can it be improved
    • Ongoing dialogue/input re customer needs
    • Ongoing discussion re industry/marketing changes
    • Ongoing analysis which includes rate changes/make-up changes/industry trends.
    • Inventory knowledge in USPS/mailers plants
workgroup focus
Workgroup Focus

Subgroup Reports

  • MTE Forecasting Pilot
    • FY06 Fall/Holiday Mail Planning

BSN Service Improvement Team working in collaboration with Network Operations (weekly meetings)

      • Created Beta Forecast Process (14 days out)
      • Identified 14 Customers for Participation
      • Analyzing Forecast Data vs. Actual Orders
workgroup focus8
Workgroup Focus

MTE Forecasting Pilot Subgroup Reports

  • Preliminary Findings
    • Template Revision
      • Some mailers asked if they could use their own (some very rudimentary – some very sophisticated)
    • Forecast Responsiveness
      • Some mailers were more responsive than others. As mailers started to see a return on investment, they were more responsive.
    • Data Findings
      • There were large variances in the forecast vs. actual orders placed
      • ?? Lack of ability to forecast? (mail pieces vs. equipment needs)
      • ?? Inventory was already in the mailers plant?
workgroup focus9
Workgroup Focus

EIRS Revived

  • EIRS – Equipment Inventory Reporting System
    • Weekly Equipment Inventory
      • USPS Plants
      • Customer Plants
    • MTESS provides inventory levels available at 23 MTESC sites and 3 commercial warehouses. There is no data available on the amount of equipment available at either postal plants or mailer plants. This leaves a knowledge gap in understanding all inventory in the system.
    • Exploring SOP and means to automate reporting
workgroup focus10
Workgroup Focus

Subgroup Reports

  • Standardization:
    • Mission: Develop a standardized national process for ordering MTE with a focus on technology/ease of use/tracking. Any “system” solution should fit in with overall USPS technology strategy.
      • Telecon scheduled within the next two weeks.
workgroup focus11
Workgroup Focus

Subgroup Reports

  • Contingency Plan
    • Mission: Explore and create a contingency plan for industry/USPS when there is an equipment shortage for submission of mail to USPS.
    • Identified Two Major Tasks:      
      • Communications plan to ensure that mailings with alternative MTE will be accepted by BMA and processed without delay.
      • Creation of a list of acceptable alternative MTE items to be used when insufficient equipment is available.
workgroup focus12
Workgroup Focus

Subgroup Reports

  • Education Communication
    • Key Areas for Communication
      • Industry Best Practices
      • MTE Newsletter/Bulletin
      • It’s A CRIME! Campaign
      • Improvement of system-generated communication (MTESS)
      • Whatever else may come out of other subgroups (Contingency Plan, Standardization, etc.)
workgroup focus13
Workgroup Focus

Subgroup Reports

  • Education/Communication
    • Communication Resources
      • USPS.com/RIBBS
      • E-Mail Alerts
      • Articles in trade magazines, company newsletters, association newsletters and/or websites
      • USPS publications, both internal and external
      • BSN
      • BMAU
      • Area MTE Coordinators
      • USPS Sales Force
      • PCC’s, etc.
workgroup focus14
Workgroup Focus

NEW SUBGROUP

  • Industry Best Practices
    • Find customers who have developed successful MTE forecasting and inventory processes
    • Gather input from other stakeholders
    • Create a standard SOP/Guidebook based on their best practices
mte workgroup next steps
MTE WorkgroupNEXT STEPS
  • Discussion/Possible Presentation from distribution trade organization (already contacted).
  • Discussion/Possible Presentation with FAST/Postal One regarding data values/communication link
  • Subgroup Meetings and output
  • Next Workgroup Meetings:
    • Mid-December (proposed)
    • February 21, 2007