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MTAC BriefingMay 16, 2002
• Progression of Task Force
•Recommendation Activities
•Q & A
• Progression of Task Force
•Recommendation Activities
•Q & A
ProgramProgram
Task Force ProgressionTask Force Progression
Fall 2001Fall 2001 Spring 2002Spring 2002 Fall 2002Fall 2002Spring 2001Spring 2001
Mailing Industry Task ForceMailing Industry Task ForceCo-ChairmenCo-Chairmen
JOHN NOLAN
Deputy Postmaster General
MICHAEL CRITELLI
Chairman and Chief Executive Officer
Charles Morgan, Company Leader Acxiom
Gary M. Mulloy, Chairman & CEO ADVO, Inc.
Jonathan Linen, Vice Chairman American Express
Nigel Morris, President & COO Capital One
Michael Sherman, President Fingerhut
Hamilton Davison, President & CEO Paramount Cards
Thomas Siebel, Chairman & CEO Siebel Systems, Inc.
Dr. Jerry Swartz, Chairman & Chief Scientist Symbol Technologies
William L. Davis, Chairman, President & CEO R. R. Donnelley & Sons
David Sable, President & CEO Wunderman
Charles Morgan, Company Leader Acxiom
Gary M. Mulloy, Chairman & CEO ADVO, Inc.
Jonathan Linen, Vice Chairman American Express
Nigel Morris, President & COO Capital One
Michael Sherman, President Fingerhut
Hamilton Davison, President & CEO Paramount Cards
Thomas Siebel, Chairman & CEO Siebel Systems, Inc.
Dr. Jerry Swartz, Chairman & Chief Scientist Symbol Technologies
William L. Davis, Chairman, President & CEO R. R. Donnelley & Sons
David Sable, President & CEO Wunderman
Mailing Industry Task Force Steering Committee
Mailing Industry Task Force Steering Committee
Wyoming
$372 million
Wyoming
$372 million
California$63 billion
California$63 billion New York
$65 billion
New York
$65 billion
• $900 Billion Industry• $900 Billion Industry
• 8% of the GDP• 8% of the GDP
Economic ImpactEconomic Impact
• Workforce of 9 Million• Workforce of 9 Million
The Mail MomentThe Mail Moment
StructureStructure
• 4,600 Reports Distributed
• 20,000 Hits on Webpage
• 4,600 Reports Distributed
• 20,000 Hits on Webpage
Seizing OpportunitySeizing Opportunity
Broaden ParticipationBroaden Participation
• 27 Accomplishments• 27 Accomplishments • 41 Planned Actions• 41 Planned ActionsProgress ReportProgress Report
William L. Davis, Chief Executive Officer R.R. Donnelley
John Rapp, Senior Vice President, OperationsUnited States Postal Service
William L. Davis, Chief Executive Officer R.R. Donnelley
John Rapp, Senior Vice President, OperationsUnited States Postal Service
Preparation and Entry OptimizationPreparation and Entry Optimization
Preparation and EntrySpecific Recommendations
Preparation and EntrySpecific Recommendations
• Facilitate preparation standardization
• Drive greater system efficiency across classes and sub-classes of mail
• Examine mail preparation, containerization, and entry requirements
• Implement MTAC’s shape based rate recommendations
• Evaluate entire value chain
• Facilitate preparation standardization
• Drive greater system efficiency across classes and sub-classes of mail
• Examine mail preparation, containerization, and entry requirements
• Implement MTAC’s shape based rate recommendations
• Evaluate entire value chain
Preparation and EntryActivities
Preparation and EntryActivities
Make Up: Align standard packaging & containerization with USPS processing
• Merge flats to carrier route
• Implement scheme-based entry
• Collect data regarding minimum-piece requirement
• Support co-containerization for destination entry
Make Up: Align standard packaging & containerization with USPS processing
• Merge flats to carrier route
• Implement scheme-based entry
• Collect data regarding minimum-piece requirement
• Support co-containerization for destination entry
Preparation and EntryActivities
Preparation and EntryActivities
Containerization: Introduce optimally designed containers
• Develop flat mail containers
• Set optimum container minimums
• Implement customer prepared three-digit containers only when they add value to USPS processing
Containerization: Introduce optimally designed containers
• Develop flat mail containers
• Set optimum container minimums
• Implement customer prepared three-digit containers only when they add value to USPS processing
Preparation and EntryActivities
Preparation and EntryActivities
Acceptance Points: Align mail entry with networks• NIA is long-term solution
• Explicitly define drop ship entry points
Acceptance Process: Optimize efficiencies between mailers & USPS• Adopt PostalOne!
• BOG Approved $54.1 million in funding for PostalOne! - May 6, 2002
Acceptance Points: Align mail entry with networks• NIA is long-term solution
• Explicitly define drop ship entry points
Acceptance Process: Optimize efficiencies between mailers & USPS• Adopt PostalOne!
• BOG Approved $54.1 million in funding for PostalOne! - May 6, 2002
William L. Davis, Chief Executive Officer R.R. Donnelley
John Rapp, Senior Vice President OperationsUnited States Postal Service
William L. Davis, Chief Executive Officer R.R. Donnelley
John Rapp, Senior Vice President OperationsUnited States Postal Service
Network OptimizationNetwork Optimization
Network OptimizationSpecific Recommendations
Network OptimizationSpecific Recommendations
• Optimize the USPS logistics network to reduce total system-wide costs
• Focus on presenting mail at the most efficient point in the most efficient manner to realize cost savings
• Adopt USPS’ network optimization effort (NIA) as part of Task Force’s vision
• Optimize the USPS logistics network to reduce total system-wide costs
• Focus on presenting mail at the most efficient point in the most efficient manner to realize cost savings
• Adopt USPS’ network optimization effort (NIA) as part of Task Force’s vision
Network OptimizationStrategic Goal
Network OptimizationStrategic Goal
Network Optimization mandates shifting our focus from optimizing the performance of a particular product or lane to optimizing the performance of the entire postal logistics network and value chain.
Network Optimization mandates shifting our focus from optimizing the performance of a particular product or lane to optimizing the performance of the entire postal logistics network and value chain.
Network OptimizationNetwork Integration & Alignment (NIA)
Objectives
Network OptimizationNetwork Integration & Alignment (NIA)
Objectives
• Reduce combined (USPS and Customers’ costs)
• Increase operational effectiveness and service responsiveness
• Improve consistency and predictability of service
• Reduce combined (USPS and Customers’ costs)
• Increase operational effectiveness and service responsiveness
• Improve consistency and predictability of service
Network OptimizationActivities
Network OptimizationActivities
• Test baseline model through summer
• Conduct mailer input workshops
• Evaluate network alternatives
• Explore workshare alternatives
• Report on model results and network strategy at Fall NPF
• Test baseline model through summer
• Conduct mailer input workshops
• Evaluate network alternatives
• Explore workshare alternatives
• Report on model results and network strategy at Fall NPF
Improve Address Quality
Charles Morgan, Company LeaderAcxiom Corporation
Charles Bravo, Sr. Vice President, Chief Technology OfficerUnited States Postal Service
Improve Address Quality
Charles Morgan, Company LeaderAcxiom Corporation
Charles Bravo, Sr. Vice President, Chief Technology OfficerUnited States Postal Service
Address Quality Specific Recommendation
Address Quality Specific Recommendation
• Require more frequent use of move update and address matching software
• Provide data on undeliverable mail to mailers
• Require more frequent use of move update and address matching software
• Provide data on undeliverable mail to mailers
Address Quality Progress to Date
Address Quality Progress to Date
Develop Federal Register Notice which recommends:• Require list reprocessing for automation rate mail
every 90 days• Require ZIP+4 directory updates monthly• Use Move Update product within 90 days of
mailing• Extend Move Update requirements to more
classes
Develop Federal Register Notice which recommends:• Require list reprocessing for automation rate mail
every 90 days• Require ZIP+4 directory updates monthly• Use Move Update product within 90 days of
mailing• Extend Move Update requirements to more
classes
Federal Register Notice to be released in May
Address Quality Progress to Date
Address Quality Progress to Date
National Change Of Address (NCOA) Data Test
• Validating accuracy of NCOA
• Involves 10 large mailers
• Take place April through July
• Report results at fall NPF
National Change Of Address (NCOA) Data Test
• Validating accuracy of NCOA
• Involves 10 large mailers
• Take place April through July
• Report results at fall NPF
Address Quality Progress to Date
Address Quality Progress to Date
UAA Tracking and Analysis• Bank One, Prudential
• First class campaign of 5 million pieces
• Zip+4 coded, Move Updated
• Expect 5-10% return mail rate
Findings• Which shouldn’t have been mailed?
• Which should have been delivered?
UAA Tracking and Analysis• Bank One, Prudential
• First class campaign of 5 million pieces
• Zip+4 coded, Move Updated
• Expect 5-10% return mail rate
Findings• Which shouldn’t have been mailed?
• Which should have been delivered?
Address Quality Activities
Address Quality Activities
• Improve compliance with Address Change Service-prepared mail handling procedures
• Support phase II proof-of-concept testing of Address Element Correction process
• Redesign and update CASS Form 3553
• Secure USPS support for preprinting ACS codes on envelopes
• Improve compliance with Address Change Service-prepared mail handling procedures
• Support phase II proof-of-concept testing of Address Element Correction process
• Redesign and update CASS Form 3553
• Secure USPS support for preprinting ACS codes on envelopes
Intelligent MailIntelligent Mail
Michael Critelli, Chairman and CEOMichael Critelli, Chairman and CEOPitney BowesPitney Bowes
Charles Bravo, Sr. Vice President and Charles Bravo, Sr. Vice President and Chief Technology OfficerChief Technology Officer
Tom Day, Vice President, EngineeringTom Day, Vice President, EngineeringUnited States Postal ServiceUnited States Postal Service
Michael Critelli, Chairman and CEOMichael Critelli, Chairman and CEOPitney BowesPitney Bowes
Charles Bravo, Sr. Vice President and Charles Bravo, Sr. Vice President and Chief Technology OfficerChief Technology Officer
Tom Day, Vice President, EngineeringTom Day, Vice President, EngineeringUnited States Postal ServiceUnited States Postal Service
Intelligent Mail Specific Recommendations
Intelligent Mail Specific Recommendations
• Create a real time web-based service measurement
• Develop delivery predictability programs
• Upgrade existing recognition technology
• Create a real time web-based service measurement
• Develop delivery predictability programs
• Upgrade existing recognition technology
Intelligent Mail Activities
Intelligent Mail Activities
• Implemented Confirm
• Enabled all automated letter & flat sorting equipment to read PLANET Code
• Expanded the use of Information-Based Indicia (IBI)
• Upgrading camera technology on letter sorting equipment
• Implemented Confirm
• Enabled all automated letter & flat sorting equipment to read PLANET Code
• Expanded the use of Information-Based Indicia (IBI)
• Upgrading camera technology on letter sorting equipment
Intelligent Mail Activities
Intelligent Mail Activities
• Begun testing parcel sorting machines equipped to read IBI and Delivery Confirmation codes
• Prepared the Confirm rate case
• Finalized common postal-and-industry Confirm reports
• Evaluating feasibility of adding IBI capability to flat-sorting machines
• Begun testing parcel sorting machines equipped to read IBI and Delivery Confirmation codes
• Prepared the Confirm rate case
• Finalized common postal-and-industry Confirm reports
• Evaluating feasibility of adding IBI capability to flat-sorting machines
Intelligent Mail Activities
Intelligent Mail Activities
• Complete a high level strategy for “intelligent mail”
• Work with USPS to determine contents & symbologies and impact
• Promote gathering of samples, perform pilot tests and assist in validation of value
• Support USPS deployment of equipment & “intelligent” mail program
• Complete a high level strategy for “intelligent mail”
• Work with USPS to determine contents & symbologies and impact
• Promote gathering of samples, perform pilot tests and assist in validation of value
• Support USPS deployment of equipment & “intelligent” mail program
Intelligent Mail Activities
Intelligent Mail Activities
• Leverage collateral benefits
• Promote publishing ISO coding standards
• Determine linkage with address quality
• Explore ways to make mail more predictable
• Investigate means of expanding to personal use
• Ensure balance between value & investment
• Leverage collateral benefits
• Promote publishing ISO coding standards
• Determine linkage with address quality
• Explore ways to make mail more predictable
• Investigate means of expanding to personal use
• Ensure balance between value & investment
Enhanced Payment Systems and Commercial Credit Options
Gary Mulloy, Chairman and CEOADVO
Bob Pedersen, Vice President, TreasurerUnited States Postal Service
Enhanced Payment Systems and Commercial Credit Options
Gary Mulloy, Chairman and CEOADVO
Bob Pedersen, Vice President, TreasurerUnited States Postal Service
Payment Systems & Credit OptionsSpecific Recommendations
Payment Systems & Credit OptionsSpecific Recommendations
• Provide business mailers with flexible payment terms
• Modernize and upgrade payment systems
• USPS offer one-source access and tracking of all financial transactions
• Explore at-home payment options
• Provide business mailers with flexible payment terms
• Modernize and upgrade payment systems
• USPS offer one-source access and tracking of all financial transactions
• Explore at-home payment options
Payment Systems & Credit OptionsActivities
Payment Systems & Credit OptionsActivities
USPS offer one source of access and tracking of all financial transactions
USPS offer one source of access and tracking of all financial transactions
Payment Systems & Credit OptionsPostalOne!
Payment Systems & Credit OptionsPostalOne!
Industry NEEDS
N – National Permit Number
E – Establish / Modify Mailing Accounts
E – Electronic & Enhanced Payment Flexibility
D – Detailed On-Line Reporting
S – Simplified Easy to Use Systems
Industry NEEDS
N – National Permit Number
E – Establish / Modify Mailing Accounts
E – Electronic & Enhanced Payment Flexibility
D – Detailed On-Line Reporting
S – Simplified Easy to Use Systems
Payment Systems & Credit OptionsActivities
Payment Systems & Credit OptionsActivities
Conduct Proof of Concept Tests:
• PIN-based debit card
• Expand CAPs availability for BRM
• Support the offering of credit terms by intermediaries
Conduct Proof of Concept Tests:
• PIN-based debit card
• Expand CAPs availability for BRM
• Support the offering of credit terms by intermediaries
Payment Systems & Credit OptionsProof of Concept Test
Payment Systems & Credit OptionsProof of Concept Test
PIN-Based Debit CardPIN-Based Debit Card
Payment Systems & Credit OptionsProof of Concept Test
Payment Systems & Credit OptionsProof of Concept Test
Expand CAPS Availabilityfor BRM
Expand CAPS Availabilityfor BRM
Payment Systems & Credit OptionsProof of Concept Test
Payment Systems & Credit OptionsProof of Concept Test
Third Party Credit Third Party Credit
Pricing Strategy
Gary Mulloy, Chairman and CEOADVO
Steve Kearney, Vice President, Pricing and ClassificationUnited States Postal Service
Pricing Strategy
Gary Mulloy, Chairman and CEOADVO
Steve Kearney, Vice President, Pricing and ClassificationUnited States Postal Service
Pricing Strategy Specific Recommendation
Pricing Strategy Specific Recommendation
• Adopt competitive pricing strategy
• Predictable price increases at or below inflation
• Streamline rate making process
• Examine customized pricing procedures
• Protect Citizen’s access to low cost First-Class Mail
• Adopt competitive pricing strategy
• Predictable price increases at or below inflation
• Streamline rate making process
• Examine customized pricing procedures
• Protect Citizen’s access to low cost First-Class Mail
Pricing Strategy Activities
Pricing Strategy Activities
• Streamlined rate-setting
• Targeted Pricing
• Pricing Strategy
• Streamlined rate-setting
• Targeted Pricing
• Pricing Strategy
Pricing Strategy Activities
Pricing Strategy Activities
• Support USPS/PRC conference
– Ratemaking Summit - May 28, 2002
• Design & implement targeted pricing initiatives
• Evaluate pricing proposals in Transformation Plan
• Support USPS/PRC conference
– Ratemaking Summit - May 28, 2002
• Design & implement targeted pricing initiatives
• Evaluate pricing proposals in Transformation Plan
Consumer Gateway Services
Dr. Jerry Swartz, Chairman and Chief ScientistSymbol Technologies
Nick Barranca, Vice President, Product DevelopmentUnited States Postal Service
Consumer Gateway Services
Dr. Jerry Swartz, Chairman and Chief ScientistSymbol Technologies
Nick Barranca, Vice President, Product DevelopmentUnited States Postal Service
Consumer Gateway Services Specific Recommendations
Consumer Gateway Services Specific Recommendations
• Create a merchandise returns service• Increase convenience by providing 24/7
access • Define consumer’s needs to support the “mail
moment”• Pilot a program using “print to Web” links
• Create a merchandise returns service• Increase convenience by providing 24/7
access • Define consumer’s needs to support the “mail
moment”• Pilot a program using “print to Web” links
Consumer Gateway ServicesActivities
Consumer Gateway ServicesActivities
Increase convenience of returning merchandise by exploring:
• Integration of barcodes on outgoing parcels and return labels
• Carrier pick-up program
• Flat rate packages
Increase convenience of returning merchandise by exploring:
• Integration of barcodes on outgoing parcels and return labels
• Carrier pick-up program
• Flat rate packages
Consumer Gateway ServicesActivities
Consumer Gateway ServicesActivities
Expand consumer access 24 by 7, and at additional locations by:
• Adding self-service technology / kiosks
• Analyzing results of Mail Item Retrieval System pilot
• Studying electronic cash at door - debit / credit
Expand consumer access 24 by 7, and at additional locations by:
• Adding self-service technology / kiosks
• Analyzing results of Mail Item Retrieval System pilot
• Studying electronic cash at door - debit / credit
Consumer Gateway ServicesActivities
Consumer Gateway ServicesActivities
Enable web portal for print-to-web transaction:
• Identify provider, either USPS or third party
• Study feasibility
Enable web portal for print-to-web transaction:
• Identify provider, either USPS or third party
• Study feasibility
Implement Industry Council
Michael Critelli, Chairman and CEO Pitney Bowes Inc.
David Sable, President and Chief Executive OfficerWunderman New York
Implement Industry Council
Michael Critelli, Chairman and CEO Pitney Bowes Inc.
David Sable, President and Chief Executive OfficerWunderman New York
Implement Industry Council Specific Recommendations
Implement Industry Council Specific Recommendations
• Foster industry standards
• Develop targeted advertising and a marketing program
• Provide public policy leadership
• Foster industry standards
• Develop targeted advertising and a marketing program
• Provide public policy leadership
Implement Industry Council Activities
Implement Industry Council Activities
• Support an industry-wide Transformation Plan effort
• Develop and launch an advertising & marketing program
• Enhance the coordinated government relations strategy
• Establish a CEO level council
• Provide standards development leadership
• Support an industry-wide Transformation Plan effort
• Develop and launch an advertising & marketing program
• Enhance the coordinated government relations strategy
• Establish a CEO level council
• Provide standards development leadership
Implement Industry Council Activities
Implement Industry Council Activities
• Establish CEO Council as legal entity
• Further develop marketing strategies
– Participate in special events
– Stimulate media coverage
• Pursue development of unified standards
• Expand participation & acquire funding
• Establish CEO Council as legal entity
• Further develop marketing strategies
– Participate in special events
– Stimulate media coverage
• Pursue development of unified standards
• Expand participation & acquire funding
Mailing Industry Task Force
Mailing Industry Task Force
ProductRedesign
ProductRedesign
Mail SecurityMail Security
Transformation PlanTransformation Plan
Strong and Vital Industry Strong and Vital Industry
All Available at www.usps.comAll Available at www.usps.com