Parcel Shippers Association

® Parcel Shippers Association February 14, 2012 James Cochrane, Vice President USPS Product Information ® AGENDA  Mail Visibility  Power of Bu...
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Parcel Shippers Association February 14, 2012

James Cochrane, Vice President USPS Product Information

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AGENDA

 Mail Visibility  Power of Business Intelligence  Package Visibility  Investment in Technology

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Building Blocks to Achieve Visibility

Intelligent Mail and Package Barcodes – Unique barcodes on all pieces, trays and containers Mail Processing and Other Equipment – Successfully read barcodes

Infrastructure – Successfully moves data Systems – Deploy actionable reporting & analytics to achieve benefits of increased visibility Real-time data availability – All systems provide real-time data

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Mail Visibility

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Full Service Provides Visibility

Full Service - Free Visibility January 7 - February 13, 2012

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Full Service Customers Only 11,463,600

398,215

1,772,138

Electronic Info for Containers and Trays Received

Entered at USPS SV Unload Scan

Enroute Depart Scan for Containers and Trays

1,379,479 Enroute Arrive Container and Tray Scans

7,600,934 Enroute Tray Scans

New Visibility for Mailers

6.6 Billion Piece level automation scans

All IMb™ Users

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Service Performance Diagnostics

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Analytics capture the benefits of 100% Product Visibility

Right mail, to the right customer, at the right time – every time! Using mail data to improve ROI Value of reliable service performance Root Cause, MP WIP, Elapsed Time USPS Vital Few Delayed Status What plant, what shape, what failed? Support Customer Inquiries How Mail Performed

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Manage Work in Process (WIP)

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Container at Risk Alerts

From: [email protected] Sent: Wednesday, January 25, 2012 8:54 AM To: PLANT MANAGER Subject: MAIL AT RISK FOR SERVICE FAILURE (TOMORROW) Plant Manager - USPS L&DC Facility The following Standard mailers have entered mail at your facility in which we have yet to see an automation scan that indicates the mail will meet service performance expectations. 

THIS MAIL IS AT RISK FOR SERVICE FAILURES with a Start the Clock Date of 01/23/2012 and a last day to meet service standard of 01/26/2012



HARTE-HANKS WILKES BARRE (2566573) JOANN FABRIC & CRAFT STORES (5338199) Standard Letter IM Container Barcode(s): ● 99M001126000002875401 (Unload: 01/23/2012 12:28:43) IMtb:297075421001126029053511(High Speed Tray Sorter : 01/24/2012 03:13:56 USPS L&DC)



DATA-MAIL, INC. -NEWINGTON (5104091) Bank Of America (2299236) Standard Letter IM Container Barcode(s): ● 99M000520917820010085 (Unload: 01/23/2012 07:26:43) IMtb:281525421000520899519691(High Speed Tray Sorter : 01/24/2012 01:04:27 USPS L&DC) 99M000520917820010086 (Unload: 01/23/2012 07:21:29) IMtb:282705421000520899520351(High Speed Tray Sorter : 01/24/2012 04:35:11 USPS L&DC)



QUAD/GRAPHICS-THE ROCK (3153614) QUAD/GRAPHICS-SUSSEX (FAST) (3591300) Standard Letter IM Container Barcode(s): ● 99M10000000PT01465820 (Unload: 01/23/2012 14:46:29) IMtb:281155427107949069477561(High Speed Tray Sorter : 01/24/2012 00:01:02 USPS L&DC)

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Operational Performance

Visibility creates operational inventory to help managers anticipate volume & schedule proactively

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Package Visibility

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Product Visibility Creates Business Intelligence  Product visibility is essential to transform our business  Visibility enhances DMAIC approach to systemic improvement  Enhances business knowledge  Drives world class service  Creates customer value – generates revenue  Creates business value – efficiency

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Package Visibility

To Align with the Shipping Marketplace we must:

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 Increase tracking events  Processing and transportation networks

 Barcode all packages  Deliver real-time visibility

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Customer Value Assessment

On par with competition Worse than competition USPS user perceptions 10%+ better than businesses that do not use USPS USPS user perceptions 5%-10% better than businesses that do not use USPS USPS user perceptions worse than businesses that do not use USPS 2011 CVA Order Of Sub-Attribute

2/3 Day Air Shipper Perceptions Of Priority Mail Performance

Importance - 2/3 Day Air Shippers Do Not Use Priority Mail Sub-Attribute Priority Mail Users On-Time Delivery 1 1 Ease Of Use 2 3 Accountable Customer Service 3 6 Total Price Paid 4 9 Tracking 5 2 Speed Of Service 6 4 Knowledgeable Representatives 7 7 Loss & Damage 8 5 Geographic Coverage 9 10 Retail Hours 10 16 Access To Retail Locations 11 15 Multiple Depositing Methods 12 14 Pick-Up 13 8 Carrier-Supplied Packaging 14 11 15 13 Location Of Drop Boxes Integrated Computer Shipping Systems 16 12

(Ratio Of USPS Versus Competitor Scores)

Priority Mail Users 0.928 1.010 0.954 1.077 0.890 0.930 1.043 1.051 0.980 1.052 1.126 1.041 0.928 1.084 1.085 0.952

Percent Difference Between

Do Not Use User/Non-User Perceptions Priority Mail 0.810 14.6% 0.780 29.5% 0.887 7.6% 0.922 16.9% 0.770 15.5% 0.793 17.2% 0.952 9.6% 0.854 23.1% 0.905 8.3% 0.866 21.6% 0.888 26.8% 0.901 15.5% 0.849 9.3% 0.929 16.6% 0.779 39.2% 0.849 12.1%

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Customer Value Assessment

Better than competition On par with competition Worse than competition 10% or greater improvement in shipper perceptions of performance versus competitors 5%-10% improvement in shipper perceptions of performance versus competitors Shipper perceptions of performance versus competitors worsened Order Of Sub-Attribute Importance For Ground Shippers

2011 2008 CVA Survey CVA Survey Sub-Attribute On-Time Delivery 1 1 Speed Of Service 2 2 Accountable Customer Service 3 4 Ease Of Use 4 3 Tracking 5 6 Loss & Damage 6 5 Knowledgeable Representatives 7 8 Total Price Paid 8 10 Geographic Coverage 9 9 Pick-Up 10 7 Multiple Depositing Methods 13 12 Integrated Computer Shipping Systems 14 11

Ground Shipper Perceptions Of Parcel Select Performance (Ratio Of USPS Versus Competitor Scores) Percent

2011 CVA Survey 1.012 1.060 1.034 1.015 1.029 0.994 1.036 1.096 0.971 1.001 1.108 1.073

2008 CVA Survey 0.936 0.950 0.913 0.941 0.903 0.947 0.938 0.910 0.968 0.886 0.892 0.889

Difference Between 2011 And 2008 Score 8.2% 11.6% 13.2% 7.8% 13.9% 5.0% 10.5% 20.5% 0.3% 13.0% 24.2% 20.7%

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What is World Class Service?

 Time-in-transit service performance • All products are day certain • Service performance must be consistently reliable • Measure all products in-transit to all destinations

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Package Diagnostics

 Measuring Rolled Throughput Yield  Pareto analysis of system failures  Critical pair analysis  Better understanding of missorts  Transportation network effectiveness  Adherence to operating plan and transportation

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Using LSS to Drive Performance  Completed Value Stream Mapping of package flows  On-going process capability analysis  Rolled Throughput Yield on all processes

P.O. to Plant

Orig. Plant to Dispatch

Transportation

Dest. Plant to Dispatch

Plant to P.O.

P.O. to Delivery

99.5%

99.5%

98%

99.5%

99.5%

99.5%

= 95.5%

99.8%

99.8%

98%

99.8%

99.8%

99.8%

= 97%

Package Diagnostics

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Packages by Failure Type Drop Page Fields Here

Sum of PcCnt 25,000

20,000

RootCauseType 15,000

6-Other 5-Delivery 4-Destination 3-Transit

10,000

2-Turnaround 1-Origin

5,000

0 CAPITAL METRO

EASTERN

GREAT LAKES NORTHEAST

AreaName

PACIFIC

SOUTHWEST

WESTERN

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World Class Package Visibility     

A barcode on every piece End-to-end visibility 10 to 12 tracking events per piece Scan performance is 99%+ and real time Barcode provides – business value • • • • • • •

Operational service analytics Cost ascertainment Volume planning for workload Transportation efficiency Customer level data for pricing Payment initiation Revenue assurance

Information is Essential

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Visibility Drives Customer Satisfaction and Performance

Scanning is Fundamental USPS Tracking #

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Operational Performance Jan FY11

Network Enroute Scan Performance – 58%

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Investment in Technology

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Current Scan Infrastructure

Passive Scan Infrastructure Equipment Parcel Sorters Flat Sorters Tray Handling Systems Letter Sorters

Number of Sorters 389 653 225 7,473

Active Scan Infrastructure Handheld Scanners Ring Scanners Surface Visibility Scanners Retail Scanners

312,577 4,000 16,500 60,946

36,183 245 170 22,185

69.44% 6.70% 0.01% 5.15% 26

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Investment in Technology

Package Nesting Solution  Deployed to 62 APPS sites - June 2011

Package Barcode Reader Program 

4,000 ring scanners to over 200 plants - June ~ December 2011

Automated Package Bundle Sorter 

Deployed 194 retro-fits - December 2011

Product Tracking System Reengineer 

On schedule for Spring 2012

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Investment in Technology

Next Generation - Intelligent Mail Device Next generation – move to real-time scanners Wireless communication Requires software modification and new hardware Targeting Commercial Off-theShelf (COTS) scanners Phased roll-out

Growth in Package Tracking Events

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2.00

2.4 BILLION new package tracking events in 4 Months!

FY 12

1.50

FY 11 1.00

FY 10 0.50

FY 09

Month

FY 2009

FY 2010

FY 2011

FY 2012

be r Se pt em

t Au gu s

Ju ly

Ju ne

ay M

Ap ril

ar ch M

Fe br ua ry

ry Ja nu a

be r De ce m

No ve m

be r

0.00

O ct ob er

Number of Events in Billions

2.50

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Transformational

Scan events turn data into customer business value - helps grow the business

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Tracking Capability End of FY 2011 Full Service Letters/Flats

Event Acceptance Depart Post Office/BMEU Arrive USPS Sort Facility (Origin) Processed through USPS sort facility (enroute) Depart USPS Sort Facility Enroute Tray and Sack Events Arrive USPS Sort Facility (Destination) Processed through USPS Sort Facility (enroute) Depart USPS Sort Facility Arrival at Post Office Processing Complete Out for Delivery Delivered Complete

Real Time Scanning - 2013

Packages

Tracking Capability End of FY 2012 (Work in Progress)

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Full Service Letters/Flats

Event Acceptance Depart Post Office/BMEU Arrive USPS Sort Facility (Origin) Processed through USPS sort facility (enroute) Depart USPS Sort Facility Enroute Tray and Sack Events Arrive USPS Sort Facility (Destination) Processed through USPS Sort Facility (enroute) Depart USPS Sort Facility Arrival at Post Office Processing Complete Out for Delivery Delivered Work in Progress Complete

Real Time Scanning - 2013

Available Now!

Packages

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Customer Satisfaction with USPS Tracking

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Operational Performance Jan FY11

Network Enroute Scan Performance – 58%

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Operational Performance Jan FY12

Network Enroute Scan Performance – 92%

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Recap

Product Visibility will Transform our Business  Essential to compete  Creates customer value  Creates business value  Drives world class service  Provides information to improve our processing system  Foundation for improved costing system  Provides information to eliminate non-value added processes 36

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Questions?

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