®

Product VisibilityBaltimore PCC

Jeff Freeman Manager, Network Visibility Systems

March 16, 2012

®

Product Visibility

•Power of Business Intelligence

Package Visibility

Mail Visibility

Full Service Moving Forward

AGENDA

®

3

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

Product Visibility Creates Business Intelligence

®

Mail Processing and Other Equipment – Successfully read barcodes

Infrastructure – Successfully moves data

Systems – Deploy actionable reporting & analytics to

achieve benefits of increased visibility

Intelligent Mail and Package Barcodes – Unique barcodes on all pieces, trays and

containers

Real-time data availability – All systems provide real-time data

Building Blocks to Achieve Visibility

®

EventFull Service Letters/Flats

Packages

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

Tracking Capability End of FY 2011

Real Time Scanning - 2013

®Tracking Capability End of FY 2012

(Work in Progress)

EventFull Service Letters/Flats

Packages

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 Available Now!

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 ProgressComplete

Real Time Scanning - 2013

®

How Mail Performed

Right mail, to the right customer, at the right time – every time!

Support Customer Inquiries

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?

Analytics capture the benefits of 100% Product Visibility

®

Package Visibility

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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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USPS Tracking #

Visibility Drives Customer Satisfaction and Performance

Scanning is Fundamental

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Network Enroute Scan Performance – 58%

Operational Performance Jan FY11

®

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

Investment in Technology

®

0.00

0.50

1.00

1.50

2.00

2.50

Billions

FY 2009 FY 2010 FY 2011 FY 2012

3.9 BILLION new package

tracking events in 5 Months!

Growth in Package Tracking Events

FY 09

FY 12

FY 10

FY 11

Nu

mb

er

of

Ev

en

ts i

n B

illi

on

s

®

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

Transformational

®

Network Enroute Scan Performance – 92%

Operational Performance Jan FY12

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Next Generation - Intelligent Mail Device

Next generation – move to real-time scanners

Wireless communication

Requires software modification and new hardware

Targeting Commercial Off-the-Shelf (COTS) scanners

Phased roll-out

Investment in Technology

®

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

World Class Package Visibility

Information is Essential

®

Mail Visibility

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Full Service Provides Visibility

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16,232,020Electronic Info for

Containers and Trays Received

560,950Entered at USPSSV Unload Scan

2,305,810Enroute Depart Scan for Containers and

Trays

1,827,900Enroute Arrive Container

and Tray Scans

11,116,070Enroute Tray

Scans

12.5 BillionPiece level

automation scans

Full Service Customers Only

All IMb™ Users

Full Service - Free VisibilityJanuary 7 - February 29, 2012

New Visibility for Mailers

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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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Service Performance Diagnostics

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®Manage Work in Process (WIP)

®Manage Work in Process (WIP)

®Inverse Correlation between

WIP & Service Level

PQ 1 FY 12 - NDC Letters

0

20

40

60

80

100

120

140

WASHIN

GTO

N DC

CHICAGO

IL

PHILA P

A

GREENSBO

RO N

C

PITTSBURG

H PA

SAN FRAN C

A

MEM

PHIS T

N

SPFLD MA

CINCIN

N OH

DETROIT

MI

MPLS

/STP M

N

ATLANTA GA

NEW J

ERSEY NJ

JAXVIL

LE F

L

DALLAS T

X

DES MOIN

ES IA

LOS A

NGELS

CA

ST LOUIS

MO

SEATTLE WA

KANS CIT

Y KS

DENVER CO

WIP

(M

ed

ian

Ho

urs

)

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

On

Tim

e%

Median Time to First Automation Scan On Time %

® Container at Risk Alerts

From: sasp@usps.gov Sent: Wednesday, March 14, 2012 8:54 AMTo: PLANT MANAGERSubject: MAIL AT RISK FOR SERVICE FAILURE (TOMORROW)

Plant Manager - USPS L&DC FacilityThe 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 02/12/2012 and a last day to meet service standard of 02/15/2012

HARTE-HANKS WILKES BARRE <HANOVER TOWNSHIP, PA>(2566573) JOANN FABRIC & CRAFT STORES <HUDSON, OH>(5338199) Standard Letter IM Container Barcode(s):

● 99M001126000002875401 (Unload: 02/12/2012 12:28:43)IMtb:297075421001126029053511(High Speed Tray Sorter : 02/13/2012 03:13:56 USPS L&DC)

DATA-MAIL, INC. -NEWINGTON <NEWINGTON, CT>(5104091) Bank Of America <CHARLOTTE, NC>(2299236) Standard Letter IM Container Barcode(s):

● 99M000520917820010085 (Unload: 02/12/2012 07:26:43) IMtb:281525421000520899519691(High Speed Tray Sorter : 02/13/2012 01:04:27 USPS L&DC) 99M000520917820010086 (Unload: 02/12/2012 07:21:29) IMtb:282705421000520899520351(High Speed Tray Sorter : 02/13/2012 04:35:11 USPS L&DC)

QUAD/GRAPHICS-THE ROCK <THE ROCK, GA>(3153614) QUAD/GRAPHICS-SUSSEX (FAST) <SUSSEX, WI>(3591300) Standard Letter IM Container Barcode(s):

● 99M10000000PT01465820 (Unload: 02/12/2012 14:46:29) IMtb:281155427107949069477561(High Speed Tray Sorter : 02/13/2012 00:01:02 USPS L&DC)

® Operational Performance

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

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Service Performance Measurement

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Commercial Mail Volume in Measurement

0

500

1000

1500

2000

2500

3000

3500

4000

FY10Q4 FY11Q1 FY11Q2 FY11Q3 FY11Q4 FY12Q1

Mil

lio

ns

FCM

STD

PER

Measurement Volume by Quarter

®

97.396.395.6

70

75

80

85

90

95

100

Month

On T

ime

Overnight Two-Day Three-To-Five-Day

Commercial First-Class Mail FY11 & FY12 PerformanceBy Month

All Mailers in Measurement

Commercial First-Class Mail

Service Performance Diagnostic Tool Launched

®

90

95

100SPFC-Overnight

COMM-Overnight

80859095

100

SPFC-Two-Day

COMM-Two-Day

80859095

100 SPFC-Three-To-Five-Day

COMM-Three-To-Five-Day

FY12 First-Class Service

®

84.3

89.1

0

20

40

60

80

100

Week Ending

On

Tim

e

DSCF DNDC

FY12 Standard Mail Performance

Source: iMAPS

By Week through Mar 2, 2012

Introduced new SPD Tools, MP WIP

®

89.4

78.9

0

10

20

30

4050

60

70

80

90

100

Week Ending

On

Tim

e

Letters FlatsSource: iMAPS

By Week through Mar 2, 2012

Introduced new SPD Tools, MP WIP

FY12 Standard Mail Performance

®

63.9

73.8

0

10

20

30

40

50

60

70

80

90

Week Ending

On

Tim

e

DSCF DADCSource: iMAPS

By Week through Mar 2, 2012

Introduced new SPD Tools, MP WIP

FY12 IMb™ Periodical Performance

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Full Service is Essential!

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Growth in Full Service is not sufficient to achieve business benefits

Full Service Adoption in FY 2011 - 2012

26.30%

32.40%

37.60%39.80%

42.10%39.86%

15%

20%

25%

30%

35%

40%

45%

50%

55%

60%

FY10 FY11Q1

FY11Q2

FY11Q3

FY11Q4

FY12(Jan 2012)

First Class Periodicals Standard Mail Total

YTD

FY 12 – Oct - Jan

®

Intelligent Mail vs. Full Service Volume Growth

7,954

® Full Service Value Proposition

Value to Industry Service Visibility & tracking across the mail supply chain Customers receive consistent & reliable service Utilization of information to drive service improvement

Customer Applications Advance remittance intelligence Test mail piece creative results Integrate multi-channel marketing strategy Measure success of each mail campaign Efficient staffing of customer call centers

® Full Service Value Proposition

Value to Industry

Financial Incentives Elimination of permit fees Access to promotions & incentives Discounted or free addressing products & services Maximize automation discounts moving forward Reduce USPS costs, protect price for mailers

Ease of Use Eligibility for eInduction and Seamless Acceptance Postal Wizard Enhancement Customized data provisioning options Opportunity for automatic move update qualification

® Steps to Attain Adoption

January 2013

IMb required for automation rates

Sunset POSTNET eligibility for automation rates

Restructure Full Service discounts to increase incentives for participation

January 2014

Sunset IMb Basic eligibility for automation rates

Require Full Service for automation discounts

® POSTNET Barcode Discontinuation

Received immediate feedback on Federal Register proposal, published on March 2, to the clear zone requirement for letters and flats

Final rule will exclude the clear zone requirement

Focus must be on the important aspects of the Intelligent Mail Barcode (IMb) implementation

Encourage the mailing community to continue commenting on retiring POSTNET for automation pricing eligibility

®

Full Service Communication Plan

PMG Industry Meeting January 31PostCom February 7MTAC February 15National Postal Forum April 1-4 National PCC Day September 19

Presentations

Customer Outreach and Support Stakeholder Meetings (MTAC)

Through Sales, BSN, and BMEU employees Develop and deliver PCC workshop in box

Customer webinars Post Info on USPS.com and RIBBS

NCSC help desk

Industry Trade Shows Industry Webinars

Industry Trade Publications

Offer Small Business Tool

Work Closely with Industry Mail Service Providers

Software Vendors

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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

Product Visibility will Transform our Business

Recap

®

Thank You