DMA Post Haste: Towards a speedy reversions solution
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Transcript of DMA Post Haste: Towards a speedy reversions solution
Post haste: Towards a speedy reversions solution10.30am Registration & refreshments
11.00am DMA Welcome Chris Combemale, DMA
11.05am Council Manifesto and proposed solutions Howard Matthews, Vice Chair, DMA Mailing House Council
11.25am TNT/DSA proposed solutions Charles Neilson, Group services director, TNT Post
11.45am Present proposed solutions and updated processes Jenny Ledgar, Network Access Director, Royal Mail
12.05pm Interactive Question & Answer session
13.00pm Lunch & Networking
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WelcomeChris Combemale, Executive Director, DMA
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Council manifesto and proposed solutions
Howard Matthews, Vice Chair, DMA Mailing House Council
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DMA Mailing House Council
1. Product specifications cannot be consistently achieved in volume mail production
2. Surcharges are not proportional to either the failure rate or the additional cost incurred
3. Lack of objective evidence of failing to meet
specification
DMA Mailing House Council
4. No process for mail producers to challenge surcharges and no independent adjudication
5. Little or no communication between mail producers and RMW
TNT/DSA proposed solutionsCharles Neilson, Group services director, TNT Post
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Poste Haste: Towards a speedy reversions solution
1st August 2012
Reversions are increasing
• Increase shows increasing focus by Royal Mail
• Not about your mail getting worse!
• About improving processing efficiency and collecting due revenue
• Forcing compliance to specification or changing basis of presentation
NB 2012 figures include sealing reversion charges of which 90% have recently been credited
Contractual position
Customers Royal Mail
Mailing Agents
DSA Providers
Contractual position
Customers Royal Mail
Mailing Agents
DSA Providers
80%
18%
2%
NB Numbers are illustrative only
Contractual position
Customers Royal Mail
Mailing Agents
DSA Providers
80%
18%
2%
34%
66%
NB Numbers are illustrative only
To whom do RM bill surcharges?
• Posting customer– CDA Clients directly– Carrier
• Carriers usually have back to back contracts with their clients and pass on reversion charges in full
• Posting customer sometimes charges the mailing agent for its failure to meet specification
Common Reversion types
– Address Clear zones– Tap test failures– Punctuation– Barcode clear zones– Sealing
• Technically these have failed current spec
• Mail can be sorted and delivered
• Are examples representative or the exception?
What MCF would like to see
Transparency and reliability
• RM to share sampling methodology– Best case with industry so we all know the rules
– Worst case with some trusted third party
– Certainty that rules are followed equally in both Wholesale and Retail mailings
• How else will we know if the process is– Fit for purpose
– Fair and reasonable
What MCF would like to see
Proportionality
• Review of charging structures– Charge proportional to the failure and its
consequences– Not an arbitrary next service charge– Charge levied on
• Only the Items that fail• On some objective cost justified measure
What MCF would like to see
Realistic Trigger Points
• Review of trigger points– What dictates a local or national reversion?– Must take industry capability into account
• 100% compliance not achievable• Specifications cannot require 100% compliance• Fairer tolerance needed
What MCF would like to see
Evidence• Tolerances are being properly measured• That tests are being conducted fairly• That the tests are being applied equally
across channels and providers• That the problems reported result in cost
increases that justify the surcharge• Detailed RP evidence can be provided to
prove reversion
Present proposed solutions and updated processesJenny Ledgar, Network access director, Royal Mail
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Royal Mail Revenue Protection
Stephen Agar - Managing Director, Consumer and Network Access
Jenny Ledgar - Network Access Director, Consumer and Network Access
Tim Cable - Director Products, Royal Mail Retail
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Agenda• Key industry issues & input from the Industry
• Proposed solutions to tackle key issuesMap of where the ‘speed cameras’ are
Full review of OCR and barcode product specification including sealing specification
An interim approach to reversions
• More work to doImproved communication with industry / process for the mail
producer to challenge any surcharge
Revenue protection on site – what are the options?
• Conclusions
• Questions
21
Key industry issues
•Proportionality
•Transparency
•Production difficulties with 100% specification requirement
•Communication with the ‘bill payer’ / no opportunity for the mail producer to challenge any surcharge
•Provision of evidence when mail fails specification
22
Input from the Industry
•Our customers
•Strategic Mailing Partnership members
•Mailing Presentation Advisory Group members
•DMA
Our thanks to all who have helped develop the following proposed solutions
23
Solution – tackling transparency•Map of where the ‘speed cameras’ are
Produce and publish a schedule of attributes that our Revenue Protection teams will focus on, on a 12 month rolling basis
e.g.
Oct-Dec 12 - sealing specificationJan-Mar 13 - flexibilityApr-Jun 13 - specific addressing standardsJul-Sep 13 - dimensions
Note: We reserve the right to revert on any failed attribute of the specification
Share schedule on RMW website, RM technical and via industry groups i.e. SMP
Provide regular update on RMW website, RM technical and via industry groups on key causes of reversions by number and value
24
Solution- tackling the product specification•Full review of OCR and Barcode product specification
including sealing specification underway Due to be concluded Sept 12
New sealing tolerance defined and to be shared shortly
A phased reintroduction of sealing reversions between Sept 12 and Jan 13
17th Sept – Oct revert 20% of any national reversionNov – Dec revert 50% of any national reversion1st Jan 2013 full reversion
•Product specifications defined as having a high operational impact or a low operational impact …. see next slide
25
High / low impact attributes• Examples of high impact attributes
sealing specificationvisibility of address for OCR; clear route and tag zones for OCR; 2mm clear zone round CBC
• Examples of low impact attributesmail piece meeting specific flexibility requirement; specific width of individual bars of a CBC; delivery address only - Punctuation corresponding to PAF® or all punctuation omittedcountry name must not be usedtype face - recommended fonts to be used (others permitted)
• We reserve the right to switch attributes between low and high impact and vice versa depending on how the attributes perform in our operation. We have focussed on getting this solution developed and approach agreed and therefore, we have not had time to fully test all attributes
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Solution – tackling proportionalityAn interim approach to reversions for OCR/CBC in Retail/Wholesale
Low volume
detectedMedium volume
detectedHigh volume
detectedAuto
Reversions
Retail
Reversion Policy Defined
Find one container with faulty item/items, levy a fixed charge for container.
Up to 10% of mailing detected
Over 10% of mailing detected
Process needs to be developed
Ops Impact (High)
£25 minimum plus a charge * for each container up to x container. Above x container, non compliance will move to medium volume detected
10% of mailing reverted to next applicable service
100% of mailing reverted to next applicable service
Process needs to be developed
Ops Impact (Low)
10% of mailing surcharged with a fixed unit charge based on a flat fee per item eg range 0.5p – 1.5p
100% of mailing surcharged with a fixed unit charge based on a flat fee per item eg range 0.5p – 1.5p
Process needs to be developed
Wholesale
Reversion Policy Defined
Find one failed container, revert that container to next applicable service
Find failed containers in multiple IMC’s, revert the total segment at those IMCs.
Find failed containers in many IMC’s, revert the entire mailing
Current process maintained for high impact failures
Ops Impact (High)
100% of container is reverted to next applicable service
100% of mail in identified IMC’s reverted to next applicable service
100% of mail reverted to next applicable service
Current process maintained
Ops Impact (Low)
100% of mail in identified IMC’s surcharged with a fixed unit charge based on a flat fee per item eg range 0.5p – 1.5p
100% of mail surcharged with a fixed unit charge based on a flat fee per item eg range 0.5p – 1.5p
Process needs to be developed
Retail/ Wholesale
Rework/Ops Charges
Operational charges* for additional activity undertaken by RM Ops. Retail = additional charges. Wholesale = contractual charges already in place
Retail/ Wholesale
Admin Charge
Fixed Admin charge* to carry out each reversion (tbc)
* to be determined
New or revised
27
More work to do……..
Finalise solutions and prepare for launch
Improved communication with industry / process for the mail producer to challenge any surcharge
Revenue protection on site – what options are available?
28
In conclusion•You said your issues with our processes were with
Proportionality
Transparency
Production difficulties with 100% specification requirement
Communication with the ‘bill payer’ / no opportunity for the mail producer to challenge any surcharge
Provision of evidence when mail fails specification
•Our proposals provide an interim solution to most.
•Aim to launch 17th Sept
29
Any Questions?
Panel discussionChris Combemale, DMAHoward Matthews, DMA Mailing House CouncilCharles Neilson, TNT PostJenny Ledgar, Royal MailStephen Agar, Royal MailTim Cable, Royal Mail
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SummaryChris Combemale, Executive Director, DMA
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Thank you for attending Please join us for lunch and networking
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