Postal Product Innovation and New Opportunities for Postal Commerce

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Postal Product Innovation and New Opportunities
for Postal Commerce
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Operations driven Optimized for efficient
delivery of a few traditional products (minimum
cost given required service quality) Rigid Cost
structure, relatively high labor cost Rigid
Infrastructure (expensive to change) Extensively
regulated
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How to respond to competition?

• USO Postal Operator
• The Postal Service must design and deliver
  products that meet customer needs in a rapidly
  changing market. It must control costs to remain
  competitive. USPS STP 2008
• Competing on cost/price and products
• Private operators and carriers
• Competing on cost/price and products
• Competing on the cost basis is conceptually
  straightforward but difficult to execute given
  immutable constraints
• Competing on the product basis is hard both
  conceptually and operationally
• How to compete on the product basis is the main
  purpose of this talk

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Responding to competition RM
Luisa Fulci Royal Mail (March 13, 2008)

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There is no disagreement..

• All Posts and mailers agree Postal product
  innovation is the key
• But how???

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What is postal product innovation?

• Designing new product
• Evaluating new product operational feasibility
• Access requirements
• Evaluating new product economic feasibility
• Costing and pricing
• Marketing and selling new product
• Distribution channel
• Enabling access to new products
• Production (delivering new product)
• Note
• First three activities are essentially
  information gathering and processing
• Fourth activity can be viewed also as information
  processing
• Production is a set of physical and information
  processing activities that involves mail
  collection, induction, sorting, transportation,
  delivery and data services

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New approach

• If we make computers to play far more significant
  role in postal product innovation and
  consumption, we can substantially improve its
  quality and speed and product adoption by end
  users (mailers and recipients)
• How to make computers to play such role in
  product innovation?
• Hint If we can only teach our computers the
  notion of postal product
• what is the postal product from human and
  computer perspectives?
• Analysis of all known postal products (existing
  and planned) reveals that they have a deep
  structure that can be formalized for computer
  consumption while preserving their essential
  human processability
• Postal product can be described as a collection
  of named attributes which have measurable values
• Postal product can be represented for computer
  consumption using modern mark-up language like XML

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Model

• Mail creation, induction, processing and delivery
  driven by standardized information interfaces
  between all parties involved
• Model to emulate e-commerce
• ubiquitous computing
• connectivity
• information presentation standards (XML/HTML)

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Structure of postal product

• Physical elements
• Physical parameters (dimensions, volume, density,
  material characteristics) and content (restricted
  for certain services)
• Geography of induction and geography of delivery
• Priority (where there are options) routing
  information
• Timing and frequency of collection and delivery
• Information about
• Events that occurred during mail item processing
• Other mail items linked to the mail item being
  served
• Objects linked to the mail item being served
  (box, signatory, )
• Other mail sent, received or replied to by sender
  or recipient
• Rules
• Conditions imposed on physical and informational
  elements(mail unit, mail unit content, mail unit
  attributes, money)
• If (attribute x meets this condition) Then (do
  this)
• Remedies for when service could not be delivered
  as specified

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Postal product access requirements

• Postal Product Access Requirements
• Mail Item make up (data, format and placement)
• Computerized data to accompany mailing, its
  timing, messaging and protocol requirements
• (Statement of Mailing Submission, Manifest,
  PostalOne documentation etc.)
• Grouping and containerisation requirements
  (pre-sort and mail unit packaging rules)
• Pricing and payment requirements
• Rates and accounting rules
• Validity period

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What is EPPML?

• Acronym for Extensible Postal Product Model and
  Language
• EPPML delivers standardized definition of postal
  products
• UPU and CEN TC 331 Standards
• A postal product expressed in EPPML
• Is an information object (for computers)
• Can be represented by elements organized as an
  extensible collection of measurable attributes
• All postal products represented in EPPML have a
  common structure across all carriers/posts
  (defined by EPPML standard schema)

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Designing new product

• Postal product design must encompass and leverage
  collective customers knowledge rather than
  simply "marketing existing products to them".

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Capturing mailers needs and constraints
Mailer Domain
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Designing New Postal Product
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Evaluating new postal product operational
feasibility with EPPML
Access Requirements
Postal Operator Domain

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Evaluating new product economic feasibility with
EPPML
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Creating mail with EPPML
Post
Mailer
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Working in Concert
Needs and Preferences
UPU Server
Operations
Post
Mailer
New Products
New Mailing
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On-demand Postal Products
Mailer Domain
Postal Domain
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Benefits for Posts

• Operations
• Improved quality of mail created by computer
  assisted systems (cost savings)
• Mail make up, Mail packaging, Statement of
  Mailing Submission (electronic manifest), Postal
  Revenue Protection Information
• Mailer and postal constraints can be
  automatically analyzed and incorporated into
  postal product design
• More information from mailers enables better
• Operations planning, Dynamic capacity management,
  Network rationalization and process optimization
• Marketing
• Demand-driven postal products
• Product distribution using existing, well
  established and understood electronic channels
  (Internet)
• Individualized postal products for customers of
  any size
• Finance and governance
• Distinguish market dominant vs. competitive
  products
• Improved and accelerated cost accounting

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Summary

• We explored a new vision for mail that
  extensively leverages computers and Internet
• e-Postal commerce or EPPML-enabled mail
• e-Postal commerce offers unprecedented
  opportunities in postal product innovation
• By effectively integrating customers and Posts
  e-Postal commerce creates
• new automated distribution channel for postal
  products
• mail provably consistent with postal products
  access requirements reducing operational cost for
  mailers and posts
• Virtual private channel between customers and
  Posts
• Challenges
• cultural change to radical and open innovation
• rigidity of postal operations and infrastructure
• regulatory framework
• EPPML framework is complete and we are working on
  
• demonstrable hardware and software
• In discussions with Posts for potential pilots