Flats Strategy

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Flats Strategy
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OVERVIEW

• Background
• Near Term Actions FY 2001 to FY 2003
• Longer Term Plans FY 2004 and Beyond
• Delivery Vision
• DPS Flats
• Summary

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Background
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Background

• Revenue From Flats ? 14 Billion
• Periodicals Mailbox Anchor
• Other Revenue Streams
• Standard Mail Contribution 2nd only
  to FCM
• Flats Rates Rising Faster Than Inflation

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Background

• Cost Drivers Distribution
• Material Handling
• Delivery
• Flats Unique Challenges
• B/C Discounts Pass Through gt 100

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Background

• Planning Focus
• Near Term Now - FY 03
• Longer Term FY 04 and Beyond

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Near Term ActionsFY 2001 to FY 2003
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Near Term

• Draw From Letter Automation Experience
• Apply Technology
• Continually Improve Operations
• Manage the Base
• Extend Automation to Delivery
• Involve Customers

Presorting Barcoding
Readability Entry
Address Quality Etc.

• Capture Savings

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Near Term

• Deploy Equipment
• AFSM 100
• FSM 1000 Enhancements
• FSM 881s Redeployment

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Near Term
FSM 1000
AFSM 100
Mail characteristics Study to look at Height,
Length, Thickness, Packaging, Polywrap, Rigidity
and Flexibility
Mail characteristics New feeder will handle
existing FSM 1000 mail characteristics
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AFSM 100
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Near Term
Equipment Deployments

• AFSM 100
• 537 Units Total in 2 Buys of 175 362
• Deployed Through May 2002
• Deployment Rate - 6 per Week
• Program Deployment is on Track

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Near Term

• AFF/OCR FSM 1000
• 359 Modification Kits
• Conversion to an Automated Machine
• Replace one Keying Station with the Automated
  flats Feeder
• Greater Throughput and Increased Productivity
• Deployed through Oct. 2002

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Near Term
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Near Term

• Deploy Equipment
• AFSM 100
• FSM 1000 Enhancements
• FSM 881s Redeployment

• Utilize Equipment
• Up-the-Ladder
• Minimize Manual Volumes

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Near Term

• Reduce Mail Preparation Costs
• Bundle Breakage
• Alternative Bundle Preparation Tests
• Unique Operation Number
• Makeup Changes

• Manage the Base
• Standardization
• Establish Targets
• Track Performance

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Near Term

• Involve Customers
• Increase Barcoded Volumes
• Additional Mail Make-up Changes
• Bundle Breakage Reduction
• MTAC Flats Strategy Work Group

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Near Term

• MERLIN Pilot Site Test Data
• 18 of Mailings Had Presort Errors ? 5
• 24 of Mailings Had Readability Rates Below 90

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Longer TermFY 2004 and Beyond
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Longer Term

• Delivery Vision
• Plan for Flats DPS
• Automated Package Processing System
• Alternative Flats Packaging
• Identify Customer Impacts

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Longer Term

• Delivery Vision

• Minimize In-Office Costs
• DPS Letters and Flats

• Maximize Street Efficiency
• Sequence Letters and Flats Together
• One Delivery Point Bundle/Package

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Longer Term

• DPS Flats

• Concept Sequence Flat Mail in the Order of
  Delivery

• Evaluating Possible Scenarios
• Operating Variables Being Considered
• Locations
• Equipment Type(s)

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Longer Term

• DPS Flats

• Evaluating Equipment Type(s)
• Sequencer
• Collator
• Mixed Mail Sorter

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Longer Term

• DPS Flats

• Location
• All Plant
• All Delivery Unit
• Combination

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Longer Term

• DPS Flats

• One Possible Scenario
• DPS Non-CRRT Volumes _at_ Plant
• Collate Plant DPS Volumes With CRRT Volumes _at_
  Delivery Unit

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Longer Term

• FBC Theory

• 50 of flats dropped shipped at DU, in DPS
  Sequence
• 11 digit barcode and DPS Sequence Required

• Actual

• 17 of CR Standard mail is dropped shipped at the
  DU
• Mostly Line of Travel (LOT), not DPS
• Three vendors tested
• Systems ran much slower than specified 6,000
  pcs/hr

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Longer Term

• DPS Flats

• Likely Customer Impacts
• Piece Design
• Presort
• Presentation -- containers
• Entry Point
• 11 Digit Barcode
• CRRT Walk Sequence and Barcoded
• USPS ID Tag Application

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Longer Term

• DPS Flats

• Another Possible Scenario
• DPS All Flats _at_ Plant

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Longer Term
Flats Sequencing System (FSS)

• Centralized DPS Strategy
• High Speed 2nd Generation Flats Sorter
• Funded in Current Five Year Plan
• Schedule - 3 Phases
• Phase I - Design and Simulation
• Phase II - Build FSS/Conduct In-Plant Tests
• Phase III - Competitive Field Test

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Longer Term

• DPS Flats

• Likely Customer Impacts
• Piece Design
• Presort (For Automated Zones)
• By 5 Digit or Scheme
• No Carrier Route Sorts
• Presentation -- containers
• Entry Point / Time
• 11 Digit Barcode
• USPS ID Tag Application

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Longer Term

• DPS Flats

• Conclusion
• Given the amount of work still to be completed,
  implementation prior to 2004 is unlikely.

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Summary
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Summary
Near Term Deploy Equipment Utilize
Equipment Reduce Mail Preparation Costs Manage
the Base Involve Customers
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Summary
Longer Term Refine Delivery Vision Evaluate DPS
Scenarios Develop Technology Involve Customers