presentation to staff side on mail optimization.

1. Mail Network Optimization Project New Delhi, November 23, 2010 Interaction with the Staff Side

5. The Project Plan Geographical reach Speed Post & International mail Ist class IInd class Product range Priority cities All India 2011 2012 Scenario-based design and pilots Scenario- based design Roll-out 2010 "Wave 1" Approach reflects a strong need for immediate tangible impact 3 1 2

8. Initial Impact of the Project in terms of Operational Improvement Easier sorting – Ensure minimum multiple handling Less workload – reduce no. of bags & missorts between different locations 1 Better equipment – Ease of working for staff at SPCs with new equipments Higher throughput – Ensure higher processing with improved process design 2 Streamlined workflow – by having optimised inflow of mails in the processing centers Prioritized processing – Ensure processing prioritisation based on the time of the day for maximum connectivity 3 Keep everyone informed – Regular interaction and display of SPC's daily performance, suggestions and feedback encouraged Training & Incentives – Incentivise high performers and help all staff with newly developed training modules 4 SOURCE: Mail Network Optimisation Project

10. Sorting complexities necessitated changes in the operational network for Speed Post SOURCE: Mail Network Optimisation Project 1 Assuming that there is at least one mail from every NSPC to every other NSPC 314 Selections 315  314 98,910 1 = Number of Speed Post Centres Number of final selections at each Speed Post Centre Number of bags closed across Speed Post Centres 315 NSPCs

11. Input components of the network topology model SOURCE: Mail Network Optimisation Project Location information Volume data Air/road connections Cut-off times Simulation of mail flow in the network Inputs Outputs Processing D+x percentage NSPC-PO mapping Volume flows Throughput requirements For different number of NSPCs

18. Contents Inputs to the model Working of the model Outputs of the model

23. Deciding the ‘right’ number of sorting hubs 1 Measured in terms of ‘D+1’ % as per the network topology model 2 Measured in terms of number of bags closed in a day assuming 1 bag from every sorting hub to every other sorting hub SOURCE: Mail Network Optimisation Project Subjective trade-off between structural quality and operational ease No. of sorting hubs Structural quality 1 Operational complexity 2 Better quality due to improved network structure… … will be compensated by delays due to increased operational complexity Factor ~ 3.0 ‘ Right’ number of sorting hubs? ILLUSTRATIVE 80 45% 7% 140 48% 20% 310 51% 100%

27. System based Performance Report: Sample web page SOURCE: Mail Network Optimisation Project

28. Sample Circle Score Card SOURCE: Mail Network Optimisation Project

29. Impact in terms of improved transit and delivery performance SOURCE: Mail Network Optimisation Project 2.56 August July 2.60 June 2.69 May 2.86 December 3.57 -1.01 days 2010 2009 NTD D+x of 6 metros Average of full month, in days

31. Incentives for good performers being planned through training SOURCE: Mail Network Optimisation Project Focus and training Recognition Recognition of good performers Training at Bangkok for SPC Managers, ASPs Find out need for training Train people to help them to also become star performers

32. The "look and feel" SOURCE: Mail Network Optimisation Project Ensure uniform brand/appearance across locations Develop standardised and consistent, interior and exterior of the building and supporting infrastructure to the line team Decide on the new tools and technologies to be used and also on how do we upgrade the exiting ones to ensure faster, better services Develop scheme for recognising star circles/ performers Ensure 100% trained staff on field Look and feel Branding Infrastructure Technology Recognition and training

33. Speed Post update 1 Approach for First Class 2

34. First Class Mail Network need a revamp as well SOURCE: Mail Network Optimisation Project Volumes and revenues in First Class Mail are on a declining trend (- 20 to - 25% over the past 5 years) Current performance does not match customer expectations, they expect a substantial improvement in D+x First Class Mail offers untapped potential that India Post could capture with high-quality network The context for change 1 2 3

35. First class accounts for ~63% of mail volumes and ~34% of revenues, but is on declining volume and revenue trends Share of traffic and revenue 498 17 481 2004-05 579 561 18 -5% p.a. 2008-09 465 16 449 2007-08 460 17 443 2006-07 496 18 478 2005-06 INR crore (%), 2009-10 (Projected) Registered Unregistered Crore items (%), 2008-09 -4% p.a. 2008-09 2007-08 2006-07 2005-06 2004-05 SOURCE: Mail Network Optimization Project, Book of Information 2008-2009, MIS reports, Costing department 1 Revenue figures are for First Class and Second Class Mail as they are not separately tracked Development of First Class over time Speed Post 74 (11) International 17 (3) Second class mail 150 (23) First class mail 413 (63) Postal 654 (100) Volume (crore) Speed Post 736 (21) International 307 (9) Second class mail 1,215 (36) First class mail 1,178 (34) Postal 3,436 (100) Revenue (INR crore) 1

36. Customers are aware of India Post’s insufficient performance and expect improvements in the range of 2 to 4 days for delivery 4.8 2.8 NTD delivery metro to non-metro TD delivery 1.5 2.5 3.5 NTD delivery metro to metro 2.0 2.5 3.2 6.5 2.0 2.8 4.0 SOURCE: Survey of 120 retail customers and 38 corporate customers (30/08/2010 to 08/09/2010), Project team test letter program 2.8 3.5 1.6 2.5 3.4 2.5 1.9 4.2 3.3 1.7 1.8 1.6 Expected performance Perceived performance Actual performance 1 1 Performance based on test-letter program conducted by Project Team from 31/08/10 to 06/09/10 (total sample size: 438, of which 238 unregistered letters and 200 registered letters) 2.9 N/A 2.2 1.7 2.9 N/A 2.9 3.5 N/A 0.6 0.7 0.8 Unregistered mail N = 51 (non-bulk) Registered mail N = 69 (non-bulk) Bulk mail N = 38 (bulk)

41. Any questions or comments?