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Union meeting nov_2010_wb.32870522

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presentation to staff side on mail optimization.

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Union meeting nov_2010_wb.32870522

  1. 1. Mail Network Optimization Project New Delhi, November 23, 2010 Interaction with the Staff Side
  2. 2. The Background External Factors <ul><ul><li>Declining mail volumes </li></ul></ul><ul><ul><li>Competition from Domestic and Inter-national players </li></ul></ul><ul><ul><li>Absence of regulation </li></ul></ul><ul><ul><li>Change in mail profile </li></ul></ul><ul><ul><li>Customer Demands (e.g. Track & Trace) </li></ul></ul>Systemic Issues <ul><ul><li>Difficulties of existing mail network vis-à-vis changed mail profile </li></ul></ul><ul><ul><li>Low level of IT induction in mail processing </li></ul></ul><ul><ul><li>Low productivity and ageing workforce </li></ul></ul><ul><ul><li>Delivery inconsistencies and visibility </li></ul></ul><ul><ul><li>Lack of customer focus </li></ul></ul>Impact <ul><ul><li>Inconsistent quality of service </li></ul></ul><ul><ul><li>High operational costs </li></ul></ul><ul><ul><li>Eroding customer base </li></ul></ul>
  3. 3. The Scope of Project &quot;Get the core right&quot; SCOPE &quot;Modernise the look and feel&quot; <ul><ul><li>Optimise India Post's network from collection to delivery </li></ul></ul><ul><ul><li>Standardize processes with focus on significant quality improvement & reduction in network complexity </li></ul></ul><ul><ul><li>Put in place an effective performance measurement system through regular reviews </li></ul></ul><ul><ul><li>Improve the ambience of mail offices </li></ul></ul><ul><ul><li>Upgrade processing facilities and improve working conditions for employees </li></ul></ul><ul><ul><li>Make staff and customers proud of being associated with India Post </li></ul></ul>
  4. 4. The Approach PROJECT APPROACH 1 Start with limited product range for prioritised cities Increase the product range for these prioritised cities Expand to all India for all products 2 3 <ul><ul><li>Early pilot and broad involvement of field units </li></ul></ul><ul><ul><li>Rigorous monitoring </li></ul></ul>
  5. 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 &quot;Wave 1&quot; Approach reflects a strong need for immediate tangible impact 3 1 2
  6. 6. Project Waves for Speed Post SOURCE: Mail Network Optimisation Project <ul><ul><li>March-July </li></ul></ul><ul><ul><li>August-September </li></ul></ul><ul><ul><li>September-November </li></ul></ul><ul><ul><li>Mumbai </li></ul></ul><ul><ul><li>Delhi </li></ul></ul><ul><ul><li>Kolkata </li></ul></ul><ul><ul><li>Chennai </li></ul></ul><ul><ul><li>Bangalore </li></ul></ul><ul><ul><li>Hyderabad </li></ul></ul><ul><ul><li>Noida </li></ul></ul><ul><ul><li>Gurgaon </li></ul></ul><ul><ul><li>Pune </li></ul></ul><ul><ul><li>Mysore </li></ul></ul><ul><ul><li>Howrah </li></ul></ul><ul><ul><li>Bhopal </li></ul></ul><ul><ul><li>Trivandrum </li></ul></ul><ul><ul><li>Chandigarh </li></ul></ul><ul><ul><li>Nagpur </li></ul></ul><ul><ul><li>Ahmedabad </li></ul></ul><ul><ul><li>Patna </li></ul></ul><ul><ul><li>Kochi </li></ul></ul><ul><ul><li>Lucknow </li></ul></ul>Wave 1 Wave 2 Wave 3 Cities in scope Timeline 8 5 6
  7. 7. Network optimisation: Key Operational Areas (Speed Post) Optimization of delivery in wave 2 (1st class mail) as SpeedPost only accounts for ~10% of delivery volume SOURCE: Mail Network Optimisation Project <ul><ul><li>What are the right processes within the facility? </li></ul></ul><ul><ul><ul><li>How to ensure standardisation? </li></ul></ul></ul><ul><ul><ul><li>How to maximize productivity and quality? </li></ul></ul></ul><ul><ul><li>What is the right network schedule? – Which cut-off times and processing windows at each processing step across the value chain would facilitate next day delivery? </li></ul></ul><ul><ul><li>How to measure India Post's performance? </li></ul></ul><ul><ul><ul><li>How is the share of next day delivery (D+1)? </li></ul></ul></ul><ul><ul><ul><li>Track & Trace: Are 100% scans ensured across the network? </li></ul></ul></ul><ul><ul><li>What is the right network topolgy? </li></ul></ul><ul><ul><ul><li>How many processing SPCs do we need within one city (and where)? </li></ul></ul></ul><ul><ul><ul><li>How many sorting hubs do we need across cities (and where)? </li></ul></ul></ul>1 2 3 4
  8. 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
  9. 9. The project has witnessed significant changes <ul><ul><li>International EMS: IT interface fixed (19:59 timestamp) ~Rs. 1.5 crore revenue recovery </li></ul></ul><ul><ul><li>D+x performance in 6 metros improved by ~1.0 day over last months </li></ul></ul><ul><ul><li>Productivity and throughput improved across centres by more than 50% </li></ul></ul><ul><ul><li>Comprehensive set of 18 KPIs for Speed Post developed, scorecards and VCs institutionalised </li></ul></ul><ul><ul><li>Detailed Speed Post Manual developed to ensure standardi-sation of processes across India </li></ul></ul><ul><ul><li>Quality management cells institutionalized </li></ul></ul><ul><ul><li>Network schedules in 6 metros revised using comprehensive model </li></ul></ul><ul><ul><li>Instructions to merge international EMS inbound network with Speed Post issued </li></ul></ul><ul><ul><li>Multiple sorting at SPC &quot;outlets&quot; reduced, e.g., Bangalore (6 sub hubs), Mumbai (GPO volumes) </li></ul></ul><ul><ul><li>Network topology model developed with revision of sorting hubs from 315 to 89 </li></ul></ul><ul><ul><li>Integrated SpeedPost database being developed </li></ul></ul><ul><ul><li>Directorate rigorously monitoring the progress through score card </li></ul></ul><ul><ul><li>All CPMGs involved (focus until date on 8 circles) and actively participating </li></ul></ul><ul><ul><li>Performance dialogues initiated on a daily basis across the organisation </li></ul></ul><ul><ul><li>New equipment tested and introduced to improve working conditions (e.g., roller containers, revised sorting cases, roller trays, bag scissors) </li></ul></ul><ul><ul><li>Project has brought comprehensive look at the all the stakeholders </li></ul></ul><ul><ul><li>Comprehensive Look and Feel workstream initiated and institutionalized (run by BD team) </li></ul></ul>Quality/performance improvement Financial improvements Complexity reduction Proud to be part of India Post Changes in day-to-day life Soft facts Hard facts 1 3 5 6 4 9 10 11 13 14 18 19 SOURCE: Mail Network Optimisation Project 12 20 7 16 15 8 17
  10. 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. 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
  12. 12. Basic NSPC and Post Office information Data type Source <ul><ul><li>Classification of NSPCs done based on population </li></ul></ul><ul><ul><li>Population figures taken from 2001 census reports </li></ul></ul><ul><ul><li>Urban: Population >5 lakhs e.g., Delhi, Mumbai </li></ul></ul><ul><ul><li>Rural: Population <5 lakhs e.g., Pauri, Vashi </li></ul></ul>Urban/rural classification of NSPCs Data characteristics <ul><ul><li>List of NSPCs and delivery POs covered by Speed Post taken from the official Speed Post Directory </li></ul></ul><ul><ul><li>Consistency checks on NSPCs done by BD Directorate </li></ul></ul>List of NSPCs and Delivery Post Offices 1 <ul><ul><li>315 NSPCs </li></ul></ul><ul><ul><li>delivery POs with unique pin codes </li></ul></ul><ul><ul><li>Mapping of POs to corresponding NSPCs </li></ul></ul>SOURCE: Mail Network Optimisation Project 1 SSPCs have not been considered for comprehensively modelling as they do not play a role in arriving at an optimal NSPC – PO mapping
  13. 13. Post Office coordinates and booking/delivery volume Coordinates (Latitude / Longitude) Missing coordinates Questionable 2 coordinates 12.0 Unique coordinates Duplicate 1 coordinates All coordinates SOURCE: Mail Network Optimisation Project Percent of average daily booking volumes Used for modelling as is PO coordinates assumed to be same as NSPC coordinates Booking / Delivery Volumes <ul><ul><li>Booking/delivery volume information at the post office level is used to split the “ from-to ” NSPC volume matrix (previous page) between the POs </li></ul></ul><ul><ul><li>For post offices for which no volume information is available, the average daily booking and delivery volumes are assumed to be 1 </li></ul></ul>Source <ul><ul><li>Coordinate </li></ul></ul><ul><ul><li>Volume </li></ul></ul>: http://itouchmap.com/latlong.html : Jan - Apr 2010 PO level data from Speed Net 1 Duplicate coordinates exist since India (specially rural areas) is not yet completely mapped by latitude/longitude providers 2 The distance between PO and corresponding NSPC is more than 200 km as per the coordinates Note: 100% = 10 million per month 85% of data is usable which is sufficient for the purpose of modeling
  14. 14. Air connections h Text Text SOURCE: Mail Network Optimisation Project Airports <ul><ul><li>List of ~70 domestic airports in India picked up from a global list of airports </li></ul></ul><ul><ul><li>Latitude/longitude information taken from http://itouchmap.com/latlong.html </li></ul></ul>Flights <ul><ul><li>List of 6,633 domestic flights collected from airlines </li></ul></ul><ul><ul><li>Flights mapped to airports in the above airport list </li></ul></ul>Loading/ Unloading Times Loading time, hours Airport category Unloading time, hours Airports classified in 3 categories based on domestic cargo traffic A 2.0 1.5 B 1.5 1.0 C 1.0 0.5 Example Bangalore Bhopal Dibrugarh
  15. 15. Road connections SOURCE: Mail Network Optimisation Project Factor Assumption Reasoning <ul><ul><li>Air distances calculated based on latitude/ longitude information </li></ul></ul><ul><ul><li>Air distances multiplied by detour factors </li></ul></ul>Distances <ul><ul><li>Standard practice for distance calculation </li></ul></ul><ul><ul><li>Detour factors taken based on sample calculations for a few NSPCs </li></ul></ul>Detour factor <ul><ul><li>Separate MMS speeds assumed for rural and urban NSPC-PO travel </li></ul></ul><ul><ul><li>All NSPC-NSPC travel is assumed to be rural </li></ul></ul>MMS Speed <ul><ul><li>Based on inputs from the field </li></ul></ul>Urban 1.45 Rural 1.25 Urban 20 km/hr Rural 35 km/hr
  16. 16. Cut-off times (1/2) SOURCE: Mail Network Optimisation Project Parameter Explanation <ul><ul><li>Time at which MMS vehicles leave booking post offices to take articles to origin NSPCs </li></ul></ul><ul><ul><li>All articles booked after this cut-off are assumed to be booked the next day </li></ul></ul>Cut-off from POs <ul><ul><li>Majority of post offices do not work beyond 16:00 hrs but there are a few post offices which offer booking up to 19:00 hrs 2 or later </li></ul></ul><ul><ul><li>Latest time by which MMS vehicles carrying articles from the destination NSPCs reach the delivery post offices </li></ul></ul><ul><ul><li>Articles that arrive at the delivery post office after this cut-off, will not be delivered the same day </li></ul></ul><ul><ul><li>Second delivery rounds have been introduced in the 6 metros </li></ul></ul><ul><ul><li>Only single delivery round is feasible in rural areas because of long distance </li></ul></ul>Cut-off to POs 1 Reasoning Assumption 1 MMS vehicles leave the destination NSPCs 3 hours before this cut-off i.e. at 10:00 hrs for urban POs and at 06:00 hrs for rural Pos 2 Only for 6 metros which have 2 nd delivery round. 1900 cut off doesn’t mean commitment to customer. Not all mail booked till 1900 would be delivered in D+1 Metros 13:00 hrs Rest 09:00 hrs 19:00 hrs Scenarios 16:00 hrs
  17. 17. Cut-off times (2/2) SOURCE: Mail Network Optimisation Project Parameter Explanation <ul><ul><li>Time at which articles leave origin NSPC to be taken (by flight/road) to destination NSPC </li></ul></ul><ul><ul><li>Articles unable to be processed at the origin NSPC by this cut-off, will not be connected on the same day </li></ul></ul>Cut-off between NSPCs Reasoning Processing time A processing time of 120 minutes is assumed at both origin and destination NSPC Articles need to arrive 2 hours before the cut-offs to be able to get processed and connected the same day  Assumption <ul><ul><li>Right cut-off time can vary depending on number of NSPCs and hence need to be optimized </li></ul></ul>Options 20:00 hrs 21:00 hrs 01:00 hrs 02:00 hrs
  18. 18. Contents Inputs to the model Working of the model Outputs of the model
  19. 19. Output of the network topology model – Scenario 1 40 Configuration Comparison SOURCE: Mail Network Optimisation Project Quality Percentage No. of NSPCs ‘ D+1’ % ‘ D+1 plus D+2’ % Network complexity <ul><ul><li>Cut-off from POs : 16:00 hrs </li></ul></ul><ul><ul><li>Cut-off between NSPCs : 21:00 hrs </li></ul></ul><ul><ul><li>Second delivery round : for all urban POs </li></ul></ul>1 Measured in terms of number of bags closed in a day assuming 1 bag from every sorting hub to every other sorting hub No. of sorting hubs ‘ D+1’ % ‘ D+1 plus D+2’ % Network Complexity 1 20 42.74% 62.19% 0.42% 70 56.63% 84.70% 5.10% 80 57.91% 85.95% 6.66% 90 58.54% 87.19% 8.43% 100 59.51% 88.38% 10.41% 110 60.33% 91.24% 12.59% 120 61.42% 90.69% 14.98% 130 61.51% 92.25% 17.59% 140 62.58% 93.53% 20.40% 150 63.00% 94.28% 23.41% 310 66.74% 98.68% 100.00% Scenario 1 Scenario 1
  20. 20. Output of the network topology model – Scenario 2 70 Configuration Comparison SOURCE: Mail Network Optimisation Project Quality Percentage No. of NSPCs ‘ D+1’ % ‘ D+1 plus D+2’ % Network complexity <ul><ul><li>Cut-off from POs : 19:00 hrs </li></ul></ul><ul><ul><li>Cut-off between NSPCs : 24:00 hrs </li></ul></ul><ul><ul><li>Second delivery round : for all urban POs </li></ul></ul>1 Measured in terms of number of bags closed in a day assuming 1 bag from every sorting hub to every other sorting hub No. of sorting hubs ‘ D+1’ % ‘ D+1 plus D+2’ % Network Complexity 1 20 38.13% 62.57% 0.42% 70 48.79% 79.95% 5.10% 80 49.23% 83.97% 6.66% 90 50.26% 86.29% 8.43% 100 50.97% 87.97% 10.41% 110 51.57% 88.53% 12.59% 120 52.37% 91.09% 14.98% 130 53.03% 92.48% 17.59% 140 53.41% 92.28% 20.40% 150 53.91% 93.36% 23.41% 310 56.83% 98.46% 100.00% Scenario 2 Scenario 1
  21. 21. Output of the network topology model – Scenario 3 Configuration Comparison SOURCE: Mail Network Optimisation Project Quality Percentage No. of NSPCs ‘ D+1’ % ‘ D+1 plus D+2’ % Network complexity <ul><ul><li>Cut-off from POs : 16:00 hrs </li></ul></ul><ul><ul><li>Cut-off between NSPCs : 21:00 hrs </li></ul></ul><ul><ul><li>Second delivery round : for POs in the 6 metros </li></ul></ul>1 Measured in terms of number of bags closed in a day assuming 1 bag from every sorting hub to every other sorting hub No. of sorting hubs ‘ D+1’ % ‘ D+1 plus D+2’ % Network Complexity 1 20 41.34% 66.74% 0.42% 70 52.40% 84.43% 5.10% 80 53.36% 85.61% 6.66% 90 55.18% 87.24% 8.43% 100 55.93% 88.98% 10.41% 110 57.31% 91.08% 12.59% 120 57.47% 91.76% 14.98% 130 57.98% 92.38% 17.59% 140 58.62% 92.85% 20.40% 150 59.47% 94.10% 23.41% 310 62.62% 97.89% 100.00% Scenario 3 Scenario 1
  22. 22. Output of the network topology model – Scenario 4 60 Configuration Comparison SOURCE: Mail Network Optimisation Project Quality Percentage No. of NSPCs ‘ D+1’ % ‘ D+1 plus D+2’ % Network complexity <ul><ul><li>Cut-off from POs : 19:00 hrs </li></ul></ul><ul><ul><li>Cut-off between NSPCs : 24:00 hrs </li></ul></ul><ul><ul><li>Second delivery round : for POs in the 6 metros </li></ul></ul>1 Measured in terms of number of bags closed in a day assuming 1 bag from every sorting hub to every other sorting hub No. of sorting hubs ‘ D+1’ % ‘ D+1 plus D+2’ % Network Complexity 1 20 37.12% 65.35% 0.42% 70 44.28% 83.92% 5.10% 80 44.94% 84.32% 6.66% 90 45.72% 85.98% 8.43% 100 46.30% 87.02% 10.41% 110 46.53% 88.50% 12.59% 120 47.29% 89.88% 14.98% 130 47.71% 90.58% 17.59% 140 48.02% 91.46% 20.40% 150 48.46% 92.52% 23.41% 310 51.32% 97.25% 100.00% Scenario 4 Scenario 1
  23. 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%
  24. 24. Other outputs provided by the model SOURCE: Mail Network Optimisation Project <ul><ul><li>List of sorting hubs </li></ul></ul><ul><ul><li>Mapping of post offices to sorting hubs </li></ul></ul><ul><ul><li>Expected daily volumes at sorting hubs </li></ul></ul><ul><ul><li>Volume flows between sorting hubs </li></ul></ul><ul><ul><li>Expected throughput requirements at sorting hubs </li></ul></ul>Note: The above outputs are provided for specific configurations
  25. 25. New Speed Post Operational Network SOURCE: Mail Network Optimisation Project <ul><ul><li>89 Sorting Hubs </li></ul></ul><ul><ul><li>Sorting hubs: Location and number arrived at through a comprehensive modelling </li></ul></ul><ul><ul><li>Only Sorting Hubs to close bags for each other, only a few intra-Circle hubs allowed </li></ul></ul><ul><ul><li>Booking interface not reduced </li></ul></ul><ul><ul><li>Overall expedited processing, transit and delivery time, reduced sorting complexity (back-routing to a small fraction of mail notwithstanding) </li></ul></ul>
  26. 26. Key Performance Indicators for Speed Post Performance Management: Fortnightly Review through VCs Inter-national reports 3 SOURCE: Mail Network Optimisation Project Scan com-pliance reports Transit analysis within city Transit analysis across city Time per leg of transit within city Time per leg of transit across city Scans compliance in the entire network Scan analysis per leg of transit within city Scan analysis per leg of transit across city Percent of F-scans in SpeedNet vs. F-scans in IPS 1 Share of SpeedNet Delivery scans vs. IPS F-scans (TBD) Articles processed per hour per FTE Staff absenteeism Share of bags without bag labels Share of articles not processed in SpeedNet Share of articles closed after cut-off time Share of missorted articles Share of articles with missing pin codes Share of articles not dispatched same set Percent of F-scans in IPS vs. D-scans in IPS D+X reports KPI What does it do? 1 <ul><ul><li>Measures for international inbound article the efficiency of movement at every step before merger with Speed Post </li></ul></ul>2 Support-ing KPIs 4 Measures for each processing step whether articles got scanned as prescribed <ul><ul><li>Measures speed and reliability of processing of Speed Post articles from booking to delivery </li></ul></ul><ul><ul><li>Supports achieving better D+x and scan performance </li></ul></ul>1a 1b 1c 1d 2a 2b 2c 3a 3c 4a 4b 4c 4d 4e 4f 4g 4h 3b
  27. 27. System based Performance Report: Sample web page SOURCE: Mail Network Optimisation Project
  28. 28. Sample Circle Score Card SOURCE: Mail Network Optimisation Project
  29. 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
  30. 30. To ensure sustainability, a Speed Post manual has been developed SOURCE: Mail Network Optimisation Project Speed Post Manual How many processing SPCs should exist in a city? How to use the to ensure constant performance monitoring and improvement? How to ensure standardisation and maximise throughput and quality? Which are the right cutoff-times and processing windows to allow for maximum next day delivery? Network topology Processes within facilities Network schedule Performance management <ul><ul><li>Objectives </li></ul></ul><ul><ul><li>A relevant document for Speed Post operations across the country </li></ul></ul><ul><ul><li>To help achive reliable, fast, and standardised Speed Post operations </li></ul></ul><ul><ul><li>Modular approach allows for flexible updates to keep the Manual up to date </li></ul></ul>
  31. 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. 32. The &quot;look and feel&quot; 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. 33. Speed Post update 1 Approach for First Class 2
  34. 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. 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. 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)
  37. 37. India Post is in a good position to capture future growth opportunities in case it can turnaround its First Class mail business SOURCE: Mail Network Optimisation Project <ul><ul><li>Indian mail market is underpenetrated with Indians receiving less than 10 mail articles/person vs. 200 articles/person in Germany and 600 articles/person in US </li></ul></ul><ul><ul><li>India Post has a strong network with ~155,000 post offices, which means that with a ratio of one office for ~7,000 Indian citizens it provides a very dense service infrastructure </li></ul></ul><ul><ul><li>Majority of ordinary non-bulk mail is posted through letter boxes. With ~685,000 letter boxes across the country, India Post provides a wide network </li></ul></ul>Capturing the growth opportunity in the future will only happen if quality is improved, which will require an operational transformation of the First Class product segment Untapped growth potential can be captured … … by leveraging India Post’s unique and large network
  38. 38. For First Class, we will focus on the same elements as for SpeedPost, while recognizing differences SOURCE: Mail Network Optimisation Project Text NOT EXHAUSTIVE Text What is the right network topology? 1 <ul><ul><li>Higher fragmentation of network (more facilities, less concentrated volumes) </li></ul></ul><ul><ul><li>Higher intra-city complexity (more facilities, less standardized flow) </li></ul></ul><ul><ul><li>How to measure India Post's performance? </li></ul></ul>4 <ul><ul><li>Lack of objective data hinders performance measurement </li></ul></ul><ul><ul><li>Low performance management orientation and lack of consistency of existing reports for unregistered mail </li></ul></ul><ul><ul><li>Higher planning complexity (multiple transport modes involved) </li></ul></ul><ul><ul><li>Lower planning capacity </li></ul></ul>What is the right network schedule? 2 <ul><ul><li>Relative importance of processes within sorting facilities lower in First Class </li></ul></ul><ul><ul><li>Relevance of sorting automation and of improvements to delivery preparation higher in First Class (higher volumes) </li></ul></ul><ul><ul><li>What are the right processes? </li></ul></ul>3 Main differences between First Class and Speed Post
  39. 39. Proposed approach for First Class wave – Initial efforts will focus on topology (country-wide and intra-city) and network scheduling 29 06 22 15 08 01 25 18 11 04 27 20 13 Dec-10 Nov-10 Oct-10 Sep-10 Develop strategy for sorting machines Codify best practices Processes (sorting) – Implement First Class manual and develop additional improvements in consolidated facility Build comprehensive topology model Build KPI architecture based on SpeedPost and redesign test-letter program Build preliminary topology model Define optimal Network Schedule (between 6 metros) Processes – Build First Class manual based on SpeedPost Manual Processes (delivery) – Identify improvements in delivery preparation Define facility for consolidation 1 in the 6 metros SOURCE: Mail network optimisation project “ Getting the core right” in country-wide and intra-city topology is a prerequisite to achieve long-term impact as it will create the basis on which scheduling and process improvements can be built on and sustained <ul><ul><li>Continued support on Speed Post </li></ul></ul>
  40. 40. First Class Mail Network Optimization: Study in Progress SOURCE: Mail Network Optimisation Project <ul><ul><li>Study of mail profile in 6 cities currently undergoing </li></ul></ul><ul><ul><li>Mapping of P.O.s to mail offices undertaken </li></ul></ul><ul><ul><li>Level I and II sorting offices being planned </li></ul></ul><ul><ul><li>Delivery Office process optimization pilot being undertaken in metro cities </li></ul></ul>
  41. 41. Any questions or comments?

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