Opportunities for the postal industry to improve productivity and revenue
Pat Byrne, President & CEO, Intermec Technologies. Mail & Express Review May 2009
These are challenging times for global businesses and certainly postal. The key challenges include a global recession, changing regulatory issues, changes in customer expectations and hence in the way businesses need to approach their customers.
As everyone in the postal industry knows, these issues amongst others present unique and formidable difficulties and place increased pressure on all businesses. In this tough climate, postal operators are fighting hard to gain an edge.
Yet these are also times of significant new opportunity for innovation. Around the globe, it was previously disallowed to compete with government monopolies in the realm of last mile delivery. The recent trends towards privatisation and the relinquishing of monopoly control, however, mean that in return postal operators can now enter the postal markets in other countries and provide services outside of traditional mail. These new market conditions can translate to increased market size for postal operators. This, in turn, creates the opportunity for broaderservices, new revenues and potentially more profits. and, the economic situation means greater competition which will allow the best companies to emerge as the winners.
With these trends – especially the movement towards privatisation and increased competition – postal operators need to increase efficiency and productivity in order to compete in the global market. Fortunately, a number of new technology solutions allow for the better optimisation of resources:
Better Optimisation of Resources
Physical Assets
By optimising the use of their assets, postal operators can save considerable financial resources and hence be more competitive in the marketplace. Whether the asset is a roll cage, tote bag or box to carry mail, delivery vehicles or forklifts, assets are both expensive and limited; hence, postal operators need to make sure they are utilising them in the best possible way. New technologies to track and trace assets using RFID, bar codes, GPS or other solutions provide a variety of efficiency increases. For one, it means that postal operators can save when it comes to current assets maintained and additionally assists with future purchasing decisions. In the case of delivery vehicles, for example, as postal operators’ standard base starts to age and to depreciate, they have already projected spending considerable sums of money to replace these vehicles. However, with better tracking and tracing technology, giving postal operators greater knowledge of exactly where their fleet is located throughout the day, they can reduce the size of their standard base, buying fewer new delivery vehicles but using their existing fleet more efficiently. This saves not only on the purchasing cost of the new vehicles, which are among postal operators’ most expensive assets, but also on the high cost of maintaining these vehicles on an ongoing basis.
Better control of vehicles also provides considerable environmental benefits: The more efficient use of delivery vehicles translates to a reduction in the amount of fuel consumed, helping to reduce a company’s carbon footprint. It also has the additional advantage of providing cost savings on petroleum, further benefiting the company and the environment. These same benefits apply toward smaller assets like roll cages and totes as well. Such assets must be purchased, maintained and regularly repositioned to make the best use of them in day to day operations. A heightened level of visibility as to the current location and status of these assets can lead to significant savings in costs associated with their management. Having better visibility allows postal operators to reduce their overall number of assets while better utilising their current inventory, all while reducing their maintenance costs – including those associated with continually re-positioning the assets to meet demand. By using passive technologies like RFID it is easy for administrations to get a grasp on the flow of their assets like roll cages without making difficult changes to the workflows in order to accommodate the technology.
Human Resources
A more optimal use of its workers can also help companies operate with greater efficiency and reduce costs. Letter carriers and delivery staff are a key part of the postal administration, generally accounting for some 58% of the workforce. New technologies to help them increase their efficiency can therefore translate to large time and cost savings. The use of mobile computers with integrated scanning and bar-coding, for example, enables letter carriers to economise several seconds per task, which when performed 150 times per day by tens of thousands of workers in an organization, means thousands of hours saved per day throughout the organization. These time savings allow postal operators to better utilise their employees, enabling workers to carry out even more tasks and provide better service in the time available – not to mention that they translate directly into millions returned to the bottom line in savings.
Another advantage of new technologies that use scanning and bar-coding to track items is error reduction. Eliminating the manual data entry of item tracking information, which was not only time consuming but also error prone, means that workers no longer have to spend hundreds of hours fixing these errors, including re-processing misdirected items. Automated item-level tracking technologies therefore contribute to even greater time savings by eliminating costly mistakes. It also requires less use of paper, which promotes environmental sustainability as well.
Inventories
The better use of inventories can also render postal operators more profitable. New technologies which give postal operators greater visibility and control over their inventories enable large cost savings. The use of mobile printers, for example, can help considerably increase the efficiency with which resources are used. Rather than using fixed mount printers, the latest portable printers – which are so small that they can be worn on a belt – enable workers to print labels on the spot. This not only makes it much easier for them to label items but also reduces the amount of inventory that they need to hold: Whereas in the past, workers had to prepare a large quantity of pre-printed labels – regardless of whether they were certain that they would be needed – and carry the labels with them, it is now possible for postal operators to reduce the inventory of unnecessary labels printed in advance.
The ability to simply print what you need also has considerable advantages for the environment. Whereas in the past extra labels would either be tossed out or end up misplaced or damaged, allowing for printing on demand means less paper consumption and less waste.
New Revenue-Generating Services
Track-and-Trace
While increasing operational efficiencies are one side of the coin, how to win and generate new revenue is another. Extending the number of higher margin services they provide in the domestic market not only allows postal operators to capture new revenue but also to position themselves to withstand new competitors entering and even to gain more international business. Such add-on services might include parcel tracking-andtracing technologies. Shippers increasingly want to track their items throughout each stage of the process from collection to delivery – and have indicated a willingness to pay an additional charge for such a service.
In fact, Saudi Post recently equipped its sales force with CN3 mobile computers and IP30 handheld readers from Intermec in order to provide tracking-and-tracing of parcels. “As soon as a postal worker makes a delivery, they can use their Intermec CN3 to synchronize and update our database,” explains Eng. Majed BinAnzzan, E-Business Director at Saudi Post. “They no longer need to wait for them to return at the end of the day. Also, the new solution will increase customer satisfaction as it enables us to immediately show customers that a letter or package has been delivered as the confirmation of delivery is detailed on the Saudi Post website.”
Electronic Signature Capture
In addition to allowin g for the tracking-and-tracing of items, postal operators may also wish to provide electronic signature capture for proof of delivery at the customer’s doorstep. Again, operators can charge more for supplying added services such as these while reducing costs by eliminating the need to bring paper documents back to the point of origin as a receipt.
Royal Mail recently ordered 25,000 Intermec CN3 mobile computers in order to improve on its current paper-based system for collecting signatures for the majority of its tracked products, including Special Delivery and Recorded Signed For services. The technology allows for a signature to be collected on the handheld device which is then sent via GPRS wireless technology in order to enable sending customers to confirm delivery, and view the signature, within 15 minutes. This is a tremendous efficiency boost for Royal Mail and greatly benefits its customers. Robin Dargue, Chief Information Officer at Royal Mail Group, comments that the technology will help Royal Mail continue to meet the needs of its customers and improve its competitive edge in a market where competition is increasing.”
Conclusions
In conclusion, although new regulations and the current macroeconomic conditions bring a host of challenges, at the same time new technologies are providing tremendous opportunities for not only overcoming these obstacles but also for generating new revenue. New technologies are the key that allow postal operators to reduce costs by better optimising their assets, including their physical assets, human resources and inventories. At the same time, these new technologies also enable to postal operators provide more add-on services such as tracking-and-tracing and electronic signature capture, further bolstering revenue.
As a customer-centric company, Intermec is committed to innovating around the latest market needs. Enabling the productivity of the mobile work force is our focus and we do this in partnership with our customers so that they have confidence in their implementation of these latest technologies. The result is business process transformation in the last mile. From handheld computers with the latest wireless technologies to barcode and scanning technologies to mobile printers, we aim to provide the most capable, advanced and user-friendly products and services in order to meet our customers’ business goals driven by the regulatory and economic conditions.
