Transforming Belgian Post: the work continues

Johnny Thijs, CEO, De Post-La Poste

The Challenge

In 2002 De Post-La Poste commenced a huge programme to modernise every part of its business. This was an absolute necessity as we were faced with a situation that had the potential to threaten the very existence of our company. Not only were there alarming financial losses in 2002 and 2003, but we were also experiencing increasing competition, the development of electronic communication tools, and an annual 2-3% fall in mail volumes,  not to mention the burden of a loss making post office network which was unable to meet the needs of customers.

But that was not all.The quality of next day mail delivery was low, and customer and employee satisfaction levels were both below average.

Since then many major investments have been made to modernise our infrastructure (such as the new sorting centres), our operational processes,  and how we organise our work. Every field of activity, every employee of De Post-La Poste, has been involved in these changes. They all have been made, and will continue to be made, in a socially responsible way.

The partnership with the Post Danmark/CVC consortium sealed in 2006 has enabled us to continue to strengthen our position and invest more resources and expertise in our modernisation.

The Changes Since 2003

Our core business, mail, and the postal points of sale, have experienced the most striking transformations.

Today, De Post-La Poste has five state of the art sorting centres, collectively representing the biggest investment we have ever made. The centres are the result of an unavoidable need to modernise our logistics chain to safeguard our competitiveness. They have allowed us to improve the performance of our logistics chain and to gain a competitive edge. The sorting centres place De Post-La Poste in the leading group of European operators in terms of technology.

The accessibility of De Post-La Poste’s products and services has been rethought. Since 2005 De Post-La Poste has been committed to an integrated multichannel approach. Where previously the post office was once the sole outlet for De Post-La Poste products and services, we wanted to give customers the opportunity to access us when it suits them. We believe in a strategy combining several sales channels, such as post offices, PostPoints, partner stores selling stamps, our online eShop and… our mailpersons.

At the same time, we are investing in work tools for our employees. For instance, all post offices have been equipped with PostStation.  This computer system provides access to all types of information on our products and services as well as conveniently registering all transactions.

In 2006 we also launched a programme to refurbish post offices, STORE. The purpose of the STORE programme is to guarantee an optimal working environment for staff, and a welcoming, contemporary retail environment for customers.

Change has brought improvement

Several key indicators show that De Post-La Poste’s modernisation projects over the past half a decade are already starting to pay dividends. In comparison to 2003, operational profit (normalised EBITDA) has multiplied elevenfold, normalised revenues have risen by more than 13%,  and next day delivery quality has improved from 85% to 92.4%. Revenue per FTE has gone up by 39%, and customer satisfaction has improved from 78% to 82%.

The development of the PostPoint network means that outlets selling basic postal products are now open 20% longer. This accessibility will continue to increase over the next few months as we roll out more and more PostPoints.

Our dynamic sales strategy pays dividends. Our initiatives have enabled us to improve our revenues by marketing new products and services, capturing back customers in liberalised markets and capitalising on growth niches. In 2007, our revenues increased in addressed direct mail (+ 4%), parcels (+3.8%), international mail (+8.3%), newspaper delivery (+3.5%) and hybrid solutions through our subsidiaries (+11.8%).

Change is here to stay

De Post-La Poste cannot rest on its laurels just yet. On 1 January 2011 we will find ourselves in a totally liberalised market. In anticipation, in 2007 we updated our Strategic Plan (2008-2010).

The many efforts already invested have made us leaner, but we still have work to do. Over the next few years we will work to cut costs, strengthen customer confidence, constantly assure quality, safeguard value for money,  and achieve new growth.

So change will not come to a halt in 2008. On the contrary, we have projects readied that will offer customers products and services that meet their needs in full. For example, we are launching a new parcels and express range, with various innovations and improvements.

We will also continue to drive down costs. The transformation of the retail network will be complete by mid 2009. Crucially, the project does not make the postal point of service any less local: the total opening hours of  postal outlets will actually be 23% higher in 2009 compared with 2006.

Mail delivery activities will also undergo change. Our new sorting centre technologies enable us to immediately sort mail into individual rounds. We began implementing this change in 2007 and the task will be continued in 2008. Further down the line we will refine the system to sort mail by building.

The network of 500 delivery offices will gradually be re-organised into 150 operational platforms. A large number of short mail rounds will be introduced, performed by “mail deliverers”.

Although next day delivery quality reached 92.4% in 2007,  we continue to target 95%.

Last but not least, we are always looking to identify new growth opportunities. Some are expected in direct mail and document management, and in international markets, where De Post-La Poste has doubled its turnover in the past five years.

Lower costs and higher quality should enable us, in a totally liberalised market, to provide good value for money to our clients. Only satisfied customers will remain loyal.

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