Postal Product Innovation and New Opportunities for Postal Commerce.

Postal Product Innovation and New Opportunities for Postal

Commerce

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USO Postal Operator

Electronic Substitution/Diversion

LiberalizationPostal Reform Operations driven

Optimized for efficient delivery of a few traditional products (minimum cost given required service quality)Rigid Cost structure, relatively high labor costRigid Infrastructure (expensive to change)Extensively regulated

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• USO Postal Operator – ”The Postal Service must design and deliver products that meet customer needs in a

rapidly changing market. It must control costs to remain competitive.” USPS STP 2008

– Competing on cost/price and products• Private operators and carriers

– Competing on cost/price and products• Competing on the cost basis is conceptually straightforward

but difficult to execute given immutable constraints• Competing on the product basis is hard both conceptually

and operationally • How to compete on the product basis is the main purpose of

this talk

How to respond to competition?How to respond to competition?

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Responding to competition: RM Responding to competition: RM

Luisa Fulci – Royal Mail (March 13, 2008)

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There is no disagreement..There is no disagreement..

• All Posts and mailers agree: Postal product innovation is the key

• But how???

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1. Designing new product2. Evaluating new product operational feasibility

Access requirements3. Evaluating new product economic feasibility

Costing and pricing4. Marketing and selling new product

Distribution channel Enabling access to new products

5. Production (delivering new product)Note:

– First three activities are essentially information gathering and processing

– Fourth activity can be viewed also as information processing– Production is a set of physical and information processing

activities that involves mail collection, induction, sorting, transportation, delivery and data services

What is postal product innovation?What is postal product innovation?

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• If we make computers to play far more significant role in postal product innovation and consumption, we can substantially improve its quality and speed and product adoption by end users (mailers and recipients)

• How to make computers to play such role in product innovation?

• Hint: If we can only teach our computers the notion of “postal product” – what is the “postal product” from human and computer

perspectives?• Analysis of all known postal products (existing and

planned) reveals that they have a deep structure that can be formalized for computer consumption while preserving their essential human processability

• Postal product can be described as a collection of named attributes which have measurable values

• Postal product can be represented for computer consumption using modern mark-up language like XML

New approach New approach

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Model Model

• Mail creation, induction, processing and delivery driven by standardized information interfaces between all parties involved

• Model to emulate: e-commerce

–ubiquitous computing

–connectivity

–information presentation standards (XML/HTML)

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Structure of postal productStructure of postal product• Physical elements

– Physical parameters (dimensions, volume, density, material characteristics) and content (restricted for certain services)

– Geography of induction and geography of delivery– Priority & (where there are options) routing information– Timing and frequency of collection and delivery

• Information about– Events that occurred during mail item processing– Other mail items linked to the mail item being served – Objects linked to the mail item being served (box, signatory, …)– Other mail sent, received or replied to by sender or recipient

• Rules – Conditions imposed on physical and informational elements

(mail unit, mail unit content, mail unit attributes, money)• If (attribute x meets this condition) Then (do this)

– Remedies for when service could not be delivered as specified

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Postal product access requirements Postal product access requirements

• Postal Product Access Requirements– Mail Item make up (data, format and

placement)– Computerized data to accompany mailing, its

timing, messaging and protocol requirements • (Statement of Mailing Submission, Manifest,

PostalOne documentation etc.)– Grouping and containerisation requirements

(pre-sort and mail unit packaging rules)– Pricing and payment requirements

• Rates and accounting rules– Validity period

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What is EPPML?What is EPPML?

• Acronym for: Extensible Postal Product Model and Language

• EPPML delivers standardized definition of postal products – UPU and CEN TC 331 Standards

• A postal product expressed in EPPML:– Is an information object (for computers)– Can be represented by elements organized as an

extensible collection of measurable attributes– All postal products represented in EPPML have a

common structure across all carriers/posts (defined by EPPML standard schema)

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Designing new productDesigning new product

• Postal product design must encompass and leverage collective customers’ knowledge rather than simply "marketing existing products to them".

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Capturing mailer’s needs and constraints

Capturing mailer’s needs and constraints

Mailer Domain

Mailer’sNeeds and

Cons-traints(XML)

Mailer’sNeeds and

Cons-traints(XML)

<MailerNeeds xsi:noNamespaceSchemaLocation=…... <MailerID>1234PB6789-... </MailerID>... <MailUnitAttribute> <Weight>6</Weight> </MailUnitAttribute>...</ MailerNeeds >

<MailerNeeds xsi:noNamespaceSchemaLocation=…... <MailerID>1234PB6789-... </MailerID>... <MailUnitAttribute> <Weight>6</Weight> </MailUnitAttribute>...</ MailerNeeds >

Tracking

InductionEvery DayNone

InductionEvery DayNone

Chicago

Chicago

Mail Operations

Weight (Kg)6

Delivery TimeTuesday

Comm. owner

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Post

Regulator

Postal Product Development

Operations

Recipient

Application for new product

(EPPML)

New Product Definition File

Operational Constraints

Application for new product

(EPPML)

Mailer Recipient

Mailer’s BusinessCommunication Requirements

New or Updated Carrier Products

Designing New Postal Product Designing New Postal Product

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Evaluating new postal product operational feasibility with EPPML

Evaluating new postal product operational feasibility with EPPML

Postal Operator Domain

Postal Product (XML)






<PostalProduct xsi:noNamespaceSchemaLocation=…... <UniqueProductID>CD12-9123-FFE5-912E-... </UniqueProductID>... <MailUnitAttributeConstraints> <AccessRequirements> <MailUnitPhysicalAttributes> <Weight>0-2</Weight> </MailUnitPhysicalAttributes> </AccessRequirements> </MailUnitAttributeConstraints>...</PostalProduct>

<PostalProduct xsi:noNamespaceSchemaLocation=…... <UniqueProductID>CD12-9123-FFE5-912E-... </UniqueProductID>... <MailUnitAttributeConstraints> <AccessRequirements> <MailUnitPhysicalAttributes> <Weight>0-2</Weight> </MailUnitPhysicalAttributes> </AccessRequirements> </MailUnitAttributeConstraints>...</PostalProduct>

Weight Range

Induction0-30 Kg10-100 Kg

Induction0-30 Kg10-100 Kg

0-2 Kg

0-2 Kg Max. Transit Time

2 d5-7 d

2 d5-7 d

2 d

1 d2 d

marketing

Confirmation of events

InductionFirst processingDelivery

InductionFirst processingDelivery

InductionInduction

operations

Access Requirements

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Evaluating new product economic feasibility with EPPML

Evaluating new product economic feasibility with EPPML

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Creating mail with EPPML

Creating mail with EPPML

Mailer







Mailer’sNeeds(XML)


Post

Mailer’sConstraints

(XML)


(XML)

Mail Production System

mail tray

Instructionsfor

Mail Production

(XML)

Instructionsfor

Mail Production

(XML)

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Working in Concert

Working in Concert

PostMailer

UPU Server

product(XML)

product(XML)product

(XML)

New Products

New Mailing

schema(XML)schema

(XML)

schema(XML)

Cons

train

ts

XML CDI

mail traySMS Operations

Needs(XML)

product(XML)

product(XML)product

(XML)

Needs and Preferences

Instructions(XML)

20Mailer Domain Postal Domain

On-demand Postal ProductsOn-demand Postal Products







Postal Product Management




(XML)


(XML)

Comm. owner

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Benefits for PostsBenefits for Posts• Operations

– Improved quality of mail created by computer assisted systems (cost savings)

• Mail make up, Mail packaging, Statement of Mailing Submission (electronic manifest), Postal Revenue Protection Information

– Mailer and postal constraints can be automatically analyzed and incorporated into postal product design

– More information from mailers enables better:• Operations planning, Dynamic capacity management, Network

rationalization and process optimization• Marketing

– Demand-driven postal products– Product distribution using existing, well established and

understood electronic channels (Internet)– Individualized postal products for customers of any size

• Finance and governance– Distinguish market dominant vs. competitive products– Improved and accelerated cost accounting

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SummarySummary• We explored a new vision for mail that extensively leverages

computers and Internet

– e-Postal commerce or EPPML-enabled mail

• e-Postal commerce offers unprecedented opportunities in postal product innovation

• By effectively integrating customers and Posts e-Postal commerce creates:

– new automated distribution channel for postal products

– mail provably consistent with postal products access requirements reducing operational cost for mailers and posts

– Virtual private channel between customers and Posts

• Challenges:

– cultural change to radical and open innovation

– rigidity of postal operations and infrastructure

– regulatory framework

• EPPML framework is complete and we are working on

• demonstrable hardware and software

• In discussions with Posts for potential pilots

Postal Product Innovation and New Opportunities for Postal Commerce.

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