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Neutralizing The U.S, Postal Rate Increase: Strageies and Tactics
 

Neutralizing The U.S, Postal Rate Increase: Strageies and Tactics

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Strategies and Tactics Procurement and Soucring Professionals Should Know To Help Control The Cost Of Mail

Strategies and Tactics Procurement and Soucring Professionals Should Know To Help Control The Cost Of Mail

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    Neutralizing The U.S, Postal Rate Increase: Strageies and Tactics Neutralizing The U.S, Postal Rate Increase: Strageies and Tactics Presentation Transcript

    • Since 1991, the Sourcing Interests Group (SIG) has provided forums for networking, relationship building, knowledge sharing and education in a non-commercial environment. SIG, a recognized industry-leading, membership-based organization, helps members to achieve improved business results, sooner, at a lower cost and with reduced risk across the spectrum of outsourcing, offshoring, insourcing, procurement and shared services. SIG members are from both the user and provider communities drawn from Fortune 500 companies. For more information go to www.sourcinginterests.org Welcome to Neutralizing the US Postal Rate Increase:  Strategies and Tactics Procurement and Sourcing Professionals Should Know to Help Control the Cost of Mail Presented by Océ Business Services, Inc.
    • Upcoming SIG Events
      • SIG Webinar Series- every Tuesday Register at www.sourcinginterests.org
      • NEW DATE: Thursday, April 23, 2009 - Winning Tools and Techniques for Sourcing in a Down Market
      • Presented By: Denali Consulting
      • April 28, 2009 - An Integrated View of Supplier Risk: Protecting your Company’s Results and Reputation
      • Presented By: Hiperos LLC
      • May 5, 2009 - Untapped Savings Opportunity: An Innovative Approach to Rapidly Reduce Costs
      • Presented By: ICG Commerce and The Hackett Group
      • SIG Global Leadership Summit, Loews Coronado Bay, Coronado, Calif. October 20 – 23, 2009
      • Upcoming Regional Meetings
      • Regional Meetings are one-day gatherings that provide an intimate setting for providers to interact with corporate users.
      • SIG's Regionals provide education and local networking for members and invited non-member corporate users.
        • Tuesday, April 28th – New York City
        • Thursday, April 30th – Chicago
        • Wednesday, May 20th – Toronto
        • Register at www.sourcinginterests.org
        • For more information, call 530-582-8600
    • Joseph Freeman, CMDSM, MQC, AQS, ECMP James P. Mullan, CMDSM, EMCM, MQC, CSSGB April 21, 2009 Neutralizing the U.S. Postal Rate Increase: Strategies and Tactics Procurement and Sourcing Professionals Should Know to Help Control the Cost of Mail
    • Speakers           Joe Freeman, CMDSM, MQC, AQS, ECMP Joe is a Business Solutions Architect with over 20 years of experience managing planning, and implementing large and complex mail center operations in Fortune 1000 companies. He is a leader in the Mail Systems Management Association (MSMA) where he currently serves as the NY Chapter President.              James P. Mullan, CMDSM, EMCM, MQC Jim is a National Operations Manager at Océ responsible for overseeing complex client mail operations.  His 35 years of experience includes mail process management, mail automation, shipping & receiving, disaster recovery planning, distribution, and fulfillment.   Jim currently serves as Executive Vice President of the GNY MSMA.  He also served as Chairman on the CMDSM Study Guide Committee.
    • About Océ Business Services, Inc.
      • Division of Océ N.V. – 131 years, € 3.0B
      • Onsite Document Process Outsourced Services
        • Life-cycle document process approach
          • Mail, Print, Scan, Records, eDiscovery – physical and electronic
        • Six Sigma based methodology
      • US, Canada, Europe
      • Philippines processing center – legal coding, indexing
      • Global revenue ~ €427M, 8,000 employees
      • 1,250 client sites
      • 95% client retention rate
      • IAOP Top 100 Global Outsource provider 2007, 2008, 2009
      • Black Book of Outsourcing #1 DPO Provider 2007, 2008
      • Socia-Gelbmann Top eDiscovery Provider
      Copyright © 2009 IAOP. All Rights Reserved. Océ N.V. Venlo Hdqr
    • Agenda
      • The USPS Shape Based Pricing of 2007
      • Strategies to overcome price increase
      • Top mail consuming functions
      • Implementable tactics to control mail cost
      • Mail Center technology and cost analysis
    • U.S. Postal Service Reform Act- Dec 9, 2007
      • Provided the ability for the government to re-write the rules regarding postal rate increases
      • Old practice: timely and costly – utilized a series of rate inquiries, hearings and requests, then approval meetings and CFR updates
      • New procedure – evaluate Postal cost on an annual basis and increase prices in line with cost of living
    • USPS Shape-based Rate Change
        • US Postal Service rate restructuring took effect May 14, 2007
        • New rates are based on weight and shape
      $ + $ Previous Now
    • USPS Rate Change
      • Major increase in costs for non-conforming pieces
      • Decrease in costs for conforming pieces
      2 oz flat +54.0% 63¢ 97¢ 63 ¢ 59¢ 2 oz letter - 7.9% 63 ¢ $1.30 2 oz parcel +106.3%
    • What shape is it?
    • Poll Question #1 Do you know what your total cost of mail is? Yes No
    • 5 Strategies to reduce mail cost
      • Change shape to avoid cost increase
      • Review, challenge Mail Class or Service needed
      • Use automation (intelligent bar code)
      • Change, update, mail piece / document design
      • Database (house list update, cleanse, update, CASS, etc)
    • Strategies – Shape
      • Change shape to avoid cost increase
        • Fold
        • Package
        • Group / Combine
      Flat-size to letter-size envelope Save 38 ¢ 2-oz example 97¢ 59¢
    • Strategies – Class / Service
      • When, How, Where
        • Review, assess, and challenge mail class requirements
        • Review, assess, and challenge mail service requirements
      Co. Location 1 Co. Location 2 Field Office Mail Center Bureau pre-sort (automated) Direct USPS Group to package/pouch Multiple Mail Options Customer Home Example Mail Center
    • Strategies - Automate
      • New Intelligent Mail Barcode (IMB)
        • What it is …
      • Benefits of IMB
      • How to use the IMB
        • Detailed specs at www.ribbs.usps.gov
    • Strategies – Change, update mail piece and/or document design/format
      • Document design can made a big difference
        • 2 page to 1 – print duplex, cut paper in half
        • Letter size v. flat size
        • Send and return address window envelope
      • Variable data, 1 to 1, document composition
        • Simple formats can reduce number of pages
          • Decrease margin
          • Decrease font
        • Variable data and document composition tools may combine 2 documents/mailings into 1
          • Trans Promo
      • Package can make a difference
        • Padded to card board to avoid over ¾ inch
    • Strategies – Database
      • Return mail facts
        • Total cost of re-mail estimated at $3 per mail piece
        • 18% of outgoing mail pieces have something wrong with the address
        • 2% of all mail is returned
          • Return in corporate mail can be up to 20%
      • House list hygiene
        • 17% of consumers and businesses move every year
        • Use mail center to update databases and prevent re-mail
      • USPS data services
        • CASS
        • ACS – Address Correction Service
        • DPV Delivery Point Validation
        • Fast Forward
    • High Mail Consumption Activities
      • Customer Service
      • Sales & Marketing
      • Field offices / Distribution Centers
      • Shared Service Center
        • Accounting/Finance, HR, Logistics, Training
      • Processing Centers (print production)
      • Headquarter or Regional Offices
    • Poll question #2 Has your company implemented changes to take advantage of the postal discounts offered under the shape-based pricing method? Yes No Don’t know / not sure
    • Mail cost reduction tactics Letter - reduce thickness to < ¼ inch 6” x 9.5” + = $1.14 Flat Rate 10 sheets folded in half < ¼ thick + = $0.59 Letter Rate Reduce envelope thickness save 40%! 6 Pages 6 Pages 6 Pages 6 Pages 10 sheets tri-folded 20lb. stock > ¼” thick 4” x 9.5” From To For every 10,000 pieces save = $5,100
    • Mail cost reduction tactics Category - change from FLAT to Letter + = $1.14 + = $0.59 10” x 13” Flat Change size category by folding save 49%! From To 9 sheets folded in half 6” x 9.5” For every 10,000 pieces save = $5,500 6 Pages 6 Pages 6 Pages 6 Pages 6 Pages 9 Sheets mailed flat
    • Mail cost reduction tactics Automation - IMB 2 oz. letter 1 oz. letter 33.4¢ 45.9 ¢ Automated 21% Savings 20% Savings Based on 3-digit sort Not Automated 59 ¢ 42 ¢ Automate and save 20%! Automation requires a minimum volume of 200 mail pieces
    • Mail cost reduction tactics Duplex print reduces weight and thickness by 50% 10 Pg document Double side print, 5 sheets Weight reduced by 1 oz. Mail category – letter (bi-folded) Cost $0.42 6” x 9.5” 10 Pg document single side print, 10 sheets If tri-fold thickness >1/4 = flat Or Flat Mail category – flat Cost $1.14 10 Pg document single side print, 10 sheets Mail category – letter (bi-folded) Cost $0.59 Bi-fold, change shape save 49% 6” x 9.5” Duplex print, reduce weight, (help the environment) + Bi-fold, change shape save 63% 9” x 13” or 4” x 9.5” thickness >1/4”
    • Mail cost reduction tactics General
      • Address for Success – address validation
      • Design to shape-based standard
      • Combine (consolidate) mailings (House holding)
      • Mind Your Packaging
      • Contain Certified Mail Costs
      • Track and Control Postage
    • Getting Cost of Mail Data
      • USPS mail accounting tools
        • Postage tracking by
          • Departments
          • Mail classes
          • Timeframe
      • Rate Shop
      • Carrier systems and reports
      • Mail process performance management tools such as Océ MAX
    • Conclusion
      • The USPS shape-based pricing requires attention until organizations migrate from the old ways of mailing to the new
      • The strategies discusses will help reduce costs immediately but they require implementing change
      • Procurement professional can help reduce the cost of mail by working with the mail center and business units to help implement the strategies and tactics throughout the organization
    • Thank You! Q & A Joe Freeman [email_address] Jim Mullan [email_address] ADVANCING TO A HIGHER LEVEL Business Services www.obs-innovation.com
    • Upcoming SIG Events
      • SIG Webinar Series- every Tuesday Register at www.sourcinginterests.org
      • NEW DATE: Thursday, April 23, 2009 - Winning Tools and Techniques for Sourcing in a Down Market
      • Presented By: Denali Consulting
      • April 28, 2009 - An Integrated View of Supplier Risk: Protecting your Company’s Results and Reputation
      • Presented By: Hiperos LLC
      • May 5, 2009 - Untapped Savings Opportunity: An Innovative Approach to Rapidly Reduce Costs
      • Presented By: ICG Commerce and The Hackett Group
      • SIG Global Leadership Summit, Loews Coronado Bay, Coronado, Calif. October 20 – 23, 2009
      • Upcoming Regional Meetings
      • Regional Meetings are one-day gatherings that provide an intimate setting for providers to interact with corporate users.
      • SIG's Regionals provide education and local networking for members and invited non-member corporate users.
        • Tuesday, April 28th – New York City
        • Thursday, April 30th – Chicago
        • Wednesday, May 20th – Toronto
        • Register at www.sourcinginterests.org
        • For more information, call 530-582-8600
    • Since 1991, the Sourcing Interests Group (SIG) has provided forums for networking, relationship building, knowledge sharing and education in a non-commercial environment. SIG, a recognized industry-leading, membership-based organization, helps members to achieve improved business results, sooner, at a lower cost and with reduced risk across the spectrum of outsourcing, offshoring, insourcing, procurement and shared services. SIG members are from both the user and provider communities drawn from Fortune 500 companies. For more information go to www.sourcinginterests.org Thank you for attending Océ Business Services, Inc. presentation of: Neutralizing the US Postal Rate Increase:  Strategies and Tactics Procurement and Sourcing Professionals Should Know to Help Control the Cost of Mail