Creating Value by Incorporating Customer-Centric, Sustainability-Driven Innovation into Postal Products
Michael R. Barr, Jesus M. Garza & Duy L. Nguyen
November 2013
Master of Science in Sustainability Management | SEM 610 - Capstone Project
National University
Creating Value by Incorporating Customer-Centric, Sustainability-Driven Innovation into Postal Products
1. Creating Value by Incorporating Customer-Centric,
Sustainability-Driven Innovation into Postal Products
By
Michael R. Barr, Jesus M. Garza and Duy L. Nguyen
2. Creating Value, Sustainability-Driven Innovation
Agenda
Πάντα ῥεῖ καὶ οὐδὲν μένει “Everything flows, nothing stands still”
-- Heraclitus of Ephesus, Greek Philosopher 2
Project Idea
Background
Hypothesis &
Objective
Methodology
Research Results
Benefits of
Sustainability-
Driven Innovation
Conclusion
What’s Next?
3. Project Idea
“My interest would be with a policy or practice relating to Sustainability. In particular,
my interest lies with how to move an organization beyond an inward focus to reduce
its own environmental impact, to one in which creates products and services to help
its customers achieve Sustainability objectives. ”
-- Thomas G. Day, Chief Sustainability Officer, United States Postal Service
“The Postal Service is focused on creating greater value for both the senders and
receivers of mail…
It begins by leveraging data and technology to create compelling tools that make the
experience of mail more interesting and valuable. Senders want to realize a high
return on their mailing investment. Receivers want useful, relevant and compelling
information. Innovations that achieve these goals for senders and receivers will
ensure that mail remains a powerful communications and marketing channel.”
United States Postal Service, Progress and Performance, Annual Report to Congress 2012
Driving Innovation, Innovation in Delivery, p. 9
3
4. Background
Current Business Status
• Economy
• Deteriorating financial situation
• First-Class and Standard Mail rapid volume decline due to Electronic Diversion.
• Unfunded pension and retiree health benefits
• USPS Five-Year Business Plan, 2012-2017
• Equity (Social)
• Universal Service Obligation (USO)
• Corporate Social Responsibility (CSR)
• Environment
• Practice Environmental Sustainability
• Voluntarily alignment of Stewardship practices to Federal Executive Orders,
because they make business sense and are the right thing to do.
“The Postal Service is an organization like no other. We’re in every community in every state, and
we deliver mail to every address. This gives us a special responsibility to be good neighbors.”
-- Patrick R. Donahoe, Postmaster General and CEO
4
5. Hypothesis
• Hypothesis (H): Developing sustainability policy that
incorporates sustainability-driven innovation into business
strategies will enable the creation of postal products and
services that benefit and provide economic, social, and
environmental value to the Postal Service and its customers.
“One finds the truth by making a hypothesis and comparing observations with the hypothesis.”
-- David Douglass, American Physicist
5
6. Objective
• Propose policy and guidance strategy
Move beyond environmental sustainability
Address 3 E’s through the Sustainability-Driven Innovation of customer products.
• First-Class Mail (Market Dominant) vs. Digital Mail (Strategic Initiative Portfolio)
• View Sustainability-Driven Innovation through 3-Stage Framework
“A sustainable business is resource efficient, respects the environment and is a good neighbour.”
-- Phil Harding, Head/Sustainable Business Team, Government Office for the South West, UK (2000) 6
7. Methodology
• Use of the Natural Step’s ABCD Planning
Method
• Based on techniques from business
strategy, time-series and life cycle analysis
• Assess Product Current Status vs. Future
Status through the 3-Stage Innovation
Framework
• Value Proposition
• Operating Model
• Establish Cause-Effect Relationships for
Sustainability-Driven Innovation relating
to First-Class and Digital Mail.
“Research is to see what everybody else has seen, and to think what nobody else has thought.”
-- Albert Szent-Györgyi, Hungarian Physiologist
Perform SWOT
Analysis on
current USPS
Policy
Perform SWOT
Analysis on
current USPS
Policy
Determine
USPS status
using 3 Stage
Framework for
Innovation
Does USPS
meet requirements
for Stage 1
Use ABCD
Planning
method to
determine
Stage 1
requirements
Start
No
Will
implementation
of changes meet
Stage 1 Req’s
Implement
changes
Perform
Experiment
Yes
Perform SWOT
of Stage 1
Yes
Does USPS
meet requirements
for Stage 2
No
7
8. Vision
To be the first Postal Service that, by its deeds, becomes a holistic, sustainable business
By 2033, our customers will benefit from economic, social, and environmental value provided by a safe, trusted, reliable, convenient,
affordable and sustainable communication channel in the delivery of mail to all the communities, businesses and households served.
Innovation
Framework
Stage
Sustainability
Vision
Innovation
Approach
Innovation
Objective
Innovation
Outcome
Innovation –
Organization
Relationship
1
Eliminate Waste
Operational
Optimization
Compliance,
efficiency
Reduces harm
Incremental
improvements
to business-as-
usual
Benign Emissions
Efficient
Transportation
Renewable
Energy
2 Closing the Loop
Organizational
Transformation
Novel products,
services or
business models
Creates shared
value
Organization
purpose
fundamental
shift
-- Ray Anderson, Former Chairman and Founder, Interface, Inc. 8
9. Business Strategy
• Business Model Innovation (BMI)
• BMI applied across First-Class Mail and Digital Mail value chain models
– First-Class Mail’s cost mostly in delivery function
– Digital Mail demonstrates majority of process efficiencies through elimination of
processing, transportation and delivery functions
– 72% Value Added
Value
Proposition
Question
Target
Segments
Which customers do we
choose to serve?
Product
Offering
What are we offering
customers to satisfy their
needs?
Revenue
Model
How are we compensated
for our offering?
Operating
Model
Question
Value Chain How are we configured to deliver on customer
demand?
What do we do in-house?
What do we outsource?
Cost Model How do we configure our assets to deliver on our
value proposition profitably?
Organizational
Change
How do we deploy and develop our people to
sustain and enhance our competitive advantage?
9
10. Business Strategy
• SWOT Analysis/TOWS Matrix
– Situational Analysis is systematic collection and evaluation of past and
present economical, political, social, and technological data
– Develop strategies, tactics, and actions for the effective and efficient
attainment of its organizational objectives and its mission.
– Applied across First-Class Mail and Digital Mail models
• Threats from private digital mail providers.
• Businesses & consumers looking to reduce mailing costs and carbon
footprint.
• Legal documents still required physical signature.
• Privacy and security concerns with digital communication.
10
11. Time Series Analysis
Research was concentrated to segments in energy, climate, waste, facilities, and transportation.
Transportation is what connects the senders to receivers within the value chain.
• Reducing building occupancy, lowering its energy consumption, reducing fuel and water
consumption, USPS is revamping its carbon footprint thereby helping with climate change and
reducing GHG emissions. These incremental changes to business as usual is placing USPS at the
forefront of sustainable innovation by maintaining operational optimization
11
12. Time Series Analysis
• Removal of Seasonalities & Irregularities smooths plot line and confirms downward
trend.
• Total First-Class Mail is predicted to decline to $5,235,763 in Q4 of 2017
• Single-Piece Letters & Cards has highest correlation to Total Revenue
12
13. Life Cycle Cost Analysis
• Objective:
– LCCA enables economic comparison of First-Class Mail and Digital Mail.
• Assumptions:
– Starting capital of $1 billion
– Discount rate of 5%
– Life cycle of 10 years
– Costs category increases by 5% each year
– Digital mail will reduce mail processing facilities from 461 to 27 (6 Data
Centers and 21 Network Distribution Centers)
– Delivery infrastructure is removed with digital mail
– No acquisition costs for IT equipment for digital mail.
13
14. Life Cycle Cost Analysis
First-Class Mail Digital Mail
Costs:
• Energy = $242,920,050
• O&M = $42,377,494,375
• Water = $36,102,224
• Fleet Vehicles Fuel & Maintenance =
$5,823,193,998
Costs:
• Energy = $15,423,495
• O&M = $2,481,979,060
• Water = $2,062,721
Savings: Savings:
• Fleet Vehicles Fuel & Maintenance =
$442,600,000
• Mail Processing Plants Reduction =
$3,040,000,000
NPV = - $33,267,292,809 NPV = $787,912,641
Sustainability Details:
• CO2 Emissions = 538,810 MT
• Energy Consumption = 923,173,913 kWh
• Water Consumption = 686,000,000
gallon
Sustainability Details:
• CO2 Emissions = 34,510 MT
• Energy Consumption = 58,614,217 kWh
• Water Consumption = 38,700,000 gallon
14
15. Benefits of Sustainability-Driven Innovation
Economy
• Yields top-line and bottom-line returns
• Creates Competitive Advantage
• Reduced life cycle costs
• Less business risk
Equity (Social)
• Transition from CSR to CSV model
• Reconceiving products and markets
• Redefining productivity in the value chain
• Enabling local cluster development
• Increased social benefits (health, well-being)
Environment
• Contribution to conservation efforts (Energy, Fuel, Water)
• Increased use of sustainable energy sources
• Reduces emissions and waste (GHGs, paper waste)
• Lower environmental risk
Operational Optimization Organizational Transformation
15
16. Conclusion
Research supports Hypothesis (H):
Developing sustainability policy that incorporates sustainability-driven innovation into business strategies will enable
the creation of postal products that benefit and provide economic, social and environmental value to the Postal Service
and its customers.
Innovation
Framework
Definition Compliance with regulations
Optimized performance through
increased efficiency
Process Stage
Viewing compliance as an
opportunity
Making value chains sustainable
Designing Sustainable Products
and Services
Developing new business models
Innovation
Focus
People
Organizational
View
Systemic
Innovation
Extension
Integrated
Innovation
Outcome
Organizational
Intent
Stand-alone
Company-centric, incremental fixes focusing on new technologies as
ways to reduce impacts while maintaining business as usual (i.e. reduce
harm).
Disruptive new products that change consumption habits or that benefit
people; replacing products with services or replacing physical products
with electronic services; services with social benefits (i.e. create shared
value).
Reduce costs or maximize profits Benefit financially from sustainable products or value-created services.
Insular
Operational Optimization Organizational Transformation
Creation of disruptive new products and services by viewing
sustainability as a market opportunity
Technology
“There's two possible outcomes: if the result confirms the hypothesis, then you've made a discovery. If the result is contrary to the
hypothesis, then you've made a discovery.”
-- Enrico Fermi, Italian Physicist
16
17. What’s Next?
“To be the first Postal Service that, by its deeds, becomes a holistic, sustainable business.”
Innovation
Framework
Stage
Sustainability
Vision
Innovation
Approach
Innovation
Objective
Innovation
Outcome
Innovation -
Organization
Relationship
2 Closing the Loop
Organizational
Transformation
Novel products,
services or
business models
Creates
shared value
Fundamental
shift in
organization
purpose
3
Sensitizing
Stakeholders
Systems Building
Novel products,
services or
business models;
impossible to
achieve alone
Creates net
positive
impact
Extends beyond
the organization
to drive
institutional
change
Redesign
Commerce
WE ARE SUCCESSFUL BECAUSE WE DRIVE
POSITIVE INSTITUTIONAL CHANGE FOR SOCIETY
(CREATING NET POSITIVE IMPACT)
17
18. Acknowledgements
We would like to thank our project sponsor…
Mr. Thomas G. Day, Chief Sustainability Officer, United States Postal Service
18
20. Time Series Analysis
• Plot at Left, downward
trend can be attributed
to the restructuring of
USPS infrastructure.
• Plot at Right,
downward trend
indicates that USPS
is making progress
in reducing
greenhouse gases
21. Time Series Analysis
Research was concentrated to segments in energy, climate, waste, facilities, and transportation.
21
MULTIPLE REGRESSION SUMMARY OUTPUT
Regression Statistics
Multiple R 0.99297673
R Square 0.98600278
Adjusted R Square 0.98200357
Standard Error 95190.8491
Observations 19
ANOVA
df SS MS F Significance F
Regression 4 8.93624E+12 2.23E+12 246.5496 8.31823E-13
Residual 14 1.26858E+11 9.06E+09
Total 18 9.0631E+12
Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0%
Intercept -721339.68 797231.1534 -0.90481 0.380875 -2431230.444 988551.0863 -2431230.444 988551.0863
Total Single-Piece Letters and Cards 1.16896833 0.1219019 9.589418 1.57E-07 0.907514753 1.430421898 0.907514753 1.430421898
Total Presort Letters and Cards 1.2324398 0.267994662 4.598748 0.000413 0.657648421 1.807231189 0.657648421 1.807231189
Flats 0.46339045 0.695228326 0.66653 0.515907 -1.02772601 1.954506907 -1.02772601 1.954506907
Parcels 0.81206109 0.401323393 2.023458 0.06255 -0.048691982 1.672814162 -0.048691982 1.672814162
Multiple Regression: Y = a + b1X1 + b2X2 + B3X3 + ... + BtXt + u
• A null hypothesis where the coefficient of an independent variable is
non-zero, and this null hypothesis is accepted, then that particular
independent variable would have a definite effect on the dependent
variable
22. Email vs. Digital Mail
Email Digital Mail
Account can be created by user with no
relation to a verifiable identity.
Account is based on physical mailing
address.
Email is an open platform. Digital Mail is a closed system.
Consumer has to remember logins and
passwords for many websites.
Digital Mail consolidate all
communications from companies and
organizations in one place.
Control is in the hand of the sender. Control is in the hand of the receiver.
22
23. Email vs. Digital Mail
Email Digital Mail
Modification of message content: email
contents can be modified during transport or
storage.
Message content is between sender and
receiver and cannot be modified once sent.
Masquerade: send a message in the name of
another person or organization
Senders and receivers are registered and
accountable for contents.
Replay of previous messages: Previous
messages resent to other recipients.
Message content is between sender and
receiver, and cannot be sent to other recipients.
Denial of service: carried out thru Trojan
horses/viruses within email contents.
Digital Mail platform routinely monitors for
Trojan horse/virus activity within contents.
Spoofing: false messages inserted into mail
system of another user
Authenticated from sender to receiver.
Disclosure of information: Most emails are non-
encrypted and can be read by non-recipients
Digital Mail follows a similar First-Class Mail
model
Traffic analysis: monitoring email messages as
part of surveillance.
Limited traffic surveillance per Government
jurisdiction.
23
24. Current Digital Mail Providers
Name of Provider Types of services provided
Zumbox Connects large transactional, financial, and
government mailers to consumer households.
Volly Direct connections between institutions and
customers, plus bill pay and transactional
functionality.
Doxo Focuses primarily on bill payment capabilities.
Manilla Manage and organize bills and accounts in one
place.
24
25. Digital Mail - Limitations
Limitation Digital Mail
Culture: Some people want to correspond with
physical mailpieces (i.e. bills, bill payment, and
correspondence).
Over time, trend is moving towards secure
digital forms of correspondence.
Government: Current statutes and laws are not
flexible enough to allow USPS to operate
autonomously.
Congress must pass legislation that enables e-
commerce role through Digital Mail platform.
Universal Service Obligation (USO): Applies to
Postal Service, telecommunications, and
broadband communications.
USO will need to be redefined to protect
‘Market Dominant’ products, maintain uniform
pricing, and foster cooperation and competition
among industries.
25
Editor's Notes
Notes:
Good afternoon Ladies and Gentlemen,
First, I like to thank you for attending our Capstone Project presentation
Our team, consisting of Michael R. Barr, Jesus M. Garza and Duy L. Nguyen, will present our research and findings on how promoting a policy or practice involving Sustainability-Driven Innovation can create value economically, socially, and environmentally into Postal Products and Services.
Where innovating its products is not a foreign concept to the United States Postal Service, creating products, services and processes that produce environmental and/or social benefits as well as economic value does pose both a challenge and an opportunity.
Notes:
Project Idea – Why did our research group choose the capstone project idea and concept?
Background – What is the current business status in relationship to the 3E’s?
Hypothesis & Objective – What is the idea or explanation that can be tested through study and experimentation? What (goal) are we trying to accomplish?
Methodology – What system of methods used in research of supporting the hypothesis?
Research Results – What value is demonstrated through Business Strategy, Time Series Analysis, and Life Cycle Cost Analysis?
Benefits of Sustainability-Driven Innovation – What 3E benefits are realized as the business progresses towards sustainable business?
Conclusion – Was the null hypothesis supported? Why or why not?
What’s Next? – What further research is necessary for the Postal Service to become a holistic, sustainable business?
Notes:
Our product idea focuses on two statements…one that wants to promote a policy or practice to drive Sustainability into products and services, and one that utilizes the power of innovation to create value in mail products and services.
“What if” one could utilize sustainability in the innovation process to create value in mail products and services for its stakeholders and customers?
Use sustainability-driven innovation to transform a Market Dominant, First-Class Mail product into a Digital Mail product equivalent.
Notes:
Economy
Net losses totaling $40 Billion
Total mail volumes have declined 25 percent and are forecasted to decline or remain flat through fiscal year 2020
Financial liabilities totaling $96 billion
Gap between revenues and costs is widening [worst case scenario: $238 Billion by FY 2020]
Network Realignment result of First-Class Mail driven process efficiency; part of comprehensive plan to reduce costs by $20 billion by 2015 .
Equity (Social)
Universal Service Obligation (USO) refers to the practice of providing an affordable, baseline level of postal services, uniform pricing to every resident in the United States [See PMG/CEO statement].
Corporate Social Responsibility (CSR) - corporate initiative to assess and take responsibility for the company's effects on the environment and impact on social welfare. The term generally applies to company efforts that go beyond what may be required by regulators or environmental protection groups.
Environment
The Postal Service practices several noteworthy aspects of environmental sustainability which are framed in “reducing harm” to the organization:
Cradle-to-Cradle Products [Competitive products: Priority Mail/Express Mail]
Nationwide waste/recycling
Energy Conservation
Carbon Footprint/GHG Management
Environmental Management
Environmental sustainability is about making responsible decisions that will reduce your business' negative impact on the environment. It is not simply about reducing the amount of waste you produce or using less energy, but is concerned with developing processes that will lead to businesses becoming completely sustainable in the future.
Notes:
Creation of disruptive new products and services by viewing sustainability as a market opportunity…”Doing good by doing new things.” [Organizational Transformation strategy]
Innovation Outcome: Disruptive new products that change consumption habits or that benefit people; replacing products with services or replacing physical products with electronic services (First-Class Mail Digital Mail); services with social benefits (i.e. create shared value).
Organizational Intent: Benefit financially from sustainable products or value-created services.
Requires different mindset since USPS currently exhibits Operational Optimization tendencies.
[Innovation outcome: Company-centric, incremental fixes focusing on new technologies as ways to reduce impacts while maintaining business as usual (i.e. reduce harm); Organizational intent: reduce costs or maximize profits]
Null Hypothesis H0: Developing sustainability policy that incorporates sustainability-driven innovation into business strategies will not enable the creation of postal products and services that benefit and provide economic, social, and environmental value to the Postal Service and its customers.
[Transition to Jessie]
Notes:
The objective is to take the Postal Service from an Environmental Sustainability practicing organization to one that changes its policy to address the 3E’s through Sustainability-Driven Innovation.
The Sustainability Business Framework was used to determine where the Postal Service currently resides and then decide what is needed to transition into the next Stage.
Develop a strategy that will transition First-Class Mail to that of Digital Mail
Notes:
The research Team used a Sustainability Principal Methodology better known as the Natural Step’s ABCD Planning method
The Process Diagram on the right was used to guide us through the methodology. It describes the steps used for each stage of the Sustainability Business Framework discussed in the previous slide. The actual process uses the same steps for the other two stages.
The team also used a causal research design to explore cause and affect relationships. The experiment selected was Quasi-experiment time series design proposes to use because the design tests the independent variable using groups that are not randomly pre-selected and finally a LCCA which will be discussed by another team member later
From the diagram we begin by assessing the current status of the policy by performing a SWOT analysis. It was further analyzed in terms of:
Value Proposition – What are we offering and to whom?
Operating Model - How do we profitably deliver the offering?
Notes:
The vision is to help The Postal Service become a holistic Sustainable Business so that customers can benefit from economic, social, and environmental value.
The table below shows how the ideal transformation from the current status of environmental sustainability or Operational Optimization to one of Organizational transformation.
The idea is to take the postal Service from a compliant, efficient organization that practices environmental sustainability to one that produces novel products and services y closing the loop.
in other words we want to take the postal Service from an organization that gives back to one that creates shared value.
Transition – Pass on to DL
Situational Analysis - a systematic collection and evaluation of past and present economical, political, social, and technological data, aimed at (1) identification of internal and external forces that may influence the organization's performance and choice of strategies, and (2) assessment of the organization's current and future strengths, weaknesses, opportunities, and strengths.
To get a better picture of the Postal Services’ organizational status, the team concentrated its analysis to segments in energy, climate, waste, facilities, and transportation.
There are many different components within the postal service but the team analyzed the ones they believed would help prove the case for the policy change. The three selected were:
Transportation
Custodial & Maintenance Services
Building Occupancy
All three were analyzed the same way and all three show a downward trend in cost over the 5 year span. These plots all have one thing in common in that they each deal with mail pieces.
From these plots, we learned that while the postal Service is making improvements, there is still room for improvement and a need for sustainable innovation.
The analysis also reinforces the results found on federal sustainability and energy performance scorecard from the Environmental Sustainability Reports.
Reducing building occupancy, lowering its energy consumption, reducing fuel and water consumption, USPS is revamping its carbon footprint thereby helping with climate change and reducing GHG emissions. These incremental changes to business as usual is placing USPS at the forefront of sustainable innovation by maintaining operational optimization.
Notes:
Once the Status was determined it was time to Analyze First Class mail, we did this by looking at Total revenue.
All the data used came from Annual Reports between 2008-2012.
The plot in the upper right shows all the independent Variables the have an Impact on the dependent Variable or Total Mail Revenue for First Class mail.
The correlation of the variables determined that Total Single piece letters & cards had the highest correlation of 96%. This can be seen by how close the purple plot follows the top most plot.
After removing the seasonalities and irregularities we were able to make our forecast and found that by 2017, revenue will go from 7,213,635 in 2013 to 5,235,763 in 2017.
We used MS Excel’s multiple regression tool to determine the results of our analysis. Looking at the Adjusted R square, there is a 98% probability. The coefficients are also a good indication. Non zero variables in a null hypothesis signify that independent variables would have a definite effect on the dependent variable because anything multiplied by zero would be zero.
Notes:
Economy
“Top Line” refers to Revenues
“Bottom Line” refers to Net Income
Equity (Social)
Corporate social responsibility (CSR) is a form of corporate self-regulation integrated into a business model. CSR policy functions as a built-in, self-regulating mechanism whereby a business monitors and ensures its active compliance with the spirit of the law, ethical standards, and international norms. CSR is a process with the aim to embrace responsibility for the company's actions and encourage a positive impact through its activities on the environment, consumers, employees, communities, stakeholders and all other members of the public sphere who may also be considered as stakeholders.
“We contribute to society because we are successful” (CSR) vs. “We are successful because we contribute to society” (CSV)
Creating shared value (CSV) is a business concept that recognizes that the competitiveness of a company and the health of the communities around it are mutually dependent.
Reconceiving products and markets
Redefining productivity in the value chain
Enabling local cluster development
Many approaches to CSR pit businesses against society, emphasizing the costs and limitations of compliance with externally imposed social and environmental standards.
CSV acknowledges tradeoffs between short-term profitability and social or environmental goals, but focuses more on the opportunities for competitive advantage from building a social value proposition into corporate strategy.
Environment
“To live within the carrying capacity of the planet.”
Environment becomes the externality…cost or benefit which affects a party who did not choose to incur that cost or benefit. Human society is a wholly-owned subsidiary of the environment—that without food, clean water, fresh air, fertile soil, and other natural resources, we place ourselves at considerable risk.
Notes:
Business Strategy
Business Model Innovation (BMI):
First-Class Mail’s cost mostly in delivery function
Digital Mail demonstrates majority of process efficiencies through elimination of processing, transportation and delivery functions
Value Proposition suggests 72% Value Added from Digital Mail Model
SWOT/TOWS Analysis:
Suggesting opportunities for Hybrid/Digital Mail solutions
Suggesting opportunities for business model redevelopment
Suggesting opportunities for future value chain sustainability
Time Series Analysis
Exploratory analysis
Reinforces the results from federal sustainability & energy performance scorecard from the Environmental Sustainability Reports.
Reduced building occupancy, reduced energy consumption, reduced fuel and water consumption; carbon footprint reduction reduced GHG emissions.
Incremental innovation of value chain maintains and improves on operational optimization.
Regression analysis
Non zero variables in the null hypothesis signify that independent variables would have a definite effect on the dependent variable.
Independent variable Developing sustainability policy that incorporates sustainability-driven innovation into business strategies
Dependent variable Enable the creation of postal products that benefit and provide economic, social and environmental value to the Postal Service and its customers
Coefficient of determination R2 = 98% probability; good model fit.
Life Cycle Cost Analysis (LCCA) NPVFCM = - $33,267,292,809 vs. NPVDM = $787,912,641
NPV is the value in today’s dollars of its implementation over the specified timeframe (10 years) with assumed discount rate of 5%.
A positive NPV financial metric for Digital Mail indicates the measure is generally considered to be beneficial.
The high ground of the holistic, sustainable business lies within the innovation framework known as Systems Building
Oxford Strategic Consulting (OSC) – “Postal Services will play a prominent role in enabling e-commerce in the future”
Reducing building occupancy, lowering its energy consumption, reducing fuel and water consumption, USPS is revamping its carbon footprint thereby helping with climate change and reducing GHG emissions. These incremental changes to business as usual is placing USPS at the forefront of sustainable innovation by maintaining operational optimization.
To get a better picture of the Postal Services’ organizational status, the team concentrated its analysis to segments in energy, climate, waste, facilities, and transportation.
There are many different components within the postal service but the team analyzed the ones they believed would help prove the case for the policy change. The three selected were:
Transportation
Custodial & Maintenance Services
Building Occupancy
All three were analyzed the same way and all three show a downward trend in cost over the 5 year span. These plots all have one thing in common in that they each deal with mail pieces.
From these plots, we learned that while the postal Service is making improvements, there is still room for improvement and a need for sustainable innovation.
The analysis also reinforces the results found on federal sustainability and energy performance scorecard from the Environmental Sustainability Reports.
Reducing building occupancy, lowering its energy consumption, reducing fuel and water consumption, USPS is revamping its carbon footprint thereby helping with climate change and reducing GHG emissions. These incremental changes to business as usual is placing USPS at the forefront of sustainable innovation by maintaining operational optimization.
Once the Status was determined it was time to Analyze First Class mail, we did this by looking at Total revenue.
All the data used came from Annual Reports between 2008-2012.
The plot in the upper right shows all the independent Variables the have an Impact on the dependent Variable or Total Mail Revenue for First Class mail.
The correlation of the variables determined that Total Single piece letters & cards had the highest correlation of 96%. This can be seen by how close the purple plot follows the top most plot.
After removing the seasonalities and irregularities we were able to make our forecast and found that by 2017, revenue will go from 7,213,635 in 2013 to 5,235,763 in 2017.
We used MS Excel’s multiple regression tool to determine the results of our analysis. Looking at the Adjusted R square, there is a 98% probability. The coefficients are also a good indication. Non zero variables in a null hypothesis signify that independent variables would have a definite effect on the dependent variable because anything multiplied by zero would be zero.
Multiple Regression: Y = a + b1X1 + b2X2 + B3X3 + ... + BtXt + u
A null hypothesis where the coefficient of an independent variable is non-zero, and this null hypothesis is accepted,
then that particular independent variable would have a definite effect on the dependent variable
Notes:
Digital Mail: Only registered user can communicate with each other.
Notes:
Digital Mail: Only registered user can communicate with each other.
Notes:
Digital Mail: Only registered user can communicate with each other.