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Webinar 2013 performance measurement slideshare

  1. 1. Measuring Postal Performance May 16, 2013
  2. 2. Balanced Scorecard Framework
  3. 3. The Importance of a Strategic Vision Measurable Objectives: “Marching Orders" Strategy Formulation: What is the firm in the business of doing? • Digitising Australia Post • Connecting your business • Connecting your community • Digital access • New marketplace initiatives • Brand reputability Australia Post
  4. 4. Cascading Measures of Performance Strategic Tactical Operational Grow logistics revenue Develop 3 logistics alliances Open 10 logistics distribution centers
  5. 5. What Makes Postal Performance Different? Universal Service Obligation & Public Service / Public Good Quality postal service within their territories at affordable prices (EU) At least 85/97 percent delivered next/three working day(s) (Sweden) Dual identity: Public service / Business that must pay its own way. Those who stand to lose the most are the most isolated and vulnerable Network Effects How well is it configured? How well am I using my network? Connectivity – Capacity - Adaptability – Resiliency 5
  6. 6. Customer Performance 6
  7. 7. Traditional Measures of Customer Performance Traditional measures of performance Product or product line IRR/ROI, ROIC Revenue goals, Market share, Market position “profitable-product death spiral.” - profitability by product = index of benefit to both the company and the customer. Consequences Product overlaps/competition within product line Product line thinning DHL: Portfolio of time-definite products simplified and strengthened 7
  8. 8. Product Portfolio Approach Doing products right, and doing the right products Portfolio approach Consumers desire assortments of products rather than individual items Identify products that optimize the entire portfolio. Incorporate attributes specifically identified as attractive by consumers What is the right portfolio of products for postal operators? How do we know we are doing the right products? 8
  9. 9. Customer Performance and Product Mix Concept of Customer lifetime value (CLV) Customer equity (CE) = discounted value of future sales for all customers “Selling more products to the same customers.” Performance Strategy Create close connections or emotional ties with the consumer. Positioning In Relation to the Competitor Measuring: “Knowing your customer” Customer value and satisfaction Customer loyalty and retention Customer equity, turnover, margins, profit, etc. 9
  10. 10. Japan Post We are dedicated to assisting people all over Japan lead more enjoyable lives. We sincerely provide services that people can trust and rely on. We will constantly redefine “Atarashii-Futsu” by evolving to meet the changing needs of our customers, serving people nationwide, one by one. 10 postal, banking, and insurance services
  11. 11. Product Mix and Product Co-dependence Product co-dependence in the product portfolio Level of interaction between products in the portfolio “Leather Case Compatible with Apple iPhone 5” High versus low co-dependence? Swiss Post: My Newspaper Bpost: Home delivery of meals UPS: Broadens B2C platform with acquisition of Kiala 11
  12. 12. Meeting Customer Needs & Leveraging Assets 12 Customers • Individuals/ Households • Businesses • Mailers Internal Assets • Retail Network • Delivery Network • Distribution Network • Data High Satisfaction + High Margins
  13. 13. Meeting needs and Leveraging Networks (distribution – retail – delivery – data) 13 LeveragesNetwork Leverages Customer Relationship Custom Newspaper Home Services Freight SIM Cards Fulfillment Low Low High High Logistics
  14. 14. Operations Performance 14
  15. 15. Measuring performance – an integral process to managing operations 15 Manage Operations Plan operations Execute operations Measure operational performance Adapt operations
  16. 16. Operational performance is measured across four performance indicators 16 Operational Performance Indicators 1. Service 2. Costs 3. Efficiency 4. Profitability Plan operations Execute operations Measure operational performance Adapt operations
  17. 17. The performance indicators are reflected at various levels of a (networked) enterprise 17 Costs Service Efficiency Profitability
  18. 18. Specific effects of network layer on performance indicators 18 R E P S M Network Layer Elements Primary Performance Indicator Influenced Real Estate Plants, Facilities Costs Service Equipment, Fleet Sorting & material handling systems, trucks, planes Costs Service People, Skills Clerks, drivers, planners, managers. Costs Efficiency Profitability Service Sort Plans & Schedules Sort & operating plans, transportation & other schedules. Efficiency Profitability Measurement Mgt & Planning Evaluation, planning & forecasting. Efficiency Profitability
  19. 19. Measures of service performance Adapt network infrastructure to match volume levels Measures: % on time Network capacity utilization Work in process and staged inventories Reduce time in transit Measures: Speed of lanes – ground and air Eliminate manual processing Measures: Machinability factor Address readability/interpretation % damage shipments Eliminate wrong addressing Measures % undeliverable as addressed (UAA) 19 R E P S M E
  20. 20. Measures of cost performance Integrate networks (e.g., express and deferred, or air and ground) Measures: Duplication of services between networks Value of network assets (e.g., vs. revenues) Transportation costs and fuel consumption Reduce labor costs Measures Fixed to variable labor Workload planning and scheduling Reduce equipment/fleet operating costs: Measures Fuel efficiency of fleet Mean time between maintenance Mean time to repair Reduce handlings Measures Total pieces handled (vs. first handling pieces) 20 R E S M PE S E
  21. 21. Measures of efficiency Adapt the networks to meet traffic flows and levels Measure: Asset utilization Distributed capacity Work in process and staged inventories Increase sorting efficiency through technology Measure: Machine throughput / machine jams Read rates Mis-sorts (e.g., out-of-sequenced DPS mail) Machinability/rework Improve delivery efficiency Measure: Density of delivery In-office vs. street time Continuous improvement / six-sigma Measure: Process deviations/ Trending 21 MS E S P M
  22. 22. Measures of profitability Improve revenue per piece - Shift product mix Measures: Ratio of high yield products (heavier weight segments) Ratio of letters to parcels Improve revenue per piece - Shift customer mix Measures: Ratio of business to residential deliveries Improve revenue per piece – Defer delivery Measures: Shift from air to ground; use multimodal Promote low-cost non-urgent deliveries to increase density Measures: Consolidated shipments and asset utilization Urban vs. rural deliveries 22 M E M R E M
  23. 23. Tradeoffs of costs and service 23 60.0% 65.0% 70.0% 75.0% 80.0% 85.0% 90.0% 95.0% 100.0% 500 465 430 400 365 330 300 280 250 Service Revenue Number of Plants in the Network Studies show that reducing network (operating costs) will affect service, and may reduce revenues
  24. 24. Leverage the potential of your network Intelligent network configuration and management for optimum performance Connectivity Measures: o Multiple paths between nodes o Alternate processing nodes Capacity Measures: o Network-wide capacity vs. node-level capacity Adaptability Measures o Adaptive sort and distribution Resiliency Measures o Contingency plans 24
  25. 25. Managing information to monitor and improve performance 25 Static Operating Environment Dynamic Operating Environment • Managing according to historic demand averages • Spikes in demand met with additional infrastructure • Fixed operating schedule • Resource commitment is pre-planned and pre-allocated • Plans based on mid to long-terms projections • Managing deviations from the norms • Spikes in demand are anticipated and are “business as usual” • Variable operating schedule • Resource commitment is dynamically allocated • Near real time visibility, and rapid planning capability Low HighHigh Performance Business Infrastructure-Based More (Under-utilized) Resources More Stability Information-Based Fewer (Better utilized) Resources More Frequent Planning Leveraging your enterprise’s information to monitor and improve operational performance (service, efficiency, profitability, costs)
  26. 26. 26 > insight > action > transformation