This series of posts is designed to discuss some of the challenges faced by mid-sized postal organizations and parcel carriers wanting to take advantage of the growth in parcel volumes. As we mentioned in the initial post, it is critical to develop a clear operations strategy focused on parcel distribution, rather than “piggy-backing” parcels on the letter mail processing network. How many hubs? How far apart? What processing windows? These are just a few of the key questions that must be answered when designing the right parcel distribution network. Overnight products leave very little time for processing, requiring high-capacity, high-speed equipment; two- or three-day products allow a more efficient design of the distribution network, of hubs and of terminals.
comScore recently forecasted that 2014 e-Commerce sales in the U.S. will grow 16% over 2013. At the same time, major shippers like Amazon are creating new distribution centers, changing distribution patterns and increasing the demand for shorter, regional trips. There is no point in designing a parcel network that achieves optimal efficiency if the first change causes the system to collapse. The carrier’s distribution network must be designed to adapt to changing distribution patterns and to other changes in environmental conditions (also referred to as environmental requests).
Resilience is defined as the ability to maintain critical functionality in the face of significant stress. Resilient networks (also said to be”robust”) exhibit two key abilities: infrastructure capacity to respond (equipment, people) and a response culture. More about the latter in another post. Defining the optimal level of infrastructure needed to maintain robustness is not trivial. Interestingly, the study of complex adaptive biological systems provides some answers (1) (2). These complex systems usually show two characteristics:
- Partial redundancy, or the ability of the network’s nodes and links to (partially) take over a similar function in other parts of the network. This means, for instance, the ability to process, sort and transport on behalf of other parts. This way, if a part of the network is lost or overwhelmed, other parts can help.
- Versatility is the ability of network nodes and links to (partially) perform other functions than their primary role. For instance, primary sort hubs should be able to provide collection or delivery for other terminals in case of need. This capability has also been referred to as “functional plasticity” in the study of complex adaptable systems.
Planning such a network is now highly doable. The robustness of a planned network of hubs and links can be tested in response to environmental changes by using a simulation model such as the one developed to study USPS consolidation here and here. Various levels of redundancy and versatility can be tested and optimal levels can be selected. Of course, as mentioned above, infrastructure is only half of the equation, a response culture is also necessary.
(1) Whitacre J. M., “Degeneracy: a link between evolvability, robustness and complexity in biological systems” Theoretical Biology and Medical Modelling, vol. 7(6), 2010
(2) Braendle, C. and M.A. Félix, Plasticity and Errors of a Robust Developmental System in Different Environments. Developmental Cell, 2008. 15(5): p. 714-724.
USPS has started offering its residential customers in the Northern Virginia area (Near Washington DC) free notification by email of mail to be delivered to their mailbox the same day. Customers receive scanned images of the outside of their envelopes and small packages the morning before they receive it. The images are a by-product of the automated sorting process where addresses are located on the envelope or small parcel and red to determine their sorting destination.
Notification for PO Boxes
A similar service has been available to P.O.Box holders where they can receive text messages when mail is being delivered to their box. The USPS strategy is to increase direct mail response rates by providing direct mailers with “two impressions”, one when customers sees the email and one when they receive the “real mail”, according to an MTAC meeting summary.
“Did you know that the USPS is building new tools to help our customers manage their mail from PCs, smartphones and other devices? Now, we’re inviting you to test on new service—Real Mail Notification—at no cost when you register below,” the invitation said. About 10 to 14 days after the user signs up they will receive daily emails with the scanned images of the mail that will be delivered that day.
We are delighted to announce that our Virginia office will be moving September 1, 2014. The new address is 8300 Greensboro Drive, Suite 800, McLean, VA 22102. The phone number will still be 703 691 0380.
decision analysis partners has been awarded a project to evaluate the feasibility of several innovative postal products. The respective studies include benchmarking similar services by other posts, estimate market size and demand, perform SWOT analyses and cost and revenue estimations.
Postal operators we must create new and innovative solutions that meet the needs of tomorrow’s customers and increase the loyalty of current customers. This includes developing new relationships with younger people who, compared with earlier generations, increasingly view mail as less relevant. Operators must anticipate the needs of technologically connected small businesses and recognize the global nature of commerce by responding to the needs of customers who operate internationally.
decision analysis partners has been awarded a complex study of telecommunications for the Caribbean islands of Saint Lucia, Saint Vincent and the Grenadines, and Grenada by the World Bank. The study aims at evaluating overall broadband availability on the islands, and connectivity to the outside World. Following the development of a detailed baseline, the team will recommend Government-wide solutions on each island, digital inclusion initiatives and improvements to overall connectivity.
Latin America and the Caribbean lag far behind developed countries in broadband penetration, according to a new index launched on Wednesday by the Inter-American Development Bank. It finds Chile, Barbados and Brazil in the best position to take advantage of this vital development tool. The 26 countries of the region included in the index posted a score of 4.37 on the Broadband Development Index. By comparison, the countries of the OECD rate an average of 6.14. Chile leads the regional ranking with a combined score of 5.57, followed by Barbados at 5.47 and Brazil with 5.32. The index brings together 37 indicators, each with a score ranging from one (least development) to 8 (most development), to come up with the overall index. The indicators are chosen on the basis of four pillars: public policy and strategic vision, strategic regulation, infrastructure, and applications and knowledge.
decision analysis partners is pleased to announce that it has opened an additional office in Princeville, Hawaii on the Island of Kauai.
“This office will enable us to cover more ground on the U.S. Mainland, in Hawaii and in the Far East as we expand our geographical coverage”, said Bernard Markowicz, dap’s Managing Director. “We are also proud to support the economic development of Kauai by seeking to hire and employ additional local residents as our business expands.”, he added.
This is the seventh webinar in our series of free 2013 postal webinars;
Are Parcel Terminals for You?
August 15, 2013 at 10:30 AM EST(*)
45 minute presentation followed by 15 minute Q&A
Registration is limited.
The e-commerce boom is pushing the rise of parcels terminal networks and the convenience of anywhere/anytime e-commerce is met by the convenience of anywhere/anytime pickup. This webinar will examine the principal strategies and economic models for parcel terminals and ask the question: Are Parcel Terminals for You?
Parcel income country postal operators have the opportunity to leverage their rising middle class to increase mail and parcel
- Pierre Kacha, Ph.D., director of decision analysis partners postal practice will lead this webinar. Pierre has led over 60 postal projects with decision analysis partners, including operations planning and perfromance measurement projects.
(*) Click here to convert to your time zone.
Check the proposed dates and topics of the 2013 Webinar Series