modernizing postal communications services and logistics...

Modernizing Postal CommunicationsServices and Logistics: The Operationsof Deutsche Post World Net

Amin Saidoun, Director UPU Affairs, New Dehli June 2005

Amin Saidoun, Deutsche Post AG, New Dehli, June 2005

Contents

Modernization of distribution and retail– Modernization of distribution– Modernization of retail outlets

Modernisation of Operations– Transport– Sorting centers– Delivery– Quality


Successful restructuring

Letter83 state-of-the-art mail sorting centers3,700 delivery bases95% J+1 (1.06 days)Parcel33 standardized parcel sorting centersMax. 3 handling steps95% J + 1 (1.1 days)Retail Outlets13,000 Outlets“Open service” conceptAgency concept

Postal Services in GermanyHigh quality (J + 1)Comprehensive customer serviceUp to 98% automationUniform IT systemsFull tracking and tracing

Letter328 sorting stations11,000 delivery basesLow quality (Approx. 75% J+1)Parcel140 sorting centersUp to 9 handling stepsPoor quality (J + 3 and J + 4)Retail Outlets29,299 OutletsInsufficient opening hoursHigh costs

Postal Services in GermanyLow qualityPoor customer serviceLow automationNo IT supportHigh costsVery poor DDR-Post

„Concept2000“

Modernisation of Distribution


Changing the letter mail logistics: Projects 1991 - 1998

Major Project to Improve Operational Efficiency

Year1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002

Computerized Forwarding System

33 new Parcel Processing Facilities

New 5-digit Postal Code

83 new Mail Processing Facilities

Optimization of Delivery Depot Structure

(number, location, size)

Modernisation of Distribution


Mail sorting centreentrance

Machinablestandard letterssorted by district

Non-machinablestandard letters

Machinablestandard letterssorted by DDG

Delivery base

Mail input

Preparation byletter carrier

Delivery

Mail automatically sorted in walk sequence

Flats/Maxibriefe

Parcel delivery(in 2,750 delivery bases)

Modernisation of distribution

Manual input sorting

District sorting – walk sequence sorting


Deutsche Post delivery: Facts and figures (2004)

1-wave delivery

approx. 3,000 delivery depots (of which 280 with local management function)

approx. 57,000 delivery districts (11 % foot, 33 % bicycle, 56 % car)

approx. 30,000 combined delivery districts (with parcels)

approx. 38.6 million handover locations, 80 % used daily

approx. 21.09 billion mail items delivered

Start of implementation of TVZ districts (1,200 districts planned for 2005)

Modernisation of distribution


~ 12 million individuals& company addresses,

updated daily

Movers database

Forwarding service

Post Adress - Address management and re-direction services

Classical mail business

Address Management -Value added service business

Modernization of distribution


Modernization of retail outlets

Retail Outlets - Point of sales for Deutsche Post, Deutsche Postbank and DHL products targeted to private customers

Retail Network

Mail FinancialServices

ExpressLogistics

• Retail outlets are targeted to households and private customers• More then 13,500 outlets in Germany provide Universal Service• Regulation Authority provides framework for Universal Service in Germany


Multi-channel banking at its best

Online brokerage– 394,000 online brokerage accounts

Telephone banking– 3.0m telephone banking accounts

Retail outlets– 9,000+ retail outlets incl. 787 Postbank Centers

Online banking– 1.9m online banking accounts

Mobile sales force– 374 financial advisors

Agents network for home mortgages (DSL)– >5,500 independent agents

Rankings

2

1

1

1

(4) Postbank, best online Bank (magazine com! Issue 10/2004)

(4)

(1)

(2)

(3)

(3) Top performer according to 2003 e-sales banking study from Cambridge Technology Partners (best technical performance)(2) No 1 in Nielsen netratings banks (most clicks/most frequented financial webpage)(1) Ranked second best of all German financial institutions in Call Center test (magazine Capital 02/2004)

Modernisation of retail outlets


Further expanding advisory services

Driving forward risk adverse lending business

Attracting new business in Transaction Banking

Continuing strict cost management and strengthening active cost culture

Completing current insourcing projects

At least 15%(1) RoEp in 2006, even in an unchanged interest rate environment

Core(2) CIR < 65%

Major step towards achieving these goals in 2005

•(1) Calculation of target pre tax RoE based on at least €5,100m Equity•(2) Excl. Transaction Banking

Targets 2006:RoEp 15%(1)

Core(2)CIR < 65%

Cost efficiency remainsin focus

Successfulprogress in customerbusiness

2005 – Focussing on profitable growth

Committedto clearlydefined targets

Modernisation of retail outlets


Contents

Overview– The Group DPWN - Development and Structure – MAIL Division - Organisation– MAIL Division - Facts and figures

MAIL Division - Operations– Transport– Sorting centers– Quality

Preview / Summary


BZ

Collection Letter Mail Delivery

Linehaul

BZ DeliveryOffice

Mail Operations in Germany – Basic Network Design


Deutsche Post Transport network

Collection / Inbound transport

109,000 post boxes (50 % are served by delivery)

More than 12,000 retail outlets

3,300 delivery offices

Business customers

Linehaul (J+1, J+4)

Outbound Transport

3,300 delivery offices

Business customers

MAIL Operations - Transport


Deutsche Post Mail sorting centers are standardised and high-technology production centers of various size

83 high-tech mail sorting centres(incl. International Post Centre in Frankfurt)

Straight-through mail centers for sizes ‘S’, ‘M’ and ‘L’

U – Mail centers for sizes ‘X’ to ‘XXL’ (are additionally equipped with materials handling technology)

Automatic sequence sorting machines are exclusively located in Mail centers

Rate of automation in mail centers: 89 % (67 % incl. sequence sorting machines)

MAIL Operations – Sorting Centers


Deutsche Post delivery: Facts and figures (2004)

One delivery round a day

Approx. 3,300 delivery offices (therefrom 280 with local management function)

approx. 57,000 routes (11 % foot, 33 % bicycle, 56 % car)

approx. 30,000 joint delivery routes (with parcels)

approx. 38.6 mn delivery points total, 80 % served daily

approx. 21.09 bn mail items deliverd

Start implementation of delivery routes with separated preparation (1,000 routes planned for 2005)

MAIL Operations - Delivery


Letter mail centreincoming

Machinablestandard letters

sorted on carrier routes

Non machinable standard letters

Machinablestandard letters

sorted on groups

Delivery base

incoming mail

Separate preparation

fordelivery

manual sorting

Delivery

automatically sorted letters(sequencing)

flats

Distribution of parcels(in 2.766 delivery bases)

Round sorting - sequenzing


Contents

Overview– The Group DPWN - Development and Structure – MAIL Division - Organisation– MAIL Division - Facts and figures

MAIL Division - Operations– Transport– Sorting centers– Quality

Summary


89,1

91,3

92,9

94,4 94,695,0 94,8

95,8

94,595,3

98,398,8 99,1 99,3 99,3 99,3 99,2 99,5 99,4 99,4

86,0

88,0

90,0

92,0

94,0

96,0

98,0

100,0

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Del

iver

y tim

e / P

erce

ntag

e

E+1

E+2

The key quality indicator ‘E+1’ is measured End to End by an external, independent institute. The process is certified (EN 13850)

Quality


Figures Target Results 2004

- Transit time J+1 94.5% 95.3%- Transit time J+4 Infopost 97.0% 98.6%- Infopost success rate 98.0% 98.6%- Damage rate 500ppm 600ppm- Correctly processed/delivered 1500ppm 1300ppm- Redirected successfully 96.5% 96.1%

- Transit time REIMS J+1 Import 93.0% 94.5%- Transit time Netherlands J+1 Import 94.0% 95.0%- Parcel transit time PZE+0 93.0% 97.1%- Parcel documentation rate 100% 98.1%- Parcel notification rate 6.5% 7.2%

Quality objectives


Survey design

Name

"Kundenmonitor" Germany

Frequency

Once a year (since 1992)

Method

Telephone interviews(German-speaking population ≥ 16 years of age)

Sample size

Approx. 2,500

KuBiS MAIL Once a year in 2 waves

Telephoneinterviews

Approx. 13,500

Target group

Private customers (incl. semi-professionals

Business customers (annual revenues up to €50,000)

and

Business customers(4.2% share) (annual revenues ≥€50,000)

Customer satisfaction

Two customer surveys to measure our customer satisfaction and customer loyalty


Quality evaluation systems

Quality controlling

Process-oriented management system DIN EN ISO 9001:2000

CD MAIL Quality management

Customer satisfaction Employee satisfaction

Employee surveyEvaluating product and process quality

Evaluating employee motivation and active management indicators

- Analysing KPI’s- Identifying areas of activity

=> Quality reporting=> Quality communication=> Quality checks

=> regular employee survey=> D+1, D+4, Backlogs, Damages ...

Managing employee commitment

- Analysing developing failures - Deriving recommendations foraction

- Supporting solutions

Main assignment of quality team

The Quality management is built on the requirements of DIN EN 9001


Five Key Statements for Success of modernization of mail operations

1. Striving for quality leadership

2. Increasing cost and process efficiency

3. Satisfying and monitoring customer needs

4. Striving for strategic managementcommitment

5. Getting employee satisfaction

modernizing postal communications services and logistics...

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